Document:

Exhibit 4.3

 

Genworth Life and Annuity
Insurance Company

 

Funding Agreement

 

POLICYHOLDER:  Genworth Global Funding
Trust 2008-43, its
successors and permitted assignees

 

POLICY NUMBER: GS-R6059

 

EFFECTIVE DATE: August 14,
2008

 

ISSUE STATE:  Virginia

 

Genworth Life and Annuity Insurance
Company (“GLAIC”) (which term includes its successors and permitted assignees)
and the Policyholder hereby agree to the terms of this funding agreement (this “Policy”).  This Policy, including the attached
Accumulation Fund Schedule, and any amendments thereto, constitutes the entire
contract between GLAIC and the Policyholder.  
This Policy is delivered in the Issue State and governed by the laws of
that state.

 

In witness whereof, GLAIC
and the Policyholder have agreed to this Policy as of the Effective Date and
caused the same to be in full force and effect.

 

 

	
  /s/ Thomas E. Duffy

  	
   

  	
  /s/ Pamela S. Schutz

  
	
  Secretary

  	
   

  	
  President

  

 

 

Genworth Life and Annuity
Insurance Company

6610 West Broad Street

Richmond, VA  23230

1-800-635-8056

 

 

Table
of Contents

 

	
  Section 1 – Accumulation Fund – Establishment
  and Operation

  
	
   

  
	
  Section 2 – Payments From the Accumulation Fund

  
	
   

  
	
  Section 3 – Termination of Agreement

  
	
   

  
	
  Section 4 – General Provisions

  
	
   

  
	
  Section 5 – Definitions

  

 

 

SECTION 1
– ACCUMULATION FUND – ESTABLISHMENT AND OPERATION

 

1.1                 POLICY PAYMENTS.  The Policyholder agrees to pay to GLAIC in
the currency specified in the Accumulation Fund Schedule (the “Specified
Currency”), and by wire transfer, the Net Deposit Amount on the Deposit
Date.  Regardless of the Effective Date
of the Policy or the Deposit Date specified in the Accumulation Fund Schedule,
this Policy shall become effective only upon the receipt by GLAIC, or its
designee, of the Net Deposit Amount.

 

1.2                 ESTABLISHMENT OF THE ACCUMULATION FUND.  Upon the receipt by GLAIC of the Net Deposit
Amount, GLAIC will establish an Accumulation Fund.  The Accumulation Fund is a general account
record that reflects the Fund Balance under this Policy.  GLAIC is neither a trustee nor a fiduciary
with respect to the Accumulation Fund. 
The Net Deposit Amount is allocated to GLAIC’s general account for
investment but all funds received under this Policy will become the exclusive
property of GLAIC without any duty or requirement for segregation or separate
investment.  The Fund Balance is not
affected by the investment results of the assets held in the general account.

 

1.3                 INTEREST ON THE ACCUMULATION FUND.  The Guaranteed Rate for the AccumulationFund
is effective until the Fund Balance is paid in full to the Policyholder.  Interest is credited based upon the
methodology specified in the Accumulation Fund Schedule.

 

1.4                 VALUE OF THE ACCUMULATION FUND.  The Fund Balance on any given day equals the Deposit
Amount plus interest, if any, credited thereon at the Guaranteed Rate, less any
payments made under Section 2 of the Policy.

 

SECTION 2
– PAYMENTS FROM THE ACCUMULATION FUND

 

2.1                 PERIODIC PAYMENTS.  GLAIC will pay the
Policyholder the amounts specified in the Accumulation Fund Schedule as Periodic
Payouts, including the Maturity Payout, on the dates specified(subject to Section 4.7).  Such payment amounts are adjusted to reflect
any other payment payable under this Section of the Policy.  The interest factor used in making such
adjustments is theGuaranteed Rate.

 

2.2                 OPTIONAL REPAYMENT.  If so indicated in
the Accumulation Fund Schedule, GLAIC shall pay to the Policyholder the amount
the Policyholder needs to redeem or repay any notes or other instruments issued
by the Policyholder and backed by this Policy, pursuant to any limited right of
redemption or repayment contained in such note or instrument.  GLAIC may require reasonable evidence that
the redemption or repayment request satisfies all the terms and conditions
described in the prospectus, prospectus supplement and/or pricing supplement
applicable to such note or other instrument. 
Additional restrictions, if any, on the Policyholder’s reimbursement
rights under this Section may be included in the Accumulation Fund
Schedule.

 

1

 

2.3                         OPTIONAL REDEMPTION.  If so indicated in
the Accumulation Fund Schedule, GLAIC may elect
to pay the Policyholder all or any part of the Fund Balance on the Call Dates
specified in the Accumulation Fund Schedule. 
Unless otherwise provided in the Accumulation Fund Schedule, GLAIC will
give the Policyholder at least thirty-five (35) calendar days and no more than
seventy-five (75) calendar days notice of its intent to make such pre-payment.  No adjustment will be made to the amount of
such payment, unless such adjustment is specifically provided for in the
Accumulation Fund Schedule.

 

2.4                         MATURITY PAYMENTS.  GLAIC shall pay the
Policyholder the Fund Balance on the Maturity Date.

 

2.5                         FORM OF PAYMENT.  All payments GLAIC
makes to the Policyholder will be made in the Specified Currency, by wire
transfer, unless otherwise agreed in writing by the parties hereto. Unless
otherwise stated in the Accumulation Fund Schedule, all payments GLAIC makes
will be net of any applicable withholding or deduction for or on account of any
present or future taxes, duties, levies, assessments or other governmental
charges of whatever nature imposed or levied by or on behalf of any
governmental authority having the power to tax. 
Unless otherwise specified in the Accumulation Fund Schedule, such net
payments fully satisfy GLAIC’s obligation to the Policyholder with respect to
the full amount due.

 

SECTION 3 –
TERMINATION OF AGREEMENT

 

3.1                       AUTOMATIC TERMINATION/ACCELERATION.  This Policy terminates
with respect to the Accumulation Fund when the Fund Balance is zero and GLAIC’s
obligations hereunder shall automatically accelerate upon the occurrence of an
Event of Default described in Section 3.3(a). 

 

3.2                       EARLY TERMINATION/ACCELERATION.  The Policyholder may
accelerate this Policy by giving GLAIC not less than two (2) Business Days’
written notice upon the occurrence of an Event of Default specified in Section 3.3
b., c. or d. below.  GLAIC may accelerate
this Policy, in whole but not in part, by giving the Policyholder not less than
forty-five (45) days’, but no more than seventy-five (75) days’, prior written
notice of the occurrence of a Tax Event as described in Section 3.4,
provided, however that this Policy shall not be terminated until the Fund
Balance has been paid to the Policyholder in full.

 

3.3                       EVENTS OF DEFAULT.  An Event of Default occurs if:

 

a.                  GLAIC is
dissolved or a resolution is passed or proceeding is instituted for the
winding-up,liquidation or similar arrangement of GLAIC (other than pursuant to
a consolidation, amalgamation or merger);

 

b.                 GLAIC breaches
any material obligation, representation or certification contained herein, provided
that there is no bona fide dispute as to whether such breach has occurred and
that such breach continues for fifteen (15) Business Days following the
Policyholder’s written notice to GLAIC of such breach;

 

2

 

c.               GLAIC fails to make
any required Periodic Payout (other than the Maturity Payout) described in the
Accumulation Fund Schedule or any other payment described in Sections 2.2 or
2.3 of this Policy or any other funding agreement GLAIC issues in connection
with the Program, and such failure continues for seven (7) Business Days
after the due date thereof; 

 

d.              GLAIC fails to make
the Maturity Payout described in the Accumulation Fund Schedule or in any other
funding agreement GLAIC issues in connection with the Program and such failure
is continuing as of the end of the Business Day following the due date thereof.

 

3.4                       TAX EVENT.  A “Tax Event” occurs
if GLAIC has received an opinion of independent legal counsel stating in effect
that there is more than an insubstantial risk that as a result of  any amendment to, or change (including any
announced prospective change) in, the laws (or regulations thereunder) of the
United States or any political subdivision or taxing authority thereof or
therein or any amendment to, or change in, an interpretation or application of
any such laws or regulations by any governmental authority in the United
States, which amendment or change is enacted, promulgated, issued or announced
on or after the Deposit Date, the Policyholder is or will be within ninety (90)
days of the date thereof, (1) subject to an entity level U.S. federal
income tax with respect to interest accrued or received on this Policy or (2) subject
to more than a de minimis amount of taxes, duties or other governmental
charges. 

 

Notwithstanding anything to the contrary in
this Section 3, if GLAIC shall comply in all respects with the
requirements of this Section 3, but an event of default has occurred with
respect to the notes backed by the Policy and as a result payments with respect
to the notes have been accelerated, otherwise than by reason of any default
under this Policy by GLAIC, no Event of Default (as defined above) under this
Policy shall be deemed to have occurred, no payments with respect to this Policy
shall be accelerated and GLAIC will remain obligated to make payments under
this Policy as if no Event of Default had occurred with respect to the notes.

 

SECTION 4 – GENERAL PROVISIONS

 

4.1                         PAYMENT UPON TERMINATION.  Unless otherwise
specified in the Accumulation Fund Schedule, GLAIC shall pay the Policyholder
the Fund Balance on the Maturity Date. 
Such payment fully discharges GLAIC’s obligation to the Policyholder
under this Policy. 

 

4.2                         DISCLAIMER OF RESPONSIBILITY.  GLAIC’s only liability
is as set out in this Policy, including the Accumulation Fund Schedule attached
hereto.  In performing its obligations
under this Policy, GLAIC is not acting as a fiduciary or agent for the
Policyholder or anyone else regardless of whether or not they are directly or
indirectly associated with the Policyholder. 

 

4.3                         NOTICES.  All agreements, notices, directions,
consents, elections or other communication (“Notices”) required by this Policy
must be in writing, directed to the applicable address designated on    the face page.  Any such Notices may be given by facsimile
transmission or other acceptable electronic means.  All Notices are effective when received.

 

3

 

4.4                         AMENDMENTS.  This Policy may be
amended only by mutual written agreement between the parties hereto.

 

4.5                         CONFLICT.  To the extent that
there is a conflict in terms between the Policy and the Accumulation Fund
Schedule, the Accumulation Fund Schedule will control the conduct of the parties.

 

4.6                         TRANSFERABILITY/ASSIGNMENT.  This Policy and the
Accumulation Fund established pursuant to it may solely be sold, assigned,
transferred or pledged in accordance with, and for the purposes contemplated
by, the documents and agreements governing the establishment and operation of
the Program.  GLAIC will maintain a
record of ownership of this Policy on its books and records.

 

4.7                         PAYMENTS BY GLAIC.  When this Policy
provides that GLAIC will make a payment to thePolicyholder, such payment shall
be made to the Policyholder or to the agent the Policyholder designates.  Unless otherwise specified in the
Accumulation Fund Schedule, if a payment date is not a Business Day, GLAIC will
pay such amount on the next Business Day.

 

4.8                         WAIVER BY GLAIC.  At the Policyholder’s
request, GLAIC may waive any terms, conditions or adjustments provided for in
this Policy.  Any such waiver is subject
to any limitations GLAIC specifies in making the waiver and does not require
GLAIC to grant similar future waivers to the Policyholder or anyone else.  A failure or delay in exercising a right
under this Policy does not waive GLAIC’s right or ability to assert such right
in the future. 

 

4.9                         MUTUAL REPRESENTATIONS.  The parties mutually
represent and warrant, each to the other, that:

 

a.               This Policy is its
legal, valid and binding obligation, enforceable in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium or
other laws affecting creditor’s rights, and subject, as to enforceability, to
general principals of equity, regardless of whether enforcement is sought in
proceeding in equity or law;

 

b.              It has the power to
enter into this Policy and to consummate the transactions contemplated hereby;

 

c.               All information
provided in connection with this Policy is, to the best of its knowledge and
belief, true, correct and complete;

 

d.              The execution and the
delivery of this Policy and the performance of obligations hereunder do not and
will not constitute or result in a default, breach or violation, of the terms
or provisions of its certificate, articles or charter of incorporation,
declaration of trust, by-laws or any agreement, instrument, mortgage, judgment,
injunction or order applicable to it or any of its property.

 

4

 

4.10                  TAX PROVISIONS.  The Policyholder and
each transferee and assignee of this Policy, to the extent required by law,
agree to provide GLAIC with any properly completed tax forms that are needed
for GLAIC to satisfy its tax reporting obligations with respect to amounts held
under this Policy.  This Policy is
intended to be ignored for U.S. federal, state and local income and franchise tax
purposes. To the extent it cannot be ignored, GLAIC and the Policyholder and
each transferee and assignee of this Policy agree to treat this Policy as GLAIC’s
debt obligation for U.S. federal, state and local income and franchise tax
purposes.

 

SECTION 5 – DEFINITIONS

 

5.1          POLICY DEFINITIONS.  The following terms have the meanings
indicated:

 

“Accumulation
Fund” is the accounting record GLAIC will establish under
this Policy as described in Section 1.2.

 

“Accumulation
Fund Schedule” is attached to this Policy and establishes the
terms of the Accumulation Fund.

 

“Business
Day” is any day, other than Saturday or Sunday, that is
neither a legal holiday nor a day on which commercial banks are authorized or
required by law, regulation or executive order to close, or are otherwise
closed, in each Business Day City specified in the Accumulation Fund Schedule.

 

“Call
Date” is the day or days prior to the Stated Maturity Date,
if any, specified in the Accumulation Fund Schedule attached to this Policy, on
which GLAIC may elect to pay the Policyholder all or any part of the Fund
Balance.  If no Call Date is indicated in
an Accumulation Fund Schedule, GLAIC will pay to the Policyholder the Fund
Balance prior to the Stated Maturity Date only to the extent provided in Section 3.2.

 

“Deposit
Amount” is the amount GLAIC credits to the Accumulation Fund
on the Deposit Date as set forth in the Accumulation Fund Schedule.

 

“Deposit
Date” is the date, specified in the Accumulation Fund
Schedule, on which GLAIC receives the Net Deposit Amount.

 

“Event
of Default” has the meaning described in Section 3.3.

 

“Fund
Balance” is the value of the Accumulation Fund, determined
pursuant to Section 1.4.

 

“Guaranteed
Rate” is the interest rate, if any, applied to the
Accumulation Fund, as stated in the Accumulation Fund Schedule.

 

“Indenture”
is that certain indenture agreement, made between the Policyholder and the
Indenture Trustee related to the notes to be supported by this Policy as such agreement
may be amended, supplemented or replaced from time to time.

 

5

 

“Indenture
Trustee” is the party specified as trustee under the
Indenture, or its successor.

 

“Maturity
Date” is the earlier of (i) the Stated Maturity Date and
(ii) each date on which the Fund Balance is payable in full to the
Policyholder pursuant to an Event of Default, Optional Repayment, Optional
Redemption or otherwise.  Unless
otherwise indicated in the Accumulation Fund Schedule, if any of the foregoing
dates is not a Business Day, the Maturity Date is the next following Business
Day.  Interest accrues during such delay
only if specified in the Accumulation Fund Schedule.

 

“Net
Deposit Amount” is the amount GLAIC receives from the Policyholder
on the Deposit Date as set forth in the Accumulation Fund Schedule.

 

“Program”
is the Genworth Global Funding program, as described in the prospectus relating
thereto, including the applicable prospectus supplement or pricing supplement
or in any amendment thereto.

 

“Stated
Maturity Date” is the date, as set forth on the Accumulation
Fund Schedule, when the Fund Balance is originally due and payable to the
Policyholder.

 

“Tax
Event” has the meaning described in Section 3.4.

 

5.2                   OTHER DEFINITIONS.  Other capitalized terms appearing in this
Policy have the meanings indicated on the Policy’s face page or in the
Accumulation Fund Schedule.

 

6

 

GLAIC

Accumulation
Fund Schedule – Fixed Rate

 

Policy
Number: GS-R6059

 

	
  Deposit
  Date:

  	
   

  	
  August 14, 2008 or
  the date the deposit is actually received by GLAIC

  
	
   

  	
   

  	
   

  
	
  Specified
  Currency:

  	
   

  	
  United
  States Dollars

  
	
   

  	
   

  	
   

  
	
  Deposit
  Amount:

  	
   

  	
  $2,124,000.00

  
	
   

  	
   

  	
   

  
	
  Net
  Deposit Amount:

  	
   

  	
  $2,092,140.00

  
	
   

  	
   

  	
   

  
	
  Stated
  Maturity Date:

  	
   

  	
  August 15, 2018

  
	
   

  	
   

  	
   

  
	
  Guaranteed
  Rate:

  	
   

  	
  6.05%

  
	
   

  	
   

  	
   

  
	
  Crediting
  Period:

  	
   

  	
  The first Crediting
  Period shall be a long period commencing on the Deposit

  
	
   

  	
   

  	
  Date to but
  excluding February 15, 2009. Each subsequent Crediting Period shall be
  the semi-annual period occurring between the 15th of each February and
  August thereafter. The final Crediting Period will be the period from
  and including February 15, 2018, to but excluding August 15, 2018.

  
	
   

  	
   

  	
   

  
	
  Interest
  Crediting:

  	
   

  	
  Interest is credited
  based upon a 30/360 basis, applied to
  the Fund Balance each day.

  
	
   

  	
   

  	
   

  
	
  Periodic
  Payouts:

  	
   

  	
  On
  the 15th of each February and
  August, GLAIC will pay the Policyholder all accrued and unpaid interest (if
  such date is not a Business Day, the Periodic Payout will be made on the next
  following Business Day, and in such cases the amount of interest shall not be
  adjusted for non-Business Days) (each, an “Interest Payment Date”); provided, however, that
  the final Periodic Payout shall be on the Maturity Date, on which date all
  accrued and unpaid interest will be paid.

  
	
   

  	
   

  	
   

  
	
  Optional
  Repayment:

  	
   

  	
  Optional
  Repayments under Section 2.2 of the Policy may be made solely with
  respect to the “Survivor’s Option” described in Pricing Supplement
  No. 048 dated August 4, 2008 to the Prospectus Supplement dated December 9,
  2005 related to the Program.

  
	
   

  	
   

  	
   

  
	
  Call
  Terms:

  	
   

  	
  Under
  Section 2.3 of the Policy, GLAIC may elect to pay the Policyholder all
  of the Fund Balance on August 15, 2010, or as of any date thereafter
  when a Periodic Payout is due (the “Call Dates”).

  
	
   

  	
   

  	
   

  
	
  Maturity
  Payout:

  	
   

  	
  On
  the Maturity Date, GLAIC will pay to the Policyholder the Fund Balance. If
  such date is not a Business Day, the Maturity Payout will be made on the next
  following Business Day; provided, however, that interest shall not accrue beyond the
  Maturity Date.

  

 

 

	
  Business
  Day City(s):

  	
   

  	
  New York, New York

  
	
   

  	
   

  	
   

  
	
  Other
  Terms:

  	
   

  	
  None

  

 

*********************

 

The calculation of the Guaranteed Rate and all
other payment terms of this Policy will be determined in the manner described
in the “Description of the Notes” section in the Prospectus Supplement.

 

*********************

 

	
  GENWORTH LIFE AND
  ANNUITY

  	
   

  	
  GENWORTH GLOBAL FUNDING
  TRUST 2008-43

  
	
  INSURANCE
  COMPANY

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By: 

  	
    /s/ Pamela C. Asbury

  	
   

  	
  By*:

  	
    /s/ Patricia M.
  Child

  
	
   

  	
  Pamela C. Asbury

  	
   

  	
   

  	
  Patricia M. Child

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Official Title:

  	
    Vice
  President

  	
   

  	
  Official Title:

  	
    Vice
  President

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
      August
  12, 2008

  	
   

  	
  Date:

  	
      August
  12, 2008

  
										

 

* It is expressly
understood and agreed that (a) this Policy is executed and delivered by
U.S. Bank National Association (“USB”) not individually or personally, but
solely as Trustee of the Genworth Global Funding Trust 2008-43 in the exercise
of powers and authority conferred and vested in it (b) each of the
representations, undertakings and agreements herein made on the part of the
Trust is made and intended not as personal representations, undertakings and
agreements by USB but is made and intended for the purpose of binding only the
Trust, (c) nothing herein contained shall be construed as creating any liability
on USB individually or personally, to perform any covenant either express or
implied contained herein, all such liability, if any being expressly waived by
the parties hereto and by any person claiming by, through or under the parties
hereto and (d) under no circumstances shall USB be personally liable for
the payment of any indebtedness or expenses of the Trust or be liable for the
breach or failure of any obligation, representation, warrant or covenant made
or undertaken by the Trust under this Policy or any other related documents.

 

*********************Exhibit 10.3

 

EMPLOYMENT AGREEMENT (this “Agreement”)
dated as of December 21, 2006 (the “Agreement Date”), and amended and
restated 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 its
Subsidiaries is engaged in the business (the “Business”) of producing
and distributing polymer-based, value-added films and flexible packaging
products for food, personal care, medical, agricultural, industrial and other
applications.

 

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

 

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

 

The Company and the
Executive each desire to amend the Executive’s current employment agreement to
comply with the requirements of Code Section 409A and to make certain
additional modifications to the terms and conditions of Executive’s employment
by amending and restating the Executive’s employment agreement to contain the
terms and be subject to the conditions hereinafter set forth.

 

NOW, THEREFORE, in
consideration of the mutual covenants contained herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as set forth below.

 

Section 1.              Employment.

 

The Company hereby employs
the Executive, and the Executive accepts employment with the Company, upon the
terms and conditions set forth in this Agreement for the period beginning with
the Company’s pay period immediately preceding the 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
the Employment Period, the Executive’s base salary shall be $675,000 per annum
(the “Base Salary”), which salary shall be payable in such installments
as is customary for senior executives of the Company, but not less frequently
than monthly.  In addition, during the
Employment Period, (i) the Executive shall participate in all bonus and
incentive plans or arrangements which may be provided by the Company from time
to time to its senior executives, with award opportunities commensurate with
Executive’s position, duties and responsibilities, including the Management
Incentive Plan for calendar years commencing after December 31, 2005, the
Pliant 2006 Restricted Stock Incentive Plan and the Pliant Deferred Cash
Incentive Plan; (ii) the Executive shall be entitled to participate in all
savings and retirement plans which may be provided by the Company from time to
time to its senior executives; (iii) the Executive and the Executive’s
spouse and children shall be eligible to 

 

 

participate
in, and receive all benefits under, welfare and insurance benefit plans which
may be provided from time to time by the Company (including, without
limitation, medical, prescription, dental, disability, individual life, group
life, dependent life, accidental death and travel accident plans) to senior
executives of the Company and their spouses and children generally, in
accordance with the terms of such plans; (iv) the Executive shall be
entitled to fringe benefits which may be provided by the Company from time to
time in accordance with the most favorable fringe benefit plans made available
to senior executives of the Company, generally; and (v) the Executive
shall be entitled to an office of a size and with furnishings and other
appointments, and to secretarial and other assistance, which may be provided by
the Company from time to time, in each case, in accordance with the most
favorable policies applicable to senior executives of the Company
generally.  The Executive acknowledges
that the current office, furnishings, appointments and secretarial and other
assistance provided to him by the Company satisfies the requirements set forth
in Section 2(a)(v).  The Executive
shall be entitled to take four weeks of paid vacation annually, or any greater
amount of paid vacation to which he is entitled under the Company’s vacation
policy as in effect during the Employment Period.  The Board shall conduct a review of, and may
increase (but not decrease), the Executive’s Base Salary on an annual or more
frequent basis.

 

(b)           In
addition to the Base Salary and other benefits specified in Section 2(a),
the Company shall pay to the Executive a cash incentive bonus (“Bonus
Compensation”) for each calendar year ending during the Employment
Period.  The amount of Bonus
Compensation, if any, payable to the Executive shall be determined and
calculated in accordance with the terms of the Management Incentive Plan.  Accrued Bonus Compensation for any calendar
year shall be due and payable on March 15 of the calendar year following
the 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 from
its public accountants of the audited consolidated financial statements of the
Company for the calendar year for which such Bonus Compensation was
earned.  Notwithstanding any provision in
the Management Incentive Plan to the contrary, if the Executive’s employment
with the Company is terminated for any reason, the Company will pay the
Executive on the date required by this Section 2(b) his Bonus
Compensation with respect to the calendar year preceding the calendar year in
which Executive’s employment terminated at the to the extent not previously
paid.  However, the Company will not pay
the Executive any Bonus Compensation with respect to the calendar year in which
the Executive’s employment is terminated (other than pursuant to Section 5(a)(iii) and
5(b)(iv)) or for any calendar year ending thereafter.

 

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

 

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

 

(e)           The
Company shall reimburse the Executive for (i) country club membership dues
and expenses incurred in 2006 or incurred in the portion of any subsequent 

 

2

 

calendar
year 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 or
incurred in the portion of any subsequent calendar year within the Employment
Period in an amount not to exceed $10,500 per annum and (iii) the cost and
expense of annual physicals at the Mayo clinic (or such other facility of the
Executive’s choosing) incurred in 2006 or incurred in the portion of any
subsequent calendar year within the Employment Period in an amount not to
exceed $7,000 per annum, with all such reimbursements for any calendar year
subject to the Company’s requirements with respect to reporting and
documentation of such expenses.  In
addition, beginning in 2006 and continuing for the remainder of the Employment
Period, the Company shall provide the Executive with an allowance of $27,600
per annum for automobile costs and expenses. 
In return for such allowance, the Executive agrees and acknowledges that
he shall be responsible for all insurance, operating expenses and taxes related
to such automobile and the allowance paid pursuant to this Section 2(e).  Notwithstanding the foregoing, all
reimbursements made to the Executive by the Company for allowances, fees and
expenses incurred by the Executive during any calendar year pursuant to this Section 2(e) shall
be paid no later than March 15 of the calendar year following the calendar
year in which such fees or expenses were incurred, provided that the Executive
has by then complied with applicable Company requirements with respect to
reporting and documentation of such expenses and that such reimbursement
expense request is submitted to the Company within one year after the date such
fees or expenses were incurred.

 

Section 3.              Position and Duties.

 

(a)           The
Company employs the Executive as the President and Chief Executive
Officer.  His responsibilities and duties
will be commensurate with the title of his position, and will include those
duties and responsibilities normally performed by the Chief Executive Officer
of a private corporation in the Business, including the management and
direction of the affairs of the Company on a day to day basis and such other
duties as the Board shall assign to the Executive from time to time.  The Executive shall also have the
non-exclusive authority to call and agenda items for meetings of the Board, so
long as the Executive is a member of the Board and the Chief Executive Officer
of the Company.  All operations and staff
personnel shall report directly to the Executive or through one or more
officers designated by the Executive who shall report directly to the
Executive.  The Executive will report
directly and exclusively to the Board. 
The Executive will perform his duties from the Schaumburg, Illinois
location of the Company.

 

(b)           The
Executive acknowledges and agrees to discharge his duties and otherwise act in
a manner consistent with the best interests of the Company and its
Subsidiaries.  During the Employment
Period, the Executive shall devote his best efforts, on a full-time basis, to
the performance of his duties and responsibilities under this Agreement (except
for vacations to which he is entitled pursuant to Section 2(a), illness or
incapacity or other personal or personal investment activities that do not
interfere with his full and timely performance of his duties and
responsibilities 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) deliver
lectures, fulfill speaking engagements or teach at educational institutions,
and (iii) manage personal investments, so long as such activities, either
individually or in the aggregate, do not materially conflict with the
performance of the Executive’s duties under this Agreement.

 

3

 

Section 4.              Termination.

 

(a)           Termination
Date.  The Executive’s employment under this
Agreement shall terminate upon the earliest to occur (the date of such
occurrence 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) the
Executive’s death, (v) the Executive’s Disability, (vi) the Executive’s
Retirement, (vii) the effective date of a termination of the Executive’s
employment for Cause by the Company (including by the Board) (a “Termination
for Cause”), and (viii) the effective date of a termination of the
Executive’s employment by the Company (including by the Board) for reasons that
do not constitute Cause (a “Termination Without Cause”).  The effective date of the Executive’s
Resignation 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 determined
under Section 4(c); the effective date of the Executive’s Disability shall
be the date specified in a Notice of Termination delivered to the Executive by
the Company; and the effective date of a Termination for Cause or a Termination
Without Cause shall be the date specified in the Notice of Termination
delivered to the Executive by the Company.

 

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

 

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

 

Section 5.              Effect of Termination;  Severance.

 

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

 

(i)            a lump sum payment of the unpaid portion of the Base Salary,
computed on a pro  rata basis to 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 is customary for senior executives
of the Company, but not less frequently than monthly, over the period beginning
on the Termination Date and ending on the second 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 or after the Termination Date, the
provisions of Section 11 shall apply;

 

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

 

4

 

calendar
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 year that
elapse before the Termination Date, and the denominator of which is 365,
payable in accordance with Section 2(b) or, if later, on the
Termination Date; 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 11 shall apply;

 

(iv)          a lump sum reimbursement for any expenses for which the
Executive 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 reimbursement
expense request is submitted to the Company; provided, however,
that such reimbursement expense is submitted to the Company within one year
from the Termination Date; and

 

(v)           subject to Section 17, continued participation in the
Company’s comprehensive medical and dental plan for the period beginning on the
Termination Date and ending on the second anniversary of the Termination Date,
with the COBRA continuation coverage qualifying event connected with the
Executive’s termination occurring when he loses coverage at the end of that
two-year period.  If it is unable to
obtain the consent of its medical 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 dental insurance that provides comparable coverage
for the required two year period, and require the Executive to pay an amount
equal to the then-current COBRA continuation premium for the period commencing
on the second anniversary of the Termination Date during which the Executive
would be entitled to COBRA continuation coverage (with the Executive and his
dependents being treated for all notice, election, coverage entitlement and
other administrative purposes the same as other COBRA qualified beneficiaries
under the Company’s medical and dental plan). 
Payment or reimbursement of the amount of any premium, medical or dental
expenses under this clause (v) shall be made on or before the last day of
the 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 dental
coverage during the two years after the Termination Date will end on the date
he becomes eligible for comprehensive medical and dental coverage under a plan
of his successor employer, if he becomes so eligible before the second
anniversary of the Termination Date.

 

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

 

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

 

(ii)           a lump sum reimbursement for any expenses for which the
Executive 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 

 

5

 

reimbursement
expense request is submitted to the Company; provided, however, that such
reimbursement expense is submitted to the Company within one year from the
Termination Date; and

 

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

 

(iv)          subject to Section 17(b) and solely in the case of
the Executive’s death or Disability, an amount equal to the Bonus Compensation
that was paid or is payable to the Executive for the year preceding the
calendar 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 year
that elapse before the Termination Date, and the denominator of which is 365,
payable in accordance with Section 2(b) or, if later, on the
Termination Date; 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 11 shall apply.

 

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

 

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

 

(ii)           a lump sum reimbursement for any expenses for which the
Executive 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 reimbursement
expense request is submitted to the Company; provided, however, that such
reimbursement expense is submitted to the Company within one year from the
Termination Date.

 

(d)           Notwithstanding
any other term of this Agreement to the contrary, but subject to Section 11
hereof, upon termination of the Executive’s employment for any reason, the
Executive will in all events receive, when they would otherwise be then due and
owing, any amounts that, as of his Termination Date, have accrued and become
vested under the Pliant 2006 Restricted Stock Incentive Plan, the Pliant
Deferred Cash Incentive Plan, the Company’s qualified and nonqualified
retirement plans, all statutory rights to receive or purchase welfare benefits,
reimbursement for unreimbursed expenses in accordance with the policies of the
Company in effect as of the Termination Date, accrued vacation pay, and any
other employee benefits owing to him as of the Termination Date, all as
determined in accordance with the applicable terms of the plans themselves and
the laws applicable to them.  In
addition, the Company shall continue (i) to indemnify the Executive for
acts and omissions which occurred prior to the Termination Date, subject to and
in accordance with the terms of the Company’s organizational documents referred
to in Section 15(b) as they are in effect on the Termination 

 

6

 

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

 

(e)           If
the Executive is employed as the President and Chief Executive Officer of the
Company following an Expiration (such period, the “Post-Employment Agreement
Period”) and no other event of termination of employment under this
Agreement has occurred prior 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 may be terminated at any time during the Post-Employment
Agreement Period, for any reason. 
Subject to Section 17(b), if the Executive’s employment with the
Company is terminated by the Company at any time during the Post-Employment
Agreement Period for reasons that constitute a Termination without Cause, the
Executive or his beneficiaries or estate shall receive the monthly portion of
the Base Salary, payable monthly, during the period beginning on the date his
employment 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 Sections
6, 7, 8 or 9, the provisions of Section 11 shall apply.

 

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

 

Section 6.              Nondisclosure and Nonuse of Confidential
Information.

 

The Executive will not
disclose 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 the
Employment Period, to the extent that such disclosure or use is directly
related to and reasonably consistent with the Executive’s performance of duties
assigned to the Executive by the Company, and except in connection with
enforcing the Executive’s rights under this Agreement or if compelled by a
court or governmental agency.

 

Section 7.              Inventions and Patents.

 

The Executive agrees that
all 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 such
ownership (including, without limitation, the execution and delivery of
assignments, consents, powers of attorney and other instruments) and to provide
reasonable assistance to the Company in connection with the prosecution of any
applications for patents, trademarks, trade names, service marks or reissues
thereof or in the prosecution or defense of interferences relating to any Work
Product.  Notwithstanding the 

 

7

 

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

 

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

 

The Executive acknowledges
and agrees that during the course of such Executive’s association with the
Company or any of its Subsidiaries, the Executive has had the opportunity to
develop relationships with existing employees, customers and other business
associates of the Company and its Subsidiaries which relationships constitute
goodwill of the Company and its Subsidiaries, and the Company and its
Subsidiaries would be irreparably damaged if the Executive were to take actions
that would damage or misappropriate such goodwill.  Accordingly, from and after the Agreement
Date, the Executive covenants and agrees to comply with the terms and
provisions set forth in this Section 8.

 

(a)           The
Executive acknowledges that the Company and its Subsidiaries currently conduct
the Business throughout the world (the “Territory”).  Accordingly, during the period (the “Non-Compete
Period”) commencing on the Agreement Date and ending on the first
anniversary of either (i) the Termination Date, or (ii) the date of
the Executive’s termination of employment during any Post-Employment Agreement
Period, as applicable, the Executive shall not, without the consent of the
Company, directly or indirectly, enter into, engage in, assist, give or lend
funds to or otherwise finance, be employed by or consult with, or have a financial
or other interest (other than (i) an ownership interest of less than 1% of
the outstanding common equity securities in any publicly traded company and (ii) an
investment by the Executive in the restaurant business operated by the
Executive’s brother) in, any business which competes with the Business, whether
for or by himself or as an independent contractor, agent, stockholder, partner
or joint venturer for any other Person. 
To the extent that the covenant provided for in this Section 8(a) or
Section 8(b) may later be deemed by a court to be too broad to be
enforced with respect to its duration or with respect to any particular
activity or geographic area, the court making such determination shall have the
power 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 shall
then be enforced.

 

(b)           The
Executive covenants and agrees that during the Non-Compete Period, the
Executive will not, directly or indirectly, either for himself or for any other
Person (i) solicit any employee of the Company or any of its Subsidiaries
to 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 to
purchase products or services of or on behalf of the Executive or such other
Person that are competitive with the products or services provided by the
Company or any of its Subsidiaries 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 any of its Subsidiaries or any of
their employees and any lessor, lessee, vendor, supplier, customer,
distributor, employee, consultant or other business associate of the Company or
any of its Subsidiaries as such 

 

8

 

relationship
relates 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) shall
expire on the first anniversary of a Liquidation Event.

 

(c)           The
Executive understands that the foregoing restrictions may limit his ability to
earn a livelihood in a business similar to the Business, but he nevertheless
believes that he has received and will receive sufficient consideration and
other benefits under this Agreement and the Pliant 2006 Restricted Stock
Incentive Plan and Pliant Deferred Cash Incentive Plan to clearly justify such
restrictions which, in any event, he does not believe would prevent him from
otherwise earning a living.

 

Section 9.              Delivery of Materials Upon Termination of
Employment.

 

The Executive shall deliver
to the Company at either (i) the termination of the Employment Period or, (ii) the
termination of the Executive’s employment during any Post-Employment Agreement
Period, 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 documents
and data (and copies thereof) relating to the Confidential Information or Work
Product which he may then possess or have under his control regardless of the
location or form of such material and, if requested by the Company, will
provide the Company with written confirmation that all such materials have been
delivered to the Company.

 

Section 10.            Insurance.

 

The Company may, for its own
benefit, maintain “keyman” life and disability insurance policies covering the
Executive.  The Executive will cooperate
with the Company and provide such information or other assistance as the
Company may reasonably request in connection with the Company’s obtaining and
maintaining such policies.

 

Section 11.            Enforcement.

 

Because the Executive’s
services are unique and because the Executive has access to Confidential
Information and Work Product, the parties hereto agree that money damages would
be 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 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 and remedies
existing in their favor, apply to any court of competent jurisdiction for
specific performance and/or injunctive or other relief in order to enforce, or
prevent any violations of, 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, if
the Executive violates any provision of the foregoing Sections 5(f), 6, 7, 8 or
9, the Company shall have the right to set off any payments then or thereafter
due 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 Stock
Incentive Plan and the Pliant Deferred Cash Incentive Plan against any damages
and costs or expenses incurred by the Company or its Subsidiaries by such
violation, in each case without 

 

9

 

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

 

Section 12.            Representations.

 

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

 

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

 

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

 

Section 13.            Expense Reimbursement and Default Interest.

 

(a)           The
Company will reimburse the Executive for reasonable legal fees and expenses
incurred by the Executive in connection with the negotiation and execution of
this Agreement.

 

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

 

Section 14.            No Mitigation.

 

The Executive shall not have
any duty to mitigate the amounts payable by the Company under this Agreement
upon any termination of employment by seeking new employment following
termination.  Except as specifically otherwise
provided in this Agreement, all amounts payable pursuant to this Agreement
shall 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 as
the result of the Executive’s employment by another employer or self
employment.

 

Section 15.            Indemnification.

 

(a)           During
the Employment Period, the Company shall maintain directors and officers’
liability insurance covering the Executive through the second anniversary of
the Termination Date.  Such insurance
shall provide coverage in amounts and on terms and conditions customary for a
private corporation in the Business.  The
Executive confirms that the current directors and officers liability insurance
policy satisfies the foregoing requirements.

 

10

 

(b)           During
the Employment Period, the Company shall not amend or repeal any article,
section or provision of the Company’s Certificate of Incorporation or Bylaws
related to liability and/or indemnification of officers and directors of the
Company in a manner materially adverse to the Executive without the prior
written consent of the Executive.

 

Section 16.            Parachute Gross-Up.

 

If the Executive incurs an
excise tax imposed on “excess parachute 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, the Executive by the Company or its stockholders or
affiliates in respect of obligations of the Company, in each case, in respect
of this Agreement or any of the Company’s incentive and benefit plans, then the
Company shall pay the Executive, simultaneously with the payment of the excess
parachute payment(s) and in no event later than the end of the Executive’s
taxable year after the taxable 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 excess parachute payments, plus (y) an additional amount
such that after payment of all Taxes on such additional amount there remains a
balance sufficient to pay Taxes actually due and payable on the payment made in
clause (x).

 

Section 17.            Section 409A Amendments.

 

(a)           Benefits
under this Agreement are intended either not to be part of a deferred
compensation plan within the meaning of Section 409A of the Code and regulations
and rulings thereunder (“Section 409A”), or to meet the requirements of Section 409A
for deferred compensation plans, and this Agreement shall be construed
consistently with that intent.

 

(b)           Without
limiting the generality of Section 17(a) and notwithstanding any
other provision in this Agreement to the contrary, if immediately prior to the
Termination Date or, as applicable, the termination of the Executive’s
employment during any Post-Employment Agreement Period, the Executive is a “specified
employee” (within the meaning of Section 409A(a)(2)(B)(i) of the Code
and the regulations or rulings thereunder), any payments otherwise payable to
the Executive pursuant to clauses (ii) or (iii) of Section 5(a),
clauses (iii) or (iv) of Section 5(b) or Section 5(e) during
the first six (6) months following the Termination Date or, as applicable,
the termination of the Executive’s employment during any Post-Employment
Agreement Period (without regard to this Section 17(b)) shall be delayed
and paid to the Executive in a lump sum on the date that is six (6) months
after the Termination Date or, as applicable, the date of termination of the
Executive’s employment during any Post-Employment Agreement Period, and any
remaining payments due under Section 5 shall be paid in accordance with
the terms of Section 5; provided, however, that this Section 17(b) shall
not apply if the Executive’s employment is terminated due to his death or due
to his disability (within the meaning of Code Section 409A(a)(2)(C)), and
further provided that if the Executive dies prior to the date that is six (6) months
after the Termination Date or, as applicable, the date of termination of the
Executive’s employment during any Post-Employment Agreement Period, his
beneficiaries or estate shall receive an immediate lump sum payment of all
amounts otherwise payable to the Executive through the date of the Executive’s
death pursuant to Section 5 (without regard to this Section 17(b))
that were delayed pursuant to this Section 17(b), 

 

11

 

and
any remaining payments due under Section 5 will be paid in accordance with
the terms of Section 5.

 

Section 18.            Definitions.

 

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

 

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

 

“Cause” shall mean:

 

(a)           (i) the
Executive commits a crime involving his fraud, theft or dishonesty or (ii) engages
in willful or wrongful activities that are materially detrimental to the
Company or its Subsidiaries;

 

(b)           the
material and willful breach by the Executive of his responsibilities under this
Agreement or willful failure to comply with reasonable directives or policies
of the Company or the Board, but only if the Company has given Executive
written notice specifying the breach or failure to comply, demanding that the
Executive remedy the breach or failure to comply and the Executive (i) failed
to remedy the alleged breach or failed to comply within thirty days after
receipt of the written notice and (ii) failed to take all reasonable steps
to that end during the thirty days after he received the notice; or

 

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

 

Notwithstanding the
foregoing, the term “Cause” shall not include any one or more of the
following: (i) bad management decision-making by the Executive or (ii) any
act or omission reasonably believed by the Executive in good faith to have been
in 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 to which the
Executive was not legally entitled) and reasonably believed by the Executive
not to have been improper or unlawful.

 

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

 

“COBRA” means the
Consolidated Omnibus Budget Reconciliation Act of 1985.

 

“Code” means the
Internal Revenue Code of 1986 and the regulations thereunder, as amended and in
effect from time to time.

 

12

 

“Common Stock” means
the 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 or
obtained by the Company or any of its Subsidiaries in connection with the
Business, and that the Executive learns in the course of performing services
for the Company or any of its Subsidiaries, including, but not limited to, (a) information,
observations, procedures and data obtained by the Executive while employed by
the Company (including those obtained prior to the Agreement Date) concerning
the business or affairs of the Company or any of its Subsidiaries, (b) products
or services of the Company or any of its Subsidiaries, (c) costs and
pricing structures of the Company or any of its Subsidiaries, (d) analyses
of the Company or any of its Subsidiaries, (e) drawings, photographs and
reports of the Company or any of its Subsidiaries, (f) computer software,
including operating systems, applications and program listings of the Company
or any of its Subsidiaries, (g) flow charts, manuals and documentation of
the Company or any of its Subsidiaries, (h) data bases of the Company or
any of its Subsidiaries, (i) accounting and business methods of the
Company or any of its Subsidiaries, (j) inventions, devices, new
developments, methods and processes, whether patentable or unpatentable and
whether or not reduced to practice of the Company or any of its Subsidiaries, (k) customers
and customer lists of the Company or any of its Subsidiaries, (l) other
copyrightable works of the Company or any of its Subsidiaries, (m) all
production methods, processes, technology and trade secrets of the Company or
any of its Subsidiaries, and (n) all similar and related information of
the Company or any of its Subsidiaries in whatever form.  Confidential Information will not include any
information that is now or later becomes part of the public domain, without
breach of this Agreement by the Executive.

 

“Disability” means
any medically determinable physical or mental impairment that has lasted, or is
reasonably expected to last, for a period of at least six (6) months, can
reasonably be expected to be permanent or of indefinite duration, and renders
the Executive unable to perform his duties hereunder, as certified by a
physician jointly selected by the 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 related
transactions) of all or substantially all of the Company’s consolidated assets
to a Person or a group of Persons acting in concert (other than to a Subsidiary
of the Company, JPMP or any of their respective affiliates); (b) the sale
or transfer (in one or a series of related transactions) of a majority of the
outstanding 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 or
consolidation of the Company with or into another Person (other than to JPMP or
any 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 of
the outstanding Common Stock immediately prior to such transaction own less
than a majority in voting power of the outstanding Common Stock or other voting
securities of the surviving or resulting corporation or acquirer, as the case
may be, immediately following such transaction.

 

13

 

“Notice of Termination”
means a written notice delivered by the Company to the Executive which sets
forth (a) the specific termination provisions in this Agreement relied
upon by the Company to effect a termination of the Executive’s employment
hereunder, (b) in reasonable detail the facts and circumstances claimed to
provide a basis for termination of the Executive’s employment under such
termination provision, as applicable, and (c) if the Termination Date is
other than the date of receipt of such Notice of Termination, the Termination
Date.

 

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

 

“Resignation for Good
Reason” occurs if the Executive terminates his employment with the Company
and the Subsidiaries in accordance with Section 4(c) because, without
Executive’s express written consent, any of the events described below occurs
during the Employment Period and, with respect to the events described in
clauses (a) through (d) below, the Company fails to cure or remedy
the same within thirty days (the “Cure Period”) after receiving written
notice thereof from the Executive, which the Executive shall deliver within
ninety (90) days following the occurrence of any of such events; it being
agreed that the failure by the Executive to provide such notice during such 90
day period shall preclude the Executive from invoking any such events as the
basis for a Resignation for Good Reason:

 

(a)           the
assignment to the Executive of any material duty materially inconsistent with
the Executive’s position (including status, offices, titles and reporting
requirements), authority, duties or responsibilities as contemplated by Section 3(a);

 

(b)           the
material breach by the Company of any material provision of this Agreement (it
being agreed that the failure to elect or re-elect the Executive to the Board
in accordance with Section 5(f) during the Employment Period and the
failure to appoint or reappoint the Executive as the President and Chief
Executive Officer of the Company in accordance with Section 3(a) during
the Employment Period shall constitute a material breach by the Company of a
material provision of this Agreement);

 

(c)           any
reduction in the Base Salary or the applicable percentages of Base Salary set
forth in the Management Incentive Plan which are used to determine the Bonus
Compensation, if any, payable hereunder;

 

(d)           the
Company requires the Executive to, or assigns duties to the Executive which
would reasonably require him to, relocate his principal business office more
than forty (40) miles from where it is located on the Agreement Date;

 

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

 

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

 

14

 

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

 

“Subsidiary” of a
Person means any other Person fifty percent (50%) or more of whose outstanding
voting securities or other equity interests are directly or indirectly owned by
the first Person.

 

“Taxes” means any
Federal, 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 5
or (if applicable) Section 17(b), the Termination Date shall be the date
of separation from service (as defined for purposes of Section 409A).

 

“Work Product” shall
mean all inventions, innovations, improvements, technical information, systems,
software developments, methods, designs, analyses, drawings, reports, service
marks, trademarks, tradenames, logos and all similar or related information
(whether patentable or unpatentable) which relates to the Company’s or any of
its Subsidiaries’ business, research and development or existing or future
products or services and which are conceived, developed or made by the
Executive (whether or not during usual business hours and whether or not alone
or 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 and
service mark applications or registrations, copyrights and reissues thereof
that may be granted for or upon any of the foregoing.

 

Section 19.            General Provisions.

 

(a)           Severability.  It is the desire
and intent of the parties hereto that the provisions of this Agreement be
enforced to the fullest extent permissible under the laws and public policies
applied in each jurisdiction in which enforcement is sought.  Accordingly, if any particular provision of
this Agreement shall be adjudicated by a court of competent jurisdiction to be
invalid, prohibited or unenforceable for any reason, such provision, as to such
jurisdiction, shall be ineffective, without invalidating the remaining
provisions of this Agreement or affecting the validity or enforceability of
this Agreement or affecting the validity or enforceability of such provision in
any other jurisdiction.  Notwithstanding
the foregoing, if such provision could be more narrowly drawn so as not to be
invalid, prohibited or unenforceable in such jurisdiction, it shall, as to such
jurisdiction, be so narrowly drawn, without invalidating the remaining
provisions of this Agreement or affecting the validity or enforceability of
such provision in any other jurisdiction.

 

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

 

15

 

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

 

Sonnenschein
Nath & 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:

 

Pliant
Corporation

1475
Woodfield Road

Suite 700

Schaumburg,
Illinois 60173

Attention:
Chief Financial Officer

Telecopier:
(847) 969-3338

Telephone:
(847) 969-3330

 

with
a copy to:

 

CCMP
Capital Advisors, LLC

245
Park Avenue, 16th Floor

New
York, New York 10167-2403

Telephone:
(212) 600-9650

Telecopier:
(917) 464-9024

Attention:
Timothy Walsh

 

and

 

O’Melveny & Myers LLP

7
Times Square

New
York, New York 10036

Telephone:
(212) 408-2400

Telecopier:
(212) 408-2420

Attention:
Ilan S. Nissan, Esq.

 

and

 

Sidley
Austin LLP

One
South Dearborn Street

Chicago,
Illinois  60603

Telephone:
(312) 853-7000

Telecopier:
(312) 853-7036

Attention:  Brian J. Gold;

 

16

 

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

 

(c)           Entire
Agreement.  This Agreement and the documents expressly
referred to herein embody the complete agreement and understanding among the
parties and, with respect to the subject matter of this Agreement, supersede
and preempt any prior understandings, agreements or representations by or among
the parties, written or oral, which may have related to the subject matter
hereof in any way.

 

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

 

(e)           Successors
and Assigns.  Except as otherwise provided herein, this
Agreement shall bind and inure to the benefit of and be enforceable by the
Executive 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 be
assigned without the prior written consent of the Company.  The Company will request any successor to all
or substantially all assets of the Company upon a Liquidation Event of the type
specified in clause (a) thereof to assume expressly and agree to perform
this Agreement in the same manner and to the same extent that the Company would
be required to perform it if no such succession had taken place.  If such successor shall not so assume the
performance thereof or if the Executive does not consent to such assignment,
then the Executive’s sole recourse under this Agreement with respect to such
event shall be to effect a Resignation for Good Reason, effective immediately
prior to the consummation of such Liquidation Event; provided, however,
that such Resignation for Good Reason shall not be effective if such
Liquidation Event shall not be consummated. 
Any successor to the assets of the Company which so assumes or agrees to
perform this Agreement with the consent of the Executive shall be liable under
this Agreement as if such successor were the Company.

 

(f)            Payments
to Beneficiary.  If the Executive dies before receiving
amounts to which the Executive is entitled under this Agreement, such amounts
shall be paid in accordance with the terms of this Agreement to the beneficiary
designated in writing by the Executive, or if none is so designated, to the
Executive’s estate.

 

(g)           Survival
of the Executive’s Rights.  All of the Company’s and Executive’s rights
hereunder shall survive any termination of the relationship of the Executive
with the 

 

17

 

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

 

(h)           Amendment
and Waiver.  The provisions of this Agreement may be
amended and waived only with the prior written consent of the Company and the
Executive, and no course of conduct or failure or delay in enforcing the
provisions of this Agreement shall affect the validity, binding effect or
enforceability of this Agreement or any provision hereof.

 

(i)            Governing
Law.  This Agreement shall be governed by and
construed in accordance with the domestic laws of the State of Illinois without
giving effect to any choice or conflict of law provision or rule that
would cause the application of the laws of any jurisdiction other than the
State of Illinois.

 

(j)            Selection
of Jurisdiction.  WITH RESPECT TO ANY LAWSUIT OR PROCEEDING
ARISING OUT OF OR BROUGHT WITH RESPECT TO THIS AGREEMENT, EACH OF THE PARTIES
HERETO IRREVOCABLY (a) SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE UNITED
STATES FEDERAL COURTS LOCATED IN CHICAGO, ILLINOIS; (b) WAIVES ANY
OBJECTION IT MAY HAVE AT ANY TIME TO THE LAYING OF VENUE OF ANY PROCEEDING
BROUGHT IN ANY SUCH COURT; (c) WAIVES ANY CLAIM THAT SUCH PROCEEDING HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM; AND (d) FURTHER WAIVES THE RIGHT TO
OBJECT, WITH RESPECT TO SUCH PROCEEDINGS, THAT SUCH COURT DOES NOT HAVE
JURISDICTION OVER SUCH PARTY.

 

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

 

(l)            Mutual
Contribution.  The parties to this Agreement and their
counsel have mutually contributed to its drafting.  Consequently, no provision of this Agreement
shall be construed against any party on the ground that one party drafted the
provision or caused it to be drafted.

 

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

 

18

 

IN WITNESS WHEREOF, the parties
hereto have executed this Employment Agreement on and to be effective as of the
dates 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

  
				

 

19

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00146-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00146-of-00352.parquet"}]]