Document:

Exhibit 10.17

 

EMPLOYMENT AGREEMENT

 

dated as of

 

November 1, 2008, between

 

AEP INDUSTRIES INC.,

 

a Delaware corporation (the “Company”), and

 

LINDA GUERRERA

 

(the “Executive”).

 

 

EMPLOYMENT AGREEMENT

 

This
Employment Agreement, dated November    , 2008 by and between AEP INDUSTRIES,
INC., a Delaware corporation having its offices at 125 Phillips Avenue, South
Hackensack, New Jersey 07606 (the “Company”), and LINDA GUERRERA (the “Executive”), presently residing at 20 Powderhorn Drive, Wayne, New Jersey 07470, is
entered into and shall be effective as of November 1, 2008 (the “Effective Date”).

 

RECITALS

 

The
Executive is an employee of the Company; and

 

The
Company desires to continue to employ Executive upon the terms and conditions
set forth in this Agreement, and Executive desires to accept such continuation
of employment.

 

Accordingly,
in consideration of the mutual promises contained herein, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound hereby, the parties hereto
agree as follows:

 

Section 1.               Employment; Term.

 

(a)           Employment. Subject to Section 3, commencing as of the Effective Date, the
Company hereby agrees to continue to employ Executive, and Executive hereby
agrees to continue to be employed by the Company, in accordance with the terms
and provisions of this Agreement.

 

(b)           Term. The initial term of this Agreement shall be a period of one (1) year
(the “Initial Term”). Thereafter this Agreement shall be extended for
successive periods of one (1) year each from the Effective Date (each an
“Extended Term” and together with the Initial Term the “Term”) unless either
party gives written notice to the other at least one hundred (180) days before
the expiration of the Initial Term or the then current Extended Term that it
does not wish to extend this Agreement beyond the last day of the current Term.

 

Section 2.               Terms of Employment.

 

(a)           Position. During the term of Executive’s employment, Executive shall serve in the
position set forth on the signature page hereto and shall report to the
person or persons set forth on the Executive Data Sheet annexed hereto as Exhibit A. Executive shall have
supervision and control over, and responsibility for, such management and operational
functions of the Company currently assigned to such position, and shall have
such other powers and duties (including holding officer positions with the
Company and one or more subsidiaries of the Company) as may from time to time
be prescribed by the person or persons to whom Executive will report, so long
as such powers and duties are reasonable and customary for such position of an
enterprise comparable to the Company. The primary person(s) that Executive
reports to shall be such person(s) as set forth under the label “Reports to” on the Executive Data Sheet annexed hereto as Exhibit A.

 

(b)           Duties. During the term of Executive’s employment, and excluding any periods of
vacation and sick leave to which Executive is entitled, Executive agrees to
devote substantially all of his business time to the business and affairs of
the Company and, to the extent necessary to discharge the responsibilities assigned to Executive hereunder, to use Executive’s reasonable best

 

 

efforts
to perform faithfully, effectively and efficiently such responsibilities.
During the term of Executive’s employment, it shall not be a violation of this
Agreement for Executive to (1) serve on corporate, civic or charitable
boards or committees, (2) deliver lectures or fulfill speaking
engagements, and (3) manage personal investments, so long as such
activities do not interfere with the performance of Executive’s
responsibilities as an employee of the Company in accordance with this
Agreement.

 

(c)           Compensation.

 

(i)             Base
Salary. During the term of Executive’s employment,
Executive shall receive an annual base salary (the “Annual
Base Salary”),  which shall be paid in
accordance with the customary payroll practices of the Company, at least equal
to the base salary set forth on the Executive Data Sheet annexed hereto as Exhibit A. Commencing on November 1, 2008 (the “First Date”), and on each subsequent anniversary
date of the First Date as long as Executive remains an employee of the Company
(the First Date and each subsequent
anniversary of the First Date
being herein referred to as an “Adjustment Date”),  the
Annual Base Salary of Executive in effect on the day preceding the Adjustment
Date shall be increased by (A) the percentage equal to the percentage
increase, if any, in the Consumer Price Index for all Urban Consumers for the
New York-Northeastern New Jersey Metropolitan Area (or any successor Consumer
Price Index) based on data published by the Bureau of Labor Statistics of the
United States Department of Labor for the 12-month period ended on the September 30th immediately preceding the
Adjustment Date over such Consumer Price Index for September 30, in the
year preceding the Adjustment Date, and (B) such additional amount as the
Board of Directors of the Company (the “Board”)  in its
discretion may determine to be appropriate. The result of such increase or
increases to the then current Annual Base Salary shall constitute Executive’s
Annual Base Salary commencing on the Adjustment Date then at hand and
continuing until the next Adjustment Date. Any increase in Annual Base Salary shall not serve to
limit or reduce any other
obligation to Executive under this Agreement. After an Adjustment Date the term
Annual Base Salary as used in this Agreement shall refer to Annual Base Salary as
so increased.

 

(ii)            Bonuses.
In addition to his Base Salary, Executive shall be paid an annual bonus (the “Bonus”)  during
the term of his employment pursuant to the Company’s Management Incentive Plan or any successor thereto (the “MIP”). The Bonus shall be based upon performance
criteria and objectives determined by the Compensation Committee of the Board
in its reasonable discretion and approved by the Board. All Bonuses shall
become payable on a date reasonably determined by the Company after the Company
finally determines with respect to Executive that the Company has achieved the
applicable performance criteria and objectives under the MIP, and the amount of
the Bonus shall be paid to Executive promptly thereafter.

 

(iii)           Benefits.
The Company shall provide Executive during the term of his employment hereunder
with coverage under all employee pension and compensation programs, plans and
practices (commensurate with his positions in the Company and to the extent
permitted under any employee benefit plan) in accordance with the terms
thereof, which the Company makes available to its senior executives. During the
term of Executive’s employment,
Executive shall be entitled to
receive, in addition to the benefits described above, such perquisites and
fringe benefits appertaining to his position in accordance with any practice
existing at the Company prior to the Effective Date or as subsequently changed
by the Board, which perquisites and fringe benefits will be consistent with
past practice. The Executive shall also be entitled to an additional perquisite
allowance each year in an amount from time to time determined by the Company’s
Compensation Committee in order to cover expenses not covered by the Company’s

 

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business
expense reimbursement policy.

 

(iv)            Expenses. During the term of Executive’s employment,
Executive shall be entitled to receive reimbursement for all reasonable
employment expenses incurred by Executive in accordance with the policies, practices
and procedures of the Company, including, without limitation, expenses for
travel and similar items related to such duties and responsibilities. The
Company will reimburse Executive for all such expenses upon presentation by
Executive from time to time of appropriately itemized and approved (consistent
with the Company’s policy) accounts of such expenditures.

 

(v)             Vacation: During the term of Executive’s employment,
Executive shall be entitled to such number of days of paid vacation as set
forth under the label “Vacation Days” on the Executive Data Sheet annexed
hereto as Exhibit A, to be taken in
accordance with the existing policies of the Company and past practice. Any
paid vacation shall be taken at such times as are consistent with Executive’s
responsibilities hereunder. Unless otherwise approved by the Company, any
vacation days not taken in any calendar year shall be forfeited without payment
thereof as permitted by applicable law. No such vacation days shall be
forfeited to the extent that such vacation days are not taken at the request of
the Company.

 

(vi)            Stock
Options etc. In addition to
any benefits Executive may receive hereunder, the Company may, from time to
time, grant Executive stock options exercisable for shares of common stock of
the Company or restricted stock, stock appreciation rights or performance
awards under the Company’s then current Stock Option Plan (the “Executive Options”), and such Executive
Options shall be of such kind, in such number and have such terms and
provisions as may be determined appropriate by the Board or Stock Option
Committee thereof.

 

(vii)           Witholding. The Company shall be entitled to withhold
from payment any amount of withholding required by law as the Company may
reasonably determine.

 

(d)           Director’s and Officer’s Liability Insurance. The Company shall use all commercially
reasonably efforts to obtain and maintain a director’s and officer’s liability
insurance policy during the term of Executive’s employment covering Executive
on commercially reasonable terms, and the amount of coverage shall be
reasonable in relation to Executive’s position and responsibilities hereunder;
provided, however, that such coverage may be reduced or eliminated to the
extent that the Company reduces or eliminates coverage for its directors and
executives generally.

 

Section 3.               Termination of Employment.

 

(a)           Death or Disability. Executive’s employment shall terminate
automatically upon Executive’s death. If Executive becomes Disabled during the
Employment Period (pursuant to the definition of Disability set forth below),
the Company may give to Executive written notice in accordance with Section 10(g) of
its intention to terminate Executive’s employment on the date specified in such
notice. In such event, Executive’s employment with the Company shall terminate
effective on such specified
date, which date shall be at
least on thirty (30) days after receipt of such notice by Executive (the “Disability Effective Date”), prior to the Disability Effective Date, Executive shall not have
returned to full-time performance of Executive’s duties. For purposes of this
Agreement, “Disability”  means, with respect to Executive, Executive’s
inability to perform the duties and obligations required by Executive’s job by
reason of any medically determined physical or mental impairment, as determined
in accordance with the

 

3

 

provisions
of the long term disability coverage under the AEP Industries Inc. Long Term
Disability Plan (the “AEP
Disability Plan”), if Executive has elected coverage thereunder,
provided, however, that if Executive has not elected long term disability
coverage under the AEP Disability Plan, then “Disability”  shall mean, with respect to Executive, any
medically determined physical or mental impairment by the Compensation
Committee of the Company or its insurers and acceptable to Executive or
Executive’s legal representative that prevents Executive from performing the
duties and obligations required by Executive’s job for more than ninety (90)
days during a period of one hundred and eight (180) consecutive days.

 

(b)           Cause. Executive’s employment
may be terminated at any time by the Company for Cause or without Cause. For
purposes of this Agreement, “Cause”  shall mean an Executive’s (i) commission of a crime of moral
turpitude or a felony that involves financial misconduct or moral turpitude or
has resulted, or reasonably could be expected to result, in any adverse
publicity regarding Executive or the Company or economic injury to the Company,
(ii) dishonesty or willful commission or omission of any action that has
resulted, or reasonably could be expected to result, in any adverse publicity
regarding Executive or the Company or has caused, or reasonably could be
expected to cause, demonstrable and serious economic injury to the Company, or (iii) material
breach of this Agreement or any other agreement entered into between Executive
and the Company or any of its subsidiaries or Affiliates (other than as a
result of the Disability of Executive or other factors outside of Executive’s
control) after notice and a reasonable opportunity to cure (if such breach can
be cured). For purposes of this Agreement, “without Cause”  shall mean a termination by the Company of
Executive’s employment during the Employment Period for any reason other than a
termination based upon Cause, death or Disability. For purposes hereof, no act
or omission shall be considered willful unless committed in bad faith or
without a reasonable belief that the act or omission was in the best interests
of the Company or any of its Affiliates. For purposes of this Agreement, “Affiliate”
of the Company
means a Person (as defined below) that directly or indirectly through one or
more intermediaries, controls, or is controlled by, or is under common control
with, the Company. As used in this definition, the term “control,”
including the
correlative terms “controlling,”  “controlled
by”  and “under common control with”
mean the
possession, directly or indirectly, of the power to direct or cause the
direction of management or policies (whether through ownership of securities or
any partnership or other ownership interest, by contract or otherwise) of a
Person. For purposes of this Agreement, “Person”  shall be construed broadly and shall include,
without limitation, an individual, a partnership, a limited liability company,
a corporation, an association, a joint stock company, a trust, a joint venture,
an unincorporated organization and a governmental entity or any department,
agency or political subdivision thereof.

 

(c)           Good Reason. Executive’s employment
may be terminated at any time by Executive for Good Reason or without Good
Reason. For purposes of this Agreement, “Good Reason”  means voluntary resignation after any of the
following actions are taken by the Company or any of its subsidiaries without
Executive’s consent: (a) any material breach by the Company of any
provision of this Agreement; (b) a significant diminution in the
responsibilities or authority of Executive which are materially inconsistent
with Executive’s position other than (1) an insubstantial and inadvertent
diminution that is remedied by the Company promptly after receipt of written
notice thereof sent by Executive, (2) in connection with the termination
of Executive’s employment for Cause, (3) as a result of Executive’s
Disability, or (4) by Executive other than for Good Reason; (c) a
significant diminution in the Annual Base Salary and Bonus to be paid to
Executive (but not including any diminution related to a broader compensation
reduction that is not limited to any particular employee or executive);
provided, however, that none of the events described in the foregoing clauses
(a), (b) or (c) shall constitute Good Reason unless Executive shall
have notified the Company in writing describing the events which

 

4

 

constitute
Good Reason and then only if the Company shall have failed to cure such events
within (x) in the case of clause (a), fifteen (15) days, or (y) in
the case of clauses (b) or (c), thirty (30) days, after the Company’s receipt of such written notice.

 

(d)             Notice of Termination. Any termination by the Company for Cause or
without Cause, or by Executive for Good
Reason or without Good Reason, shall be communicated by Notice of Termination
to the other party hereto given in accordance with Section 11(g). For
purposes of this Agreement, a “Notice of Termination”  means a written notice which (i) indicates
the specific termination
provision in this Agreement relied upon, (ii) to the extent applicable,
sets forth in reasonable detail
the facts and circumstances claimed to provide a basis for termination of
Executive’s employment under the provision so indicated, and (iii) if the
Date of Termination (as defined below) is other than the date of receipt of
such notice, specifies the termination date (which date shall not be more than
five (5) days after the giving of such notice). The failure by Executive
or the Company to set forth in the Notice of Termination any fact or
circumstance which contributes to a
showing of Good Reason or Cause shall not waive any
right of Executive or the
Company hereunder or preclude Executive or the Company from asserting such fact
or circumstance in enforcing Executive’s or the Company’s rights hereunder.

 

(e)             Date of Termination.  “Date of Termination”  means (i) if Executive’s
employment is terminated by the Company for Cause or without Cause, or by
Executive for Good Reason or
without Good Reason, the date of receipt of the Notice of Termination or any
later date specified therein
pursuant to Section 3(d), as the case may be, and (ii) if Executive’s
employment is terminated by reason of death or Disability, the date of death of
Executive or the Disability
Effective Date, as the case may
be.

 

Section 4.               Obligations
of the Company upon Termination.

 

(a)             With Good Reason; Other Than for Cause, Death
or Disability. If, during
the period commencing with the Effective Date and ending with the termination
of Executive’s employment (the “Employment Period”), (1) the
Company shall terminate Executive’s employment other than for Cause, or (2) Executive
shall terminate his employment for Good Reason or within thirty (30) days
subsequent to a Discontinuation Event, and (3) the termination of Executive’s employment in any case is not due to his death or Disability, then the
Company will provide Executive
with the following severance payments and/or benefits:

 

(i)              The Company shall pay, subject to Section 8, to Executive as a
severance payment an amount equal to two (2) times the sum of (x) the
Annual Base Salary in effect immediately prior to the event giving rise to such
termination and (y) the Bonus earned, if any, for the fiscal year immediately preceding the fiscal year in which
the event giving rise to such termination occurs. The severance payment shall be payable over a period of two (2) years
commencing on the Termination Date (subject to applicable federal and state
withholding taxes, social security contributions, any garnishments, or any
deductions required by law and any other deductions) in accordance with the
ordinary payroll practices of the Company, but no less frequently than
semi-monthly following such termination of employment. In addition, the Company
shall pay to Executive (A) any earned but unpaid Bonus of Executive with respect to the fiscal year preceding this termination, (B) any
earned but unpaid Bonus of Executive with respect to the fiscal year in which his termination occurs,
multiplied by a fraction, (x) the numerator of which is the number of days
during such fiscal year that Executive was employed by the Company, and (y) the
denominator of which is three hundred and sixty-five (365), and (C) amounts
with respect to accrued and unused vacation through the Date of Termination to
the extent not theretofore paid (“Accrued Obligations”); [Q: change re: termination
by the Company

 

5

 

without
Cause, e.g. downsize]

 

(ii)             Solely for purposes of this Section 4(a),
the following defined terms shall have the following meanings:

 

“Discontinuation
Event”  shall
have occurred if the conditions set forth in any one of the following
paragraphs shall have been satisfied:

 

(A)    Any person, corporation or other entity or
group, including any “group”  as defined in Section 13(d)(3) of the Exchange Act of 1934,
as amended, other than (1) those persons in control of the Company on the
Effective Date, (2) any person acting on behalf of the Company in a distribution of stock to the public, or (3) a
trustee or other fiduciary holding securities of the Company under an employee
benefit plan of the Company, becomes the beneficial owner of shares of the
Company having fifty (50%) percent or more of the total number of votes that
may be cast for the election of directors of the Company; or

 

(B)    As the result of, or in connection with, any
tender or exchange offer, merger or other business combination, sale of assets
or contested election, or any combination of the foregoing (a “Transaction”), the
persons who were directors of the Company before the Transaction shall cease to
constitute a majority of the Board of Directors of the Company or any successor
to the Company or its assets; or

 

(C)    If at any time, (1) the Company shall
consolidate with, or merge with, any other Person and the Company shall not be
the continuing or surviving corporation, (2) any Person shall consolidate
with, or merge with, the Company, and the Company shall be the continuing or
surviving corporation and in connection therewith, all or part of the
outstanding Stock shall be changed into or exchanged for stock or other
securities of any other Person or cash or any other property, (3) the
Company shall be a party to a statutory share exchange with any other Person
after which the Company is a Subsidiary of any other Person, or (4) the
Company shall sell or otherwise transfer 50% or more of the assets or earning
power of the Company and its Subsidiaries (taken as a whole) to any Person or
Persons;

 

“Person”  shall have the meaning ascribed to such term in
Section 3(a)(9) of the Exchange Act of 1934, as
amended, and used in
Sections 13(d) and 14(d) thereof, including a “group”  as defined in Section 13(d); and

 

“Subsdiary”  shall mean, a
subsidiary of the Company within the meaning Section 424(f) of Internal
Revenue Code, as amended. .

 

(iii)            After
the Date of Termination, Executive (and Executive’s eligible family members) will be entitled to
continue their participation in the Company’s medical and dental insurance
plans at normal associate contribution rates during the period ending on the
earlier of (A) the last day of the Severance Period and (B) the first
date as of which the Company ceases to be obligated to make such plans
available to Executive under COBRA (the “COBRA Termination Date”). In the event that the date specified in
clause (A) is the earlier date, Executive (and Executive’s eligible family
members) shall be entitled to continue their participation in the Company’s
medical and dental insurance plans during the period from such date until the
COBRA Termination Date by paying the full monthly premiums under these plans.

 

6

 

Except
in the case of a termination by reason of Executive’s death or Disability, the
Company’s obligations to make payments under this Section 4(a) will
be conditioned on Executive executing and delivering a customary general
release reasonably satisfactory to the parties.

 

(b)             Death; Disability; Cause; Other than for Good
Reason. If Executive’s
employment shall be terminated by reason of Executive’s death or Disability, by
the Company for Cause or by Executive without Good Reason, Executive shall only
be entitled to receive (i) any earned but unpaid Annual Base Salary
through the date of the termination event, (ii) any earned but unpaid Bonus of
Executive with respect to the fiscal year preceding his termination, (iii) if
other than Cause, any earned but unpaid Bonus of Executive with respect to the
fiscal year in which his termination occurs, multiplied by a fraction, (x) the
numerator of which is the number of days during such current fiscal year that
Executive was employed by the Company, and (y) the denominator of which is
three hundred and sixty-five (365), (iv) payment of Accrued Obligations to
Executive or his legal representatives in the case of the death or, if
applicable, the Disability of Executive, and (v) the continuance of
benefits under the Company’s employee benefit plans to the Date of Termination
and in the case of death or Disability, the continuance of death or Disability
benefits thereafter in accordance with the terms of such plans and the
Company’s perquisite policies as in effect as of such date. [Company Policy
must be written.]

 

(c)             Company Obligations After Termination. After the termination of Executive’s
employment under Section 4(b) and payment of all amounts due and
provision of all benefits due to Executive pursuant to Section 4(b), the
obligations of the Company under this Agreement to make any further payments or
provide any benefits specified elsewhere in this Agreement (other than benefits
required to be provided by applicable law or under the terms of any employee
benefit of the Company in which the Executive was a participant), shall
thereupon cease and terminate.

 

(d)             Nature of Payments. Notwithstanding anything contained in this Section 4,
all payments under this Section 4 shall be deemed severance payments for
the purpose of Section 8 and may be terminated as therein provided.

 

(e)             Executive’s Obligations after Termination. Executive agrees that at any time after the
Date of Termination he will cooperate with the Company in any litigation
brought by or against the Company at no additional compensation. Executive
shall, however, be entitled to be reimbursed by the Company for his reasonable
costs and expenses in connection with such cooperation.

 

Section 5.               Nondisclosure and Nonuse of Confidential
Information.

 

(a)             Executive shall not disclose or use at any
time, either during the Employment Period or thereafter, any Confidential
Information (as hereinafter defined) of which Executive is or becomes aware,
whether or not such information is developed by him, except (i) to the
extent that such disclosure or use is directly related to, and required by,
Executive’s performance in good faith of duties assigned to Executive by the
Company or (ii) when required to do so by a court of competent
jurisdiction, by any governmental agency having supervisory authority over the
business of the Company, or by any administrative body or legislative body
(including a committee thereof) with jurisdiction to order Executive to
divulge, disclose or make accessible such information, provided that Executive
shall notify the Company promptly upon learning that such event may occur, and,
if the Company shall so request, Executive shall use his reasonable best
efforts (without any additional consideration to be paid to Executive) to
assist the Company in

 

7

 

seeking
a protective order to prevent and/or limit disclosure of such Confidential
Information. Executive will take all appropriate steps to safeguard
Confidential Information in his possession and to protect it against
disclosure, misuse, espionage, loss and theft. Executive shall deliver to the
Company at the termination of the Employment Period, and at any time, either
before or after the Termination Date, as the Company may request, all memoranda,
notes, plans, records, reports, computer tapes and software and other documents
and data (and copies thereof) relating to the Confidential Information or the
Work Product (as hereinafter defined) of the business of the Company or any of
its Affiliates which Executive may then possess or have under his control.

 

(b)             As used in this Agreement, the term “Confidential
Information”  means
information that is not generally known to the public in the context in which
used and that is used, developed or obtained by Executive in the course of
performing his duties for the Company, including, but not limited to,
information, observations and data obtained by Executive while employed by the
Company or any predecessors thereof (including those obtained prior to the date
of this Agreement) concerning (i) the business or affairs of the Company
and its Affiliates (or such predecessors), including without limitation,
financial data, marketing plans, strategic business plans, product development
plans (or other product data), (ii) products or services, (iii) fees,
costs and pricing structures, (iv) designs, (v) analyses, (vi) drawings,
photographs and reports, (vii) computer software, including operating
systems, applications and program listings, (viii) flow charts, manuals and
documentation, (ix) data bases, (x) accounting and business methods,
(xi) inventions, devices, new developments, methods and processes, whether
patentable or unpatentable and whether or not reduced to practice, (xii)
customers and clients and customer or client lists, (xiii) other copyrightable
works, (xiv) all production methods, processes, technology, know how and trade
secrets, and (xv) all similar and related information in whatever form.
Confidential Information will not include any information in the context in
which used that has been published in a form generally available to the public
prior to the date Executive proposes to disclose or use such information.
Confidential Information will not be deemed to have been published merely
because individual portions of the information have been separately published,
but only if all material features comprising such information have been
published in combination.

 

(c)             As used in this Agreement, the term “Work Product”  means
all inventions, innovations, improvements, technical information, systems,
software developments, methods, designs, analyses, drawings, reports, service
marks, trademarks, trade names, logos and all similar or related information (whether patentable or
unpatentable) which relates to the Company’s or any of its Affiliates’ actual
or anticipated business, research and development or existing or future
products or services and which are conceived, developed or made by Executive
(whether or not during usual business hours and whether or not alone or in
conjunction with any other person) while employed (and for the Restricted
Period (as defined below) if and to the extent such Work Product results from
any work performed for the Company, any use of the Company’s premises or
property or any use of the Company’s Confidential Information) by the Company
(including those conceived, developed or made prior to the date of this
Agreement) together with all patent applications, letters patent, trademark,
trade name and service mark applications or registrations, copyrights and
reissues thereof that may be granted for or upon any of the foregoing.

 

Section 6.               Non-Solicitation: Non-Compete.

 

(a)             During the period commencing on the Effective
Date and ending on the latter of (x) second anniversary of the Termination
Date or (y) the first anniversary of the date on which Executive ceases to
receive any payments from the Company or any of its Affiliates related to
salary, bonus or severance (the “Restricted Period”), Executive
shall not directly or indirectly through another Person (i) induce or
attempt to induce anyone who was engaged or employed by

 

8

 

the
Company or any Affiliate of the Company to leave the employ or engagement of
the Company or such Affiliate, or in any way interfere with the relationship
between the Company or any such Affiliate, on the one hand, and any such person
thereof, on the other hand, (ii) hire any person who was engaged or
employed by the Company or any Affiliate of the Company at any time until
twenty-four (24) months after such individual’s employment relationship or
engagement with the Company or such Affiliate has been terminated, or (iii) induce
or attempt to induce any customer, supplier, licensee or other business
relation of the Company or any Affiliate of the Company to cease doing business
with the Company or such Affiliate, or in any way interfere with the
relationship between any such customer, supplier, licensee or business
relation, on the one hand, and the Company or any Affiliate, on the other hand.
Executive further agrees that, during the period of his employment and
thereafter during the restricted period, Executive will not disparage the
Company or any of its Affiliates or any of employee of the Company or its Affiliates
in any manner whatsoever

 

(b)             Executive acknowledges that in the course of
his employment with the Company and/or its Affiliates and their predecessors,
he has become familiar, or will become familiar, with the Company’s and its
Affiliates’ and their predecessors’ trade secrets and with other Confidential
Information concerning the Company, its subsidiaries or Affiliates and their
respective predecessors and that his services have been and will be of special,
unique and extraordinary value to the Company, its subsidiaries and its
Affiliates. Therefore, Executive agrees that, during the Restricted Period,
Executive shall not directly or indirectly, engage in the production, sale or
distribution of any product produced, sold or distributed by the Company, its
subsidiaries or its or Affiliates on the Effective Date or during the
Restricted Period in the same geographic areas in which the Company, its
subsidiaries or any of its Affiliates is doing business. For purposes of this
Agreement, the phrase “directly or
indirectly engage in”  shall include any direct or indirect
ownership or profit participation interest in such enterprise, whether as an
owner, stockholder, partner, principal, manager, agent, consultant, officer,
investor, lender, joint venturer of or otherwise in any capacity whatsoever,
and shall include any direct or indirect participation in such enterprise as an
employee, consultant, licensor of technology or otherwise. Nothing herein shall
prohibit Executive from being a passive owner of not more than two (2%) percent
of the outstanding stock or ownership interest of any class of a corporation or
other entity which is publicly traded, so long as Executive has no active
participation in the business or management of such corporation or other entity.

 

(c)             Executive understands that the foregoing
restrictions may limit his ability to earn a livelihood in a business similar
to the business of the Company and any of its subsidiaries and Affiliates, but
he nevertheless believes that he has received and will receive sufficient
consideration and other benefits as an employee of the Company and as otherwise
provided hereunder or as described
in the recitals hereto to clearly justify such restrictions which, in any event
(that given his education, skills and ability), Executive does not believe
would prevent him from otherwise earning a living. Executive has carefully
considered the nature and extent of the restrictions placed upon him by this
Agreement, and hereby acknowledges and agrees that the same are reasonable in
time and territory and do not confer a benefit upon the Company
disproportionate to the detriment of Executive.

 

Section 7.               Enforcement.

 

Because
Executive’s services are unique and because Executive has access to
Confidential Information and Work Product, and because Executive acknowledges
that any breach of the covenants contained in Section 6 would irreparably
injure the Company, the parties hereto agree that money damages would be an
inadequate remedy for any  breach of this

 

9

 

Agreement.
Therefore, in the event of a breach or threatened breach of this Agreement, the
Company or its successors or assigns may, in addition to other rights and
remedies existing in their favor at law or in equity, 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, the provisions hereof
(without posting a bond or other security) or require Executive to account for
and pay over to the Company all compensation, profits, moneys, accruals,
increments or other benefits derived from or received as a result of any
transactions constituting a breach of the covenants contained herein in this
Agreement, if and when final judgment of a court of competent jurisdiction is
so entered against Executive.

 

Section 8.               Severance Payments.

 

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 Executive
violates any provision of the foregoing Section 5 or 6, any severance payments then or thereafter due from the
Company to Executive under Section 4
or otherwise shall be terminated forthwith, and the Company’s obligation to
pay, and Executive’s right to receive, such severance payments shall terminate
and be of no further force or effect, if and when determined by a court of
competent jurisdiction, in each case without limiting or affecting Executive’s
obligations under such Sections 5 and 6 or the Company’s other rights and
remedies available at law or equity.

 

Section 9.               Executive’s Representations, Warranties and
Covenants.

 

(a)           Executive hereby represents and warrants to
the Company that:

 

(1)           Executive has all requisite power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby,
and this Agreement has been duly
executed by Executive;

 

(2)           the execution, delivery and performance of
this Agreement by Executive does not and will not, with or without notice or
the passage of time, conflict with, breach, violate or cause a default under
any agreement, contract or instrument to which Executive is a party or any
judgment, order or decree to which Executive is subject;

 

(3)           Executive is not a party to or bound by any
employment agreement, consulting agreement, non-compete agreement,
non-solicitation agreement, confidentiality agreement or similar agreement with
any other Person;

 

(4)           upon the execution and delivery of this
Agreement by the Company and Executive, this Agreement will be a legal,
valid and binding obligation of Executive, enforceable in accordance with its
terms;

 

(5)           Executive is a continuing employee of the
Company or one of its Affiliates; and

 

(6)           Executive understands that the Company will
rely upon the accuracy and truth of the representations and warranties of
Executive set forth herein, and Executive consents to such reliance.

 

10

 

Section 10.             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 under any present or future law, and if
the rights and obligations of any party under this Agreement will not be
materially and adversely affected thereby, such provision, as to such
jurisdiction, shall be ineffective, without invalidating the remaining
provisions of this Agreement or affecting the validity or enforceability of
such provision in any other jurisdiction; furthermore, in lieu of such invalid
or unenforceable provision there will be added automatically as a part of this
Agreement, a legal, valid and enforceable provision as similar in terms to such
invalid or unenforceable provision as may be possible. 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)           Entire Agreement. Each party acknowledges and agrees that,
except as expressly set forth herein, no representations, warranties, promises
or statements of any kind or character have been made to them by each other, or
their agents, representatives or attorneys, to induce the execution of this Agreement. This Agreement,
together with the Executive Data Sheet annexed hereto as Exhibit A
and such other employee benefits that Executive has on the Effective Date,
constitute the entire agreement between the parties with respect to the subject
matter hereof and supersedes all prior agreements, commitments, arrangements,
negotiations or undertakings, whether oral or written, between the parties with
respect to its subject matter. No changes, amendments, waivers or modifications
to this Agreement shall be valid, unless made by a written instrument that
expressly refers to the relevant provision of this Agreement and that is
executed by all parties in the case of any changes or modifications and by the
party against whom enforcement is sought in the case of any discharge or waiver
and then only to the specific purpose, extent and instance so provided. This
Agreement shall be deemed to have been jointly drafted and, in construing and
interpreting this Agreement, no provision shall be construed or interpreted for
or against any party because such party prepared or requested such provision.

 

(c)           Successors and Assigns.

 

(i)            This Agreement is personal to Executive and
without the prior written consent of the Company shall not be assignable by
Executive otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by Executive’s legal
representatives or estate upon Executive’s death or, if applicable, Disability.

 

(ii)           This Agreement shall inure to the benefit of
and be binding upon the Company and its successors and assigns. The Company
will require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or
assets of the Company 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. As used in this Agreement, “Company”
shall mean the
Company as hereinbefore defined and any successor to its business and/or assets
as aforesaid which assumes and agrees to perform this Agreement by operation of
law, or otherwise.

 

11

 

(d)           Governing Law. THIS AGREEMENT WILL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW JERSEY, WITHOUT
GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICTING PROVISION OR RULE (WHETHER OF
THE STATE OF DELAWARE OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE LAWS OF
ANY JURISDICTION OTHER THAN THE STATE OF NEW JERSEY TO BE APPLIED. IN
FURTHERANCE OF THE FOREGOING, THE INTERNAL LAW OF THE STATE OF NEW JERSEY WILL
CONTROL THE INTERPRETATION AND CONSTRUCTION OF THIS AGREEMENT, EVEN IF UNDER
SUCH JURISDICTION’S CHOICE OF LAW OR CONFLICT OF LAW ANALYSIS, THE SUBSTANTIVE
LAW OF SOME OTHER JURISDICTION WOULD ORDINARILY APPLY.

 

(e)           Remedies. Each of the parties to this Agreement and any such person or entity
granted rights hereunder whether or not such person or entity is a signatory
hereto shall be entitled to enforce its rights under this Agreement
specifically to recover damages and costs for any breach of any provision of
this Agreement and to exercise all other rights existing in its favor. The
parties hereto agree and acknowledge that money damages may not be an adequate
remedy for any breach of the provisions of this Agreement and that the Company
may in its sole discretion apply to any court of law or equity of competent
jurisdiction for specific performance and/or other injunctive relief (without
posting any bond or deposit) in order to enforce or prevent any violations of
the provisions of this Agreement. Each party shall be responsible for paying
its own attorneys’ fees, costs and other expenses pertaining to any such action
for and enforcement, regardless of whether an award or finding or any judgment
or verdict thereon is entered against Executive. [Q-add: except that Executive
shall be entitled to be reimbursed for his reasonable legal fees if he is
successful in enforcing the provisions requiring payment by the Company.]

 

(f)            Amendment and Waiver. The provisions of this Agreement may be
amended and waived only with the prior written consent of the Company and
Executive. The failure of any party to insist upon strict performance of any
provision hereof, irrespective of the length of time for which such failure
continues, shall not be a waiver of such party’s right to demand strict
compliance in the future, and no consent or waiver, express or implied, to any
breach or default in the performance of any obligation hereunder shall
constitute a consent or waiver to any other breach or default in the
performance of the same or any other obligation hereunder.

 

(g)           Notices. All notices, requests, demands, claims, consents and other
communications required or permitted to be given in this Agreement must be in
writing and must be either personally delivered, transmitted via telecopier,
mailed by certified or registered mail (postage prepaid and return receipt
requested) or sent by reputable overnight courier service (charges prepaid) to
the recipient at the address below indicated or at such other address or to the
attention of such other person as the recipient party has specified by prior
written notice to the sending party. Notices will be deemed to have been given
hereunder and received when delivered personally, when received if transmitted
via telecopier, five (5) days after deposit in the U.S. mail and one (1) day
after deposit with a reputable overnight courier service.

 

If
to the Company, to:

 

AEP
Industries Inc.

125
Phillips Avenue

South
Hackensack, NJ 07606-1546

Facsimile:
(201) 807-6801

Attention:
Paul M. Feeney

Executive
Vice President, Finance

 

12

 

with
a copy (which shall not constitute notice) to:

 

Warshaw
Burstein Cohen Schlesinger & Kuh, LLP

555
Fifth Avenue

New
York, New York 10017

Facsimile:
(212) 972-9150

Attention:
Paul E. Gelbard, Esq.

 

If
to Executive, to Executive’s address set forth on the signature page hereto.

 

(h)           Survival of Representations, Warranties and
Agreements. All
representations, warranties and agreements contained herein shall survive the
consummation of the transactions contemplated hereby indefinitely.

 

(i)            Descriptive Headings; Counterparts. The descriptive headings of this Agreement
are inserted for convenience only and do not constitute a part of this Agreement.
This Agreement may be executed in separate counterparts, each of which is
deemed to be an original and all of which taken together constitute one and the
same agreement.

 

(j)            Construction. Where specific language is used to clarify
by example a general statement contained herein, such specific language shall
not be deemed to modify, limit or restrict in any manner the construction of
the general statement to which it relates. The language used in this Agreement
shall be deemed to be the language chosen by the parties to express their
mutual intent, and no rule of strict construction shall be applied against
any party.

 

(k)           Nouns and Pronouns. 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.

 

(l)            Further Assurances. Executive agrees to do such further acts
and things, and to execute and deliver such additional conveyances,
assignments, agreements and instruments, as the Company may at any time
reasonably request in connection with the administration and enforcement of
this Agreement or in order better to assure and confirm unto the Company its
rights and remedies hereunder.

 

(m)          Acknowledgements. Executive has carefully read and considered
all of the terms and conditions of the Agreement, including the restraints and
obligations imposed upon Executive under Sections 5 and 6 of this Agreement.
Executive agrees that said restraints and obligations are necessary for the
reasonable and proper protection of the Company and its Affiliates, and that
each and every one of the restraints and obligations is reasonable in respect
to subject matter, length of time and otherwise.

 

Executive
has had an opportunity to consult with independent counsel with respect to the
execution of this Agreement and Executive has made such investigation of the
facts pertaining to this Agreement and of all the matters pertaining hereto as
Executive deem necessary or appropriate.

 

(n)           Acceptance of Offer; Reservation of Rights to
Withdraw Offer. By executing
the enclosed counterpart of this Agreement where indicated and returning it to
the Company, Executive hereby accepts the Company’s offer of continued employment and agrees to all terms and
conditions of this Agreement. Until such execution, the Company hereby reserves
all rights to withdraw its offer of employment to Executive pursuant to this
Agreement.

 

13

 

(o)           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.

 

IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date
first written above.

 

	
   

  	
  AEP INDUSTRIES INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Paul
  M. Feeney

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  LINDA GUERRERA, Executive

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Signature:

  	
  /s/ Linda Guerrera

  
				

 

14

 

EXHIBIT A

 

Executive Data Sheet for Signature Page

 

	
  Name

  	
   

  	
  Linda
  Guerrera

  
	
   

  	
   

  	
   

  
	
  Address

  	
   

  	
  [Address]

  
	
   

  	
   

  	
   

  
	
  Annual
  Base Salary (Fiscal 2009)

  	
   

  	
  $200,018

  
	
   

  	
   

  	
   

  
	
  Position

  	
   

  	
  Vice
  President, Finance and Controller

  
	
   

  	
   

  	
   

  
	
  Reports
  to

  	
   

  	
  Executive
  Vice President, Finance/CFO

  
	
   

  	
   

  	
   

  
	
  Vacation
  Days

  	
   

  	
  20
  days

  

 

15Exhibit
10.18

 

Form of Amendment to
Employment Agreement (Section 409A)

 

December 23,
2008

 

[Name/Address]

 

Dear
_____________:

 

Reference
is made to that Employment Agreement, dated as of November 1, 2004,
between you and AEP Industries, Inc. (the “Employment
Agreement”) which is hereby amended as provided below.  Capitalized terms used but not defined in
this letter shall have the meaning specified in the Employment Agreement.

 

1.                                       The third sentence of Section 2(c)(ii) of
the Employment Agreement shall be deleted and replaced with the following
sentence:

 

All Bonuses shall be paid at the time specified in
the MIP.

 

2.                                       The following sentence shall be added at the
end of Section 2(c)(iii) of the Employment Agreement:

 

Any additional perquisite allowance for a year shall
be paid by the Company to Executive no later than March 15 of the
following calendar year.

 

3.                                       The following shall be added at the end of Section 2(c)(iv) of
the Employment Agreement:

 

The reimbursement policies, practices and procedures
applicable to Executive shall be the most favorable policies, practices and
procedures of the Company relating to reimbursement of employment expenses
incurred by Company directors, officers or employees in effect at any time
during the 12 month period preceding the date Executive incurs the
expenses.  Any employment expense
reimbursement shall be made no later than the last day of the calendar year
following the calendar year in which the Executive incurs the expense, the
expense reimbursement for any calendar year shall not affect the expenses
eligible for reimbursement in any other calendar year, and Executive’s right to
expense reimbursement cannot be liquidated or exchanged for any other benefit.

 

 

4.                                       Section 4(a)(i) of the Employment
Agreement shall be deleted and replaced with the following:

 

(i)                                    The Company shall pay, subject to Section 8,
to Executive as a severance payment an amount equal to two (2) times the
sum of (x) the Annual Base Salary in effect immediately prior to the event
giving rise to such termination and (y) the Bonus earned, if any, for the
fiscal year immediately preceding the fiscal year in which the event giving
rise to such termination occurs.  Except
as otherwise provided in this  Employment Agreement, the severance
payment shall be payable in equal pro rata installments over a period of
two (2) years commencing on the Termination Date (subject to applicable
federal and state withholding taxes, social security contributions, any
garnishments, or any deductions required by law and any other deductions) in
accordance with the ordinary payroll practices of the Company, but no less
frequently than semi-monthly following such termination of employment.  In addition, the Company shall pay to
Executive (A) any earned but unpaid Bonus of Executive with respect to the
fiscal year preceding the termination payable at the time specified in the
MIP, (B) any earned but unpaid Bonus of Executive with respect to the
fiscal year in which his termination occurs payable at the time and
calculated in the manner  specified in the MIP, and (C) amounts
with respect to accrued and unused vacation through the Date of Termination to
the extent not theretofore paid (“Accrued Obligations”).

 

5.                                       Section 4(b) of the Employment
Agreement shall be deleted and replaced with the following:

 

(b)                                Death; Disability; Cause; Other than for Good
Reason.  If Executive’s employment shall be terminated
by reason of Executive’s death or Disability, by the Company for Cause or by
Executive without Good Reason, Executive shall only be entitled to receive (i) any
earned but unpaid Annual Base Salary through the date of the termination event,
payable in  accordance with the ordinary
payroll practices of the Company, (ii) any earned but unpaid Bonus of
Executive with respect to the fiscal year preceding his termination, payable
at  the time specified in the MIP, (iii) if other than Cause,
any earned but unpaid Bonus of Executive with respect to the fiscal year in
which his termination occurs calculated in the manner and payable at the
time specified in the MIP, (iv) payment of Accrued Obligations to
Executive or his legal representative in the case of the death or, if
applicable, the Disability of Executive, and (v) the continuance of
benefits under the Company’s employee benefit plans to the Date of Termination
and in the case of death or Disability, the continuance of death or Disability
benefits thereafter in accordance with the terms of such plans and the Company’s
perquisite policies as in effect as of such date.

 

2

 

6.                                       The following sentence shall be added at the
end of Section 4(e) of the Employment Agreement:

 

Any such reimbursement shall be made no later than
the last day of the calendar year following the calendar year in which the Executive
incurs the costs and expenses, the reimbursement for any calendar year shall
not affect the costs and expenses eligible for reimbursement in any other
calendar year, and Executive’s right to reimbursement cannot be liquidated or
exchanged for any other benefit.

 

7.                                       A new Section 11 shall be added to the
Employment Agreement as follows:

 

Section 11.                                      Code Section 409A Compliance

 

(a)                                 The intent of the parties is that payments
and benefits under this Agreement comply with Internal Revenue Code Section 409A
and the regulations and guidance promulgated thereunder (collectively “Code  Section 409A”)
and, accordingly, to the maximum extent permitted, this Agreement shall be
interpreted to be in compliance therewith. In no event whatsoever shall the
Company be liable for any additional tax, interest or penalty that may be
imposed on Executive by Code Section 409A or damages for failing to comply
with Code Section 409A.

 

(b)                                In the event that any provision of this
Agreement is determined by the Company or Executive to not comply with Code Section 409A,
the Company shall fully cooperate with Executive to reform this Agreement to
correct such noncompliance to the extent permitted under any guidance,
procedure, or method promulgated by the Internal Revenue Service now or in the
future that provides for such correction as a means to avoid or mitigate any
taxes, interest, or penalties that would otherwise be incurred by Executive on
account of such noncompliance.

 

(c)                                 A termination of employment shall not be
deemed to have occurred for purposes of any provision of this Agreement
providing for the payment of any amounts or benefits upon or following a
termination of employment unless such termination is also a “separation from
service” within the meaning of Code Section 409A and, for purposes of any
such provision of this Agreement, references to a “termination,” “termination
of employment” or like terms shall mean “separation from service.” 

 

3

 

(d)                                Notwithstanding any other payment schedule
provided herein to the contrary, if Executive is deemed on the date of
termination to be a “specified employee” within the meaning of that term under
Code Section 409A(a)(2)(B). then each of the following shall apply:

 

(i)                                     With regard to any payment that is considered
deferred compensation under Code Section 409A payable on account of a “separation
from service,” such payment shall be made on the date which is the earlier of (A) the
expiration of the six (6)-month period measured from the date of such “separation
from service” of Executive, and (B) the date of Executive’s death (the “Delay Period”) to the extent
required under Code Section 409A. Upon the expiration of the Delay Period,
all payments delayed pursuant to this Section (whether they would have
otherwise been payable in a single sum or in installments in the absence of
such delay) shall be paid to Executive in a lump sum, and all remaining
payments due under this Agreement shall be paid or provided in accordance with
the normal payment dates specified for them herein; and

 

(ii)                                  To the extent that any benefits to be
provided during the Delay Period are considered deferred compensation under
Code Section 409A provided on account of a “separation from service,” and
such benefits are not otherwise exempt from Code Section 409A, Executive
shall pay the cost of such benefits during the Delay Period, and the Company
shall reimburse Executive (to the extent that such costs would otherwise have
been paid by the Company or to the extent that such benefits would otherwise
have been provided by the Company at no cost to Executive) the Company’s share
of the cost of such benefits upon expiration of the Delay Period, and any
remaining benefits shall be reimbursed or provided by the Company in accordance
with the procedures specified herein.

 

(e)                                 To the extent that severance payments or
benefits pursuant to this Agreement are conditioned upon execution and delivery
by Executive of a release of claims, Executive shall forfeit all rights to such
payments and benefits unless such release is signed and delivered (and no
longer subject to revocation, if applicable) within sixty (60) days following
the date of Executive’s termination of employment. If the foregoing release is
executed and delivered and no longer subject to revocation as provided in the
preceding sentence, then the following shall apply: 

 

4

 

(i)                                     To the extent any such cash payment or
continuing benefit to be provided is not “deferred compensation” for purposes
of Code Section 409A, then such payment or benefit shall commence upon the
first scheduled payment date immediately after the date the release is executed
and no longer subject to revocation (the “Release Effective
Date”). The first such cash payment
shall include payment of all amounts that otherwise would have been due prior
to the Release Effective Date under the terms of this Agreement applied as
though such payments commenced immediately upon Executive’s termination of
employment. and any payments made thereafter shall continue as provided herein.
The delayed benefits shall in any event expire at the time such benefits would
have expired had such benefits commenced immediately following Executive’s
termination of employment.

 

(ii)                                  To the extent any such cash payment or
continuing benefit to be provided is “deferred compensation” for purposes of
Code Section 409A, then such payments or benefits shall be made or
commence upon the sixtieth (60) day following Executive’s termination of employment.
The first such cash payment shall include payment of all amounts that otherwise
would have been due prior thereto under the terms of this Agreement had such
payments commenced immediately upon Executive’s termination of employment, and
any payments made thereafter shall continue as provided herein. The delayed
benefits shall in any event expire at the time such benefits would have expired
had such benefits commenced immediately following Executive’s termination of
employment.

 

The Company may provide, in its sole discretion,
that Executive may continue to participate in any benefits delayed pursuant to
this Section during the period of such delay, provided that Executive
shall bear the full cost of such benefits during such delay period. Upon the date
such benefits would otherwise commence pursuant to this Section, the Company
may reimburse Executive the Company’s share of the cost of such benefits, to
the extent that such costs would otherwise have been paid by the Company or to
the extent that such benefits would otherwise have been provided by the Company
at no cost to Executive, in each case had such benefits commenced immediately
upon Executive’s termination of employment. Any remaining benefits shall be
reimbursed or provided by the Company in accordance with the schedule and
procedures specified herein.

 

5

 

(f)                                   For purposes of Code Section 409A,
Executive’s right to receive any installment payments pursuant to this
Agreement shall be treated as a right to receive a series of separate and
distinct payments.

 

(g)                                Notwithstanding any other provision of this
Agreement to the contrary, in no event shall any payment under this Agreement
that constitutes “deferred compensation” for purposes of Code Section 409A
be subject to offset, counterclaim or recoupment by any other amount payable to
Executive unless otherwise permitted by Code Section 409A.

 

(h)                                Unless this Agreement provides a specified
and objectively determinable payment schedule to the contrary, to the extent
that any payment of base salary or other compensation is to be paid for a
specified continuing period of time beyond the date of Executive’s termination
of employment in accordance with the Company’s payroll practices (or other
similar term), the payments of such base salary or other compensation shall be
made upon such schedule as in effect upon the date of termination, but no less
frequently than monthly or such shorter interval specified herein.

 

The
Employment Agreement, as hereby amended, shall remain in full force and effect.

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  	
   

  
	
   

  	
  AEP Industries Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Its:

  
				

 

The
Above Is Agreed To

And
Accepted:

 

 

	
   

  	
   

  	
   

  

 

6

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