Exhibit 10.3

 

PACKAGING CORPORATION OF AMERICA

AMENDED AND RESTATED 1999 LONG-TERM EQUITY INCENTIVE PLAN

PERFORMANCE UNIT AGREEMENT-TSR

 

PARTICIPANT:

 

DATE OF GRANT:

June 28, 2019

NUMBER OF PERFORMANCE UNITS:

 

PERFORMANCE PERIOD:

July 1, 2019 to June 30, 2022

 

This Agreement is entered into between Packaging Corporation of America, a
Delaware corporation (the "Company"), and the Participant named above. In
consideration of the mutual covenants hereinafter set forth and for other good
and valuable consideration, the Company and the Participant hereby agree as
follows:

1.

Grant of Performance Units. Subject to the restrictions, terms and conditions of
this Agreement and the Plan Documents (as hereafter defined), the Company hereby
awards to the Participant the number of performance units stated above (the
“Performance Units”).

2.

Governing Documents. This Agreement and the Performance Units awarded hereby are
subject to all the restrictions, terms and provisions of the Amended and
Restated 1999 Long-Term Equity Incentive Plan (the “Plan”) which are herein
incorporated by reference and to the terms of which the Participant hereby
agrees. Capitalized terms used in this Agreement that are not defined herein
shall have the meaning set forth in the Plan.

3.

No Stockholder Rights. The Performance Units will be a book entry credited in
the name of the Participant representing a Full Value Award under the Plan and
are not actual Shares. The Participant will not have the right to vote the
Performance Units.  

4.

Vesting. Except as otherwise provided in the Plan and subject to paragraph 6
hereof, the Participant’s Performance Units covered hereby may (to the extent
not previously forfeited) vest as of the occurrence of a Vesting Date (as
defined on Exhibit A).  The terms and conditions of vesting, and the number of
Shares to be paid out upon vesting, shall be as provided on Exhibit A.  

5.

Forfeiture Upon Separation from Service. Except as provided by the Company’s
Compensation Committee or the Board of Directors, upon the Participant’s
cessation of employment (or provision of other services as permitted under the
Plan) prior to a Vesting Date for any reason, all Performance Units granted
hereunder shall be forfeited.

6.

Recovery of Unearned Compensation. The Performance Units are subject to the
Company’s compensation recovery policy applicable to executive officers as shall
be in effect from time to time.

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7.

Dividend Equivalents.  Dividend equivalents are hereby granted on the
Performance Units, which shall accrue to the extent that dividends are declared
on the Shares of the Company’s common stock as described in your Notice of
Award.

8.

Section 409A Compliance.  It is the intention that this Agreement conform and be
administered in all respects in a manner that complies with Section 409A of the
Code; provided, however, that the Company does not make any representations or
guarantees of the tax treatment of the award under Section 409A or otherwise.

Notwithstanding any provision contained in this Agreement to the contrary, if
(i) any payment hereunder is subject to Section 409A of the Code, (ii) such
payment is to be paid on account of the Participant’s separation from service
(within the meaning of Section 409A of the Code) and (iii) the Participant is a
“specified employee” (within the meaning of Section 409A(a)(2)(B) of the Code),
then such payment shall be delayed, if necessary, until the first day of the
seventh month following the Participant’s separation from service (or, if later,
the date on which such payment is otherwise to be paid under this
Agreement).  With respect to any payments hereunder that are subject to Section
409A of the Code and that are payable on account of a separation from service,
the determination of whether the Recipient has had a separation from service
shall be determined in accordance with Section 409A of the Code.

8.

Miscellaneous.

 

(a)

Modification/ Binding Effect.  The Committee may from time to time modify or
amend this Agreement in accordance with the provisions of the Plan. This
Agreement shall be binding upon and inure to the benefit of the Company and its
successors and assigns and shall be binding upon and inure to the benefit of the
Participant and his or her legatees, distributees and personal representatives.
By signing this Agreement, the Participant acknowledges and expressly agrees
that the Participant has read the Agreement and the Plan and agrees to their
terms.

 

(b)  

No Right to Continued Employment.  Nothing in the Plan or this Agreement shall
interfere with or limit in any way the right of the Company or any of its
Subsidiaries to terminate the Participant’s employment at any time, or confer
upon the Participant any right to continue in the employ of the Company or any
of its Subsidiaries.

 

(c)  

Interpretation.  The Committee shall have full power and discretion to construe
and interpret the Plan (and any rules and regulations issued thereunder) and
this Award.  Any determination or interpretation by the Committee under or
pursuant to the Plan or this Award shall be final and binding and conclusive on
all persons affected hereby.

 

(d)  

Applicable Law.  This Agreement shall be governed by and construed in accordance
with the law of the State of Delaware regardless of the application of rules of
conflict of law that would apply the laws of any other jurisdiction.

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(e)  

Limitation on Rights; No Right to Future Grants; Extraordinary Item of
Compensation.  By entering into this Agreement and accepting the Performance
Units evidenced hereby, the Participant acknowledges: (a) that the Plan is
discretionary in nature and may be suspended or terminated by the Company at any
time; (b) that the Award does not create any contractual or other right to
receive future grants of Awards; (c) that participation in the Plan is
voluntary; (d) that the value of the Performance Units is not part of normal or
expected compensation for purposes of calculating any severance, resignation,
redundancy, end of service payments, bonuses, long-service awards, pension or
retirement benefits or similar payments; and (e) that the future value of the
Stock is unknown and cannot be predicted with certainty.

 

(f)  

Employee Data Privacy.  By entering into this Agreement and accepting the
Performance Units evidenced hereby, the Participant: (a) authorizes the Company,
any agent of the Company administering the Plan or providing Plan recordkeeping
services, to disclose to the Company or any of its affiliates any information
and data the Company requests in order to facilitate the grant of the Award and
the administration of the Plan; (b) waives any data privacy rights the
Participant may have with respect to such information; and (c) authorizes the
Company and its agents to store and transmit such information in electronic
form.

 

(g)  

Consent to Electronic Delivery.  By entering into this Agreement and accepting
the Performance Units evidenced hereby, Participant hereby consents to the
delivery of information (including, without limitation, information required to
be delivered to the Participant pursuant to applicable securities laws)
regarding the Company and the Subsidiaries, the Plan, this Agreement and the
Performance Units via Company web site or other electronic delivery.

 

(k)  

Headings and Captions.  The section and other headings contained in this
Agreement are for reference purposes only and shall not affect the meaning or
interpretation of this Agreement.

 

(l) 

Counterparts.  This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original and all of which together shall
constitute one and the same instrument.

 

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IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by
its officer thereunto duly authorized, and the Participant has hereunto set his
or her hand, all as of the Date of Grant written above.

 

PACKAGING CORPORATION OF AMERICA

 

 

 

 

 

BY:

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Kent Pflederer

Senior Vice President, General Counsel and Secretary

 

EMPLOYEE NAME

 

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Exhibit A

 

Vesting Provisions

 

1. Vesting Date. Vesting Date means, with respect to the vesting of Performance
Units pursuant to this Exhibit A, June 30, 2022, with the amount of Shares to be
paid out to be determined pursuant to paragraph 2 below.  Notwithstanding the
foregoing: (a) in the event of the Participant’s death or termination on account
of Disability, the Vesting Date and amount of Shares to be paid out will be
determined pursuant to paragraph 3 below: and (b) in the event of a Change in
Control, the Vesting Date and amount of Shares to be paid out will be determined
pursuant to paragraph 4 below.   Dividend equivalents shall be paid on all
Shares paid out upon vesting pursuant to Section 7 of the Performance Unit
Agreement.

2. Performance Criterion: The Performance Criterion applicable to the award is
total shareholder return, or “TSR” as more fully described in your Notice of
Award.  In determining the actual number of Shares to be paid out pursuant to
this Exhibit A on the Vesting Date, the Committee will determine the Company’s
TSR over the Performance Period and compare such number against the TSRs for the
companies included in the “Peer Group” defined in your Notice of Award.  The
performance and payout scale is set forth in your Notice of Award.  

Promptly after the end of the Performance Period, and in any event, within 2 ½
months after the end of the Performance Period, the Committee shall determine
the Company’s performance against the Peer Group and the number of Shares to be
paid out upon vesting.  

3.  Vesting Upon Death or Disability.  The Performance Units shall vest in the
event of the Participant’s death or termination on account of Disability prior
to June 30, 2022, in each case as provided below.

In the event of the Participant’s death, the Vesting Date shall be the date of
death, as the case may be; and the number of Shares to be paid out to such
Participant shall equal to the number that would be paid out pursuant to
paragraph 2 based upon performance through the date of death, multiplied by a
fraction the numerator of which is the number of days elapsed in the Performance
Period through and including the date of death and the denominator of which is
the total number of days in the Performance Period.  

In the event of termination on account of Disability prior to June 30, 2022, the
Vesting Date will be June 30, 2022 and the number of Shares to be paid out will
be determined pursuant to paragraph 2 based upon actual performance through the
entire Performance Period multiplied by a fraction the numerator of which is the
number of days elapsed in the Performance Period through and including the date
of termination on account of Disability and the denominator of which is the
total number of days in the Performance Period.

4.  Vesting Upon Change in Control.  Upon a Change in Control prior to June 30,
2022, the Performance Units will vest, with the Vesting Date being the date of
such Change in Control.  In such case, the number of Shares to be paid out will
equal the number that would be paid out pursuant to paragraph 2 based upon
performance through the date of the Change in Control.  The number of Shares to
be paid out pursuant to a Change in Control as determined pursuant to the
previous two sentences shall be defined as the “Change in Control Vest
Amount.”  Notwithstanding the foregoing, the Performance Units will not vest
and  will not be paid out  upon a Change in Control if an award meeting the
following requirements (the “Replacement Award”) is provided in substitution
hereof:  

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(i)

it relates to equity securities of the Company or its successor following the
Change in Control or another entity that is affiliated with the Company or its
successor following the Change in Control and such equity securities are
publicly traded and registered under the Securities Exchange Act of 1934;  

 

(ii)

it has a value at least equal to the value of this award as of the date of the
Change in Control as determined by the Committee, assuming payout at the Change
in Control Vest Amount;

 

(iii)

it does not contain any performance goals and will be paid out at the Change in
Control Vest Amount subject only to continued service with the Company or its
successor following the Change in Control through June 30, 2022.  

 

(iv)

its forfeiture provisions, transfer restrictions and any other restrictions
lapse upon June 30, 2022; provided, however, that such restrictions will lapse,
and the award will fully vest and be paid out at the Change in Control Vest
Amount, if within two years after the date of the Change in Control, the
Participant’s employment is terminated by the Company without Cause or the
Participant resigns for Good Reason; and

 

(v)

its other terms and conditions relating to the service condition, dividend
equivalents and a subsequent change in control are not less favorable to the
Participant than the terms and conditions of this award.

Without limiting the generality of the foregoing, the Replacement Award may take
the form of a continuation of this award or such other form approved by the
Committee provided that the preceding requirements of this subsection are
satisfied. The determination of whether the requirements are satisfied shall be
made by the Committee, as constituted immediately prior to the Change in
Control, in its sole discretion.  In the event of a Change in Control,
Participant agrees to accept a Replacement Award meeting the above conditions in
substitution of this award.

"Good Reason" means:  (i) a change in the Participant’s job title or position,
which results in a material diminution in authority, duties or responsibilities;
(ii) any material breach of this agreement by the Company of any material
obligation of the Company for the payment or provision of compensation or other
benefits to the Participant; (iii) a material diminution in Participant’s
compensation or a failure by the Company to provide an arrangement for the
Participant for any fiscal year of the Company giving the Participant the
opportunity to earn an incentive award for such year; or (iv) the Company
requires Participant to materially change the location of Participant’s
principal office; provided such new location is one in excess of 35 miles from
the location of Participant’s principal office before such change.