Exhibit 10.2

PACKAGING CORPORATION OF AMERICA

AMENDED AND RESTATED 1999 LONG-TERM EQUITY INCENTIVE PLAN

PERFORMANCE UNIT AGREEMENT

 

PARTICIPANT:

   

DATE OF GRANT:

  June 24, 2013  

NUMBER OF PERFORMANCE UNITS:

   

PERFORMANCE PERIOD:

  2014-2016  

SERVICE VESTING DATE

  June 24, 2017  

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”) and the 2013
Performance-Based Equity Award Pool for Executive Officers (the “Award Pool”)
adopted by the Compensation Committee on June 24, 2013 (together with the Plan,
the “Plan Documents”) 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 Documents.

 

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 Documents and subject to
paragraphs 6 and 8 hereof, all of the Participant’s Performance Units covered
hereby shall (to the extent not previously forfeited) vest as of the occurrence
of a Vesting Date (as defined on Exhibits A and B). The terms and conditions of
vesting shall be as provided on Exhibit A and Exhibit B, which are separate and
independent from each other, with the amount of Shares being paid out on vesting
to equal the sum of (i) the number of Shares vesting pursuant to Exhibit A; and
(ii) the number of Shares vesting pursuant to Exhibit B. Payout on any vesting
shall be in the form of Shares.

 

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 Documents) prior to a Vesting Date for any reason, all Performance Units
granted hereunder shall be forfeited.

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

 

7. Dividend Equivalents. The Company shall pay dividend equivalents on the
Performance Units in cash as, when and if dividends are declared and paid on the
Shares of the Company’s common stock. For purposes of calculating the amount of
dividend equivalents, the Participant will be deemed to hold a number of Shares
equal to the number of Performance Units in this award (subject to paragraph 8
below).

 

8. Pool Provisions. This award is subject to the Award Pool. The number of
Shares to be awarded on any Vesting Date may in no event exceed the number of
Shares to which Participant is entitled under the Award Pool for this Award as
certified by the Committee in accordance with the Award Pool (the “Certified
Share Amount”). In the event the number of Performance Units awarded hereby
exceeds the Certified Share Amount, then such excess will be forfeited as of the
date of such certification.

 

9. Miscellaneous. The Committee may from time to time modify or amend this
Agreement in accordance with the provisions of the Plan Documents. 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 Documents and agrees to
their terms. This Agreement may be executed by the Company and the Participant
by means of electronic or digital signatures, which shall have the same force
and effect as manual signatures. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware.

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10. 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.

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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:  

 

   

 

      Participant

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Exhibit A

Vesting Provision—Formula Component

1. Vesting Date. Vesting Date means, with respect to the vesting of Performance
Units pursuant to this Exhibit A, the earliest of (i) the fourth anniversary of
the Date of Grant (subject to the terms and conditions of paragraph 2 below)
(the “Service Vesting Date”), (ii) the occurrence of a Change in Control, and
(iii) the Participant’s death or termination on account of Disability.

2. ROIC Peer Group Rank: In determining the actual number of Shares to vest
pursuant to this Exhibit A on the Service Vesting Date, the Committee will
determine the Company’s average ROIC (as hereinafter defined) over the three
years comprising the Performance Period (i.e., the arithmetic mean of ROICs for
the three individual years) and compare such number against the average ROIC for
the companies included in the Peer Group (as hereinafter defined). Based on the
ranking of the Company’s ROIC with the Peer Group, the Applicable Percentage of
Shares will vest as follows:

 

Peer Group Ranking

   Applicable Percentage

Top quartile

   100%

Second quartile

   80%

Third quartile

   40%

Fourth quartile

   0%

The “Peer Group” will include Aptargroup, Bemis, Berry Plastics, Boise,
Cascades, Clearwater Paper, Crown Holdings, Domtar, Glatfelter, Graphic
Packaging, Grief, International Paper, KapStone, Owens Illinois, Resolute Forest
Products, Rock Tenn, Sealed Air, Silgan and Sonoco. The Committee may modify the
Peer Group for significant or extraordinary events outside the ordinary course
of business, such as mergers or acquisitions, recapitalizations, bankruptcy or
other events in which a Peer Group company ceases reporting financial results to
the public.

“ROIC” means return on invested capital, which is calculated by dividing
(a) operating profit by (b) average invested capital over the applicable period.
In calculating ROIC for the Company or a Peer Group company, the Committee may
adjust for reported special, non-recurring or non-operating items or the effects
of mergers, acquisitions or extraordinary transactions. The Committee may
establish rules for calculating ROIC for purposes of ensuring consistency in
calculations across the Company and the Peer Group.

3. Vesting Upon Change in Control or Death or Disability. In the event a Vesting
Date occurs as a result of a Change in Control or the Participant’s death or
termination on account of Disability, then the number of Shares to be awarded to
such Participant shall equal 100% of the number of Performance Units.

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Exhibit B

Vesting Provision—Committee Determination Component

1. Vesting Date. Vesting Date means, with respect any vesting of Performance
Units pursuant to this Exhibit B, the Service Vesting Date. No vesting may occur
under this Exhibit B in any other case.

2. Committee Determination. The Committee shall have the right to determine, on
or around the Service Vesting Date, to pay out a number of Shares vested
pursuant to this Exhibit B. The number of Shares that the Committee may pay out
on vesting pursuant to this Exhibit B will depend upon the Company’s ranking on
average ROIC against the Peer Group (as determined pursuant to Exhibit A). The
Committee is not obligated to award any Shares pursuant to this Exhibit B. The
maximum number of Shares that may be awarded pursuant to vesting under this
Exhibit B are as follows:

 

Peer Group Ranking

  

Applicable Percentage

Top quartile

   Up to 20% of the Performance Units

Second quartile

   Up to 20% of the Performance Units

Third quartile

   Up to 40% of the Performance Units

Fourth quartile

   No Performance Units may be vested
under this Exhibit B

The Committee shall determine whether to pay out any Shares and the amount of
Shares to be paid out. In making such determination, the Committee may consider
the level of ROIC performance within the quartile, the business conditions
relating to the Company’s and the Peer Group companies’ performance during the
Performance Period and such other factors that the Committee determines to be
appropriate for purposes of assessing performance over the Performance Period.