Exhibit 10.6
Amended and Restated
Pactiv Corporation Change-in-Control
Severance Benefit Plan for Key Executives
The Pactiv Corporation Change-in-Control
Severance Benefit Plan for Key
Executives (the "Plan") was established by Pactiv Corporation (the
"Company")
November 4, 1999 (the "Effective Date"). It was amended and
restated effective
March 1, 2005, further amended and restated effective December 29,
2006, and is
hereby further amended and restated effective March 27, 2009. The
purpose of the
Plan is to induce Key Executives to enter into or continue services
or
employment with, and to steadfastly serve, the Company if and when
a Change in
Control (as defined below) is threatened, despite attendant
career
uncertainties, by committing the Company to provide severance
benefits in the
event their employment terminates as a result of a Change in
Control.
Article 1. Definitions
(a) "Change in Control" shall
mean the first to occur of the following
events
(but no event other than the following events), except as
otherwise provided herein:
(i) Any person and any of their affiliates or
associates
becomes
the beneficial owner, directly or indirectly, of
securities of the Company representing twenty percent (20%)
or more of either the Company's then outstanding shares of
common stock or the combined voting power of the Company's
then outstanding securities having general voting rights.
Notwithstanding the foregoing, a Change in Control shall
not be deemed to occur pursuant to this paragraph solely
because the requisite percentage of the Company's then
outstanding shares of common stock or the combined voting
power of the Company's then outstanding securities having
general voting rights is acquired by one (1) or more
employee benefit plans maintained by the Company; or
(ii) Members of the Incumbent Board cease to constitute
a
majority of the Company Board; or
(iii) The consummation of any plan of merger,
consolidation,
share exchange, or combination between the Company and any
person including without limitation becoming a subsidiary
of any other person without members of the Incumbent Board,
as constituted immediately prior to the merger,
consolidation, share exchange, or combination constituting
a
majority of the board of directors of: (1) the surviving
or successor corporation, or (2) if the surviving or
successor corporation is a majority-owned subsidiary of
another corporation or corporations, the ultimate parent
company of the surviving or successor corporation; or
(iv) The consummation of any sale, exchange, or
other
disposition of all or substantially all of the Company's
assets without members of the Incumbent Board immediately
prior to any sale, exchange, or disposition of all or
substantially all of the Company's assets constituting a
majority of
the board of directors of: (1) the corporation
which holds such assets after such disposition, or (2) if
such corporation is a majority-owned subsidiary of another
corporation or corporations, the ultimate parent company of
the successor corporation, provided that the Company Board
may determine conclusively that any transaction does not
constitute a sale, exchange, or other disposition of
substantially all of the Company's assets; or
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(v) The Company's stockholders approve a plan of
complete
liquidation or dissolution of the Company.
(b) "Committee" means the
Compensation/Nominating/Governance Committee of
the
Company Board.
(c) "Company" means Pactiv
Corporation and any stock corporation of which
a
majority of the voting common or capital stock is owned directly
or
indirectly by Pactiv Corporation.
(d) "Company Board" means the
Board of Directors of the Company.
(e) "Constructive Termination"
will be deemed to have occurred if, upon
or
following the Change in Control and within two (2) years after
the
Key
Executive becomes aware of a circumstance described in (i)-(v)
below,
a Key Executive Separates from Service from the Company after
the
Company, by action or inaction, and without the Key Executive's
express prior written consent; provided, however, that a
Constructive
Termination shall not be effective unless a written notice is
delivered from the Key Executive to the Company specifically
identifying an event provided in (i)-(v) below and of his or
her
intent
to terminate due to such event (a "Constructive Termination
Notice"). Upon receipt of a Constructive Termination Notice,
the
Company shall have thirty (30) days to correct the circumstance
described by such notice. The Constructive Termination
circumstances
are as
follows:
(i) Diminish in any manner the Key Executive's
status,
position, duties, or responsibilities with the Company from
those in effect immediately prior to the Change in Control;
without limiting the foregoing, for purposes of this clause
(i), a diminution will be deemed to have occurred if the
Key Executive does not maintain the same or greater status,
position, duties, and responsibilities with the ultimate
parent corporation of a controlled group of corporations of
which the Company is a member upon consummation of the
transaction or transactions constituting the Change in
Control;
(ii) Reduce the Key Executive's then current annual
cash
compensation from the Company below the sum of: (1) the Key
Executive's annual base salary or annual base compensation
from the Company in effect immediately prior to the Change
in Control, and (2)
the Key Executive's average annual
award under the Company's Executive Incentive Compensation
Plan (or any successor plan) for the three (3) calendar
year periods (or for such shorter period as the Key
Executive has been employed by the Company) completed
immediately prior to the Change in Control;
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(iii) Cause a material reduction in: (1) the level of
aggregate
Company-paid medical benefit, life insurance, and
disability plan coverages; or (2) the aggregate rate of
Company-paid thrift/savings plan contributions and of
Company-paid defined benefit retirement plan benefit
accrual, from those coverages and rates in effect
immediately prior to the Change in Control;
(iv) Effectively require the Key Executive to relocate
because
of transfer of the Key Executive's place of employment with
the Company from the place where the Key Executive was
employed immediately prior to the Change in Control; for
purposes
of the foregoing, a transfer of place of
employment shall be deemed to require a Key Executive to
relocate if such transfer: (1) is greater than twenty-five
(25) miles from the place where the Key Executive was
employed immediately prior to the Change in Control, and
(2) increases the normal commuting time of such Key
Executive by more than fifty percent (50%); or
(v) Materially breach their duties and
obligations under the
Plan.
A
Constructive Termination will be deemed to have occurred for
all
Key
Executives if any successor to the Company in a merger,
consolidation, purchase, or other combination constituting a
Change
in
Control fails to assume, in writing, all of the Company's
obligations under the Plan promptly upon consummation of such
Change
in
Control. In addition, a determination that a Key Executive has
been
Constructively Terminated for purposes of eligibility for
benefits under this Plan shall be based solely on the criteria
set
forth
in this paragraph (d) and the Key Executive's eligibility or
application for, or receipt of, any retirement benefits from
the
Company following Separation from Service shall have no bearing
on
such
determination.
(f) "Discharge for Cause"
shall be deemed to have occurred only if,
following the Change in Control, a Key Executive is discharged by
the
Company from employment because:
(i) The Key Executive has engaged in dishonesty
or other
serious misconduct related to the Key Executive's material
duties as an employee of the Company; or
(ii) The Key Executive has willfully and continually
failed
(unless due to incapacity resulting from physical or mental
illness) to perform the duties of his or her employment by
the Company after written demand for substantial
performance is delivered to the Key Executive by the
Company
specifically identifying the manner in which the
Key Executive has not substantially performed such duties.
Notwithstanding the foregoing, a Key Executive who, immediately
prior
to the
Change in Control, is a member of Executive Group I shall not
be
deemed to have been Discharged for Cause under paragraph (i) or
(ii)
above unless a written notice has been delivered to the Key
Executive stating that the Company has terminated the Key
Executive's
employment, which notice shall include a resolution, adopted by
at
least
a three-quarter's vote of the Incumbent Board (after the Key
Executive has been provided with reasonable notice and an
opportunity, together with counsel, for a hearing before the
entire
Incumbent Board), finding that the Key Executive has engaged in
the
conduct set forth in clause (i) or (ii) of this Article 1(e).
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(g) "Executive Group I" shall
consist of each individual who is an
executive officer of the Company and any other officer as approved
by
the
Committee in writing on or before the Change in Control as a
member
of Executive Group I.
(h) "Executive Group II" shall
consist of each individual who: (i)
immediately prior to the Change in Control, is an active
participant
in the
Company's Executive Incentive Compensation Plan, is not a
member
of Executive Group I and has been designated in writing by the
Chairman of the Board and Chief Executive Officer of the Company,
or
(ii)
immediately prior to the Change in Control, is an employee of
the
Company who has been designated by the Chairman of the Board
and
Chief
Executive Officer of the Company, in writing on or before the
Change
in Control, as a member of Executive Group II.
(i) "ICP" means the Pactiv
Corporation 2002 Incentive Compensation Plan,
as
amended from time to time, and any successor thereto.
(j) "Incentive Compensation"
shall include Annual Incentive Awards,
Performance Units, Performance Shares, Cash-Based Awards, and
Stock
Awards
as defined under the ICP, or any similar or successor plan,
and
any other compensation under any other compensation or
incentive
plans
of the Company that is contingent upon the achievement of
specified performance goals, but which shall exclude Stock
Options,
Stock
Appreciation Rights, Restricted Stock, or Restricted Stock
Units
as defined and which may be granted under the ICP, or any
similar plan.
(k) "Incumbent Board"
means:
(i) The members of the Company Board on the Effective
Date, to the
extent that they continue to serve as members of the Company
Board; and
(ii) Any individual who becomes a member of the Company Board
after
the
Effective Date, if his or her election or nomination for
election as a director is approved by a vote of at least
three-quarters of then Incumbent Board.
(l) "Internal Revenue Code"
means the Internal Revenue Code of 1986, as
amended.
(m) "Key Executive" means an
individual who, immediately prior to the
Change
in Control, is a member of Executive Group I or Executive
Group
II.
(l) "Separates from Service"
or "Separation from Service" shall mean the
Key
Executive's "separation from service," with the same meaning as
prescribed in Internal Revenue Code Section 409A and the
regulations
thereunder.
(m) "Specified Employee" shall
mean as of the date of Separation from
Service, a specified employee as defined in Internal Code
Section
409A
and the regulations thereunder.
(n) "Threatened Change in
Control" shall mean: (i) any publicly disclosed
proposal, offer, actual or proposed purchase of stock, or other
action
which, if consummated, would, in the opinion of the Incumbent
Board,
constitute a Change in Control, including the Company entering
into
an agreement, the consummation of which would result in a
Change
in
Control, or (ii) the adoption of a resolution by the Incumbent
Board
that a Threatened Change in Control has occurred.
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(o) "Threatened
Change-in-Control Period" shall mean the period beginning
on the
date a Threatened Change in Control occurs and ending on the
earlier of: (i) the date the proposal, offer, actual or
proposed
purchase of stock, or other action is formally withdrawn or the
Incumbent Board has determined that the circumstances which
constituted the Threatened Change in Control no longer exist, or
(ii)
the
date a Change in Control occurs. For purposes of the foregoing
definitions, the terms "associate," "affiliate,"
"person," and
"beneficial owner" shall have the respective meaning set forth
in
Sections 13(a) and 13(d) of the Securities Exchange Act of 1934,
as
amended (the "Exchange Act"), and the regulations promulgated
thereunder, and the regulations promulgated under Section 12 of
the
Exchange Act.
Article 2. Eligibility for Benefits
If the Key Executive is a member of
Executive Group I or Executive Group
II, he or she shall be entitled to receive the benefits described
in Articles 3,
4, and 6 below; provided that: (i) the Key Executive has executed a
Waiver and
Release Agreement that releases any employment-related claims
against the
Company, other than claims for vested benefits under the benefits
and
compensation plans, programs, and arrangements of the Company; and
(ii) the Key
Executive has executed a Restrictive Covenant Agreement certifying
his or her
willingness to comply with a noncompetition, nonsolicitation
and/or
confidentiality covenant substantially similar to that used by the
Company in
comparable severance situations.
Article 3. Severance Benefits
If: (a) within two (2) years after a
Change in Control, a Key Executive
Separates from Service as an employee with the Company because: (i)
the Key
Executive is discharged by the Company, provided such discharge is
not a
Discharge for Cause, is not a voluntary termination by the
Executive, or is not
a termination due to death or disability, or (ii) because of
Constructive
Termination, and (b) throughout the period beginning with the
Change in Control
and ending with such Separation from Service with the Company, the
Key Executive
remains an employee of the Company, he or she shall be entitled to
receive the
following benefits:
(a) If the Key Executive is a
member of Executive Group I immediately
prior
to the Change in Control: an amount equal to two (2) times the
sum
of: (i) the Key Executive's annual base salary in effect
immediately prior to the Change in Control, plus (ii) the greater
of:
(1)
the average of the Key Executive's annual awards under the
Company's Executive Incentive Compensation Plan (or any
successor
plan)
for the last three (3) years of the Key Executive's employment
with
the Company or such shorter period as the Key Executive has
been
employed by the Company, or (2) the Key Executive's targeted
annual
award
under such plans in effect immediately prior to the Change in
Control.
(b) If the Key Executive is a
member of Executive Group II immediately
prior
to the Change in Control: an amount equal to one (1) times the
sum
of: (i) the Key Executive's annual base salary in effect
immediately prior to the Change in Control, plus (ii) the greater
of:
(1)
the average of the Key Executive's annual awards under the
Company's Executive Incentive Compensation Plan (or any
successor
plan)
for the last three (3) years of the Key Executive's employment
with
the Company or such shorter period as the Key Executive has
been
employed by the Company, or (2) the Key Executive's targeted
annual
award
under such plans in effect immediately prior to the Change in
Control.
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(c) All deferred compensation
(and earnings accrued thereon) credited to
the
account of a Key Executive under any deferred compensation
plan,
program, or arrangement of the Company shall be paid to such
Key
Executive, notwithstanding any provisions of such plan, program,
or
arrangement to the contrary.
