PACKAGING CORPORATION OF
AMERICA
DEFERRED COMPENSATION PLAN
PACKAGING CORPORATION OF
AMERICA
DEFERRED COMPENSATION PLAN
1.
Introduction and Purpose
The Packaging
Corporation of America Deferred Compensation Plan (the
“Plan”) was originally established April 12, 1999
by Packaging Corporation of America (the “Company”).
The purpose of the Plan is to provide a select group of management
or highly compensated employees of the Company and its affiliates
an opportunity to defer compensation in accordance with the terms
and conditions set forth herein.
The Company
hereby amends and restates the Plan, effective as of
January 1, 2009 (the “Effective Date”). The Plan
was previously amended and restated, effective as of
January 1, 2005, to comply with Section 409A. The terms
of the Plan as provided herein shall apply to all Deferred Amounts
attributable to any period beginning on or after January 1,
2005. Any amounts deferred and vested under the Plan on or prior to
December 31, 2004, and any earnings attributable thereto,
shall be grandfathered for purposes of Section 409A and shall
be subject to the terms of the Plan as in effect on October 3,
2004 (“Grandfathered Deferrals”). Neither this
restatement nor any subsequent amendment hereto shall be deemed to
apply to Grandfathered Deferrals, unless such amendment explicitly
states otherwise.
As used in this
Plan, the following words shall have the following
meanings:
“Administrator” means the person, persons or
entity designated as the administrator of the Plan in
Section 9.
“Affiliate” means any parent, subsidiary, or
other entity that is directly or indirectly controlled by, or
controls, the Company, and any entity that is directly or
indirectly controlled by the Company’s parent.
“Board” means the Company’s Board of
Directors.
“Bonus” means an EICP Bonus and/or a Sign-On
Bonus.
“Code” means the Internal Revenue Code of 1986,
as amended. Any reference to any Code Section shall also mean any
successor provision thereto.
“Company” means Packaging Corporation of
America, a Delaware corporation, any successor thereto as provided
in Section 20, and where applicable, shall include any
Affiliate that adopts the Plan or has employees or former employees
who are Participants in the Plan.
“Deferral Credit” means a Bonus deferral made
pursuant to Section 4.
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“Deferred Amount” means the amount otherwise
payable to the Participant that is deferred pursuant to
Section 4.
“Deferred Compensation Account” means a
memorandum account established at the time an amount is deferred
pursuant to Section 4, and maintained by the Company on its
books for the Participant to or against which amounts are credited
or charged under the Plan.
“EICP
Bonus” means a bonus paid under the PCA Executive
Incentive Compensation Plan.
“Employment Termination Date” means, with
respect to any Participant, the date on which such Participant
experiences a “separation from service,” as defined in
Section 409A.
“ERISA” means the Employee Retirement Income
Security Act of 1974, as amended.
“Executive” means a member of a select group of
management or highly compensated employees of the
Company.
“Participant” means an Executive who meets the
eligibility requirements for the Plan set forth in Section 3
and who has deferred a portion of his or her Bonus. A Participant
shall retain such status for purposes of the Plan until his or her
Deferred Compensation Account has been distributed in
full.
“Participation Election” means the form signed
and submitted by an Executive to the Administrator prior to the
required election date under Section 4.
“Performance Based Compensation” means
compensation that is contingent upon the satisfaction of
pre-established organizational or individual performance criteria
relating to a performance period of at least 12 consecutive months
in which the Participant is employed or such other compensation
that satisfies the definition of “performance based
compensation” under Section 409A.
“Plan” means the Packaging Corporation of
America Company Deferred Compensation Plan as set forth herein and
as hereinafter amended from time to time.
“Plan
Year” means the calendar year.
“Section 409A” means Section 409A of
the Code and any regulations or other interpretive authority issued
thereunder.
“Sign-On
Bonus” means a bonus payable as an incentive to accept
employment with the Company.
“Specified Employee” means any person defined in
Section 416(i) of the Code, without regard to paragraph
(5) thereof, as determined on each September 30 and
applied for the 12-month period beginning on the following January
1.
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“Surviving Spouse” means an individual of the
opposite sex who is legally married to a Participant at the time of
the Participant’s death.
“Unforeseeable Emergency” means a severe
financial hardship of a Participant resulting from an illness or
accident of the Participant, the Participant’s spouse, or a
dependent (as defined in Section 152(a) of the Code) of the
Participant, loss of the Participant’s property due to
casualty, or other similar extraordinary and unforeseeable
circumstances arising as a result of events beyond the control of
the Participant.
U.S. paid
participants in the Company’s Executive Incentive
Compensation Plan and those individuals designated by the Vice
President of Human Resources and the Director of Benefits of the
Company shall be eligible to participate in the Plan. Only those
Executives who are in a select group of management or are highly
compensated (within the meaning of Title I of ERISA) may be
designated as eligible to participate under this
provision.
(a)
Deferrals of EICP Bonus . A Participant may elect in a
written Participation Election to defer receipt of all or a
specified portion of his or her EICP Bonus to be received on
account of a calendar year. The Participation Election must be
submitted to the Administrator pursuant to such procedures as may
be established by the Administrator from time to time, and specify
(i) such portions of his or her EICP Bonus to be credited to
his Deferred Compensation Account under the Plan as a Deferral
Credit (instead of receiving current payments), and (ii) the
time or events upon which such Deferred Amounts shall be
distributed pursuant to Section 7(a) below.
(b)
Timing of Election to Defer EICP Bonus . The Administrator
may determine that a separate Participation Election to defer an
EICP Bonus must be made with respect to each Plan Year or that a
Participant’s election for one Plan Year will be deemed to
apply to the following Plan Year, unless revoked or modified by
such Participant. Any such Participation Election (or revocation
thereof) must be made and shall be irrevocable at such times as set
forth below:
(i) at
any time prior to the thirty-first (31st) day of December prior to
the beginning of the Plan Year during which the EICP Bonus to be
deferred is otherwise earned;
(ii) in
the case of an EICP Bonus that is Performance Based Compensation,
at any time prior to six (6) months before the end of the
performance period for which it is earned, provided that such
compensation has not yet become both substantially certain and
readily ascertainable;
(iii) in
the case of the first year in which a Participant becomes eligible
to participate in the Plan (as aggregated with other plans of its
type as defined in Section 1.409A-1(c) of the Code), at any
time within 30 days after the Participant first becomes
eligible to
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participate;
provided, however, that such election may apply only to
compensation attributable to services to be performed after the
Participation Election, and in the case of compensation based upon
a performance period (other than Performance Based Compensation),
may apply only to a prorated portion of such compensation based
upon the number of days remaining in such performance period;
and
(iv) at
any other time as may be permitted under
Section 409A.
(c)
Deferrals of Sign-On Bonuses .
(i) In
the case of a Sign-On Bonus that is immediately vested or may
become vested within 13 months of its award, the Company may
require through a non-elective deferral that all or any portion of
the Participant’s Sign-On Bonus shall be deferred as a
Deferral Credit and distributed in such form, and at such time, as
provided in Section 7. The Company’s non-elective
deferral of such Sign-On Bonus shall be made at such times as are
permitted under Section 409A (for example, prior to the
Participant having a legally binding right to such Sign-On
Bonus).
(ii) In
the case of a Sign-On Bonus that cannot become vested within
13 months of its award due to vesting conditions (except for
accelerated vesting upon death, disability or change in control, as
such terms are defined in Section 409A), a Participant may
elect in a written Participation Election to defer receipt of all
or a specified portion of his or her Sign-On Bonus. The
Participation Election shall specify (i) such portions of his
or her Sign-On Bonus to be credited to his Deferred Compensation
Account under the Plan as a Deferral Credit, and (ii) the time
or events upon which such Deferred Amounts shall be distributed
pursuant to Section 7(a) below. A Participant must make a
Participation Election with respect to a Sign-On Bonus no later
than 30 days after the Participant receives a legally binding
right to such Sign-On Bonus, subject to the applicable vesting
conditions, or at such other time as permitted under
Section 409A.
5. Crediting
of Deferred Payments to the Deferred Compensation
Account
The Company
shall establish a Deferred Compensation Account for each
Participant. The Company may establish subaccounts, as necessary,
to track Deferred Amounts attributable to any particular Plan Year.
Each Participant’s Deferred Compensation Account (or
subaccount) shall be credited with such Participant’s
Deferred Amount for such Plan Year as of the day on which the
Participant would otherwise have been entitled to receive the bonus
or incentive compensation to which the Deferred Amount is
attributable. Adjustments as provided in Section 6 below,
shall be made to the Participant’s Deferred Compensation
Account.
6.
Adjustments to Deferred Compensation Account
The
Administrator shall credit the balance of the Participant’s
Deferred Compensation Account with an earnings factor. The earnings
factor will equal the amount the Participant’s Deferred
Compensation Account would have earned if it had been invested in
the deemed investment options listed below. The Participant is
permitted to select the deemed investment option used to determine
the earnings factor and may change the selection at any time. The
Participant may
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choose more
than one deemed investment option in increments of at least one
(1) percent. The Administrator reserves the right to change
or amend any of the deemed investment options at any
time.
The deemed
investment options used to determine the earnings factor
are:
(a) The prime
rate of interest as reported by The Chase Manhattan Bank at the
first day of each calendar month.
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