<DOCUMENT>

<TYPE>EX-10.6

<SEQUENCE>3

<FILENAME>a6043539ex10_6.txt

<DESCRIPTION>EXHIBIT 10.6

<TEXT>

                                  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

 

<PAGE>

 

              (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;

 

<PAGE>

 

              (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).

 

<PAGE>

 

     (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.

 

<PAGE>

 

     (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.

 

<PAGE>

 

     (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.

 

     (d)   The Key Executive and his or her eligible dependents, if any, shall

           continue to be covered by the health, life, and disability plans

           applicable to comparably situated active employees as in effect from

           time to time and subject to the rules thereof (including any

           requirement to make contributions or pay premiums, except that the

           Key Executive shall contribute or pay on an after-tax basis) for the

           period described below. For persons entitled to Executive Group I

           benefits, and their eligible dependents, the period is two (2) years

           from his or her Separation from Service. For persons entitled to

           Executive Group II benefits, and their eligible dependents, the

           period is one (1) year from his or her Separation from Service. This

           period of coverage will not count against the maximum period of

           health coverage required by the Consolidated Omnibus Budget

           Reconciliation Act of 1985 ("COBRA"), and persons covered by this

           provision will be afforded their applicable COBRA rights at the end

           of the health coverage provided herein.

 

           If, as of the Key Executive's date of Separation from Service, the

           provision to the Executive of the insurance coverage described in

           this Article 3(e) would either: (i) violate the terms of the

           Company's health insurance plan (or any other related insurance

           policies), (ii) violate any of the Internal Revenue Code's

           nondiscrimination requirements applicable to the health insurance

           coverage, or (iii) cause the Key Executive to be subject to the

           excise tax under Internal Revenue Code Section 409A, then the

           Company, in its sole discretion, may elect to pay the Key Executive,

           in lieu of the health insurance coverage described under this Article

           3(e) a lump-sum cash payment equal to the total monthly premiums (or

           in the case of a self-funded plan, the cost of COBRA continuation

           coverage) that would have been paid by the Company for the Key

           Executive under the insurance plan from the date of termination

           through the time period specified for Executive Group I or Executive

           Group II, whichever is applicable.

 

           In the event that any insurance coverage provided under this Article

           3(e) is subject to federal, state, or local income or employment

           taxes or Internal Revenue Code Section 409A excise tax, or in the

           event that a lump-sum payment is made in lieu of insurance coverage,

           the Company shall provide the Key Executive with an additional

           payment in the amount necessary such that after payment by the Key

           Executive of all such taxes (calculated after assuming the Key

           Executive pays such taxes for the year in which the payment or

           benefit occurs at the highest marginal tax rate applicable),

           including any taxes imposed on the additional payments, the Key

           Executive effectively received coverage on a tax-free basis or

           retains a cash amount equal to the health insurance cash payments

           provided pursuant to this Article 3(e).

 

<PAGE>

 

     (e)   The Company shall provide the Key Executive with the lump-sum cash

           value of an additional pension benefit in its retirement plans,

           including its Supplemental Retirement Plan, as if the Key Executive's

           employment had continued for an additional one (1) year for Executive

           Group II or two (2) years for Executive Group I, and calculated as if

           relevant pay for such additional period is at the same level as on

           the date the Key Executive Separates from Service.

 

     (f)   The Company shall provide each Key Executive with the lump-sum cash

           value of reasonable outplacement services not to exceed fifty

           thousand dollars ($50,000), consistent with past practices of the

           Company with respect to officers at such level prior to the Change in

           Control.

 

     (g)   If a Key Executive receives other cash severance benefits from the

           Company, the amount of severance benefit to which the Key Executive

           is entitled under Article 3(a) or (b) above shall be considered to be

           satisfied to the extent of such other cash severance payment.

 

 

Article 4. Other Benefits

 

     Upon a Change in Control, and without regard to the Key Executive's

employment status following such Change in Control, the Key Executive shall be

paid their Incentive Compensation (other than Performance Shares, Performance

Units, Stock Options, Stock Appreciation Rights, Restricted Stock, or Restricted

Stock Units, which are addressed below) as follows: (i) any Incentive

Compensation that has been allocated or awarded to such Key Executive for a

completed calendar year or other measuring period preceding the Change in

Control but has not yet been paid shall be paid out at the amount so allocated

or awarded; and (ii) any Incentive Compensation for the current calendar year or

other measuring period shall be paid out pro rata, to the date of the Change in

Control, calculated as if one hundred percent (100%) of any performance targets

or goals were achieved or otherwise on a basis on which such Key Executive will

receive a pro rata portion (based on elapsed time) of the amounts he or she

would have been entitled to receive if he or she had continued to be employed by

the Company throughout the period contemplated with respect to such award and if

all other conditions for receiving the target amount with respect to all such

awards had been met, notwithstanding any provision of any such plan to the

contrary.

 

     Upon a Change in Control, and without regard to the Key Executive's

employment status following such Change in Control, the Key Executive shall

receive an amount, paid in a single lump sum of cash, equal to the value of all

Performance Shares or Performance Units awarded or allocated, as follows: (i)

the portion of a Performance Share or Performance Unit award (or tranches)

related to a completed calendar year or other measuring period for which the

Committee has allocated a notional or conditional percentage value, based on

performance during such year or other period, valued at such notional or

conditional values, plus (ii) the portion of a Performance Share or Performance

Unit award (or tranches) related to a year or other measuring period for which

the Committee has not allocated a notional or conditional percentage value

(including the current and future years), valued as if one hundred percent

(100%) of any performance targets or goals were achieved during such years or

periods and assuming satisfaction of all other conditions for receiving the

target amount with respect to all such awards had been met, notwithstanding any

provision of any such plan to the contrary. Performance Shares shall be valued

at Fair Market Value (as defined the ICP) as of the date preceding the date of

such Change of Control. Performance Units shall be valued as determined under

the ICP.

 

<PAGE>

 

     Upon a Change in Control, and without regard to the Key Executive's

employment status following such Change in Control, and except to the extent an

applicable award is replaced by a Replacement Award (as defined below): (i) all

Stock Options and Stock Appreciation Rights under the Company's Stock Ownership

Plan or the ICP, or any other similar plan maintained by the Company, shall

immediately become fully vested and exercisable; and (ii) all Restricted Stock

or Restricted Stock Units under the ICP, or any other similar plan maintained by

the Company, whose vesting depends merely on the satisfaction of a service

obligation by a Key Executive to the Company shall vest in full and be free of

restrictions related to the vesting of such awards. To the extent an applicable

award is replaced by a Replacement Award, and the Key Executive Separates from

Service due to an involuntary termination of employment or a Constructive

Termination within the two (2) year period following a Change in Control, all

Replacement Awards shall become fully vested and, if applicable, exercisable.

 

     Stock Options and Stock Appreciation Rights shall remain exercisable for

the lesser of thirty-six (36) months from the date of Change in Control or

termination, as applicable, or the remaining life of the Stock Option or the

Stock Appreciation Right. The terms "Stock Options," "Stock Appreciation Right,"

"Restricted Stock," and "Restricted Stock Unit" shall have the meaning ascribed

to those terms as in the ICP.

 

     For the purposes of this Article 4, the term Replacement Award shall mean

an award which: (i) which has a value at least equal to the value of the

replaced award as determined by the Company in its sole discretion; (ii) relates

to publicly traded equity securities of the Company or its successor in the

Change in Control or another entity that is affiliated with the Company or its

successor following the Change in Control; (iii) other terms and conditions are

not less favorable to the Key Executive than the terms and conditions of the

replaced award (including the provisions that would apply in the event of a

subsequent Change in Control); and (iv) the terms of the Replacement Award

satisfy the conditions of Internal Revenue Code Section 409A. Without limiting

the generality of the foregoing, the Replacement Award may take the form of a

continuation of the replaced award if the requirements of the preceding sentence

are satisfied. The determination of whether the conditions of this Article 4 are

satisfied shall be made by the Committee, as constituted immediately before the

Change in Control, in its sole discretion.

 

 

Article 5. Method of Payment

 

     If the Key Executive is not a Specified Employee, the Company shall pay, or

cause to be paid, the cash severance benefits under the Plan to the Key

Executive in a single cash sum as soon as administratively practicable, but in

no event later than March 15 of the calendar year after the calendar year of the

Executive's date of Separation from Service. If the Key Executive is a Specified

Employee, the Company shall pay, or cause to be paid, the cash severance

benefits under the Plan to the Key Executive in a single cash sum not sooner

than the six (6) month anniversary of the Key Executive's Separation from

Service. Notwithstanding the above, payment shall not be made by the Company

prior to the submission of a claim as required by Article 12 of the Plan.

 

     Notwithstanding the preceding paragraph, no payment provided under this

Plan shall constitute an impermissible acceleration of deferred compensation

within the contemplation of Section 409A of the Internal Revenue Code, and no

payment shall be made until the earliest date on which it would not constitute

such an acceleration. Except for withholdings required by law to satisfy local,

state, and federal tax withholding requirements, no offset or any other

reduction shall be taken in paying such benefit.

 

<PAGE>

 

     Notwithstanding this Article 5, the Company's obligation to pay cash

severance amounts due the Key Executive pursuant to this Article 5, to the

extent not already paid, shall cease immediately and such obligation will be

forfeited if it is determined by the Company within a six (6) month period

following the Key Executive's Separation from Service, that the Key Executive

committed an act which would have resulted in the Key Executive's Discharge for

Cause. To the extent already paid, if it is determined by the Company within a

six (6) month period following the Key Executive's Separation from Service that

the Key Executive committed an act which would have resulted in the Key

Executive's Discharge for Cause, the severance amounts provided hereunder shall

be repaid in their entirety by the Key Executive to the Company, and all rights

to such payments shall be forfeited.

 

 

Article 6. Gross-Up Payment

 

     If the sum (the "combined amount") of the payments as described herein and

other payments or benefits which the Key Executive has received or has the right

to receive from the Company or any of its subsidiaries which are defined in

Internal Revenue Code Section 280G(b)(2)(A)(i) would constitute a "parachute

payment" (as defined in Internal Revenue Code Section 280G(b)(2)), the combined

amount shall, unless the following sentence applies, be decreased by the

smallest amount that will eliminate any parachute payment. If the decrease

referred to in the preceding sentence is 10 percent (10%) or more of the

combined amount, the combined amount shall not be decreased, but rather the

Company shall pay to the Key Executive an amount sufficient to provide the Key

Executive, after tax, a net amount equal to the Internal Revenue Code Section

4999 excise tax imposed on such combined amount, as increased pursuant to this

Article 6 (the "Gross-Up Payment"). For this purpose, "after tax" means the

amount retained by the Key Executive after satisfaction (whether through

withholding, direct payment, or otherwise) of all applicable federal, state,

provincial, and local income taxes at the highest marginal tax rate, and the Key

Executive's share of any applicable FICA taxes.

 

     If a Key Executive becomes entitled to a Gross-Up Payment as provided in

this Article 6 of the Plan, the Company shall pay the Gross-Up Payment, and such

payment shall include all Gross-Up Payments due in respect of payments made

before, payments made at the same time as, and payments projected to be made

after the payment dates as provided in Article 5 of the Plan. If the Key

Executive is not a Specified Employee, the Company shall pay the Gross-Up

Payment as soon as administratively practicable, but not later than March 15 in

the calendar year following the Key Executive's Separation from Service. If the

Key Executive is a Specified Employee, the Company shall pay the Gross-Up

Payment as soon as administratively practicable on or after the date six (6)

months following the date of the Executive's Separation from Service.

 

     In determining the potential impact of the Internal Revenue Code Section

4999 excise tax, the Company may rely on any advice it deems appropriate,

including, but not limited to, the counsel of its independent auditors; however,

such advice shall be deemed mutually acceptable to the Company and the Key

Executive. All calculations for purposes of determining whether any of the

combined amount will be subject to the excise tax and the amounts of such excise

tax will be made in accordance with applicable rules and regulations under

Internal Revenue Code Section 280G in effect at the relevant time. The Company

shall make the calculations available to the Key Executive and the Key

Executive's tax advisor and shall pay the reasonable fees of the advisor for

reviewing and counseling the Key Executive with respect to such calculations,

not to exceed ten thousand dollars ($10,000).

 

<PAGE>

 

     If the Internal Revenue Service adjusts the computation of the Company so

that the Executive did not receive the greatest net benefit, the Company shall

reimburse the Executive for the full amount necessary to make the Executive

whole, plus a market rate of interest, as reasonably determined by the Plan

Administrator. If the Key Executive is a Specified Employee, such reimbursement

shall be made as soon as administratively practicable on a date on or after the

date six (6) months following the Key Executive's date of Separation from

Service, and if the Key Executive is not a Specified Employee, such

reimbursement shall be made as soon as administratively practicable but not

later than March 15 of the calendar year following the calendar year in which

the Internal Revenue Service adjusts the Key Executive's computation. If the

Internal Revenue Service adjusts the computation such that the Company has

exceeded the maximum amount as provided for, then the amount paid in excess

shall be owed back to the Company with applicable interest.

 

     If, after the receipt by the Key Executive of an amount advanced by the

Company pursuant to this Article 6, the Key Executive becomes entitled to

receive any refund with respect to such claim due to an overpayment of any

excise tax or income tax, including interest and penalties with respect thereto,

the Executive shall (subject to the Company's complying with the requirements of

this Article 6) promptly pay to the Company the amount of such refund (together

with any interest paid or credited thereon after taxes applicable thereto).

 

 

Article 7. Assignment

 

     No Key Executive may assign, transfer, convey, mortgage, hypothecate, or in

any way encumber any severance benefit payable under the Plan, nor shall the Key

Executive have any right to receive any severance benefit under the Plan except

at the time, in the amount and in the manner provided in the Plan, provided that

the rights of a Key Executive under the Plan may be enforced by the Key

Executive's heirs and legal representatives.

 

     This Plan may and shall be assigned or transferred to, and shall be binding

upon and shall inure to the benefit of, any successor of the Company, and any

such successor shall be deemed substituted for all purposes of "the Company"

under the provisions of the Plan. As used in the preceding sentence, the term

"successor" shall mean any person, firm, corporation, or business entity which

at any time, whether by merger, purchase, or otherwise, acquires all, or

substantially all, of the assets or business of the Company. Notwithstanding

such assignments, the Company shall remain, with such successor, jointly and

severally liable for all obligations under the Plan, which, except as herein

provided, may not be assigned by the Company.

 

 

Article 8. Plan Amendment and Termination

 

     The Plan may be terminated or amended at any time by the Company Board

provided that during a Threatened Change-in-Control Period, the Plan may not be

terminated or amended in any manner that reduces the benefits to a Key Executive

or adversely affects the rights of a Key Executive under the Plan, with any such

reduction or adverse effect determined as if the Key Executive had incurred a

Separation from Service as described in Article 2. In the event of a Change in

Control, no amendment or termination made on or after the date of the Change in

Control shall apply to any Key Executive until the expiration of two (2) years

from the date of the Change in Control.

 

<PAGE>

 

Article 9. Funding

 

     The Company shall pay, or cause to be paid, any severance benefit under the

Plan out of general assets of the Company. Nothing contained herein shall

preclude the Company from establishing a grantor trust through which assets to

satisfy obligations under the Plan may be set aside to provide for benefit

payments to participants in the Plan. Any assets or property held by such trust

shall be subject to the claims of general creditors of the Company, but only

upon the insolvency or bankruptcy of the Company and only to the extent that the

assets or property held by such trust are attributable to contributions made by

the Company. No person other than the Company shall, by virtue of the provisions

of the Plan, have any interest in such funds.

 

 

Article 10. Controlling Law

 

     The Plan shall be interpreted under the laws of the state of Illinois,

except to the extent that federal law preempts such laws.

 

 

Article 11. Plan Administrator

 

     The Company is the Plan Administrator, and it shall have the authority to

control and manage the operation of this Plan with the authority to interpret

the Plan. Following a Change in Control, the Plan Administrator for purposes of

any disputed claim under Article 12 shall be an independent third party selected

by individuals constituting at least a majority of the Incumbent Board

immediately prior to the Change in Control. The Company shall pay the expenses

of such individuals in connection with such selection and shall pay the fees and

expenses of the third party serving as Plan Administrator.

 

 

Article 12. Making a Claim

 

     (a)   Submission of a Claim. In order to claim a severance benefit under

           this Plan, a Key Executive need only advise the Plan Administrator in

           writing that the Key Executive's employment with the Company has

           terminated, that the Key Executive claims a severance benefit under

           the Plan, and of the mailing address to which the severance benefit

           or related correspondence is to be sent.

 

     (b)   Denial of a Claim. If a Key Executive has made a claim for benefit

           under this Plan and any portion of the claim is denied, the Plan

           Administrator will furnish the Key Executive with a written notice

           stating the specific reasons for the denial, specific reference to

           pertinent Plan provisions upon which the denial was based, a

           description of any additional information or material necessary to

           perfect the claim and an explanation of why such information or

           material is necessary, and appropriate information concerning steps

           to take if the Key Executive wishes to submit the claim for review.

 

                The claim will be deemed accepted if the Plan Administrator does

           not approve the claim and fails to notify the Key Executive within

           ninety (90) days after receipt of the claim, plus any extension of

           time for processing the claim, not to exceed ninety (90) additional

           days, as special circumstances require. To obtain an extension, the

           Plan Administrator must advise the Key Executive in writing during

           the initial ninety (90) days if an extension is necessary, stating

           the special circumstances requiring the extension and the date by

           which the Key Executive can expect the Plan Administrator's decision

           regarding the claim.

 

<PAGE>

 

     (c)   Review Procedure. Within sixty (60) days after the date of written

           notice denying any benefits, the Key Executive or the Key Executive's

           authorized representative may write to the Plan Administrator

           requesting a review of that decision by the Company Board or the

           Committee for Key Executives in Executive Groups I, or by the Plan

           Administrator for Key Executives in Executive Group II.

 

                The request for review may contain such issues and comments as

           the Key Executive wishes to have considered in the review. The Key

           Executive may also review pertinent documents in the Plan

           Administrator's possession. The Plan Administrator, Company Board, or

           Committee, whichever is applicable, will make a final determination

           with respect to the claim as soon as practicable. The Plan

           Administrator will advise the Key Executive of the determination in

           writing and will set forth the specific reasons for the determination

           and the specific references to any pertinent Plan provisions upon

           which the determination is based.

 

                The claim will be deemed accepted on review if the Plan

           Administrator fails to give the Key Executive written notice of final

           determination within sixty (60) days after receipt of the request for

           review, plus any extension of time for completing the review, not to

           exceed sixty (60) additional days, as special circumstances require.

           To obtain an extension, the Plan Administrator must advise the Key

           Executive in writing during the initial sixty (60) days if any

           extension is necessary, stating the special circumstances requiring

           the extension and the date by which the Key Executive can expect the

           Company's decision, regarding the review of the claim.

 

 

Article 13. Legal Fees and Costs

 

     In the event a Key Executive initiates legal action to enforce his or her

right to any benefit under this Plan, the Company shall pay all reasonable legal

fees and costs incurred by the Key Executive in connection with such legal

action, provided that the Key Executive prevails on any material issue that is a

subject of the legal action.

 

 

Article 14. Severability

 

     If for any reason any provision or provisions of the Plan are determined

invalid or unenforceable, the validity and effect of the other provisions of the

Plan shall not be affected thereby.

 

 

 

<PAGE>

 

     IN WITNESS WHEREOF, the Company has caused this Amended and Restated Pactiv

Corporation Change-in-Control Severance Benefit Plan for Key Executives to be

executed on its behalf by its duly authorized officer as of the effective date

set forth above.

 

                                           PACTIV CORPORATION

 

 

                                           /s/ Michael O. Oliver

                                           -------------------------------------

                                           By:  Michael O. Oliver

                                           Its: Vice President & Chief Human

                                                Resources Officer

</TEXT>

</DOCUMENT>