PACTIV CORPORATION

                        2002 INCENTIVE COMPENSATION PLAN



ARTICLE 1.  ESTABLISHMENT, PURPOSE, AND DURATION



     1.1  ESTABLISHMENT. Pactiv Corporation, a Delaware corporation (hereinafter

referred to as the "Company"), hereby establishes an incentive compensation plan

to be known as the Pactiv Corporation 2002 Incentive Compensation Plan

(hereinafter referred to as the "Plan"), as set forth in this document.



     The Plan permits the grant of Annual Incentive Awards, Nonqualified Stock

Options, Incentive Stock Options, Stock Appreciation Rights, Restricted Stock,

Restricted Stock Units, Performance Units, Performance Shares, Stock Awards, and

Cash-Based Awards.



     Subject to approval by the Company's shareholders, the Plan shall become

effective as of May 17, 2002 (the "Effective Date") and shall remain in effect

as provided in Section 1.3 hereof.



     1.2  PURPOSE OF THE PLAN. The purpose of the Plan is to promote the

long-term success of the Company for the benefit of shareholders by encouraging

its Directors, officers, and Employees to have investments in the Company so

that, as shareholders themselves, those individuals will be more likely to

represent the views and interests of other shareholders and by providing

incentives to such Directors, officers, and Employees for continued service. The

Company believes that the possibility of participation under the Plan will

provide its Directors, officers, and Employees an incentive to perform more

effectively and will assist the Company in attracting and retaining people of

outstanding training, experience, and ability.



     1.3  DURATION OF THE PLAN. The Plan shall commence as of the Effective

Date, as described in Section 1.1 hereof, and shall remain in effect, subject to

the right of the Committee to amend or terminate the Plan at any time pursuant

to Article 16 hereof, until all Shares subject to it shall have been purchased

or acquired according to the Plan's provisions.



     1.4  SUCCESSOR PLAN. This Plan shall serve as the successor to the Pactiv

Corporation "Stock Ownership Plan" (the "Predecessor Plan"), and no further

grants shall be made under the Predecessor Plan from and after the Effective

Date of this Plan. All outstanding Options, Stock Appreciation Rights, and Share

issuances under the Predecessor Plan immediately prior to the Effective Date of

this Plan are hereby incorporated into this Plan and shall accordingly be

treated as Options, Stock Appreciation Rights, or Share issuances under this

Plan. However, each such Option, Stock Appreciation Right, and Share issuance

shall continue to be governed solely by the terms and conditions of the

instrument evidencing such grant or issuance, and, except as otherwise expressly

provided herein, no provision of this Plan shall affect or otherwise modify the

rights or obligations of holders of such incorporated Options, Stock

Appreciation Rights, or Shares. Any Shares of common stock reserved for issuance

under the Predecessor Plan in excess of the number of Shares as to which

Options, Stock Appreciation Rights, or other Awards have been awarded thereunder

shall no longer be available for grant after the Effective Date. Any Shares as

to which Options, Stock Appreciation Rights, and Shares granted or issued under

the Predecessor Plan may lapse, expire, terminate, or be cancelled, are settled

in cash in lieu of common stock, are tendered (either by actual delivery or

attestation) to pay the Option Price, or satisfy any tax withholding

requirements shall be deemed available for issuance or reissuance under Section

4.1 of the Plan.

{PAGE}



ARTICLE 2. DEFINITIONS



     Whenever used in the Plan, the following terms shall have the meanings set

forth below, and when the meaning is intended, the initial letter of the word

shall be capitalized.



     2.1   "AFFILIATE" shall have the meaning ascribed to such term in Rule

           12b-2 of the General Rules and Regulations of the Exchange Act.



     2.2   "ANNUAL INCENTIVE AWARD" means an Award granted to a Participant as

           described in Article 12 herein.



     2.3   "AWARD" means, individually or collectively, a grant under this Plan

           of Annual Incentive Awards, Nonqualified Stock Options, Incentive

           Stock Options, Stock Appreciation Rights, Restricted Stock,

           Restricted Stock Units, Performance Units, Performance Shares, Cash-

           Based Awards, or Stock Awards.



     2.4   "AWARD AGREEMENT" means either (i) an agreement entered into by the

           Company and each Participant setting forth the terms and provisions

           applicable to Awards granted under this Plan, or (ii) a statement

           issued by the Company to a Participant describing the terms and

           provisions of such Award.



     2.5   "BENEFICIAL OWNER" or "BENEFICIAL OWNERSHIP" shall have the meaning

           ascribed to such term in Rule 13d-3 of the General Rules and

           Regulations under the Exchange Act.



     2.6   "BOARD" or "BOARD OF DIRECTORS" means the Board of Directors of the

           Company.



     2.7   "CASH-BASED AWARD" means an Award granted to a Participant as

           described in Article 10 herein.



     2.8   "CODE" means the Internal Revenue Code of 1986, as amended from time

           to time.



     2.9   "COMMITTEE" means any Committee appointed by the Board to administer

           Awards under the Plan, as specified in Article 3 herein.



     2.10  "COMPANY" means Pactiv Corporation, a Delaware corporation, and any

           successor thereto as provided in Article 19 herein.



     2.11  "COVERED EMPLOYEE" means a Participant who, as of the date of vesting

           and/or payout of an Award, as applicable, is a "covered employee," as

           defined in Code Section 162(m), or any successor statute, and the

           regulations promulgated under Code Section 162(m).



     2.12  "DIRECTOR" means any individual who is a member of the Board of

           Directors of the Company; provided, however, that such Director is

           not an Employee of the Company.



     2.13  "DISABILITY" means the permanent inability of the Participant, which

           is a result of accident or sickness, to perform such Participant's

           occupation or employment for which the Participant is suited by

           reason of the Participant's previous training, education and

           experience and which results in the termination of the Participant's

           employment or directorship with the Company, its Affiliates, and/or

           its Subsidiaries.



     2.14  "EMPLOYEE" means any employee of the Company or any of its Affiliates

           and/or Subsidiaries.



     2.15  "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended

           from time to time, or any successor act thereto.



     2.16  "FAIR MARKET VALUE" means the average of the highest and the lowest

           sales prices of a Share on the composite tape for such date, as

           reported by the National Quotation Bureau Incorporated, provided that

           if (i) no sales are included on the composite tape for such date, or

           (ii) in the opinion of the Committee, the sales on such date are

           insufficient to constitute a representative market, then the Fair

           Market Value of a Share on such date shall be deemed to be the

Home        Intelligence        Services        Subscriptions        News        About Us

Contact Us       Terms of Use       Resend Documents       Shopping Cart

Copyright © 2008 The Consus Group LLC