15. Share-Based Compensation

The Company has a long-term equity incentive plan, which allows for grants of restricted stock, restricted stock units, performance awards, stock appreciation rights, and stock options to directors, officers, and employees, as well as others who engage in services for PCA. On February 28, 2024, our board of directors approved, and, on May 8, 2024, our stockholders approved, the amendment and restatement of the plan. The amendment extended the plan’s term to May 8, 2034 and increased the number of shares of common stock available for issuance under the plan by 2.4 million shares. The total number of shares authorized for past and future awards is 14.3 million shares.

On February 25, 2026, our Compensation Subcommittee approved new forms of equity award agreements under the long-term equity incentive plan for Total Shareholder Return (TSR) performance units, Return on Invested Capital (ROIC) performance units, and restricted stock units (RSUs). These agreements apply to performance units and RSUs granted on or after February 25, 2026, with no changes to prior year award forms. The new agreements are largely consistent with prior versions, with targeted amendments addressing vesting treatment upon certain termination events. The other material terms of the equity award agreement forms remain substantially unchanged.

As of June 30, 2026, assuming performance units are paid out at the target level of performance, 2.2 million shares were available for future grants under the current plan. Forfeitures are added back to the pool of shares of common stock available to be granted at a future date.

Compensation Expense

Our restricted stock awards and RSU awards cliff vest four years after the grant date. The fair values of restricted stock and RSUs are determined based on the closing price of the Company’s stock on the grant date. Compensation expense, net of estimated forfeitures, is recorded over the requisite service period. As PCA’s Board of Directors has the ability to accelerate the vesting of restricted stock awards upon an employee’s retirement, the Company accelerates the recognition of compensation expense for certain employees approaching normal retirement age.

Performance unit awards granted to certain key employees are earned based on the achievement of defined performance rankings of ROIC or TSR compared to the ROIC and TSR for peer companies. TSR and ROIC awards cliff vest three and four years, respectively, and for performance unit awards made in 2026 and 2025, in terms of grant date value, 50% used TSR as the performance measure and 50% used ROIC as the performance measure. The ROIC component of performance unit awards is valued based on the closing price of the stock on the grant date. As the ROIC component contains a performance condition, compensation expense, net of estimated forfeitures, is recorded over the requisite service period based on the most probable number of awards expected to vest. The TSR component of performance unit awards is valued using a Monte Carlo simulation as the TSR component contains a market condition. The Monte Carlo simulation estimates the fair value of the TSR component based on the expected term of the award, a risk-free interest rate, expected dividends, and expected volatility of the Company’s common stock and the common stock of the peer companies. Compensation expense is recorded ratably over the expected term of the award regardless of whether the market condition is satisfied.

For RSU and performance unit awards that meet retirement-eligibility provisions, the Company recognizes compensation expense over the period from the grant date through the date an employee attains retirement eligibility while retaining the award (derived service period), subject to a minimum period of 12 months.