Exhibit 10.1
RETIREMENT AGREEMENT
Xxxxxx X. Xxxx and International Paper Company have reached the following
Retirement Agreement, dated as of March 21, 2006. In this Retirement Agreement,
"Executive" refers to Xxxxxx X. Xxxx and "Company" refers to International Paper
Company and its affiliates, subsidiaries, predecessors, successors and assigns,
and their respective officers, directors, employees and agents.
Reasons for Agreement
---------------------
1. Executive will retire from the Company on March 31, 2006.
2. If Executive enters into this Retirement Agreement, Executive is eligible
to receive a Termination Allowance ("Allowance") under the Company Salaried
Employee Severance Plan ("Severance Plan") which is calculated on the basis of
two weeks' salary for each year or partial year of applicable service and to
certain other benefits described herein.
Wherefore, in consideration of the mutual promises and obligations herein,
Executive and the Company agree as follows:
Terms of Agreement
------------------
1. Consideration
(a) Allowance. Executive will receive the Allowance provided under the
terms of the Severance Plan. The Allowance provided under the terms of
the Severance Plan is two weeks' salary for each year or partial year
of applicable service. The Allowance will be paid in a lump sum cash
payment as soon as practicable following the later of the effective
date of retirement or the receipt of the signed Retirement Agreement
(absent revocation). The Company will withhold from Executive's
Allowance taxes and other deductions as required by law.
i. A calculation of the Allowance applicable to Executive is shown on
Exhibit A to this Retirement Agreement. It is understood, however,
that notwithstanding the amounts shown on Exhibit A, the amount of
Executive's Allowance will be calculated in accordance with, and
subject to, the terms of the Severance Plan.
ii. Acknowledgement of Receipt of Summary Plan Description. Executive
understands and agrees that the terms of his Allowance are
governed by and subject to the terms of the Severance Plan, which
are set forth in the applicable Summary Plan Description ("SPD")
and are incorporated by reference into this Retirement Agreement.
By executing this Retirement Agreement, Executive represents and
warrants that Executive has received a copy of the SPD and has had
a full opportunity to study and obtain independent legal advice,
if desired, as to the terms of the SPD before executing this
Retirement Agreement.
2. Payment for Loss on Anticipated Move to Memphis, TN. The Company has
reimbursed Executive for his financial loss of $50,000 (fifty-thousand dollars)
resulting from his deposit that was forfeited due to the termination of the
purchase agreement entered into by Executive for the purchase of a residence in
Memphis, TN. The Company also paid $34,357.20 (thirty-four thousand,
three-hundred fifty seven dollars and twenty cents) in liquidated damages and
attorneys' fees resulting from the termination of such purchase agreement. These
payments made to Executive or on behalf of Executive pursuant to this Section 2
were grossed up for tax purposes.
3. Other Payments. Executive is entitled to the following provided he
remains with the Company until March 31, 2006:
(a) SERP. Executive shall be vested in his benefit under the International
Paper Company Unfunded Supplemental Retirement Plan for Senior
Managers, as amended and restated effective January 1, 2005 (the
"SERP"). Executive may retire on an early Retirement Date (as such term
is defined in the SERP) with a reduction to Executive's SERP benefit
for early commencement, in accordance with the provisions set forth in
Section 5(D) of the SERP. Payment of Executive's SERP benefit will be
made in a lump sum distribution on January 1, 2007. Executive's SERP
benefit will be subject to the terms and conditions of the SERP and
paid in compliance with Section 409A of the Internal Revenue Code of
1986, as amended.
(b) Accelerated Vesting of Restricted Stock. Seventeen thousand (17,000)
restricted shares of common stock, plus related accrued dividends, of
the Company granted to Executive on January 11, 1994, pursuant to the
Executive Continuity Award (the "ECA") shall become vested upon
retirement. All other restricted stock held by Executive, including,
without limitation, any additional grants under the ECA, shall be
forfeited upon retirement.
(c) Continuation of Medical and Dental Coverage. The Company shall pay the
cost for six months of Executive's and Executive's dependents medical
and dental coverage as described in Exhibit B to this Agreement. If
Executive has not become eligible for coverage under another group
health plan on or before the end of such six month period, the Company
shall continue to pay for such coverage until the earlier of (i) the
first anniversary of his retirement or (ii) the date Executive becomes
eligible for coverage under another group health plan.
4. Release of Claims. Executive hereby waives and releases the Company from
any and all claims and demands Executive may have based on Executive's
employment with the Company or the termination of that employment. This waiver
and release includes, but is not limited to, a permanent and irrevocable waiver
and release of any and all rights or claims Executive may have under the Age
Discrimination in Employment Act, which prohibits age discrimination in
employment; Title VII of the Civil Rights Act of 1964, as amended, which
prohibits harassment or discrimination in employment based on race, color,
national origin, religion or sex; the Equal Pay Act, which prohibits paying men
and women unequal pay for equal work; the Americans with Disabilities Act, which
prohibits discrimination based on disability; the Family and Medical Leave Act,
which provides for unpaid leave for family or medical reasons; and any other
federal, state or local laws, ordinances, or regulations prohibiting employment
discrimination or regulating the employment relationship or the terms and
conditions of employment. This release also includes an irrevocable waiver and
release of any claims for breach of express or implied contract, including any
contract of employment entered into prior to the date of this Retirement
Agreement, and any other claims under any federal, state or local statutory or
common law relating in any way to the employment relationship. This irrevocable
waiver and release covers both claims that Executive knows about and those
Executive does not know about. This irrevocable waiver and release applies to
any occurrence or claim that arises before Executive executes this Retirement
Agreement.
Notwithstanding the foregoing, Executive does not waive or release any claim
to a vested pension benefit in accordance with, and subject to, the terms of the
Retirement Plan of International Paper Company, any claim to Workers'
Compensation benefits or any other benefit to which Executive is entitled as set
forth in Exhibit B.
5. No Further Payments. Executive understands and agrees that the benefits
stated herein are all that Executive is entitled to receive from the Company,
except for benefits set forth in Exhibit B, and any salary, wages or benefits
earned for work, if any, performed between the date of execution of this
Retirement Agreement and the effective date of retirement. Executive will not
receive any further wage, commission, incentive, separation or similar payments
from the Company, including any payments(s) that may have been specified by any
other agreement.
6. Obligations Regarding Confidentiality, Inventions and Intellectual
Property. Executive agrees that at all times after the effective date of
retirement, Executive will not publish, use or otherwise disclose (except as
directed by the Company) any Confidential Information of the Company, whether in
the possession of the Company or its employees (including, but not limited to,
Executive).
Executive agrees and represents that as of the effective date of retirement,
Executive will not retain any documents containing Confidential Information and
will deliver to the Company by the effective date of retirement any such
documents or other Company property in Executive's possession or under
Executive's control and will not use any Confidential Information for
Executive's own purposes or for the purposes of others either in any future jobs
or to create Inventions or Intellectual Property.
Executive acknowledges and agrees that the Company owns any and all rights
and interests in any Inventions or Intellectual Property which Executive
conceives of, develops or assists in developing in whole or in part prior to the
effective date of retirement that: (a) relates to the Company's current business
or anticipated future businesses; (b) uses the Company's information, equipment,
facilities or supplies; (c) is or was created or conceived of, in whole or part,
while working on the Company's time; or (d) results from Executive's work for
the Company. Executive agrees to promptly notify the Company's General Counsel
of any such Inventions or Intellectual Property. Any such Inventions or
Intellectual Property conceived or developed, in whole or in part, during
Executive's tenure with the Company will be presumed to be owned by the Company
unless Executive can prove otherwise.
Executive agrees and represents the Executive has disclosed to the Company
or will disclose to the Company by the effective date of retirement any
Inventions or Intellectual Property that Executive has conceived of, developed
or assisted in developing while employed by the Company.
"Confidential Information" as used in this Retirement Agreement includes,
but is not limited to, any information possessed or owned by the Company which
is not generally known to the public, especially if such information gives the
Company a competitive advantage or its disclosure would harm the Company. It
includes, but is not limited to, trade secrets, proprietary information and all
other information, documents or materials, owned, developed or possessed by the
Company or any employee of the Company, whether tangible or intangible, relating
in any way to the Company's research and development, customers, prospective
customers, business plans, business relationships, products or processes, costs
or profit information or data from which that information could be derived,
human resources (including internal evaluations of the performance, capability
and potential of any Company employee), business methods, databases and computer
programs.
"Inventions or Intellectual Property" as used in this Retirement Agreement
includes, but is not limited to, anything which can be protected as a trade
secret, copyright, patent or trademark, whether it arises in the form of a
concept, idea, innovation, improvement or discovery and whether it relates to a
formula, design, product, process, equipment, method of doing business,
manufacturing technique, forestry technique, plant variety, seed, or an
expression or a writing describing any of the foregoing.
This provision is in no way intended to conflict with, restrict, limit or in
any other manner change the obligation to which Executive is bound by any other
agreement entered into with the Company relating to Confidential Information
and/or Inventions or Intellectual Property.
7. Cooperation. During and after Executive's employment, Executive shall
furnish any information in his possession and fully cooperate with the Company
in connection with any litigation, administrative proceeding or inquiry that
involves the Company, or its then-current or former officers, directors,
employees or agents, about which Executive may have knowledge or information.
Such cooperation shall include, but not be limited to being available to
meet and speak with officers or employees of the Company and/or the Company's
counsel or advisors at reasonable times and locations, executing accurate and
truthful documents, providing accurate and truthful testimony at a deposition
and/or trial without the necessity of service of a subpoena, and taking such
other actions as may reasonably be requested by the Company and/or the Company's
counsel to effectuate the foregoing.
If Executive is required to participate in any legal action or proceeding
relating to the Company, the Company shall provide legal counsel to the extent
permissible by law. The Company shall also reimburse Executive for any
reasonable out-of-pocket expenses incurred by Executive in fulfilling the
obligations set forth in this Section 7.
Executive further represents and agrees that he shall not voluntarily
furnish information to or cooperate with any non-governmental entity (other than
the Company) that is a party to a proceeding or legal action involving the
Company. Nothing in this Agreement shall prohibit Executive from providing
truthful testimony or information in response to a subpoena, court order or
similar legal process; provided, however, that prior to providing any such
testimony or making any such disclosure, Executive shall provide the Company
with timely notice of the subpoena, court order or similar legal process as
promptly as practicable after receiving any such request to allow the Company a
reasonable opportunity to seek a protective order or other relief limiting or
barring such testimony and/or disclosure.
8. Non-Competition Agreement.
(a) Provision re Non-Competition. Section 3 of the Confidentiality and
Non-Competition Agreement entered into between Executive and the
Company on March 24, 2003 (the "CNA"), shall be deleted in its entirety
upon retirement. Notwithstanding the foregoing, until the first
anniversary of the Executive's retirement (the "non-compete period"),
Executive shall not, directly or indirectly, as principal, agent,
employee, consultant, director or otherwise engage in activities for or
render services to Stora Enso, UPM Kymenee or Mondi or any subsidiary,
spin-off, division or other affiliated entity of such company.
(b) Furthermore, until the first anniversary of Executive's retirement from
the Company, Executive will not pursue a position of any nature with,
or directly or indirectly render services to, a spin-off of
Weyerhaeuser's uncoated free sheet business without first notifying,
and obtaining consent from, the Company. If the Company does not
consent and Executive is unable, during the non-compete period, despite
diligent search, to obtain employment consistent with his experience
and education by reason of not being allowed to work for a spin-off of
Weyerhaeuser's uncoated free sheet business, Executive shall so notify
the Company in writing or by telephone. Upon receipt of such
notification, the Company shall make monthly payments to Executive
equal to the monthly base pay he was receiving from the Company in the
month prior to his retirement from the Company for each month (or pro
rata for periods less than a month) of such unemployment during the
non-compete period.
(c) Provision re Jurisdiction. Section 8(d) of the CNA is deleted in its
entirety.
(d) Written Amendment. This Section 8 is a written amendment for purposes
of Section 8(b) of the CNA.
(e) Full Force and Effect. All other provisions of the CNA, a copy of which
is attached hereto, remain in full force and effect.
9. Indemnification and Insurance. Executive shall continue at all times to
be indemnified with respect to claims arising out of or in connection with his
employment by the Company ("Employment Related Claims") to the fullest extent
permitted by applicable law. The Indemnity Agreement between the Company and
Executive dated March 5, 2004 shall remain in effect. The Company shall at all
times provide Executive with Directors and Officers liability insurance coverage
with respect to Employment Related Claims on the same terms and conditions
provided Company officers as of the date the claim is made.
10. Covenant Not to Xxx. Except to the extent prohibited by law, (i)
Executive represents and agrees that Executive has not, and will not, file a
lawsuit with respect to any matter released in Section 4 of this Retirement
Agreement and (ii) should any third party bring any action or claim against the
Company on Executive's behalf, Executive acknowledges and agrees that this
Retirement Agreement provides full relief and that Executive will not accept any
additional money or relief other than is specified under the terms of this
Retirement Agreement.
If Executive violates this Retirement Agreement and files a lawsuit based on
claims that Executive has validly waived and released, Executive understands and
acknowledges that a court of competent jurisdiction may require Executive to pay
appropriate damages and sanctions, which may include payment of any costs
incurred by the Company, including reasonable attorneys' fees, in defending
against Executive's lawsuit, and other damages or sanctions the court deems
appropriate.
11. Validity. Notwithstanding any other provisions in this Retirement
Agreement, this Retirement Agreement will not waive, and will not be interpreted
to waive, any rights or claims Executive may have that arise after the execution
of this Retirement Agreement by Executive, nor will it be interpreted to provide
that Executive has entered into any covenant or promise that would be invalid
under applicable federal or state law. If any portion of this Retirement
Agreement is invalid for any reasons, the invalid portion will be deemed severed
from the remaining portions of the Retirement Agreement, which will remain in
force.
12. Non-Admission. By entering into this Retirement Agreement, the Company
does not admit that it has done anything wrong or has breached any obligation
with respect to Executive's employment.
13. Termination of Employment Relationship. Executive understands and agrees
that Executive's relationship to the Company has been permanently and
irrevocably terminated as of the date he retires. Executive agrees not to apply
for or otherwise seek reemployment with the Company at any time, and agrees that
the Company does not have any obligation, contractual or otherwise, to reemploy
Executive in the future.
14. Special Notification. Because this Retirement Agreement includes a
waiver and release of claims arising under the Age Discrimination in Employment
Act, federal law provides that Executive may have twenty-one (21) days from
receipt of the Retirement Agreement to review and consider this Retirement
Agreement before executing it. Federal law also provides that the Company must
advise Executive to consult with an attorney before signing this Retirement
Agreement. Executive understands that it is Executive's decision whether or not
to consult an attorney.
Pursuant to federal law, Executive is further advised that this waiver and
release do not apply to claims that arise after the execution of this Retirement
Agreement. Executive further understands and agrees that Executive is receiving
additional consideration that Executive would not be entitled to receive under
any Company policy, practice or plan if Executive did not execute this
Retirement Agreement which includes the waiver and release of claims under the
Age Discrimination in Employment Act.
Executive represents and warrants that Executive has had ample opportunity
to consider this Retirement Agreement and consult an attorney, if desired,
before executing this Retirement Agreement.
15. Revocation of Retirement Agreement. Federal law also provides that,
because this Retirement Agreement waives and releases claims arising under the
Age Discrimination in Employment Act, Executive may revoke this Retirement
Agreement within seven (7) days after Executive executes it. For this revocation
to be effective, written notice must be delivered to the Senior Vice President
Human Resources of the Company no later than the close of business on the
seventh day after Executive has executed this Retirement Agreement. If Executive
revokes the Retirement Agreement, it will not be effective or enforceable, and
Executive will not receive the consideration set forth in this Retirement
Agreement.
16. Resolution of Disputes. In the event any dispute arises regarding the
benefits to which Executive may be entitled under the terms and the applicable
provisions of the Severance Plan, such dispute will be resolved in accordance
with the Severance Plan's claim review procedure as provided in the SPD. In the
event any dispute arises under this Retirement Agreement that does not relate to
the Severance Plan, this Retirement Agreement will be construed in all respects
by the laws of the State of Connecticut without regard to its laws or
regulations relating to conflict of laws.
17. No Other Promises. The Company has made no promises to Executive other
than those in this Retirement Agreement. This Retirement Agreement constitutes
the entire agreement between Executive and the Company. It may not be amended,
modified or supplemented except by a written agreement signed by both Executive
and the Senior Vice President, Human Resources of International Paper Company,
or his designee, that expressly amends, modifies or supplements this Retirement
Agreement.
18. Nullification. This Retirement Agreement may be declared null and void
by the Company at its option if Executive refuses to work through the effective
date of retirement.
19. Execution of Retirement Agreement. Executive acknowledges that his
execution and delivery of the Retirement Agreement and not revoking such
agreement is a condition to Executive's right to receive the consideration set
forth in Section 1 and Section 3 above. If Executive executes the Retirement
Agreement before his retirement date, he agrees to again execute the Retirement
Agreement on or after his retirement date, as a condition to Executive's right
to receive the consideration set forth in this Retirement Agreement.
BY SIGNING THIS RETIREMENT AGREEMENT, EXECUTIVE ACKNOWLEDGES THAT EXECUTIVE HAS
CAREFULLY READ THIS RETIREMENT AGREEMENT, UNDERSTANDS ITS TERMS AND THE FACT
THAT IT RELEASES EXECUTIVE'S KNOWN AND UNKNOWN CLAIMS, HAS HAD FULL OPPORTUNITY
TO OBTAIN INDEPENDENT LEGAL ADVICE, AND HAS VOLUNTARILY ENTERED INTO THIS
RETIREMENT AGREEMENT WITH THE INTENTION THAT IT WILL BE LEGALLY BINDING.
WITNESS:
/s/ Xxxxxxx XxXxxxx /s/ Xxxxxx X. Xxxx
--------------------------- ---------------------------
Witness Signature Xxxxxx X. Xxxx
--------------------------- ---------------------------
Date: 03/21/06 Date: 03/21/06
WITNESS: INTERNATIONAL PAPER COMPANY
/s/ Xxxx X. Xxxxxx /s/ Xxxxxx X. Xxxxxx
--------------------------- ---------------------------
Witness Signature Xxxxxx X. Xxxxxx
--------------------------- ---------------------------
Date: 03/21/06 Date: 03/21/06
INTERNATIONAL PAPER COMPANY
/s/ Xxxxx X. Xxxxx
---------------------------
Xxxxx X. Xxxxx
---------------------------
Date: 03/21/06
EXHIBIT A
ALLOWANCE CALCULATION
1. Weekly salary $ 15,572.12
2. Applicable service x 26
3. $ 404,875.12
4. 2 week multiplier x 2
5. $ 809,750.24
--------------------------------------------------------------------------------
Allowance $ 809,750.24
--------------------------------------------------------------------------------
Provision Governing Allowance
In order to receive the allowance, you must sign a retirement agreement.
Note: Please note that the above calculation is based on the latest data
available. If any data items are found to be incorrect or if there is a
calculation error, a recalculation of the above amount will be required. In no
event will the Allowance be other than that provided under the terms of the
Salaried Employee Severance Plan.
--------------------------------------------------------------------------------
EXHIBIT B
BENEFITS ENTITLEMENT
Pay in Lieu of Vacation and Personal/Floating Holidays
------------------------------------------------------
Pay for vacation and personal/floating holidays due but not yet taken at the
time of retirement will be paid in a lump sum.
Special Vacation Pay
--------------------
You will receive the special vacation pay for retiring employees, pursuant to HR
Policy 401, in a lump sum.
HEALTH AND WELFARE BENEFITS
---------------------------
Medical Coverage
----------------
As you are retirement eligible, you are eligible for post-retirement medical
coverage throughout retirement. Alternatively, you may elect to continue medical
coverage under COBRA for up to 18 months, as described below.
The post-retirement medical coverage or COBRA continuation coverage, whichever
you choose, will continue at no cost to you during the six months following your
effective date of retirement.
See Post-Retirement Medical Coverage under the Retirement Benefits section below
for more details.
Dental Coverage
---------------
Dental coverage in effect on your effective date of retirement for you and your
eligible dependents will continue at no cost to you during the six months
following your effective date of retirement. In order to receive this six months
of no cost coverage, you must complete a COBRA election form following your
effective date of retirement. You will be able to continue dental coverage for
up to 12 additional months under COBRA, as described below.
COBRA
-----
The Consolidated Omnibus Budget Reconciliation Act (COBRA) permits you and any
covered dependents to continue medical and dental coverage for up to 18 months
from your qualifying event date. The COBRA coverage rate is 102 percent of the
full cost of coverage. The COBRA period may be extended in certain cases of
disability or in the event you or a covered dependent have a second qualifying
event.
Although you are eligible to continue medical and dental coverage at no cost
during the six months following your effective date of retirement, the coverage
is still considered to be part of the COBRA period, and you must complete a
COBRA election form if you wish to have this six months of no cost coverage. If
you wish medical and/or dental coverage to continue beyond the six months of no
cost coverage, you will receive another COBRA election form with the applicable
rates noted for you to elect continued coverage under COBRA.
Your election for COBRA coverage must be made within 60 days of the date you are
notified of your COBRA eligibility or the date of your qualifying event,
whichever is later.
Additional information and necessary forms for enrolling in COBRA will be
forwarded to you under separate cover, including the qualifying event date, the
COBRA election period and a list of events which terminate COBRA coverage.
Group Life Insurance
--------------------
o Basic Life/AD&D Insurance - Basic life/AD&D coverage will cease on your
effective date of retirement. You can convert your basic life coverage
(excluding AD&D) to a personal policy within 31 days of the cessation of
coverage without taking a medical examination or showing evidence of good
health. Contact your local METLIFE office for further information. To locate
an office in your area, call 0-000-XXX-XXXX.
o Optional GUL Life/AD&D, Optional GUL Dependent Spouse's Life/AD&D and
Optional GUL Dependent Child Life Insurance - These optional GUL coverages
can be continued following your effective date of retirement under the GUL
portability provisions with METLIFE. METLIFE will contact you directly on
the process for making contributions.
o Travel Accident Insurance - Your travel accident coverage will cease on your
effective date of retirement. There is no conversion option available for
this coverage.
Disability Plans
----------------
Your coverage under the salary continuance and long-term disability plans will
cease on your effective date of retirement. There is no conversion option
available for these coverages.
VARIABLE COMPENSATION
---------------------
Management Incentive Plan (MIP)
-------------------------------
You will receive a prorated MIP award based on your MIP target award and the
period of active employment during the year in which your employment ends.
Payment will be made as soon as practicable following the later of your
effective date of retirement or receipt of the signed Retirement Agreement
(absent revocation).
Stock Option Program
--------------------
Options awarded prior to April 9, 2002 will be canceled as of your effective
date of retirement.
You may continue to exercise outstanding options awarded on or after April 9,
2002, for one year from your effective date of retirement but, in no event,
beyond the original option term. During such period, you should use Xxxxxxx
Xxxxx to exercise your outstanding options. Options awarded on or after April 9,
2002, will be canceled at the end of the one-year period. Options will be
reloaded on shares awarded on and after April 9, 2002, during retirement in
accordance with the terms of the Stock Option Program.
Performance Share Plan (PSP)
---------------------------
If participating, for performance periods beginning in 2004 and after, you will
be entitled to shares prorated based upon the number of months you are employed
during each segmented measurement period. Shares will be paid at the end of each
applicable three-year performance period based on actual company performance.
All payments are subject to the terms of the applicable Plan.
For performance periods beginning prior to 2004, you will be entitled to shares
prorated based on the number of months you are employed during each applicable
three-year performance period. Shares will be paid within 30 days of your
effective date of retirement based on target company performance.
RETIREMENT BENEFITS
-------------------
Salaried Savings Plan (SSP)
---------------------------
o Vesting - No further contributions (employee or company) will be made to
your SSP account after your effective date of retirement. You will be
entitled to your vested SSP account balance.
o Final Distribution/Deferrals - After your effective date of retirement, you
may request a distribution of your SSP account or may elect to leave your
SSP account in the SSP and defer receipt to any time in the future, but not
beyond age 70 1/2. You should call the InfoLine and request a Distribution
and Deferral Form.
o You may take a distribution of your SSP account in a lump sum or in
installments over a period of five to 20 years. The taxable portion of a
distribution may be rolled over to an XXX or another employer's plan.
o If you defer receipt, you can change the deferral date and payment option at
anytime before payment begins. If you fail to complete a form, your SSP
account will be distributed to you automatically in a lump sum payment at
age 65.
o Forms/Information - For forms and other information on your SSP account, you
should contact the InfoLine at 0-000-000-0000.
Deferred Compensation Savings Plan (DCSP)
-----------------------------------------
o Vesting - No further contributions (employee or company) will be made to
your DCSP account after your effective date of retirement. You will be
entitled to your vested DCSP account balance.
o Distribution/Deferral - You may elect to defer distribution of your pre-2005
vested DCSP account up to age 70 1/2 and/or may request distribution in
installment payments. This distribution election must be made before your
effective date of retirement. If no such election is made, your pre-2005
vested DCSP account will be distributed in a lump sum payment in January
following the year in which you terminate employment.
Your post-2004 DCSP account will be distributed based on your distribution
election in effect on your effective date of retirement.
o Forms/Information - For forms and other information on your DCSP account,
you should contact the InfoLine at 0-000-000-0000.
Retirement Plan
---------------
You are eligible for retirement under the Retirement Plan of International Paper
Company and are eligible to receive benefits the first day of any month after
your effective date of retirement. When you choose to retire, please notify the
Employee Service Center at least 90 days prior to the date of your retirement.
Post-Retirement Medical Coverage
--------------------------------
You are eligible for post-retirement medical coverage.
Medical coverage will be provided at no cost to you during the six months
following your effective date of retirement. Coverage may be provided under the
International Paper plan or through COBRA. In order to receive this six months
of no cost coverage, you must complete an election form as described below.
If you elect coverage under the International Paper plan, following the six
months of no cost coverage, you may continue post-retirement medical coverage
under the International Paper plan throughout your retirement. If you elect
coverage under COBRA, following the six months of no cost coverage, you may
continue COBRA medical coverage for up to an additional 12 months. If you elect
COBRA continuation coverage, you will forfeit your eligibility for
post-retirement medical coverage under the International Paper plan in the
future. For that reason, you should seriously consider whether you want to elect
continuation coverage under the IP plan or under COBRA.
To elect medical continuation under the International Paper plan, you must
request a retiree medical packet from the Employee Service Center and make the
retiree medical election. To elect medical continuation under COBRA, you must
make an election on the COBRA election form that will be sent to you
automatically following your effective date of retirement.
If you start pension payments following your effective date of retirement, your
retiree medical contributions will be deducted from your monthly pension checks.
If you elect to defer pension payments, you may make the retiree medical
contributions monthly to the Employee Service Center until your pension
payments, if any, start.
Alternatively, if you have medical coverage under a plan not sponsored by the
Company, you may defer retiree medical coverage under the Company sponsored
plan. In order to enroll for retiree medical coverage under the Company
sponsored plan at a deferred date, you must provide evidence of loss of other
coverage and enroll within 31 days of such loss of coverage.
The company established caps or limits on the Company's contributions toward the
cost of medical benefits. The maximum annual Company contribution is $2,832.00
for pre-Medicare coverage and $708.00 for post-Medicare coverage. Once the
Company's contribution reaches the cap, the remaining cost of medical benefits
is the retiree's financial responsibility.
Retiree Medical Savings Program
-------------------------------
No further contributions (employee or company) will be made to your Retiree
Medical Savings Program accounts after your effective date of retirement.
Your accounts may be used to reimburse you for the amount of your contribution
to the Retiree Medical Plan. You may also be reimbursed for the payment of
Medicare Part B premiums for you and your spouse or for the cost of any other
post-retirement medical insurance premiums paid for by you and/or your spouse,
if you so choose.
Post-Retirement Life Insurance
------------------------------
You will have post-retirement life coverage at no cost to you in the amount of
$25,000.
OTHER BENEFITS
--------------
Executive Supplemental Insurance Plan (ESIP)
You have been provided an individually-owned permanent life insurance policy
underwritten by SunLife. The Company will continue to pay your premiums for this
policy until age 65. Based upon assumed investment returns, the cash value in
your policy should be sufficient to provide a post-retirement benefit of one
times (1X) your final salary ($809,705.00). You will receive an annual benefit
statement each policy anniversary (November 1st), which will provide you with
current information regarding your policy.
Your ESIP policy provides additional options. For example, you can:
o Continue your current death benefit of two times (2X) your final salary
($1,619,500). Additional premiums may be required from you to maintain this
level of post-retirement life insurance coverage.
o Surrender your policy for its cash value or convert your policy into an
annuity.
o Borrow or make a partial withdrawal against the cash value of the policy;
however, this will reduce your death benefit accordingly.
o Combine any of the above options.
Please note only the owner of the policy can elect the above options. Currently,
your policy is owned by a trust. Therefore, the trustee must complete and sign
any paperwork that changes your policy.
Financial Counseling
--------------------
You will be provided with financial counseling services in accordance with the
terms and conditions of the Executive Financial Counseling Program in the amount
of $7,500, which amount must be used by December 31, 2006.
