International Paper CEO Performance Incentive Plan for Champion Merger Integration (July 1, 2000)

Summary

This agreement is between International Paper Company and its Chairman and CEO. It sets out a performance incentive plan to reward the CEO for achieving $425 million in annual savings from the integration of Champion International Corporation by December 31, 2001. The CEO may receive cash, stock, or performance units based on the level of savings achieved, as determined by a committee. Awards are forfeited if objectives are not met. The plan is governed by New York law and includes provisions for tax withholding, non-transferability, and accelerated awards in the event of a change of control.

EX-10.1 2 0002.txt CHIEF EXECUTIVE OFFICER PERFORMANCE INCENTIVE PLAN International Paper Champion Merger Integration Chief Executive Officer Performance Incentive Plan July 1, 2000 I. Purpose The purpose of the Chief Executive Officer Performance Incentive Plan (the Plan) is to provide additional incentive and recognition to the Participant for achieving the aggressive integration of Champion International Corporation and International Paper Company resulting in savings of $425,000,000 by December 31, 2001. II. Plan Description The Plan provides shares of stock, performance units, and/or cash to the Participant upon successful completion. Awards are forfeited if performance objectives are not achieved as determined by the Management Development and Compensation Committee (the "Committee"). A. Participation Participation in this plan is limited to the Chairman of the Board and Chief Executive Officer. Participation in the Plan, or receipt of an award under this Plan, does not give the Participant any right to a subsequent award, nor any right to continued employment by the Company for any period. B. Objectives The primary objective is to achieve $425,000,000 of annual savings by December 31, 2001. The actual amount of savings will determine the amount of the earned award according to the following table: Savings: $340mm $425mm $485mm % of Target: 50% 100% 125% Earned Award: 50,000 100,000 125,000 C. Earned Awards The Target Award is expressed as 125,000 performance units. The performance units will be granted to the Participant and will be earned in full or in part based upon the committee's determination of the level of achievement of the performance objective as identified in Section I. Earned awards are paid in cash. Each performance unit will be equal to one share of International Paper common stock at December 31, 2001. (Share price used to calculate the award will be the average between the high and low for the ten business days immediately proceeding the last day of the period). III. Administration The Plan operates at the discretion of the Committee. The Committee may exercise considerable discretion and judgment in interpreting the Plan and adapting, from time to time, rules and regulations that govern the administration of the Plan. Decisions of the Committee are final, conclusive and binding on all parties, including the Company, its Shareholders, and employees. The Committee may at any time suspend, terminate, modify, or amend any or all of the provisions of this Plan. IV. Method and Timing of Payment of Awards Performance units will be earned on the date the Committee determines the performance objective has been achieved. Payment may be in cash, in shares of International Paper common stock, or in any combination of cash and/or stock as determined by the Committee in its discretion. The Committee, in its discretion, may award all or part of any unearned award to the Participant, Participant's estate or beneficiary upon the Participant's death or total disability. V. Governing Law The Plan is governed by the laws of the State of New York. VI. Tax Withholding The Company will deduct from any award made under the Plan, a sufficient amount to cover withholding of any federal, state or local taxes required by law, or to take such other action as may be necessary to satisfy any such withholding obligations. VII. Non-Transferability of Award No award, Under this Plan, and no rights or interests therein, will be assignable or transferable by a Participant (or legal representative). VIII. Change of Control Should the Company experience a Change of Control as described in the Participant's letter agreement dated February 11, 1997, all awards described in the Plan will be 2 awarded in full at the earlier of the date of the change of control or the Participant's termination from the Company. IX. Cost Estimate Stock Price: $35 $40 $45 At 100% Performance: $4,375,000 $5,000,000 $5,625,000 At 175% Performance: $7,656,250 $8,750,000 $9,843,750