EXHIBIT 10.1
SUPPLEMENTAL PENSION BENEFIT AGREEMENT BETWEEN
INTERNATIONAL PAPER COMPANY AND XXXXXXXXXXX X. XXXXXXX
[INTERNATIONAL PAPER COMPANY LETTERHEAD]
December 14, 2004
Xx. Xxxxxxxxxxx X. Xxxxxxx
Senior Vice President and Chief Financial Officer
International Paper
000 Xxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Re: Supplemental Pension Benefit
Dear Xxxxx:
As an employee of International Paper (the "Company" or "IP"), you are entitled
to certain pension benefits under the Company's retirement plans, specifically
the Qualified Plan, and the Restoration Plan (collectively referred to herein as
the "Retirement Plans), based on your date of birth (April 24, 1958), and your
date of hire by IP (December 1, 2002). To recognize your seven (7) years of
service at Xxxxxx Xxxx Xxxxxx, a subsidiary of IP ("CHH") prior to your transfer
to IP in Stamford, CT. in December 2002, the Company previously agreed to
provide you with a supplemental pension benefit (described below) that takes
into account your CHH service.
This letter explains that the Company's obligation to pay you a supplemental
pension benefit is distinct from any benefits you may be eligible to receive
under IP's Supplemental Executive Retirement Plan (the "SERP"). You became
eligible for the SERP upon your appointment as Senior Vice President and Chief
Financial Officer of the Company in April 2003, and the terms of the SERP may
only be modified by a decision of the Management Development & Compensation
Committee of the Board. Thus, this letter relates only to the benefits to which
you are entitled under the Retirement Plans and the supplemental benefit, and
supercedes any prior oral or written communication on this subject.
Retirement Plans. The Retirement Plans are described in documents that set forth
the specific terms and conditions under which you are eligible to receive a
pension from IP. Copies of these Retirement Plans (or the Summary Plan
Descriptions) have been provided to you. You should be aware that the Company
may amend or discontinue these plans in its sole discretion, subject to
applicable U.S. laws governing termination of plan benefits. The Qualified Plan
is funded, and governed by ERISA. The plan pays benefits based on compensation
up to a maximum limit ($205,000 in 2004). The Company has also established a
plan for highly compensated individuals, namely the Restoration Plan. Under the
terms of these plans, you accrue benefits under these plans from your date of
hire by IP to your date
of termination, or the earlier amendment or termination of these plans.
Generally, these plans provide that benefits so accrued may not be rescinded,
but you should also be aware that pension amounts to which you may be entitled
under these plans may be adversely affected by liquidation, reorganization or
bankruptcy of the Company.
Pension Supplement. This pension supplement recognizes the fact that your IP
pension, accrued under the terms of the Retirement Plans, does not credit your
years of service at CHH toward calculating eligibility for vesting, or the
amount of your pension benefits. The pension supplement, paid from the general
assets of the Company, will take into account your seven (7) years of service
with CHH, commencing October 1, 1995.
Vesting and Pension Supplement Calculation. Your CHH service will be included in
determining your eligibility for retirement. The pension supplement will be in
addition to the pension to which you may be entitled under the Retirement Plans.
The amount of the pension supplement will be calculated by using your date of
hire by CHH (October 1, 1995) to your termination date from IP, using the
formula in effect as of said date in the Retirement Plans. The amount of the
pension supplement will be equal to the difference between (1) the payment to
which you would be entitled using your combined years of CHH and IP service, and
(2) the amount to be paid under the Retirement Plans without credit for CHH
service. The pension supplement will be paid in accordance with the terms of the
Restoration Plan.
Early Termination. You will not be entitled to receive your vested retirement
benefit until you reach the age of 55.
Hypothetical Pension Benefits with CHH Service. This is an example, based on an
assumed salary and bonus at termination, of the annual payments for which you
would eligible, if you were to retire at age 65 with credit for both CHH and IP
service.
IP and CHH Service Credit (28 years of service)
-------------------------------------------
Age 65 (2023)
-------------------------------------------
Qualified Plan $83,254
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Restoration Plan $489,132
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$572,386
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We hope this letter addresses your questions and clarifies the Company's
agreement with you. Please acknowledge your acceptance of this agreement by
signing below.
Sincerely,
/s/ Xxxxx Xxxxxx
--------------------------------------
Xxxxx Xxxxxx
Senior Vice President, Human Resources
/s/ Xxxx X. Xxxxxx
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Xxxx X. Xxxxxx
Chairman & CEO
Accepted: /s/ Xxxxxxxxxxx X. Xxxxxxx
----------------------------
Xxxxxxxxxxx X. Xxxxxxx
Dated: December 14, 2004
cc: Xxxxx X. Xxxxx
Xxxxxx X. Xxxxxx
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