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Exhibit 10.23
INTERNATIONAL PAPER COMPANY
RESTRICTED STOCK AND
DEFERRED COMPENSATION PLAN
FOR NON-EMPLOYEE DIRECTORS
Effective January 1, 2007
INTERNATIONAL PAPER
COMPANY
RESTRICTED STOCK AND DEFERRED COMPENSATION
PLAN
FOR NON-EMPLOYEE DIRECTORS
1. Purpose and Effective Date of Plan
This plan shall be known as the International Paper Company
Restricted Stock and Deferred Compensation Plan for Non-Employee
Directors (the "Plan"). The purpose of the Plan is to enable
International Paper Company ("International Paper") to attract and
retain persons of outstanding competence to serve as non-employee
directors of International Paper, and to permit such non-employee
directors to defer receipt of all or a portion of their annual
retainer and committee chair fees, payable in cash or restricted
shares of International Paper common stock, for services in 2005
and thereafter.
Prior to January 1, 2007, equity compensation to
non-employee directors was governed by the International Paper
Company Restricted Stock Plan for Non-Employee Directors,
originally effective January 1, 1988; and, deferrals of cash
and equity compensation by non-employee directors were governed by
the International Paper Company Nonfunded Deferred Compensation
Plan for Directors, originally effective December 11, 1973.
Effective January 1, 2007, these two plans were combined into
this Plan and renamed the International Paper Company Restricted
Stock and Deferred Compensation Plan for Non-Employee
Directors.
This Plan is a non-funded, non-qualified deferred compensation
plan that is intended to comply with Section 409A of the
Internal Revenue Code of 1986, as amended (the "Code"). The Plan is
not subject to full protection under the Employee Retirement Income
Security Act of 1974, as amended ("ERISA").
2. Stock Available for the Plan
An aggregate of 250,000 shares of $1.00 par value common stock
of International Paper shall be available for delivery pursuant to
the provisions of this Plan. Such shares shall be either previously
unissued shares or reacquired shares. Any restricted shares of
common stock awarded under this Plan with respect to which the
restrictions are not removed in accordance with the service
requirements of the Plan, or which become forfeited for any reason,
shall not be available for other restricted awards under the Plan
and shall become treasury stock of International Paper.
3. Eligibility
Participation in this Plan is limited to persons who serve as
members of the Board of Directors (the "Board") of International
Paper and who are not employees of International Paper (or its
subsidiaries) ("Participants"). An employee-director who retires
from employment with International Paper (and its subsidiaries)
shall become eligible to participate in this Plan upon his or her
re-election as a non-employee director.
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4. Equity Compensation
(a) Awards of restricted common stock of International Paper are
made to each Participant on an annual basis following the annual
meeting of shareholders in an amount equal to: (i) a fixed
dollar value determined by the independent members of the Board
based on a review of competitive market practices of International
Paper’s comparator peer group of companies for compensation
analysis (the "Compensation Comparator Group"), divided by
(ii) the fair market value of International Paper common stock
as determined based on the grant price for the most recent annual
grant under the International Paper Performance Share Plan.
(b) For purposes of this Plan, a "Performance Year" shall mean
the one-year period beginning on the date of the Annual Meeting of
Shareholders of International Paper and ending on the last business
day immediately preceding the next Annual Meeting of Shareholders
of International Paper.
(c) A Participant who is elected by the Board to fill a vacancy
during the year shall receive a number of shares of restricted
common stock representing a pro rata portion of the number
of shares of restricted common stock awarded to non-employee
directors for the Performance Year in which such Participant is
elected.
(d) Each award of restricted shares under this Plan shall be
immediately registered in the name of the Participant but shall be
expressly subject to all of the restrictions, service provisions,
and all other terms and conditions set forth in Section 7 of
this Plan.
5. Cash Compensation
(a) Each non-employee director of the Board shall receive an
annual cash retainer ("Cash Retainer Fee") in an amount determined
by the independent members of the Board. Each non-employee director
who serves as Chairperson of a standing committee shall receive an
annual cash retainer ("Committee Chair Fee", which together with
the Cash Retainer Fee shall be referred to as "Cash Compensation")
in addition to any other retainer in an amount determined by the
independent members of the Board. The amount of the Cash
Compensation shall be determined by the Board based on a review of
competitive market practices of the International Paper’s
Compensation Comparator Group.
(b) Each non-employee director of the Board may elect in the
form and manner prescribed by International Paper to receive shares
of restricted stock of International Paper in lieu of all or a
portion of such Cash Compensation. A non-employee director who
elects to receive shares of restricted stock in lieu of Cash
Compensation will receive an additional number of shares of
restricted stock equal to the value of twenty percent (20%) of
the Cash Retainer Fee. The number of shares of restricted stock to
which a Participant is entitled is determined by dividing the Cash
Compensation by the closing market price of common stock of
International Paper as reported for the New York Stock Exchange
Composite Transactions on the last business day immediately
preceding the first day of the Performance Year.
6. Deferral Elections
(a) Prior to the first day of a calendar year, non-employee
directors may elect to defer in the form of restricted stock units
("RSUs") receipt of all or a portion of shares of restricted common
stock or Cash Compensation for services on the Board in the
following Performance Year by filing an initial deferral election
notice in the manner and form prescribed by International Paper
(the "Initial Deferral Election Notice").
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(b) Non-employee directors newly elected to the
Board may submit an Initial Deferral Election Notice by the earlier
of (i) the first meeting for which such director will earn
fees; or (ii) the 30 th day after becoming eligible to
participate in the Plan.
(c) Notwithstanding the foregoing, an Initial Deferral Election
Notice may not be completed during a period when directors and
officers of International Paper are restricted from trading in
shares of International Paper common stock, referred to as a
"Black-out Period."
(d) Deferral elections are effective beginning with the first
fees payable for the Performance Year and ending with the last fees
payable for the Performance Year. Deferral elections do not carry
over from year to year. Participants must submit a new Initial
Deferral Election Notice prior to the first day of each calendar
year.
(e) An Initial Deferral Election Notice may change the
percentage to be deferred only with respect to fees payable on a
prospective basis, and may not change the percentage to be deferred
with respect to a prior year’s election.
7. Restrictions, Removal of Restrictions, and Terms and
Conditions of Awards of Restricted Shares
(a) A Participant shall have the right to receive all dividends
and other distributions made with respect to restricted shares
registered in his or her name, and shall have the right to vote or
execute proxies with respect to such registered restricted shares
(other than the awards of restricted shares made prior to the date
of shareowners approval of the Plan, which shall have such right
only upon such approval of the Plan or amendment affecting such
awards), unless and until such shares are forfeited pursuant to the
provisions of this Plan.
(b) A Participant shall have the right to elect in the form and
manner prescribed by the Company the manner in which dividends on
shares of restricted stock shall be paid to the Participant.
(c) All certificates of shares shall be endorsed with a legend
referring to the restrictions imposed by this Plan. Possession of
the certificates of shares shall be retained by the Corporate
Secretary of International Paper until the provisions of the Plan
relating to removal of the restrictions have been satisfied.
(d) Shares of restricted stock may not be sold, assigned,
pledged
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