Exhibit 10.2
AMENDMENT No. 3
TO
INTERNATIONAL PAPER COMPANY
RESTRICTED STOCK PLAN
FOR
NON-EMPLOYEE DIRECTORS
1. Purpose and Effective Date of Plan
This plan shall be known as the International Paper Company Restricted Stock
Plan for Non-Employee Directors. The purpose of this plan is to enable
International Paper Company ("International Paper") to attract and retain
persons of outstanding competence to serve as directors of International Paper
by paying such persons a portion of their compensation in restricted common
stock of International Paper pursuant to the terms of this plan. The plan became
effective as of January 1, 1988, and was amended May 12, 1992, May 27, 1999, and
May 7, 2002, and each amendment further thereto shall become effective as of the
effective date set forth in such amendment.
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 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 the Company.
3. Eligibility for Participating in Plan
Participation in this plan is limited to persons who serve as directors of
International Paper and who are not "employees" of International Paper (or its
subsidiaries) within the meaning of the Employee Retirement Income Security Act
of 1974. An employee-director who retires from employment with International
Paper (and its subsidiaries) shall become eligible to participate in this plan
and shall be entitled to receive an award of restricted stock at the time of
re-election as a non-employee director.
4. Awards of Restricted Common Stock Under the Plan
(a) Effective May 7, 2002, awards of restricted common stock of International
Paper will be made to each participant on an annual basis following the annual
meeting of shareholders. Such awards will consist of 1,750 shares of restricted
common stock. A participant who is elected by the Board to fill a vacancy during
the year shall receive a number of shares representing a pro rata portion of the
number of shares of restricted common stock awarded to non-employee directors
following the most recent annual meeting of shareholders. 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 5 of
this plan.
(b) Effective May 7, 2002, a participant may elect to receive either one hundred
percent (100%), or fifty percent (50%) of his cash compensation related to
serving on the Board in restricted common stock of the Company. The number of
shares of common stock that a participant shall receive with respect to such
election shall be determined by the administrator of this plan and communicated
to each participant in advance of such participant's election.
5. Restrictions, Removal of Restrictions, and Terms and Conditions of Awards of
Restricted Shares
(a) Participants 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 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. 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 Treasurer of International Paper until the provisions
of the plan relating to removal of the restrictions have been satisfied.
(b) Shares of restricted stock may not be sold, assigned, pledged or otherwise
transferred by the participant unless and until all of the restrictions imposed
by this plan have been removed pursuant to the provisions of this plan, and a
new certificate of shares has been issued by International Paper which does not
contain the legend of restrictions.
(c) Shares of restricted stock awarded under this plan on and after May 7, 2002,
shall become free of restrictions and non-forfeitable on the first anniversary
of the date of the award of the restricted shares. Notwithstanding the
foregoing, shares of restricted stock awarded under this plan shall become free
of restrictions and non-forfeitable upon the occurrence of one of the following
events:
2
(i) the participant's death or disability;
(ii) mandatory retirement of the participant from the Board of Directors;
or
(iii) resignation or failure to stand for re-election with the consent of
the Board (which shall mean approval by at least 80% of the
directors voting, with the affected director abstaining), or any
failure to be re-elected after being duly nominated. In the event of
a resignation with consent during the first year in which an award
is received, the number of shares with respect to which the
restrictions shall be removed will be a pro rata portion of shares
originally awarded determined by dividing the number of months
served during the first year of the award by the number twelve (12).
None of the shares of restricted stock awarded under this plan prior to May 7,
2002 shall become free of restrictions and non-forfeitable until the termination
of the participant's service as a director of International Paper. Such shares
shall become non-forfeitable upon the occurrence of one of the following events:
(x) the participant's death or disability;
(xi) the mandatory retirement at the end of the term during which the
participant reaches mandatory retirement age; or
(xii) resignation or failure to stand for re-election with the consent of
the Board (which shall mean approval by at least 80% of the
directors voting, with the affected director abstaining), or any
failure to be re-elected after being duly nominated. In the event of
a resignation with consent during a term, the number of shares with
respect to which the restrictions will be removed will be a pro rata
portion of shares originally awarded determined by dividing the
period of the director's term served to the effective date of
resignation by the original term for which the director was elected
or appointed.
Termination of service as a director for reason other than those specified in
this Section 5(c), including, without limitation, any involuntary termination
effected by Board action, shall result in forfeiture of the restricted shares.
(d) In the event of a "change of control" of International Paper (as defined
below), the Board may accelerate the removal of all restrictions relating to all
or an equal portion of the outstanding restricted shares. Termination of Board
service resulting from a change of control will result in immediate lapse of the
forfeiture provisions relating to all of the affected director's restricted
shares. In any situation involving acceleration of the removal of restrictions
relating to the awarded shares upon a change of control, the Board may elect to
repurchase such shares at the then fair market price instead of releasing the
shares to the participant owning such shares. For purposes of this plan, a
"change in control" of International Paper shall mean a change in control of a
nature that would be required to be reported in response to Item 1(a) of Form
8-K promulgated under
3
the Securities Exchange Act of 1934, as amended ("Exchange Act"); provided that,
without limitation, such a change in control shall be deemed to have occurred if
(a) any "person" (as such term is used in Sections 13(d) and 14(d)(2) of the
Exchange Act other than company benefit plans) except a transaction that is
approved by the Board in accordance with the standards set forth in section 7-17
of the New York Business Corporation Law or any successor provision is or
becomes the beneficial owner, directly or indirectly, of securities of
International Paper representing 20% or more of the combined voting power of
International Paper's then outstanding securities, or (b) during any period of
two consecutive years, individuals who at the beginning of such period
constitute the Board of Directors of International Paper cease for any reason to
constitute at least a majority thereof unless the election, or the nomination
for election, by shareholders of each new director was approved by a vote of at
least two-thirds of the directors then still in office who were directors at the
beginning of the period.
(e) All shares with respect to which the restrictions are not removed in
accordance with the provisions of this plan shall be forfeited and shall revert
to the Treasury of International Paper.
(f) All awarded shares shall remain subject to the plan's restrictions
prohibiting sales or transfer of such shares during the period of time while the
participant continues to serve as a director of International Paper, and during
the period of six (6) months from the date of grant which is required by SEC
Rule 16b-3(c)(1), and all certificates of shares shall be endorsed with a legend
referring to such restriction. In addition, the issuance or delivery of any
shares may be postponed for such period as may be required to comply with any
applicable requirements of any national securities exchange or any requirements
under any other law of regulation applicable to the issuance or delivery of such
shares, and International Paper shall not be obligated to issue or deliver any
such shares if the issuance or delivery thereof shall constitute a violation of
any provision of any law of any regulation of any governmental authority or any
national securities exchange.
6. Amendment or Termination of Plan
International Paper reserves the right to amend, modify or terminate this plan
at any time by action of its Board of Directors, provided (a) no amendment shall
be made more than once every six months, other than to comport with changes in
the Internal Revenue Code, the Employee Retirement Income Security Act, or the
rules thereunder; and (b) that such action shall not adversely affect any
participant's rights under the provisions of this plan with respect to awards of
restricted stock which were made prior to such action, provided further that no
modification of this plan shall be made which shall increase the aggregate
number of shares available for award under this plan without the approval of the
shareholders of International Paper.
4
7. Administration of Plan
This plan shall be administered by the Vice President-Human Resources of
International Paper. All decisions which are made by the Administrator with
respect to interpretation of the terms of the plan, with respect to the
restrictions, terms and conditions of the restricted shares, and with respect to
any questions or disputes arising under this plan, shall be final and binding on
International Paper and the participants (and their heirs or beneficiaries).
8. Changes in Stock and Adjustment of Number under the Plan
In the event of any stock dividend, split-up, reclassification or other
analogous change in capitalization or any distribution (other than regular cash
dividends) to holders of International Paper's common stock, the number of
shares awarded and earned under this Plan, and the aggregate number of shares
covered by this Plan shall be adjusted by the administrator to take account of
such change.
9. Designation of Beneficiary
A participant may file with the Administrator a designation of beneficiary or
beneficiaries on a form approved by the Administrator (which designation may be
changed or revoked by the participant's sole action) to receive distribution of
all or a designated portion of the participant's restricted stock account under
this Plan upon the death of the participant. If no beneficiary has been
designated or survives the participant, then the account shall be distributed as
directed by the executor or administrator of the participant's estate.
5