MEADWESTVACO Corp (Form: 10-K, Received: 02/24/2009 16:57:00)

Large accelerated filer

Accelerated filer

Non-accelerated filer

¨ (Do not check if a smaller reporting company)

Smaller reporting company

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

x	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2008

¨	TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM TO

COMMISSION FILE NUMBER 1-31215

MeadWestvaco Corporation

(Exact name of registrant as specified in its charter)


Delaware		11013 West Broad Street Glen Allen, VA 23060 Telephone 804-327-5200 (Address and telephone number of registrant’s principal executive offices)
(State of incorporation)
31-1797999
(I.R.S. Employer Identification No.)

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

Title of each class

Name of each exchange

on which registered

Common Stock- $0.01 par value

New York Stock Exchange

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes x No ¨

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. Yes ¨ No x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such a shorter period, the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

At June 30, 2008, the aggregate market value of common stock held by non-affiliates was $3,936,155,608. Such determination shall not, however, be deemed to be an admission that any person is an “affiliate” as defined in Rule 405 under the Securities Act of 1933.

At January 31, 2009, the number of shares of common stock of the Registrant outstanding was 170,813,516.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Registrant’s Proxy Statement for the Annual Meeting of Shareholders scheduled to be held on April 27, 2009, are incorporated by reference in Part III; definitive copies of said Proxy Statement will be filed with the Securities and Exchange Commission on or before March 27, 2009.

TABLE OF CONTENTS


		Page
Item	PART I

1.	Business	1
1A.	Risk factors	5
1B.	Unresolved staff comments	8
2.	Properties	9
3.	Legal proceedings	11
4.	Submission of matters to a vote of security holders	11

	PART II

5.	Market for registrant’s common equity, related stockholder matters and issuer purchases of equity securities	13
6.	Selected financial data	14
7.	Management’s discussion and analysis of financial condition and results of operations	16
7A.	Quantitative and qualitative disclosures about market risk	44
8.	Financial statements and supplementary data	45
9.	Changes in and disagreements with accountants on accounting and financial disclosure	87
9A.	Controls and procedures	87
9B.	Other information	87

	PART III

10.	Directors, executive officers and corporate governance	88
11.	Executive compensation	88
12.	Security ownership of certain beneficial owners and management and related stockholder matters	88
13.	Certain relationships and related transactions, and director independence	88
14.	Principle accounting fees and services	88

	PART IV

15.	Exhibits, financial statement schedules	89
	Signatures	93

Part I

Item 1.

Business

General

MeadWestvaco Corporation (“MeadWestvaco”, “MWV”, or the “company”), a Delaware corporation formed in 2001 following the merger of Westvaco Corporation and The Mead Corporation, is a global packaging company that provides packaging solutions to many of the world’s brands in the healthcare, personal and beauty care, food, beverage, tobacco, media and entertainment, and home and garden industries. MWV’s other business operations serve the consumer and office products, specialty chemicals, forestry and real estate markets. MWV’s business segments are (i) Packaging Resources, (ii) Consumer Solutions, (iii) Consumer & Office Products, (iv) Specialty Chemicals, and (v) Community Development and Land Management.

Packaging Resources

The Packaging Resources segment produces bleached paperboard, Coated Natural Kraft ^® paperboard (“CNK”), linerboard, and packaging for consumer products including packaging for beverage and dairy, produce, cosmetics, tobacco, pharmaceuticals and healthcare products and media. This segment’s paperboard products are manufactured at three mills located in the U.S. and two mills located in Brazil. Bleached paperboard is used for packaging high-value consumer products such as pharmaceuticals, personal and beauty care, cosmetics, tobacco, food service and aseptic cartons. CNK paperboard is used for a range of packaging applications, the largest of which for MWV is multi-pack beverage packaging. Linerboard is used in the manufacture of corrugated boxes and other containers.

Consumer Solutions

The Consumer Solutions segment offers a full range of converting and consumer packaging solutions including printed plastic packaging and injection-molded products used for personal and beauty care, cosmetics and pharmaceutical products; dispensing and sprayer systems for personal and beauty care, healthcare, fragrance and home and garden markets; and packaging for media products such as DVDs, CDs, video games and software. This segment designs and produces multi-pack cartons and packaging systems primarily for the beverage take-home market and packaging for the tobacco market. Paperboard and plastic are converted into packaging products at plants located in North America, South America, Asia and Europe. This segment also has pharmaceutical packaging contracts with retailers, including well-known mass-merchants. In addition, this segment manufactures equipment that is leased or sold to its beverage and dairy customers to package their products.

Consumer & Office Products

The Consumer & Office Products segment manufactures, sources, markets and distributes school and office products, time-management products and envelopes in North America and Brazil through both retail and commercial channels. MeadWestvaco produces many of the leading brand names in school supplies, time-management and commercial office products, including AMCAL, ^® AT-A-GLANCE, ^® Cambridge, ^® COLUMBIAN, ^® Day Runner, ^® Five Star, ^® Mead ^® and Trapper Keeper. ^®

Specialty Chemicals

The Specialty Chemicals segment manufactures, markets and distributes specialty chemicals derived from sawdust and other byproducts of the papermaking process in North America, South America and Asia. Products include activated carbon used in emission control systems for automobiles and trucks and performance chemicals used in printing inks, asphalt paving, adhesives and lubricants for the agricultural, paper and petroleum industries.

Community Development and Land Management

The Community Development and Land Management segment is responsible for maximizing the value of the company’s landholdings. Operations of the segment include real estate development, forestry operations and leasing activities. Real estate development includes (i) improving and selling rural tracts primarily for recreational and residential uses, (ii) entitling and improving high-value tracts through joint ventures and other ownership arrangements, (iii) master planning select landholdings, and (iv) monetizing non-core forestlands. Forestry operations include growing and harvesting softwood and hardwood on the company’s forestlands for external consumption and for use by the company’s mill-based business. Leasing activities include fees from third parties undertaking mineral extraction operations, as well as fees from recreational leases on the company’s forestlands.

For a more detailed description of our business segments, including financial information, see Note R of Notes to Consolidated Financial Statements included in Part II, Item 8.

Marketing and distribution

The principal markets for our products are in North America, South America, Europe and Asia. We operate in 30 countries and serve customers in approximately 100 nations. Our products are sold through a combination of our own sales force and paperboard merchants and distributors. The company has sales offices in key cities throughout the world.

Intellectual property

MeadWestvaco has a large number of foreign and domestic trademarks, trade names, patents, patent rights and licenses relating to its business. While, in the aggregate, intellectual property rights are material to our business, the loss of any one or any related group of such rights would not have a material adverse effect on our business, with the exception of the “Mead ^® “ trademark and the “AT-A-GLANCE ^® “ trademark for consumer and office products.

Competition

MeadWestvaco operates in a very challenging global marketplace and competes with many large, well-established and highly competitive manufacturers and service providers. In addition, our business is affected by a range of macroeconomic conditions, including industry capacity changes, a trend in the packaging, paperboard and forest products industry toward consolidation, global competition, economic conditions in the U.S. and abroad, and currency exchange rates.

We compete principally through quality, price, value-added products and services such as packaging solutions, customer service, innovation, technology, and product design. Our proprietary trademarks and patents, in the aggregate, are also important to our competitive position in certain markets.

The Packaging Resources segment competes globally with manufacturers of value-added CNK and bleached paperboard for packaging and graphic applications, as well as specialty paperboards. The Consumer Solutions segment competes globally with numerous packaging service providers in the package design, development, and manufacturing arenas, as well as the manufacture of dispensing and spraying systems. The Consumer & Office Products segment competes with national and regional converters, as well as foreign producers, especially from Asia. The Specialty Chemicals segment competes on a worldwide basis with producers of activated carbons, refined tall oil products, lignin-based chemicals and specialty resins. The Community Development and Land Management segment competes in the real estate sales and development market and the forestry products industry in the U.S.

Research

MeadWestvaco conducts research and development in the areas of packaging and chemicals. Innovative product development and manufacturing process improvement are the main objectives of these efforts. The company also evaluates and adapts for use new and emerging technologies that may enable new product development and manufacturing cost reductions.

Environmental laws and regulations

MeadWestvaco’s operations are subject to extensive regulation by federal, state and local authorities, as well as regulatory authorities with jurisdiction over foreign operations of the company. Due to changes in environmental laws and regulations, the application of such regulations, and changes in environmental control technology, it is not possible for us to predict with certainty the amount of capital expenditures to be incurred for environmental purposes. Taking these uncertainties into account, we estimate that we will incur $13 million and $32 million of environmental capital expenditures in 2009 and 2010, respectively. In 2008, $16 million was spent on environmental capital projects.

The company has been notified by the U.S. Environmental Protection Agency or by various state or local governments that it may be liable under federal environmental laws or under applicable state or local laws with respect to the cleanup of hazardous substances at sites previously operated or used by the company. The company is currently named as a potentially responsible party (“PRP”), or has received third-party requests for contribution under the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”) and similar state or local laws with respect to numerous sites. Some of these proceedings are described in more detail in Part I, Item 3. There are other sites which may contain contamination or which may be potential Superfund sites, but for which MeadWestvaco has not received any notice or claim. The potential liability for all these sites will depend upon several factors, including the extent of contamination, the method of remediation, insurance coverage and contribution by other PRPs. The company regularly evaluates its potential liability at these various sites. At December 31, 2008, MeadWestvaco had recorded liabilities of approximately $19 million for estimated potential cleanup costs based upon its close monitoring of ongoing activities and its past experience with these matters. The company believes that it is reasonably possible that costs associated with these sites may exceed amounts of recorded liabilities by an amount that could range from an insignificant amount to as much as $10 million. This estimate is less certain than the estimate upon which the environmental liabilities were based. After consulting with legal counsel and after considering established liabilities, it is our judgment that the resolution of pending litigation and proceedings is not expected to have a material adverse effect on the company’s consolidated financial condition or liquidity. In any given period or periods, however, it is possible such proceedings or matters could have a material effect on the company’s results of operations. Additional matters involving environmental proceedings for MeadWestvaco are set forth in Part I, Item 3.

Employees

MeadWestvaco employs approximately 22,000 people worldwide, of whom approximately 12,000 are employed in the U.S. and approximately 10,000 are employed internationally. Approximately 6,600 employees are represented by various labor unions under collective bargaining agreements. Additionally, most of MeadWestvaco’s European facilities have separate house union agreements or series of agreements specific to the workforce at each facility. MeadWestvaco has not recently experienced any significant work stoppages and considers its relationship with employees, including those covered by collective bargaining agreements, to be good. The company engages in negotiations with labor unions for new collective bargaining agreements from time to time and at present the company is in the process of negotiating new agreements at six manufacturing locations covering approximately 2,200 employees. Negotiations for an agreement at a seventh location covering approximately 1,000 employees have been held in abeyance pending the outcome of a representation proceeding before the National Labor Relations Board between competing labor unions seeking to represent those employees. While it is the company’s objective to reach agreements without work stoppages, it cannot predict the outcome of these negotiations.

International operations

MeadWestvaco’s operations outside the U.S. are conducted through subsidiaries located in Canada, Mexico, South America, Europe and Asia. While there are risks inherent in foreign investments, we do not believe at this time that such risks are material to our overall business prospects. MeadWestvaco’s sales that were attributable to U.S. operations, including export sales, were 66%, 67% and 70% for the years ended December 31, 2008, 2007 and 2006, respectively. Export sales from MeadWestvaco’s U.S. operations were 13%, 12% and 12% for the years ended December 31, 2008, 2007 and 2006, respectively. Sales that were attributable to foreign operations were 34%, 33% and 30% for the years ended December 31, 2008, 2007 and 2006, respectively. For more information about the company’s U.S. and foreign operations, see Note R of Notes to Consolidated Financial Statements included in Part II, Item 8.

Available information

Our Internet address is www.mwv.com. Please note that MeadWestvaco’s Internet address is included in this Annual Report on Form 10-K as an inactive textual reference only. The information contained on our website is not incorporated by reference into this Annual Report on Form 10-K and should not be considered part of this report. MeadWestvaco makes available on this website free of charge, our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports as soon as reasonably practicable after we electronically file or furnish such materials to the U.S. Securities and Exchange Commission (“SEC”). You may access these filings via the hyperlink to the SEC website provided on the Investor Information page of our website. MWV’s Corporate Governance Principles , our charters (Nominating and Governance Committee, Audit Committee, Compensation and Organization Development Committee, Finance Committee, and Safety, Health and Environment Committee) and our Code of Conduct can be found at our website at the following address: http://www.meadwestvaco.com/AboutUs/InvestorRelations/CorporateGovernance/index.htm .

Item 1A.

Risk factors

Risks relating to our business

Recent changes in U.S. and global economic conditions could have a continuing adverse effect on the profitability of some or all of our businesses.

Recent concerns over declining consumer and business confidence, the availability and cost of credit, reduced consumer spending and business investment, the volatility and strength of the capital and credit markets, and inflation all affect the business and economic environment and, ultimately, the profitability of our business. In an economic downturn characterized by higher unemployment, lower family income, lower corporate earnings, lower business investment and lower consumer spending, the demand for our products is adversely affected. Adverse changes in the economy could negatively affect earnings and could have a material adverse effect on our business, results of operations, cash flows and financial position. We cannot predict whether or when such circumstances may occur, or what impact, if any, such circumstances could have on our business, results of operations, cash flows and financial position.

Conditions in the global capital and credit markets and the economy generally may materially adversely affect our business, results of operations and financial position and we do not expect these conditions to improve in the near future.

Our results of operations and financial position could be materially affected by adverse changes in the global capital and credit markets and the economy generally, including recent declines in consumer and business confidence and spending, both in the U.S. and elsewhere around the world. The capital and credit markets have been experiencing extreme volatility and disruption in recent months. Recently, the volatility and disruption in these markets have reached unprecedented levels. In some cases, these markets have exerted downward pressure on availability of liquidity and credit and increased the costs of credit when such credit is available. Conditions in the capital and credit markets and the effects of the declines in consumer and business confidence and spending may adversely impact the ability of our lenders, suppliers and customers to conduct their business activities. The consequences of such adverse effects could include the interruption of production at the facilities of our customers, the reduction, delay or cancellation of customer orders, delays in or the inability of customers to obtain financing to purchase our products, and bankruptcy of customers or other creditors. Moreover, the current worldwide financial crisis has reduced the availability of liquidity and credit to fund or support the continuation and expansion of business operations worldwide as many lenders and institutional investors have reduced and, in some cases, ceased to provide funding to borrowers.

While we have procedures to monitor and limit exposure to credit risk, there can be no assurance such procedures will effectively limit our credit risk and avoid losses, which could have a material adverse effect on our financial condition and operating results.

The company has announced a strategic cost management plan. If we fail to fully execute on this initiative, we may not fully realize all the improvements we have publicly announced.

In the first quarter of 2009, the company announced a strategic cost management plan to reduce our overhead cost structure, optimize our manufacturing footprint, and realize sourcing savings throughout our supply chain. The plan is expected to generate $125 million in pre-tax savings in 2009. By mid-2010, the company anticipates achieving cumulative run-rate savings of $250 million to $300 million. This initiative is described more fully in Part II, Item 7. Although we believe that these results are reasonable and achievable, if we do not fully achieve these goals within the expected time frame, or at all, we may not fully realize the improvements we expect in our operating earnings and cash flows.

Certain of the company’s businesses are affected by cyclical market conditions which can significantly impact operating results and cash flows.

Certain of the company’s businesses are affected by cyclical market conditions that can significantly influence the demand for certain of the company’s products, as well as the pricing we can obtain for these products. The company’s paperboard business is particularly subject to cyclical market conditions. The company may be unable to sustain pricing in the face of weaker demand, and weaker demand may in turn cause us to take production downtime. In addition to lost revenue from lower shipment volumes, production downtime causes unabsorbed fixed manufacturing costs due to lower production levels. As a result, the company’s results of operations and cash flows may be materially impacted in a period of prolonged and significant market weakness. Moreover, the company is not able to predict market conditions or its ability to sustain pricing and production levels during periods of weak demand with any degree of certainty. Market conditions may also impact the company’s ability to achieve its planned or announced price increases.

The company’s businesses are subject to significant cost pressures. Pricing volatility and our ability to pass higher costs on to our customers through price increases or other adjustments is uncertain and dependent on market conditions.

The pricing environment for raw materials used in a number of our businesses continues to be challenging and volatile. Additionally, energy costs remain volatile and unpredictable.

Further unpredictable increases in the cost of raw materials or energy may materially impact our results of operations. Depending on market forces and the terms of customer contracts, our ability to recover these costs through increased pricing may be limited.

Certain of the company’s consumer packaging converting businesses are affected by consumer behavior and new technology which can significantly impact operating results and cash flows.

Changes in consumer behavior and technology for the distribution of consumer products, such as music and video entertainment, can, and is having a dramatic impact on the demand for packaging products produced by the company’s packaging converting businesses.

The company faces intense competition in each of its businesses, and competitive challenges from lower cost manufacturers in overseas markets. If we cannot successfully compete in an increasingly global market place, our operating results may be adversely affected.

The company operates in competitive domestic and international markets and competes with many large, well-established and highly competitive manufacturers and service providers, both domestically and on a global basis. The company’s businesses are facing competition from lower cost manufacturers in Asia and elsewhere. In addition, there is a risk that growth in paperboard capacity could outpace demand. All of these conditions can contribute to substantial pricing and demand pressures, which could adversely affect the company’s operating results.

A key component of the company’s competitive position is MeadWestvaco’s ability to manage expenses successfully. This requires continuous management focus on reducing and improving efficiency through cost controls, productivity enhancements and regular appraisal of our asset portfolio.

The company’s operations are increasingly global in nature, particularly in our consumer packaging businesses. Our business, financial condition and results of operations could be adversely affected by the political and economic conditions of the countries in which we conduct business, by fluctuations in currency exchange rates and other factors related to our international operations.

Approximately 47% of the company’s annual revenues in 2008 were derived from export sales and sales from locations outside of the U.S. As our international operations and activities expand, we face increasing exposure to the risks of operating in many foreign countries. These factors include:

•

Changes in foreign currency exchange rates which could adversely affect our competitive position, selling prices and manufacturing costs, and therefore the demand for our products in a particular market.

•

Trade protection measures in favor of local producers of competing products, including government subsidies, tax benefits, trade actions (such as anti-dumping proceedings) and other measures giving local producers a competitive advantage over the company.

•

Changes generally in political, regulatory or economic conditions in the countries in which we conduct business.

These risks could affect the cost of manufacturing and selling our products, our pricing, sales volume, and ultimately our financial performance. The likelihood of such occurrences and their potential effect on the company vary from country to country and are unpredictable.

The company continues to realign and restructure its packaging converting businesses. Although the company believes that it will implement and manage the reorganization effectively to achieve substantial savings for the company, these major changes have attendant inherent risks, including the potential for disruption in our packaging businesses and operations as we implement the realignment.

The company’s packaging businesses continues to be transitioned into a focused end market facing commercial organization. The company’s leadership expects to successfully and seamlessly manage these transitions. However, any major reorganization presents challenges and it is possible that there could be disruptions in our business and operations during the transition period. Disruptions in production, quality control, customer service and innovation, as well as in other aspects of our operations, could negatively impact our results of operations.

The company is subject to extensive regulation under various environmental laws and regulations, and is involved in various legal proceedings related to the environment. Environmental regulation and legal proceedings have the potential for involving significant costs and liability for the company.

The company’s operations are subject to a wide range of general and industry-specific environmental laws and regulations. The company has been focused for some time on addressing public concerns regarding global climate change. In recent years, acting unilaterally, the company has successfully reduced its total carbon dioxide emissions, even as overall production has increased. The company is committed to obtaining additional reductions in these emissions as the efficient use of various forms of energy is enhanced. Certain legislative proposals, however, would eventually mandate broad reductions of total greenhouse gas emissions in the U.S. This legislation, could, unless it is modified in certain respects, eventually affect the long term results of some of the company’s more energy intensive operations.

Changes in environmental laws and regulation, or their application, including but not limited to those relating to global climate change, could subject the company to significant additional capital expenditures and operating expenses. Moreover, future developments in federal laws and regulations are currently especially difficult to predict due to the new President and Congress. These changes in the federal government may increase the likelihood that we will be subject to new laws and regulations. However, any such changes are uncertain and, therefore, it is not possible for the company to predict with certainty the amount of additional capital expenditures or operating expenses that could be necessary for compliance with respect to any such changes.

The company is also subject to various environmental proceedings and may be subject to additional proceedings in the future. In the case of known potential liabilities, it is management’s judgment that the resolution of pending litigation and proceedings is not expected to have a material adverse effect on the company’s consolidated financial condition or liquidity. In any given period or periods, however, it is possible such proceedings or matters could have a material effect on the results of operations. The company could also be subject to new environmental proceedings which could cause the company to incur substantial additional costs with resulting impact on results of operations.

Additional information regarding environmental proceedings involving MeadWestvaco is set forth in Part I, Item 3.

Our business could be adversely affected by strikes or work stoppages and other labor issues.

Approximately one-quarter of our employees are represented by various labor unions under collective bargaining agreements. The company engages in negotiations with labor unions for new collective bargaining agreements from time to time. If we are unable to negotiate new agreements without work stoppages, it could negatively impact our ability to manufacture our products and adversely affect results of operations.

The real estate industry is highly competitive and economically cyclical.

The company engages in value-added real estate development activities, including obtaining entitlements and establishing joint ventures and other development-related arrangements. Many of our competitors in this industry have greater resources and experience in real estate development than we have currently. In addition, our ability to execute our plans to divest or otherwise realize the greater value associated with our landholdings may be affected by the following factors, among others:

•

General economic conditions, including credit markets and interest rates.

•

Local real estate market conditions, including competition from sellers of land and real estate developers.

•

Impact of federal, state and local laws and regulations affecting land use, land use entitlements, land protection and zoning.

Item 1B.

Unresolved staff comments

None.

Item 2.

Properties

MeadWestvaco is headquartered in Richmond, Virginia. MeadWestvaco believes that its facilities have sufficient capacity to meet current production requirements. The locations of MeadWestvaco’s production facilities are as follows:

Packaging Resources


Blumenau, Santa Catarina, Brazil		Manaus, Amazonas, Brazil
Cottonton, Alabama		Pacajus, Ceara, Brazil
Covington, Virginia		Silsbee, Texas
Evadale, Texas		Tres Barras, Santa Catarina, Brazil
Feira de Santana, Bahia, Brazil		Valinhos, Săo Paulo, Brazil
Low Moor, Virginia		Venlo, The Netherlands

Consumer Solutions


Aqua Branca, Săo Paulo, Brazil		Mebane, North Carolina
Ajax, Ontario, Canada		Melrose Park, Illinois (Leased)
Atlanta, Georgia		Milan, Italy (Leased)
Barcelona, Spain		Moscow, Russian Federation (Leased)
Bilbao, Spain		Piaseczno, Poland
Bristol, United Kingdom		Pittsfield, Massachusetts (Leased)
Buenos Aires, Argentina (Leased)		Preston, United Kingdom
Bydgoszcz, Poland		Roosendaal, The Netherlands
Caguas, Puerto Rico (Leased)		San Luis Potosi, Mexico
Chateauroux, France		Shimada, Japan
Corby, United Kingdom		Slough, United Kingdom (Leased)
Deols, France		Smyrna, Georgia
Dublin, Ireland (Leased)		Svitavy, Czech Republic
Elizabethtown, Kentucky		Swindon, United Kingdom (Leased)
Enschede, The Netherlands		Thalgau, Austria (Leased)
Freden, Germany		Tecate, Mexico (Leased)
Grandview, Missouri		Toronto, Canada (Leased)
Graz, Austria		Trier, Germany
Hemer, Germany		Troyes, France
Jacksonville, Illinois		Valinhos, Săo Paulo, Brazil
Krakow, Poland		Warsaw, Poland (Leased)
Lanett, Alabama		Wilmington, North Carolina
Littlehampton, United Kingdom (Leased)		Winfield, Kansas
London, United Kingdom (Leased)		Wuxi, People’s Republic of China
Louisa, Virginia (Leased)

Consumer & Office Products


Alexandria, Pennsylvania		Los Angeles, California
Bauru, Săo Paulo, Brazil		Sidney, New York
Dallas, Texas		Toronto, Ontario, Canada
Indianapolis, Indiana		Williamsburg, Pennsylvania
Kenosha, Wisconsin

Specialty Chemicals


Covington, Virginia		Shaxian, People’s Republic of China
DeRidder, Louisiana		Waynesboro, Georgia
North Charleston, South Carolina		Wickliffe, Kentucky

Specialty Papers


South Lee, Massachusetts

Community Development and Land Management Group and Forestry Centers


Rupert, West Virginia		Tres Barras, Santa Catarina, Brazil
Summerville, South Carolina		Waverly Hall, Georgia

Research Facilities


Raleigh, North Carolina (Leased)		Shekou Shenzhen, People’s Republic of China
North Charleston, South Carolina		Tres Barras, Santa Catarina, Brazil

Leases

For financial data on MeadWestvaco’s lease commitments, see Note H of Notes to Consolidated Financial Statements included in Part II, Item 8.

Other information

A limited number of MeadWestvaco facilities are owned, in whole or in part, by municipal or other public authorities pursuant to standard industrial revenue bond financing arrangements and are accounted for as property owned by MeadWestvaco. MeadWestvaco holds options under which it may purchase each of these facilities from such authorities by paying a nominal purchase price and assuming the indebtedness of the industrial revenue bonds at the time of the purchase.

MeadWestvaco owns all of the facilities listed above, except as noted.

As of December 31, 2008, MeadWestvaco owned about 800,000 acres of forestlands and other landholdings in the U.S. and about 135,000 acres of forestlands in Brazil (more than 1,200 miles from the Amazon rainforest).

Item 3.

Legal proceedings

On August 28, 2000, an enforcement action in Federal District Court in Maryland was brought by the U.S. Environmental Protection Agency (“EPA”) asserting that Westvaco did not obtain permits under the prevention of significant deterioration regulations under the Clean Air Act or install required pollution controls in connection with capital projects at the Luke, Maryland mill carried out in the 1980s. MeadWestvaco strongly disagrees and is vigorously defending this action. On April 23, 2001, the Court dismissed the EPA’s claims for civil penalties under the major counts of the complaint and the government subsequently abandoned several of its claims. Motions for summary judgment were submitted in 2005 and remain pending. Based on information currently available, MeadWestvaco does not expect this proceeding will have a material adverse effect on our consolidated financial condition or liquidity. In any given period or periods, however, it is possible such proceeding could have a material effect on the results of operations.

MeadWestvaco has established liabilities of $19 million relating to environmental proceedings. Additional information is included in Part I, Item 1, and Note O of Notes to Financial Statements included in Part II, Item 8.

MeadWestvaco is involved in various other litigation and administrative proceedings arising in the normal course of business. Although the ultimate outcome of such matters cannot be predicted with certainty, we do not believe that the currently expected outcome of any proceeding, lawsuit or claim that is pending or threatened, or all of them combined, will have a material adverse effect on its consolidated financial condition or liquidity. In any given period or periods, however, it is possible such proceedings or matters could have a material effect on the results of operations.

Item 4.

Submission of matters to a vote of security holders

There were no matters submitted to a vote of security holders of MeadWestvaco, through the solicitation of proxies or otherwise, during the fourth quarter of 2008.

Executive officers of the registrant

The following table sets forth certain information concerning the executive officers of MeadWestvaco:


Name	Age*	Present position	Year in which service in present position began
John A. Luke, Jr.**	60	Chairman and Chief Executive Officer	2002
James A. Buzzard	54	President	2003
E. Mark Rajkowski	50	Senior Vice President and Chief Financial Officer	2004
Mark S. Cross	52	Senior Vice President	2006
Linda V. Schreiner	49	Senior Vice President	2002
Bruce V. Thomas	52	Senior Vice President	2007
Mark T. Watkins	55	Senior Vice President	2002
Wendell L. Willkie, II	57	Senior Vice President, General Counsel and Secretary	2002
Donna O. Cox	45	Vice President	2005
Robert E. Birkenholz	48	Treasurer	2004
John E. Banu	61	Controller	2002

*	As of February 24, 2009

**	Director of MeadWestvaco

MeadWestvaco’s officers are elected by the Board of Directors annually for one-year terms.

John A. Luke, Jr. , President and Chief Executive Officer, 2002-2003, Chairman of the Board, Chief Executive Officer and President of Westvaco, 1996-2002;

James A. Buzzard , Executive Vice President, 2002-2003, Executive Vice President of Westvaco, 2000-2002, Senior Vice President, 1999, Vice President, 1992-1999;

E. Mark Rajkowski , Vice President, Eastman Kodak Company and General Manager Worldwide Operations for Kodak’s Digital and Film Imaging Systems Business, 2003-2004; Chief Operating Officer of Eastman Kodak’s Consumer Digital Business, 2003; Vice President, Finance of Eastman Kodak, 2001-2002; Corporate Controller of Eastman Kodak, 1998-2001;

Mark S. Cross , Senior Vice President and Group President of Europe, Middle East and Africa Region, JohnsonDiversey 2003-2006; President, Kimberly-Clark Professional, 2001-2003;

Linda V. Schreiner , Senior Vice President of Westvaco, 2000-2002, Manager of Strategic Leadership Development, 1999-2000, Senior Manager of Arthur D. Little, Inc., 1998-1999, Vice President of Signet Banking Corporation, 1988-1998;

Bruce V. Thomas , President and Chief Executive Officer, Cadmus Communications Corporation, 2000-2007;

Mark T. Watkins , Vice President of Mead, 2000-2002, Vice President, Human Resources and Organizational Development of the Mead Paper Division, 1999, Vice President, Michigan Operations of Mead Paper Division, 1997;

Wendell L. Willkie, II , Senior Vice President and General Counsel of Westvaco, 1996-2002;

Donna O. Cox , Director, External Communications, 2003-2005, Manager, Integration / Internal Communications, 2002-2003, Public Affairs Manager of Westvaco’s Packaging Resources Group, 1999-2002;

Robert E. Birkenholz , Assistant Treasurer, 2003-2004; Assistant Treasurer, Amerada Hess Corporation, 1997-2002;

John E. Banu , Vice President of Westvaco, 1999-2002; Controller, 1995-1999.

There are no family relationships among executive officers or understandings between any executive officer and any other person pursuant to which the officer was selected as an officer.

Part II

Item 5.

Market for the registrant’s common equity, related stockholder matters and issuer purchases of equity securities

(a)

Market and price range of common stock

MeadWestvaco’s common stock is traded on the New York Stock Exchange under the symbol MWV.


	Year ended December 31, 2008				Year ended December 31, 2007
STOCK PRICES	High		Low		High		Low
First quarter	$	31.44	$	23.92	$	32.46	$	28.39
Second quarter		29.40		22.75		36.01		30.92
Third quarter		28.05		21.46		36.50		28.66
Fourth quarter		24.03		9.44		34.61		29.53

This table reflects the range of market prices of MeadWestvaco common stock as quoted in the New York Stock Exchange Composite Transactions.

(b)

Approximate number of common shareholders

At December 31, 2008, the number of shareholders of record of MeadWestvaco common stock was approximately 23,400. This number includes approximately 13,400 current or former employees of the company who were MeadWestvaco shareholders by virtue of their participation in our savings and investment plans.

(c)

Dividends

The following table reflects historical dividend information for MeadWestvaco for the periods indicated.


DIVIDENDS PER SHARE	Year ended December 31, 2008		Year ended December 31, 2007
First quarter	$	0.23	$	0.23
Second quarter		0.23		0.23
Third quarter		0.23		0.23
Fourth quarter		0.23		0.23

Year	$	0.92	$	0.92

MeadWestvaco currently expects that comparable cash dividends will continue to be paid in the future.

Item 6.

Selected financial data

In millions, except per share data


	Years ended December 31,
	2008			2007			2006			2005			2004
EARNINGS
Net sales	$	6,637		$	6,407		$	6,050		$	5,719		$	5,624
Income from continuing operations		80			266			81			118			220
Income (loss) from discontinued operations		10			19			12			(90	)		(569	)
Net income (loss)		90	¹		285	²		93	³		28	⁴		(349	) ⁵
Income from continuing operations:
Per share—basic		0.46			1.45			0.45			0.61			1.09
Per share—diluted		0.46			1.45			0.45			0.61			1.08
Net income (loss) per share—basic		0.52			1.56			0.52			0.14			(1.73	)
Net income (loss) per share—diluted		0.52			1.56			0.52			0.14			(1.72	)
Depreciation, depletion and amortization		472			482			477			451			438

COMMON STOCK
Number of common shareholders (in thousands)		23,400			24,700			27,410			29,630			34,730
Weighted average number of shares outstanding:
Basic		172			183			181			192			202
Diluted		173			184			181			193			204
Cash dividends	$	159		$	169		$	167		$	178		$	186
Per share:
Dividends declared		0.92			0.92			0.92			0.92			0.92
Book value		17.37			21.33			19.40			19.20			21.17

FINANCIAL POSITION
Working capital	$	887		$	712		$	550		$	988		$	882
Current ratio		1.7			1.5			1.4			1.9			1.5
Property, plant, equipment and forestlands, net	$	3,518		$	3,790		$	4,077		$	4,019		$	4,205
Total assets		8,455			9,837			9,285			8,908			11,646
Long-term debt, excluding current maturities		2,309			2,375			2,372			2,417			3,282
Shareholders’ equity		2,967			3,708			3,533			3,483			4,317
Debt to total capital		45	%		40	%		42	%		41	%		46	%

OPERATIONS
Primary production of paper, paperboard and market pulp (tons, in thousands) ⁶		3,103			3,980			3,950			3,945			6,702
New investment in property, plant, equipment and forestlands	$	288		$	329		$	285		$	265		$	299
Acres of forestlands owned (in thousands) ⁶		932			952			1,251			1,251			2,179
Employees (in thousands) ⁶		22,000			24,000			24,000			22,200			29,400

¹	2008 results include after-tax restructuring charges of $44 million, or $0.26 per share, and after-tax income from discontinued operations of $10 million, or $0.06 per share, related to the disposition of the company’s North Charleston, S.C. kraft paper mill and related assets.

2007 results include after-tax restructuring charges of $54 million, or $0.29 per share, after-tax one-time costs related to the company’s cost initiative of $15 million, or $0.08 per share, and after-tax gains of $155 million, or $0.84 per share, from sales of large-tract forestlands. The 2007 results also include after-tax income from discontinued operations of $19 million, or $0.11 per share, reflecting the presentation of discontinued operations pursuant to the disposition of the company’s North Charleston, S.C. kraft paper mill and related assets.

2006 results include after-tax restructuring charges of $85 million, or $0.47 per share, after-tax one-time costs related to the company’s cost initiative of $26 million, or $0.14 per share, a gain on the sale of a payable-in-kind (PIK) note of $13 million, or $0.07 per share, and an after-tax gain of $11 million, or $0.06 per share, from the sale of corporate real estate. The 2006 results also include after-tax income from discontinued operations of $12 million, or $0.07 per share, reflecting the presentation of discontinued operations pursuant to the disposition of the company’s North Charleston, S.C. kraft paper mill and related assets.

⁴

2005 results include after-tax charges of $56 million, or $0.29 per share, related to the retirement of debt, after-tax restructuring charges of $20 million, or $0.10 per share, and after-tax gains of $37 million, or $0.19 per share, from sales of forestlands. The 2005 results also include an after-tax loss from discontinued operations of $90 million, or $0.47 per share, associated with the sale of the printing and writing papers business and reflect the presentation of discontinued operations pursuant to the disposition of the company’s North Charleston, S.C. kraft paper mill and related assets.

⁵

2004 results include after-tax restructuring charges of $67 million, or $0.33 per share, and after-tax gains of $110 million, or $0.54 per share, from sales of forestlands. The 2004 results also include an after-tax loss from discontinued operations of $569 million, or $2.80 per share, associated with the sale of the printing and writing papers business and reflect the presentation of discontinued operations pursuant to the disposition of the company’s North Charleston, S.C. kraft paper mill and related assets.

⁶	Data has not been revised to exclude discontinued operations.

Item 7.

Management’s discussion and analysis of financial condition and results of operations

OVERVIEW

For the year ended December 31, 2008, MeadWestvaco Corporation (“MeadWestvaco”, “MWV”, or the “company”) reported net income from continuing operations of $80 million, or $0.46 per share. Net income from continuing operations includes after-tax restructuring charges of $44 million, or $0.26 per share, related to employee separation costs, asset write-downs and other restructuring actions. Restructuring charges are included in Corporate and Other for segment reporting purposes. Comparable results for prior years are noted later in this discussion.

Sales from continuing operations were $6.64 billion, up 4% from sales of $6.41 billion in 2007. During 2008, revenue growth was driven primarily from MWV’s ongoing efforts to improve pricing and product mix and from the benefit of favorable foreign currency exchange. MWV continued to generate sales momentum and improved pricing in targeted global packaging markets, including growth from new products and packaging sales from emerging markets where the company has focused much of its expansion investments in recent years.

Earnings in 2008 were adversely impacted by significant input cost inflation and reflect lower year-over-year demand in some consumer packaging markets, largely during the latter part of 2008 when the company experienced the effects of the global economic contraction. In 2008, pre-tax costs for energy, raw materials and freight were $254 million higher compared to 2007, offsetting improvements in pricing and product mix of $165 million on a continuing operations basis. In 2008, cash flow from continuing operations of $364 million was a significant source of funds for the company, driven by our continued focus of prioritizing cash generation as a key operating principle across our businesses.

On July 1, 2008, the company completed the sale of its North Charleston, South Carolina kraft paper mill and related assets (collectively, the “Kraft business”) for net cash proceeds of $466 million, which resulted in an after-tax gain of $8 million. For the year ended December 31, 2008, the after-tax gain as well as the after-tax operating results of the Kraft business are reported as income from discontinued operations in the consolidated statements of operations. Prior period amounts have been recast on a comparable basis. The results of operations and assets and liabilities of the Kraft business were previously included in the Packaging Resources segment.

On January 15, 2009, MWV announced that it is implementing a series of broad cost reduction actions to further reduce its corporate and business unit overhead cost structure, optimize its manufacturing footprint, and realize sourcing savings throughout its supply chain. These actions are expected to result in the elimination of about 2,000 positions, or 10% of MWV’s global workforce, and the closure or restructuring of 12 to 14 manufacturing facilities by the end of 2009. These cost management actions, which build on MWV’s recent commercial alignment improvements and are in addition to our ongoing productivity improvement initiatives, are designed to achieve $125 million in pre-tax savings in 2009, with a targeted run-rate range of $250 million to $300 million by mid-2010. In connection with these actions, we expect to incur pre-tax restructuring charges of $200 million to $250 million, of which $29 million was recorded during the fourth quarter of 2008 with the remainder expected to be recorded during 2009. The cash portion of these charges is expected to be $50 million to $60 million in 2009.

RESULTS OF OPERATIONS

The following table summarizes our results for the years ended December 31, 2008, 2007 and 2006, as reported in accordance with accounting principles generally accepted in the U.S. All references to per share amounts are presented on an after-tax basis.


	Years ended December 31,
*In millions, except per share data*	2008			2007			2006
Net sales	$	6,637		$	6,407		$	6,050
Cost of sales		5,573			5,262			4,964
Selling, general and administrative expenses		809			870			894
Interest expense		210			205			195
Other income, net		(34	)		(301	)		(83	)


Income from continuing operations before income taxes		79			371			80
Income tax (benefit) provision		(1	)		105			(1	)


Income from continuing operations		80			266			81
Income from discontinued operations, net of income taxes		10			19			12


Net income	$	90		$	285		$	93


Net income per share – basic and diluted:
Income from continuing operations	$	0.46		$	1.45		$	0.45
Income from discontinued operations		0.06			0.11			0.07

Net income	$	0.52		$	1.56		$	0.52

Comparison of Years ended December 31, 2008 and 2007

Sales were $6.64 billion and $6.41 billion for the years ended December 31, 2008 and 2007, respectively. Increased sales in 2008 were driven by improved pricing and product mix and the impact of favorable foreign currency exchange, partially offset by lower volumes compared to 2007, primarily due to the effects of the global economic contraction in the second half of 2008. Refer to the individual segment discussion that follows for detailed sales information.

Costs of sales were $5.57 billion and $5.26 billion for the years ended December 31, 2008 and 2007, respectively. Increased cost of sales in 2008 was driven by continued significant input cost inflation, partially offset by lower volumes compared to 2007. In 2008, pre-tax input costs for energy, raw materials and freight included in cost of sales were $260 million higher compared to 2007. Restructuring charges included in cost of sales were $41 million and $57 million in 2008 and 2007, respectively.

Selling, general and administrative expenses were $809 million and $870 million, or 12.2% and 13.6% as a percentage of sales, for the years ended December 31, 2008 and 2007, respectively. Lower expense in 2008 compared to 2007 was due primarily to improved productivity, lower restructuring charges and one-time costs, and lower employee incentive compensation, partially offset by the impact of unfavorable foreign currency exchange. In 2008, improved productivity lowered selling, general and administrative expenses by $83 million compared to 2007. Restructuring charges and one-time costs included in selling, general and administrative expenses were $26 million and $48 million in 2008 and 2007, respectively.

Pension income from continuing operations was $93 million and $58 million for the years ended December 31, 2008 and 2007, respectively. For 2008, pension income includes a pre-tax curtailment gain of $11 million resulting from U.S. employee reductions associated with the company’s 2005 cost initiative. Pension income is reported in cost of sales and selling, general and administrative expenses, and is included in Corporate and Other for segment reporting purposes.

Interest expense was $210 million for the year ended December 31, 2008 and was comprised of $164 million related to bond and bank debt, $13 million related to a long-term obligation non-recourse to MWV and $33 million related to other borrowings. Interest expense was $205 million for the year ended December 31, 2007 and was comprised of $178 million related to bond and bank debt and $27 million related to other borrowings.

Other income, net was $34 million and $301 million for the years ended December 31, 2008 and 2007, respectively, and was comprised of the following:


	Years ended December 31,
*In millions*	2008			2007
Gains on sales of large-tract forestlands ¹	$	—		$	(250	)
Gains on sales of small-tract forestlands ¹		—			(24	)
Gains on sales of other assets		(16	)		—
Interest income		(39	)		(19	)
Asset impairments		—			2
Foreign currency exchange losses (gains)		23			(12	)
Other, net		(2	)		2

	$	(34	)	$	(301	)

In 2008, sales of landholdings are included in net sales in the consolidated statements of operations to reflect the strategic view and structure of the operations of the Community Development and Land Management segment established in 2008. For periods prior to 2008, gains from sales of landholdings are included in other income, net in the consolidated statements of operations.

The company’s annual effective tax rate attributable to continuing operations was approximately (1)% and 28% for the years ended December 31, 2008 and 2007, respectively. The decrease in the effective tax rate in 2008 compared to 2007 was primarily due to favorable settlements of certain federal tax audit issues, benefits from changes in federal tax laws and regulations, and the mix of results between the company’s domestic and foreign operations, including lower pre-tax domestic gains of $234 million from sales of forestlands in 2008 compared to 2007.

In addition to the information discussed above, the following sections discuss the results of operations for each of the company’s business segments and Corporate and Other. MWV’s business segments are (i) Packaging Resources, (ii) Consumer Solutions, (iii) Consumer & Office Products, (iv) Specialty Chemicals, and (v) Community Development and Land Management. The company is presenting the Community Development and Land Management business as a separate segment (previously included in Corporate and Other) to align segment disclosures with management’s analysis of results of operations and the process to allocate resources adopted in 2008. Results for 2007 and 2006 have been recast to reflect the new segment structure. Refer to Note R of Notes to Consolidated Financial Statements included in Part II, Item 8 for a reconciliation of the sum of the results of the business segments and Corporate and Other to the company’s consolidated income from continuing operations before income taxes. Restructuring charges are included in Corporate and Other for segment reporting purposes. Refer to the discussion included in “Significant Transactions” herein below for restructuring charges attributable to the company’s business segments.

Packaging Resources

Results for 2007 have been recast to exclude the discontinued operations of the Kraft business.

Segment profit is measured as results before restructuring charges and one-time costs, pension income, interest expense and income, income taxes, minority interest income and losses and discontinued operations.

Sales for the Packaging Resources segment increased to $2.67 billion in 2008 compared to $2.50 billion in 2007. Increased sales were driven by improved pricing and product mix in key paperboard grades and by volume growth in bleached board. Shipments of bleached paperboard in 2008 were 1,646,000 tons, up 5% from 2007 reflecting, in part, a shift by the company away from lower value grades. Shipments of CNK in 2008 were 1,043,000 tons, down 5% from 2007, mainly reflecting declines in beverage and general packaging grades in late 2008 as customers de-stocked inventories in response to weak economic conditions. In 2008, bleached paperboard prices were up 5% and CNK prices were up 4% compared to 2007. Sales for the company’s Brazilian packaging operation, Rigesa Ltda., increased 19% in 2008 over 2007, due primarily to continued solid demand for corrugated packaging solutions in the domestic Brazilian market.

Profit for the Packaging Resources segment decreased to $195 million in 2008 compared to $281 million in 2007, reflecting record input cost inflation offsetting improvements in pricing and product mix and higher volume. Earnings in 2008 were negatively impacted by $162 million from higher input costs for energy, raw materials and freight and $51 million from unfavorable productivity due primarily to unscheduled maintenance and hurricane-related downtime. Earnings in 2008 benefited by $98 million from improved pricing and product mix, $12 million from the impact of favorable foreign currency exchange, $8 million from higher volume and $9 million from other favorable items compared to 2007.

Consumer Solutions

Sales for the Consumer Solutions segment increased to $2.51 billion in 2008 compared to $2.43 billion in 2007. In 2008, higher sales were driven by growth in global beverage, home and garden and healthcare markets, and from the impact of favorable foreign currency exchange compared to 2007. These positive effects were partially offset by year-over-year volume declines in media and personal care packaging due to weakening economic conditions in the second half of 2008.

Profit for the Consumer Solutions segment decreased to $56 million in 2008 compared to $86 million in 2007. In 2008, earnings were negatively impacted by $40 million from higher input costs of energy, raw materials and freight and $9 million from other unfavorable items compared to 2007. In 2008, earnings benefited by $11 million from improved productivity, $5 million from improved pricing and product mix and $3 million from higher volume compared to 2007.

Consumer & Office Products

Sales for the Consumer & Office Products segment decreased to $1.06 billion in 2008 compared to $1.15 billion in 2007. In 2008, volume declines across key product lines due to the weakening U.S. economy offset improvements in pricing and product mix compared to 2007, as well as higher year-over-year sales in the Brazilian school products business. This segment continues to be impacted by Asian-based imported products.

Profit for the Consumer & Office Products segment decreased to $96 million in 2008 compared to $139 million in 2007. In 2008, earnings were negatively impacted by $38 million from lower volume, $28 million from higher input costs, $5 million from the impact of unfavorable foreign currency exchange and $9 million from other unfavorable items compared to 2007. In 2008, earnings benefited by $23 million from improved productivity and $14 million from improved product mix compared to 2007.

Specialty Chemicals

Sales for the Specialty Chemicals segment increased to $547 million in 2008 compared to $494 million in 2007. In 2008, improved pricing and product mix in most markets were partially offset by volume declines for carbon-based products due to lower automobile production volumes in North America compared to 2007, and volume declines for printing ink resins due to weakness in the publication inks industry.

Profit for the Specialty Chemicals segment increased to $48 million in 2008 compared to $37 million in 2007. In 2008, earnings benefited by $53 million from improved pricing and product mix and $8 million from other favorable items compared to 2007. In 2008, earnings were negatively impacted by $28 million from higher input costs of energy, raw materials and freight and $22 million from unfavorable productivity compared to 2007.

Community Development and Land Management

During 2008, MWV established a real estate business to maximize the value of its land holdings. As a result, the company is presenting the Community Development and Land Management business as a separate segment for the year ended December 31, 2008, which was previously included in Corporate and Other. Results prior to 2008 have been recast to conform to the new segment structure.

Profit for the Community Development and Land Management segment was $59 million for the year ended December 31, 2008 compared to $294 million for the year ended December 31, 2007. Sales were $135 million in 2008 compared to $87 million in 2007. Profit in 2007 includes pre-tax gains of $250 million related to sales of non-strategic large-tract forestlands. Profit from real estate activities related to small-tract land sales was $40 million in 2008 compared to $24 million in 2007. Profit from forestry operations and leasing activities was $19 million in 2008 compared to $20 million in 2007. The company sold approximately 21,200 small-tract acres for gross proceeds of $57 million in 2008 compared to approximately 7,900 acres for gross proceeds of $26 million in 2007. As the U.S. economy continued to weaken in 2008, the company shifted its marketing focus to smaller recreational properties primarily located in rural Alabama, Georgia and Virginia.

The goal of the Community Development and Land Management business is to create and manage a land portfolio capable of generating sustainable earnings and cash flow and maximizing shareholder value. To accomplish this goal, during 2008 the company evaluated its land portfolio to determine the potential maximum value for each tract and the real estate strategies for realizing those values. Based on our landholdings at December 31, 2008, management has determined that approximately 545,000 acres are most suitable for rural land sales, approximately 115,000 acres are developable and approximately 140,000 acres are strategic fiber sources for the company’s mill operations with mineral extraction potential. Current segmentation may change as a result of the company’s continuous evaluation of its landholdings for the highest and best use.

Current real estate industry conditions remain challenging due to significant credit tightening and weaker consumer spending. These factors will likely continue to influence near-term results. During this time, the company will continue to move forward with its near- and long- term real estate value creation plans, including enhancing rural land and entitling and master planning its highest potential development land.

Corporate and Other


	Years ended December 31,
*In millions*	2008			2007
Sales ¹	$	105		$	130
Corporate and Other loss ^{1, 2}		(375	)		(466	)

Results for 2007 have been recast to include certain costs previously associated with the discontinued operations of the Kraft business and to conform to the new segment structure adopted in 2008 reflecting the separate presentation of the Community Development and Land Management business previously included in Corporate and Other.

Corporate and Other loss includes minority interest income and losses, restructuring charges and one-time costs, pension income, interest expense and income, and gains and losses on certain asset sales.

Corporate and Other includes corporate support staff services and related assets and liabilities, including merger-related goodwill, and the Specialty Papers business. The results include income and expense items not directly associated with segment operations, such as certain legal settlements, net pension income, interest expense and income, sales of corporate real estate, restructuring charges and one-time costs and other activities.

Corporate and Other loss was $375 million in 2008 compared to a loss of $466 million in 2007. Contributing to the decreased loss in 2008 were lower restructuring charges and one-time costs of $40 million, higher pension income of $35 million, higher interest income of $20 million, a gain of $15 million from the sale of corporate real estate, and $8 million from other net favorable items, partially offset by $27 million from unfavorable foreign currency exchange compared to 2007.

Comparison of Years ended December 31, 2007 and 2006

Sales were $6.41 billion and $6.05 billion for the years ended December 31, 2007 and 2006, respectively. Increased sales in 2007 were driven by the addition of the dispensing and spraying systems business acquired in the third quarter of 2006, improved pricing and product mix and the impact of favorable foreign currency exchange, partially offset by lower volumes compared to 2006. Refer to the individual segment discussion that follows for detailed sales information for each segment.

Costs of sales were $5.26 billion and $4.96 billion for the years ended December 31, 2007 and 2006, respectively. In 2007, pre-tax input costs for energy, raw materials and freight included in cost of sales were $131 million higher compared to 2006. Restructuring charges included in cost of sales were $57 million and $53 million in 2007 and 2006, respectively.

Selling, general and administrative expenses were $870 million and $894 million, or 13.6% and 14.8% as a percentage of sales, for the years ended December 31, 2007 and 2006, respectively. Lower expense in 2007 compared to 2006 was primarily due to lower restructuring charges and one-time costs, partially offset by the impact of the addition of the dispensing and spraying systems business acquired in the third quarter of 2006 and the impact of unfavorable foreign currency exchange. Restructuring charges and one-time costs included in selling, general and administrative expenses were $48 million in 2007 compared to $102 million in 2006.

Pension income from continuing operations was $58 million and $54 million for the years ended December 31, 2007 and 2006, respectively. Pension income is reported in cost of sales and selling, general and administrative expenses, and is included in Corporate and Other for segment reporting purposes.

Interest expense was $205 million for the year ended December 31, 2007 and was comprised of $178 million related to bond and bank debt and $27 million related to other borrowings. Interest expense was $195 million for the year ended December 31, 2006 and was comprised of $176 million related to bond and bank debt and $19 million related to other borrowings.

Other income, net was $301 million and $83 million for the years ended December 31, 2007 and 2006, respectively, and was comprised of the following:


	Years ended December 31,
*In millions*	2007			2006
Gains on sales of large-tract forestlands	$	(250	)	$	—
Gains on sales of small-tract forestlands		(24	)		(29	)
Gains on sales of other assets		—			(29	)
Gain on sale of PIK note		—			(21	)
Interest income		(19	)		(20	)
Asset impairments		2			20
Foreign currency exchange gains		(12	)		(1	)
Other, net		2			(3	)

	$	(301	)	$	(83	)

The company’s annual effective tax rate from continuing operations was approximately 28% and (2)% for the years ended December 31, 2007 and 2006, respectively. The increase in the rate in 2007 compared to 2006 was primarily due to a shift in the level and mix of domestic versus foreign earnings, including pre-tax domestic gains from sales of forestlands of $274 million in 2007 compared to $29 million in 2006.

In addition to the information discussed above, the following sections discuss the results of operations for each of our business segments and Corporate and Other.

Packaging Resources

Results for 2007 and 2006 have been recast to exclude the discontinued operations of the Kraft business.

Sales for the Packaging Resources segment increased to $2.50 billion in 2007 compared to $2.46 billion in 2006. Increased sales were driven by improved pricing and product mix, the impact of favorable foreign currency exchange and strengthened demand in key products. Shipments of bleached paperboard in 2007 were 1,575,000 tons, down 4% from 2006 reflecting, in part, a shift by the company away from lower value grades. Shipments of CNK in 2007 were 1,096,000 tons, down 3% from 2006, with declines in beverage sales partially offset by higher sales of general packaging grades. In 2007, bleached paperboard prices were up 4% and CNK prices were up 6% compared to 2006. Sales for the company’s Brazilian packaging operation, Rigesa Ltda., increased 20% in 2007 over 2006 driven by higher volume and the impact of favorable foreign currency exchange, partially offset by lower pricing.

Profit for the Packaging Resources segment increased to $281 million in 2007 compared to $244 million in 2006. Earnings in 2007 benefited by $65 million from improved pricing and product mix, $45 million from improved productivity and $9 million from the impact of favorable foreign currency exchange compared to 2006. Earnings in 2007 were negatively impacted by $66 million from higher input costs for energy, raw materials and freight, $6 million from volume declines and $10 million from higher other costs compared to 2006.

Consumer Solutions

Sales for the Consumer Solutions segment increased to $2.43 billion in 2007 compared to $2.17 billion in 2006. In 2007, sales improved in our beverage and healthcare businesses and benefited from the addition of the dispensing and spraying systems business acquired in the third quarter of 2006 and the impact of favorable foreign currency exchange. These positive effects were partially offset by decreased sales in the media business due to market-related declines.

Profit for the Consumer Solutions segment decreased to $86 million in 2007 compared to $93 million in 2006. In 2007, earnings were negatively impacted by $26 million from higher input costs for energy, raw materials and freight, $23 million from volume declines and $8 million from lower pricing compared to 2006. In 2007, earnings benefited by $27 million from the impact of favorable foreign currency exchange and earnings from the dispensing and spraying systems business acquired in the third quarter of 2006, $20 million from improved productivity and $3 million from lower other costs compared to 2006.

Consumer & Office Products

Sales for the Consumer & Office Products segment increased to $1.15 billion in 2007 compared to $1.14 billion in 2006. In 2007, solid performance in the segment’s value-added branded consumer product lines, improved overall product mix, the impact of favorable foreign currency exchange and solid performance in the Brazilian school products business were partially offset by lower volumes compared to 2006.

Profit for the Consumer & Office Products segment increased to $139 million in 2007 compared to $127 million in 2006. In 2007, earnings were positively impacted by $43 million from improved product mix, $5 million from improved productivity and $4 million from other favorable items, partially offset by higher input costs of $22 million and volume declines of $18 million compared to 2006. The effect of improved product mix associated with the segment’s emphasis on proprietary, branded products was partially offset by lower basic product volume during 2007.

Specialty Chemicals

Sales for the Specialty Chemicals segment increased to $494 million in 2007 compared to $493 million in 2006. In 2007, improved pricing in most markets was offset by volume declines for carbon-based products due to lower automobile production volumes in North America compared to 2006, and volume declines for printing ink resins due to weakness in the publication inks industry.

Profit for the Specialty Chemicals segment decreased to $37 million in 2007 compared to $51 million in 2006. In 2007, decreased earnings reflect higher input costs of energy, raw materials and freight of $25 million, volume declines of $11 million and other unfavorable items of $11 million, partially offset by improved pricing and product mix of $33 million compared to 2006.

Community Development and Land Management

Gains from sales of forestlands in 2007 and 2006 are included in segment profit and in other income, net in the consolidated statements of operations.

Profit for the Community Development and Land Management segment was $294 million for the year ended December 31, 2007 compared to $53 million for the year ended December 31, 2006. Sales were $87 million in 2007 compared to $106 million in 2006 and were primarily related to forestry operations and leasing activities. Profit in 2007 includes pre-tax gains of $250 million related to sales of non-strategic large-tract forestlands. Profit from real estate activities related to small-tract land sales was $24 million in 2007 compared to $29 million in 2006. Profit from forestry operations and leasing activities was $20 million in 2007 compared to $24 million in 2006. The company sold approximately 7,900 small-tract acres for gross proceeds of $26 million in 2007 compared to approximately 7,700 acres for gross proceeds of $30 million in 2006.

Corporate and Other


	Years ended December 31,
*In millions*	2007			2006
Sales ¹	$	130		$	130
Corporate and Other loss ^{1, 2}		(466	)		(488	)

Results for 2007 and 2006 have been recast to include certain costs previously associated with the discontinued operations of the Kraft business and to conform to the new segment structure adopted in 2008 reflecting the separate presentation of the Community Development and Land Management business previously included in Corporate and Other.

Corporate and Other loss was $466 million in 2007 compared to a loss of $488 million in 2006. In 2007 compared to 2006, lower restructuring charges and one-time costs of $65 million and other favorable items of $1 million were partially offset by certain items reflected in the 2006 results including a $21 million gain from the sale of a PIK note, an $18 million gain from the sale of corporate real estate and $5 million in transition services income from New Page Corporation.

OUTLOOK

2009

Overview

Given worldwide economic uncertainty, year-over-year results comparisons are difficult to predict. MWV is directly addressing the uncertain economic environment by remaining focused on the key items within its control that are expected to further strengthen the company’s financial position including:

•

vigilantly managing working capital usage;

•

reducing discretionary spending, including pay freezes for salaried employees;

•

reducing capital expenditures by narrowing investments on more immediate, high-return investments;

•

matching production with demand to reduce manufacturing cash costs, and;

•

executing the broad cost reduction actions MWV announced on January 15, 2009.

Cost management actions

On January 15, 2009, MWV announced that it is implementing a series of broad cost reduction actions to further reduce its corporate and business unit overhead cost structure, optimize its manufacturing footprint, and realize sourcing savings throughout its supply chain. These actions are expected to result in the elimination of about 2,000 positions, or 10% of MWV’s global workforce, and the closure or restructuring of 12 to 14 manufacturing facilities by the end of 2009. These cost management efforts are designed to achieve $125 million in pre-tax savings in 2009, with a targeted run-rate range of $250 million to $300 million by mid-2010. In connection with these actions, we expect to incur pre-tax restructuring charges of $200 million to $250 million, of which $29 million was recorded during the fourth quarter of 2008 with the remainder to be recorded during 2009. The cash portion of these charges is expected to be $50 million to $60 million in 2009.

Other items

Capital spending was $288 million in 2008 and is expected to be about $250 million in 2009. Depreciation, depletion and amortization expense was $472 million in 2008 and is expected to be about $450 million in 2009.

Interest expense was $210 million in 2008 and is expected to be $200 million to $210 million in 2009.

Management currently estimates pension income in 2009 to be about $60 million before the impact, if any, of a curtailment gain or loss due to a plan re-measurement from actions under the 2008 strategic cost management initiative. In addition, the company’s U.S. qualified retirement plans remain over-funded and we do not anticipate any required regulatory funding contributions to such plans in the foreseeable future.

Recent developments in global credit markets have not had a material impact on the company’s investments and credit facilities. In addition, these developments have not had a material impact on the company’s relationships with its current vendors and customers. Management will continue to monitor potential changes in the credit market and related markets which may have an impact on its businesses.

LIQUIDITY AND CAPITAL RESOURCES

In response to current economic uncertainty and to enhance MWV’s liquidity, we have prioritized cash generation as a key operating principle across our businesses. We are aggressively managing working capital usage and matching production to market demand, as well as suspending all non-critical capital projects and limiting discretionary spending. Cash and cash equivalents were $549 million at December 31, 2008 compared to $245 million at December 31, 2007. The credit quality of our portfolio of short-term investments remains appropriate with the majority of the company’s cash and cash equivalents invested in U.S. government securities.

Cash flow from operations and the company’s current cash levels are expected to be adequate to fund scheduled debt payments, dividends to shareholders and capital expenditures in 2009. Capital spending is expected to be about $250 million in 2009, down from $288 million in 2008, and will be primarily allocated to productivity improvement initiatives and to safety and environmental compliance programs. In addition, the company’s U.S. qualified retirement plans remain over-funded and we do not anticipate any required regulatory funding contributions to such plans in the foreseeable future.

MWV currently has $950 million of undrawn committed credit facilities. We continuously monitor the credit quality of our credit facility banks, insurance providers and derivative contract counter-parties, in addition to our customers and key suppliers. The company has taken and will take further actions as necessary to mitigate any impact to its liquidity position; however, we cannot predict with any certainty the impact to the company of any further disruption in global credit markets.

Operating activities

Cash provided by operating activities from continuing operations was $364 million in 2008, compared to $574 million in 2007 and $523 million in 2006. The decrease in operating cash flow in 2008 compared to 2007 and 2006 was primarily attributable to lower earnings. Cash generated from year-over-year working capital improvements was $24 million, $128 million and $138 million in 2008, 2007 and 2006, respectively. See Note Q of Notes to Financial Statements included in Part II, Item 8 for information related to changes in working capital. Cash provided by operating activities from discontinued operations related to the Kraft business was $12 million, $67 million and $44 million in 2008, 2007 and 2006, respectively.

Investing activities

Cash used in investing activities from continuing operations was $264 million in 2008, compared to $227 million in 2007 and $744 million in 2006. Proceeds from dispositions of assets generated $67 million in 2008, compared to $182 million in 2007 and $165 million in 2006. Capital spending from continuing operations totaled $288 million in 2008, compared to $329 million in 2007 and $285 million in 2006. Payments for acquired businesses, net of cash acquired and transaction costs, were $18 million in 2008, compared to $52 million in 2007 and $714 million in 2006. During 2008, we purchased Oracle Packaging to expand the company’s leadership position in North American beverage packaging, and we jointly acquired International Labs, a pharmaceutical packaging company, with India-based Bilcare Ltd. During 2007, we acquired two manufacturers of high-quality, innovative dispensing and sprayer systems to strengthen our primary packaging offerings. During 2006, we acquired Saint-Gobain Calmar, a leading global manufacturer of high-quality and innovative dispensing and spraying systems, with manufacturing facilities in North America, Europe, Latin America and Asia. See related discussion in Note P of Notes to Financial Statements included in Part II, Item 8. Proceeds of the sale of a debt security generated $109 million in 2006.

Cash provided by investing activities from discontinued operations was $456 million in 2008, compared to cash used in investing activities from discontinued operations of $9 million in 2007 and $17 million in 2006. The increase in cash provided by investing activities from discontinued operations in 2008 compared to 2007 and 2006 was attributable to net cash proceeds of $466 million from the sale of the Kraft business, net of its capital expenditures and other cash outflows of $10 million.

Financing activities

Cash used in financing activities from continuing operations was $200 million in 2008, compared to cash used in financing activities from continuing operations of $332 million in 2007 and cash provided by financing activities from continuing operations of $41 million in 2006. In 2008, net cash used in financing activities from continuing operations was driven by dividend payments of $159 million, long-term debt payments of $36 million and other uses of funds of $13 million, offset in part by proceeds from other sources of funds of $8 million. Cash used in financing activities from discontinued operations was $7 million and $6 million in 2007 and 2006, respectively. There was no cash flow from financing activities attributable to discontinued operations in 2008.

The company has available a $750 million bank credit facility that expires in December 2010. Borrowings under this agreement can be in unsecured domestic or Eurodollar notes and at rates approximating Prime or the London Interbank Offered Rate (“LIBOR”) at the company’s option. The $750 million revolving credit agreement contains a financial covenant limiting the percentage of total debt (including a $338 million liability non-recourse to MWV) to total capitalization (including deferred income tax liabilities) to 55% (as of December 31, 2008, the company’s total debt to total capitalization as defined above was approximately 41%) as well as certain other covenants with which the company is in compliance. The revolving credit facility was undrawn at December 31, 2008 and 2007. In addition, the company has a $200 million secured revolving credit facility that expires in May 2009, which includes an option to extend for an additional period of up to one year if specified conditions are satisfied. Borrowings under this facility are secured by a portion of the company’s trade receivables and bear interest at LIBOR plus a margin. The secured revolving credit facility was undrawn at December 31, 2008 and 2007. We continue to monitor the credit quality of our liquidity providers by evaluating credit ratings and credit default swap levels. In addition, we undertake similar measures and evaluate deposit concentrations to monitor the credit quality of the financial institutions that hold our cash and cash equivalents.

The percentage of total debt to total capitalization for MWV was 45% at December 31, 2008 and 40% at December 31, 2007.

During 2008, MWV terminated its entire portfolio of interest rate swaps on its fixed-rate debt to mitigate any counter-party credit risk and to realize its net favorable hedge positions at that time. As a result, all of the company’s long-term debt is at fixed rates. As a result of the swap terminations, the company realized $20 million in net cash proceeds, which are included in cash flows from operations in the consolidated statements of cash flows.

The company’s Board of Directors declared dividends of $0.92 per share, paying a total of $159 million, $169 million and $167 million of dividends to shareholders for the years ended December 31, 2008, 2007 and 2006, respectively. On January 26, 2009, the company’s Board of Directors declared a regular quarterly dividend of $0.23 per common share.

Proceeds from the issuance of common stock and exercises of stock options were $162 million and $53 million for the years ended December 31, 2007 and 2006, respectively. Proceeds from the issuance of common stock and exercises of stock options were less than $1 million in 2008.

In 2007, the company entered into an accelerated share repurchase program with a financial institution counterparty to purchase $400 million of the company’s common stock. This program was funded by proceeds from sales of forestlands that closed in 2007. Pursuant to this program, the company received and retired 14.0 million shares. Under a separate share repurchase program, the company repurchased 2.6 million shares for $86 million in 2007. In 2006, the company repurchased and retired 1.3 million shares related to an obligation under a share put option to the former owner of a subsidiary. The cash impact of this transaction was $47 million. The 1.3 million shares repurchased under the put option were not a reduction of the share repurchases authorized by the Board of Directors in 2005.

In 2007, the company received an installment note in the amount of $398 million (the “Timber Note”) as part of the consideration for the sale of certain large-tract forestlands. The Timber Note does not require any principal payments until its maturity in October 2027 and bears interest at a rate approximating the LIBOR. In addition, the Timber Note is supported by a bank-issued irrevocable letter of credit obtained by the buyer of the forestlands. Using the Timber Note as collateral, the company received $338 million in proceeds under a secured financing agreement with a bank. Under the terms of the agreement, the liability from this transaction is non-recourse to MeadWestvaco and shall be paid from the Timber Note proceeds upon its maturity. As a result, the Timber Note is not available to satisfy the obligations of

MeadWestvaco. The non-recourse liability does not require any principal payments until its maturity in October 2027 and bears interest at a rate approximating LIBOR. For further discussion related to this transaction, see Note D of Notes to Financial Statements included in Part II, Item 8.

In May of 2008, Moody’s Investors Service lowered MeadWestvaco’s senior unsecured debt ratings to Ba1 from Baa3 with a stable outlook. In August of 2008, Standard and Poor’s Ratings Services revised its outlook on MeadWestvaco to negative from stable, lowered the company’s short-term credit rating to A-3 from A-2 and affirmed the company’s BBB long-term credit rating. These rating changes did not have a material financial impact to the company in 2008 and are not expected to have a material financial impact to the company in 2009.

EFFECTS OF INFLATION

Prices for energy, including natural gas, oil and electricity, and raw materials and freight, increased significantly in 2008 and 2007. The increase in these costs affected many of the company’s businesses. During 2008, the pre-tax input cost of energy, raw materials and freight attributable to continuing operations was $254 million higher than in 2007. During 2007, the pre-tax input cost of energy, raw materials and freight attributable to continuing operations was $131 million higher than in 2006.

ENVIRONMENTAL AND LEGAL MATTERS

Our operations are subject to extensive regulation by federal, state and local authorities, as well as regulatory authorities with jurisdiction over foreign operations of the company. Due to changes in environmental laws and regulations, the application of such regulations, and changes in environmental control technology, it is not possible for us to predict with certainty the amount of capital expenditures to be incurred for environmental purposes. Taking these uncertainties into account, we estimate that we will incur $13 million and $32 million in environmental capital expenditures in 2009 and 2010, respectively. Approximately $16 million was spent on environmental capital projects in 2008.

The company has been notified by the U.S. Environmental Protection Agency or by various state or local governments that it may be liable under federal environmental laws or under applicable state or local laws with respect to the cleanup of hazardous substances at sites previously operated or used by the company. The company is currently named as a potentially responsible party (“PRP”), or has received third-party requests for contribution under the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”) and similar state or local laws with respect to numerous sites. There are other sites which may contain contamination or which may be potential Superfund sites, but for which MeadWestvaco has not received any notice or claim. The potential liability for all these sites will depend upon several factors, including the extent of contamination, the method of remediation, insurance coverage and contribution by other PRPs. The company regularly evaluates its potential liability at these various sites. At December 31, 2008, MeadWestvaco had recorded liabilities of approximately $19 million for estimated potential cleanup costs based upon its close monitoring of ongoing activities and its past experience with these matters. The company believes that it is reasonably possible that costs associated with these sites may exceed amounts of recorded liabilities by an amount that could range from an insignificant amount to as much as $10 million. This estimate is less certain than the estimate upon which the environmental liabilities were based. After consulting with legal counsel and after considering established liabilities, it is our judgment that the resolution of pending litigation and proceedings is not expected to have a material adverse effect on the company’s consolidated financial condition or liquidity. In any given period or periods, however, it is possible such proceedings or matters could have a material effect on the company’s results of operations.

liabilities of approximately $21 million, a significant portion of which relates to asbestos. Should the volume of litigation grow substantially, it is possible that the company could incur significant costs resolving these cases. After consulting with legal counsel and after considering established liabilities, it is our judgment that the resolution of pending litigation and proceedings is not expected to have a material adverse effect on the company’s consolidated financial condition or liquidity. In any given period or periods, however, it is possible such proceedings or matters could have a material effect on the company’s results of operations.

MeadWestvaco is involved in various other litigation and administrative proceedings arising in the normal course of business. Although the ultimate outcome of such matters cannot be predicted with certainty, management does not believe that the currently expected outcome of any matter, lawsuit or claim that is pending or threatened, or all of them combined, will have a material adverse effect on the company’s consolidated financial condition or liquidity. In any given period or periods, however, it is possible such proceedings or matters could have a material effect on the company’s results of operations.

CONTRACTUAL OBLIGATIONS

The company enters into various contractual obligations throughout the year. Presented below are the contractual obligations of the company as of December 31, 2008, and the time period in which payments under the obligations are due. Disclosures related to long-term debt, capital lease obligations and operating lease obligations are included in the Notes to Financial Statements included in Part II, Item 8. Also included below are disclosures regarding the amounts due under purchase obligations. A purchase obligation is defined as an agreement to purchase goods or services that is enforceable and legally binding on the company and that specifies all significant terms, including fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction.

The company has included in the disclosure below all normal and recurring purchase orders, take-or-pay contracts, supply arrangements as well as other purchase commitments that management believes meet the definition of purchase obligations above.


	Payments due by period
*In millions*	Total		Less than 1 year 2009		1-3 years 2010 and 2011		3-5 years 2012 and 2013		More than 5 years 2014 and beyond
Contractual obligations:
Debt, excluding capital lease obligations	$	2,249	$	86	$	31	$	676	$	1,456
Interest on debt ⁽¹⁾		2,363		167		324		242		1,630
Capital lease obligations ⁽²⁾		364		13		23		20		308
Operating leases		462		58		114		69		221
Purchase obligations		995		549		195		136		115
Other long-term obligations ^{(3) (4)}		626		71		157		138		260


Total	$	7,059	$	944	$	844	$	1,281	$	3,990

⁽¹⁾	Amounts are based on weighted-average interest rate of 7.6% for 2009. The weighted-average interest rate for years 2010 and thereafter is 7.7%.

⁽²⁾	Amounts include both principal and interest payments.

⁽³⁾	Total excludes a $338 million liability that is non-recourse to MeadWestvaco. See related discussion in Note D of Notes to Financial Statements included in Part II, Item 8.

⁽⁴⁾	Total excludes $127 million of unrecognized tax benefits and $43 million of related accrued interest and penalties due to the uncertainty of timing of payment. See Note N of Notes to Financial Statements included in Part II, Item 8 for additional information.

SIGNIFICANT TRANSACTIONS

Discontinued operations

On July 1, 2008, the company completed the sale of its Kraft business for net cash proceeds of $466 million. The sale resulted in a pre-tax gain of $13 million ($8 million after-tax). For 2008, the after-tax gain on sale as well as the after-tax operating results of the Kraft business are being reported as income from discontinued operations in the consolidated statements of operations. Prior period amounts have been recast on a comparable basis. The results of operations and assets and liabilities of the Kraft business were previously included in the Packaging Resources segment.

Income from discontinued operations was $10 million, or $0.06 per share, for 2008, $19 million, or $0.11 per share, for 2007, and $12 million, or $0.07 per share, for 2006. Refer to Note P of Notes to Consolidated Financial Statements included in Part II, Item 8 for further discussion of the sale of the Kraft business and discontinued operations treatment.

Restructuring charges

Year ended December 31, 2008

During 2005, the company launched a cost initiative to improve the efficiency of its business model. The goal of this initiative was to reduce the overall cost structure of the company by $175 million to $200 million, before inflation, on an annual run-rate basis. The company completed this program in December 2008, achieving estimated cumulative savings of about $190 million. In January 2009, the company announced a series of broad cost reduction actions including further reducing corporate and business unit overhead expense and closing or restructuring certain manufacturing locations. Restructuring costs incurred during 2008 were pursuant to both the 2005 cost initiative and the 2008 strategic cost management initiative.

For the year ended December 31, 2008, the company incurred pre-tax charges of $69 million in connection with employee separation costs, asset write-downs and other restructuring actions of which $41 million, $26 million and $2 million was recorded within cost of sales, selling, general and administrative expenses, and other income, net, respectively. In the fourth quarter of 2008, the company incurred pre-tax charges of $51 million of which $33 million and $18 million was recorded within cost of sales, and selling, general and administrative expenses, respectively. Although these charges related to individual segments, such amounts are included in Corporate and Other for segment reporting purposes. The following table and discussion present additional detail of the 2008 charges:


*In millions*	Employee costs		Asset write-downs and other costs		Total
Consumer Solutions	$	30	$	14	$	44
Consumer & Office Products		6		2		8
Packaging Resources		2		2		4
Specialty Chemicals		1		3		4
All other		5		4		9

	$	44	$	25	$	69


*In millions*	Employee costs		Asset write-downs and other costs		Total
2005 cost initiative	$	19	$	21	$	40
2008 strategic cost management initiative		25		4		29

	$	44	$	25	$	69

Consumer Solutions:

During the year ended December 31, 2008, the Consumer Solutions segment incurred charges of $44 million for employee separation costs, asset write-downs and other restructuring actions in connection with its packaging converting operations in the U.S. and Europe. These charges include employee separation costs of $30 million related to approximately 1,260 employees. The affected employees will separate from the company by December 31, 2009. The remaining $14 million was related to asset write-downs and other restructuring actions.

Consumer & Office Products:

During the year ended December 31, 2008, the Consumer & Office Products segment incurred charges of $8 million for employee separation costs, asset write-downs and other restructuring actions in connection with its operations in the U.S. These charges include employee separation costs of $6 million related to approximately 390 employees. The affected employees will separate from the company by December 31, 2009. The remaining $2 million was related to asset write-downs and other restructuring actions.

Packaging Resources:

During the year ended December 31, 2008, the Packaging Resources segment incurred charges of $4 million for employee separation costs, asset write-downs and other restructuring actions in connection with its manufacturing operations in the U.S. These charges include employee separation costs of $2 million related to approximately 35 employees. The affected employees will separate from the company by December 31, 2009. The remaining $2 million was related to asset write-downs and other restructuring actions.

Specialty Chemicals:

During the year ended December 31, 2008, the Specialty Chemicals segment incurred charges of $4 million for employee separation costs, asset write-downs and other restructuring actions in connection with its manufacturing operations in the U.S. These charges include employee separation costs of $1 million related to approximately 20 employees. The affected employees will separate from the company by December 31, 2009. The remaining $3 million was related to asset write-downs and other restructuring actions.

All other:

During the year ended December 31, 2008, the company incurred charges of $9 million for employee separation costs, asset write-downs and other restructuring actions. These charges include employee separation costs of $5 million related to approximately 180 employees. The affected employees will separate from the company by December 31, 2009. The remaining $4 million was related to asset write-downs and other restructuring actions.

Year ended December 31, 2007

For the year ended December 31, 2007, the company recorded pre-tax charges of $85 million in connection with employee separation costs, asset write-downs and other restructuring actions, of which $57 million, $24 million and $4 million was recorded within cost of sales, selling, general and administrative expenses, and other income, net, respectively. Of these charges, $23 million was related to the Consumer Solutions segment, $5 million was related to the Consumer & Office Products segment, $2 million was related to the Packaging Resources segment, and $55 million was attributed to Corporate and Other. These charges related to various restructuring actions, including asset write-downs and employee separation costs covering approximately 240 employees. As of December 31, 2008, actions related to employee separation costs were substantially paid. Charges attributed to Corporate and Other include $42 million in connection with asset write-downs and facility closure costs in connection with the company’s Specialty Papers business.

Year ended December 31, 2006

For the year ended December 31, 2006, the company recorded pre-tax charges of $133 million in connection with employee separation costs, asset write-downs and other restructuring actions, of which $53 million, $60 million and $20 million was recorded within cost of sales, selling, general and administrative expenses, and other income, net, respectively. Of these charges, $27 million was related to the Packaging Resources segment, $30 million was related to the Consumer Solutions segment and $8 million was related to the Consumer & Office Products segment. These charges related to various restructuring actions, including asset write-downs and employee separation costs covering approximately 1,340 employees. As of December 31, 2007, actions related to employee separation costs were substantially paid. In addition, $68 million was related to Corporate and Other of which $49 million was in connection with asset write-downs and other restructuring actions associated with ceased-use facilities and asset impairments.

CRITICAL ACCOUNTING POLICIES

Our principal accounting policies are described in the Summary of Significant Accounting Policies in the Notes to Consolidated Financial Statements included in Part II, Item 8. The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of some assets and liabilities and, in some instances, the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Management believes the accounting policies discussed below represent those accounting policies requiring the exercise of judgment where a different set of judgments could result in the greatest changes to reported results. Management has discussed the development and selection of the critical accounting estimates with the Audit Committee of the Board of Directors, and the Audit Committee has reviewed the company’s disclosure.

Environmental and legal liabilities: We record accruals for estimated environmental liabilities when remedial efforts are probable and the costs can be reasonably estimated. These estimates reflect assumptions and judgments as to the probable nature, magnitude and timing of required investigation, remediation and monitoring activities, as well as availability of insurance coverage and contribution by other potentially responsible parties. Due to the numerous uncertainties and variables associated with these assumptions and judgments, and changes in governmental regulations and environmental technologies, accruals are subject to substantial uncertainties, and actual costs could be materially greater or less than the estimated amounts. We record accruals for other legal contingencies, which are also subject to numerous uncertainties and variables associated with assumptions and judgments, when the loss is probable and reasonably estimable. Liabilities recorded for claims are limited to pending cases based on the company’s historical experience, consultation with outside counsel and consultation with an actuarial specialist concerning the feasibility of reasonably estimating liabilities associated with claims that may arise in the future. We recognize insurance recoveries when collection is reasonably assured.

Restructuring and other charges: We periodically record charges for the reduction of our workforce, the closure of manufacturing facilities and other actions related to business improvement and productivity initiatives. These events require estimates of liabilities for employee separation payments and related benefits, demolition, facility closures and other costs, which could differ from actual costs incurred.

Pension and postretirement benefits : Assumptions used in the determination of net pension cost and postretirement benefit expense, including the discount rate, the expected return on plan assets, and increases in future compensation and medical costs, are evaluated by the company, reviewed with the plan actuaries annually and updated as appropriate. Actual asset returns and compensation and medical costs, which are more favorable than assumptions, can have the effect of lowering expense and cash contributions, and, conversely, actual results, which are less favorable than assumptions, could increase expense and cash contributions. In accordance with generally accepted accounting principles, actual results that differ from assumptions are accumulated and amortized over future periods and, therefore, affect expense in such future periods.

In 2008, the company recorded pre-tax pension income from continuing operations of $93 million, compared to $58 million in 2007 and $54 million in 2006. The company currently estimates overall pre-tax pension income, before curtailments, in 2009 will decrease by approximately $20 million, primarily reflecting a change in the investment return assumption. The estimate assumes a long-term rate of return on plan assets of 8.0%, and a discount rate of 6.25%. The company determined the discount rate by referencing the Citigroup Pension Discount Curve. The company believes that using a yield curve approach more accurately reflects changes in the present value of liabilities over time since each cash flow is discounted at the rate at which it could effectively be settled. Previously, the company referenced indices for long-term, high quality bonds, ensuring that the durations of those indices were not materially different from the durations of the plans’ liabilities, or if different, that adjusting the discount rate would not have produced results that were materially different from using a common discount rate for all of its plans.

If the expected rate of return on plan assets were to change by 0.5%, annual pension income in 2009 would change by approximately $16 million. Similarly, if the discount rate were to change by 0.5%, annual pension income would change by approximately $0.3 million.

At December 31, 2008, the aggregate value of pension fund assets had decreased to $3.1 billion from $3.5 billion at December 31, 2007, reflecting overall unfavorable equity and fixed income market performance during 2008. For further details regarding pension fund assets, see Note K of Notes to Financial Statements included in Part II, Item 8.

Prior service cost and actuarial gains and losses in the retirement and postretirement benefit plans subject to amortization are amortized over the average remaining service periods, which are about 10 years and 5 years, respectively, and are a component of accumulated other comprehensive income. In 2004, the company modified certain postretirement healthcare benefits to be provided to future retirees. This change reduced the postretirement benefit obligation by approximately $68 million, and is being amortized over the remaining life of the eligible employees, which is approximately 24 years.

Long-lived assets useful lives: Useful lives of tangible and intangible assets are based on management’s estimates of the periods over which the assets will be productively utilized in the revenue-generation process or for other useful purposes. Factors that affect the determination of lives include prior experience with similar assets, product life expectations and industry practices. The determination of useful lives dictates the period over which tangible and intangible long-lived assets are depreciated or amortized, typically using the straight-line method.

Impairment of long-lived assets: We review long-lived assets for impairment in accordance with SFAS No. 144, Accounting for the Impairment or Disposal of Long-lived Assets . The statement requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If such circumstances are determined to exist, an estimate of undiscounted future cash flows produced by the long-lived asset, or the appropriate grouping of assets, is compared to carrying value to determine whether impairment exists . For an asset that is determined to be impaired, the loss is measured based on quoted market prices in active markets, if available. If quoted market prices are not available, the estimate of fair value is based on various valuation techniques, including a discounted value of estimated future cash flows. Considerable judgment must be exercised as to determining future cash flows and their timing and, possibly, choosing business value comparables or selecting discount rates to use in any value computations.

Intangible assets: Business acquisitions often result in recording intangible assets. Intangible assets are recognized at the time of an acquisition, based upon their fair value. Similar to long-lived tangible assets, intangible assets with finite lives are subject to periodic impairment reviews whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. As with tangible assets, considerable judgment must be exercised. Periodic impairment reviews of intangible assets assigned an indefinite life are required, at least annually, as well as when events or circumstances change.

As with our review of impairment of tangible assets and goodwill, we employ significant assumptions in assessing our indefinite-lived intangible assets for impairment (primarily Calmar trademarks and trade names). An income approach (the relief from royalty method) is used to determine the fair values of our indefinite-lived intangible assets. Although our estimate of fair values of the company’s indefinite-lived intangible assets under the income approach exceed the respective carrying values, different assumptions regarding projected performance and other factors could result in significant non-cash impairment charges in the future. Based on our annual review of our indefinite-lived intangible assets in the fourth quarter of 2008, there was no indication of impairment.

Goodwill : Goodwill represents the excess of cost of an acquired business over the fair value of the identifiable tangible and intangible assets acquired and liabilities assumed in a business combination. As with tangible and other intangible assets, periodic impairment reviews are required, at least annually, as well as when events or circumstances change. We review the recorded value of our goodwill annually in the fourth quarter or sooner, if events or changes in circumstances indicate that the carrying amount may exceed fair value. As with our review of impairment of tangible and intangible assets, we employ significant assumptions in assessing goodwill for impairment. An income approach is generally used to determine the fair values of our reporting units.

In applying the income approach in assessing goodwill for impairment, changes in assumptions could materially affect the determination of fair value for a reporting unit. Although our fair value estimates of the company’s reporting units under the income approach exceed the respective carrying values, different assumptions regarding projected performance and other factors could result in significant non-cash impairment charges in the future, particularly for the reporting units included in the Consumer Solutions segment. The following assumptions are key to our income approach:

•

Business projections – Projections are based on three-year forecasts that are developed internally by management for use in managing the business that are updated quarterly and reviewed by the company’s Board of Directors. These projections include significant assumptions such as estimates of future revenues, profits, working capital requirements, operating plans, costs of planned restructuring actions and capital expenditures. Assumptions surrounding macro-economic data and estimates include industry projections, inflation, foreign currency exchange rates and costs of energy, raw materials and freight.

•

Growth rates – A growth rate is used to calculate the terminal value of a reporting unit. The growth rate is the expected rate at which a reporting unit’s earnings stream is projected to grow beyond the three-year forecast period.

•

Discount rates – Future cash flows are discounted at a rate that is consistent with a weighted average cost of capital for a potential market participant. The weighted average cost of capital is an estimate of the overall after-tax rate of return required by equity and debt holders of a business enterprise. The discount rates selected for the reporting units are based on existing conditions within the respective markets and reflect appropriate adjustments for potential risk premiums in those markets as well as appropriate weighting of the market cost of equity versus debt, which is developed with the assistance of external financial advisors.

•

Tax rates – Tax rates are based on estimates of the tax rates in the respective primary markets and geographic areas in which the reporting units operate.

Based on our annual review of the recorded value of goodwill during the fourth quarter of 2008, there was no indication of impairment. Holding other valuation assumptions constant, it would take a downward shift in operating profits of more than approximately 20% across all periods from projected levels before the fair values of the reporting units included in the Consumer Solutions segment would be below the respective carrying values, thereby triggering the requirement to perform further analysis which may indicate potential goodwill impairment. At December 31, 2008, goodwill allocated to the reporting units included in the Consumer Solutions segment was $556 million.

During the latter part of the fourth quarter of 2008 and continuing into 2009, the market price of our common stock has been subject to substantial volatility. While we considered the company’s recent market capitalization decline below its book value, we determined it was not a triggering event at year end and therefore no interim goodwill impairment test was performed. The continuation of our stock price trading below book value per share, adverse changes in expected operating results of our reporting units, or significant unfavorable changes in other economic factors may require us to reassess goodwill for potential impairment prior to the annual evaluation in the fourth quarter of 2009. Although a potential non-cash impairment charge could have a material adverse affect on the company’s consolidated statement of operations and balance sheet, it would not have an adverse affect on our overall compliance with the covenants of our bond indentures and debt agreements.

Revenue recognition: We recognize revenue at the point when title and the risk of ownership passes to the customer. Substantially all of our revenues are generated through product sales, and shipping terms generally indicate when title and the risk of ownership have passed. Revenue is recognized at shipment for sales when shipping terms are FOB (free on board) shipping point unless risk of loss is maintained under freight terms. For sales where shipping terms are FOB destination, revenue is recognized when the goods are received by the customer. We provide for all allowances for estimated returns and other customer credits such as discounts and volume rebates, when the revenue is recognized, based on historical experience, current trends and any notification of pending returns. The customer allowances are, in many instances, subjective and are determined with significant management judgment and are reviewed regularly to determine the adequacy of the amounts. Changes in economic conditions, markets and customer relationships may require adjustments to these allowances from period to period. Also included in net sales is service revenue which is recognized as the service is performed. Revenue is recognized for leased equipment to customers on a straight-line basis over the estimated term of the lease and is included in net sales of the company. In 2008, sales of landholdings are included in net sales in the consolidated statements of operations to reflect the strategic view and structure of the operations of the Community Development and Land Management segment established in 2008. For periods prior to 2008, gains from sales of landholdings are included in other income, net in the consolidated statements of operations.

Income taxes : Income taxes are accounted for in accordance with SFAS No. 109, Accounting for Income Taxes, which recognizes deferred tax assets and liabilities based on the estimated future tax effects of differences between the financial statement and tax basis of assets and liabilities given the enacted tax laws.

We evaluate the need for a deferred tax asset valuation allowance by assessing whether it is more likely than not that the company will realize its deferred tax assets in the future. The assessment of whether or not a valuation allowance is required often requires significant judgment, including the forecast of future taxable income and the valuation of tax planning initiatives. Adjustments to the deferred tax valuation allowance are made to earnings in the period when such assessment is made.

The company has tax jurisdictions located in many areas of the world and is subject to audit in these jurisdictions. Tax audits by their nature are often complex and can require several years to resolve. In the preparation of the company’s financial statements, management exercises judgments in estimating the potential exposure to unresolved tax matters and applies the guidance pursuant to FIN 48 which employs a more likely than not criteria approach for recording tax benefits related to uncertain tax positions. While actual results could vary, in management’s judgment, the company has adequate tax accruals with respect to the ultimate outcome of such unresolved tax matters.

Each quarter, management must estimate our effective tax rate for the full year. This estimate includes assumptions about the level of income that will be achieved for the full year in both our domestic and international operations. The forecast of full-year earnings includes assumptions about markets in each of our businesses as well as the timing of certain transactions, including forestland sales gains and restructuring charges. Should business performance or the timing of certain transactions change during the year, the level of income achieved may not meet the level of income estimated earlier in the year at interim periods. This change in the income levels and mix of earnings can result in significant adjustments to the tax provision in the quarter in which the estimate is refined.

NEW ACCOUNTING STANDARDS

In July 2006, the FASB issued Interpretation No. 48 (“FIN 48”), Accounting for Uncertainty in Income Taxes , which clarifies the accounting for uncertainty in income taxes recognized in the financial statements in accordance with SFAS No. 109, Accounting for Income Taxes . FIN 48 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. It also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. This Interpretation is effective for fiscal years beginning after December 15, 2006. The cumulative effect of applying FIN 48 was recorded as an adjustment to retained earnings as of the beginning of the period of adoption. See Note N of Notes to Financial Statements included in Part II, Item 8 for discussion of the effects of this accounting change.

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements . SFAS No. 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. This Statement does not require any new fair value measurements, but applies to existing accounting pronouncements that require or permit fair value measurement as the relevant measurement attribute. This Statement is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years and is to be applied prospectively as of the beginning of the year in which it is initially applied. As permitted by FASB Staff Position FAS 157-2, Effective Date of FASB Statement No. 157 , the company deferred the adoption of SFAS No. 157 for all non-financial assets and non-financial liabilities until January 1, 2009, except those that are recognized or disclosed at fair value in the consolidated financial statements on a recurring basis (at least annually), for which the date of adoption was January 1, 2008. The partial adoption of SFAS No. 157 did not have a material effect on the company’s 2008 consolidated financial statements and the full adoption of SFAS No. 157 is not expected to have a material effect on the company’s consolidated financial statements.

The following information is presented for financial assets and financial liabilities which are recorded in the consolidated balance sheet at fair value as of December 31, 2008. The measurements of fair value are made on a recurring basis.


*In millions*	December 31, 2008			Level 1 ⁽¹⁾		Level 2 ⁽²⁾			Level 3 ⁽³ ⁾
Derivatives-liabilities	$	(21	)	$	—	$	(21	)	$	—
Cash equivalents		381			381		—			—

Total	$	360		$	381	$	(21	)	$	—

⁽¹⁾

Quoted prices in active markets for identical assets.

⁽²⁾

Quoted prices for similar assets and liabilities in active markets.

⁽³⁾

Significant unobservable inputs.

In September 2006, the FASB issued SFAS No. 158, Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans – An Amendment of FASB Statements No. 87, 88, 106, and 132(R) . SFAS No. 158 requires an employer to recognize the overfunded or underfunded status of a defined benefit postretirement plan in its balance sheet and to recognize the changes in the plan’s funded status in comprehensive income in the year in which the change occurs. These provisions of the Statement are effective as of the end of the first fiscal year ending after December 15, 2006. SFAS No. 158 also requires an employer to measure the funded status of a plan as of the date of its fiscal year end, which is the Company’s measurement date. Pursuant to the Statement’s adoption, the net after-tax charge to accumulated other comprehensive loss in the fourth quarter of 2006 was $57 million. This adjustment principally represents the recognition of previously unrecognized prior service costs and net actuarial losses and the impact of recording additional minimum liabilities for certain under-funded plans. This Statement will not affect the company’s funding obligations under the Employee Retirement Income Security Act of 1974 (ERISA) and we do not currently anticipate any required company contributions to the U.S. qualified retirement plans in the foreseeable future.

In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities – Including an Amendment of FASB Statement No. 115 (“SFAS No. 159”) . This Statement permits an entity to measure certain financial assets and financial liabilities at fair value, which would result in the reporting of unrealized gains and losses in earnings at each subsequent reporting date. The fair value option may be elected on an instrument-by-instrument basis, with few exceptions, as long as it is applied to the instrument in its entirety. The Statement establishes presentation and disclosure requirements to help financial statement users understand the effect of an entity’s election on its earnings, but does not eliminate the disclosure requirements of other accounting standards. This Statement will be effective as of the beginning of the first fiscal year that begins after November 15, 2007, and is to be applied prospectively as of the beginning of the year in which it is initially applied. The company did not exercise the fair value option available under SFAS 159, and therefore the adoption of SFAS 159 did not have an effect on the company’s consolidated financial position or results of operations.

In December 2007, the FASB issued SFAS No. 141 (revised 2007), Business Combinations (“SFAS No. 141(R)”). This Statement replaces SFAS No. 141, Business Combinations, and requires an acquirer to recognize the assets acquired, the liabilities assumed, including those arising from contractual contingencies, any contingent consideration, and any noncontrolling interest in the acquiree at the acquisition date, measured at their fair values as of that date, with limited exceptions specified in the statement. SFAS No. 141(R) also requires the acquirer in a business combination achieved in stages (sometimes referred to as a step acquisition) to recognize the identifiable assets and liabilities, as well as the noncontrolling interest in the acquiree, at the full amounts of their fair values (or other amounts determined in accordance with SFAS No. 141(R)). In addition, SFAS No. 141(R)’s requirement to measure the noncontrolling interest in the acquiree at fair value will result in recognizing the goodwill attributable to the noncontrolling interest in addition to that attributable to the acquirer. SFAS No. 141(R) applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. The adoption of SFAS No. 141(R) is not expected to have a material effect on the company’s consolidated financial statements.

In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements . SFAS No. 160 amends Accounting Research Bulletin 51, Consolidated Financial Statements , to establish accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. This Statement clarifies that a noncontrolling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements. SFAS No. 160 also changes the way the consolidated income statement is presented by requiring consolidated net income to be reported at amounts that include the amounts attributable to both the parent and the noncontrolling interest, and requires disclosure on the face of the consolidated statements of operations of the amounts of consolidated net income attributable to the parent and to the noncontrolling interest. SFAS No. 160 is effective for fiscal periods, and interim periods within those fiscal years, beginning on or after December 15, 2008. The adoption of SFAS No. 160 is not expected to have a material effect on the company’s consolidated financial statements.

In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities—an amendment of FASB Statement No. 133 . SFAS No. 161 changes the disclosure requirements for derivative instruments and hedging activities. Entities are required to provide enhanced disclosures about (i) how and why an entity uses derivative instruments, (ii) how derivative instruments and related hedged items are accounted for under SFAS No. 133 and its related interpretations, and (iii) how derivative instruments and related hedged items affect an entity’s financial position, financial performance and cash flows. SFAS No. 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008. The adoption of SFAS No. 161 is not expected to have a material effect on the company’s consolidated financial statements.

In December 2008, the FASB issued Staff Position No. FAS 132(R)-1, Employers’ Disclosures about Postretirement Benefit Plan Assets, (“FSP No. FAS 132(R)-1”) which provides guidance on an employer’s disclosures about plan assets of a defined benefit pension or other postretirement plan. FSP No. 132(R)-1 requires disclosures that provide users of financial statements with an understanding of how investment allocation decisions are made, including the factors that are pertinent to an understanding of investment policies and strategies, the major categories of plan assets, the inputs and valuation techniques used to measure the fair value of plan assets, the effect of fair value measurements using significant unobservable inputs on changes in plan assets for the period, and significant concentrations of risk within plan assets. FSP No. 132(R)-1 is effective for years ending after December 15, 2009 and adoption is not expected to have a material effect on the company’s consolidated financial statements.

There were no other accounting standards issued in 2008 that had or are expected to have a material impact on the company’s financial position or results of operations.

Forward-looking Statements

Certain statements in this document and elsewhere by management of the company that are neither reported financial results nor other historical information are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such information includes, without limitation, the business outlook, assessment of market conditions, anticipated financial and operating results, strategies, future plans, contingencies and contemplated transactions of the company. Such forward-looking statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and other factors which may cause or contribute to actual results of company operations, or the performance or achievements of each company, or industry results, to differ materially from those expressed or implied by the forward-looking statements. In addition to any such risks, uncertainties and other factors discussed elsewhere herein, risks, uncertainties, and other factors that could cause or contribute to actual results differing materially from those expressed or implied for the forward-looking statements include, but are not limited to, events or circumstances which affect the ability of MeadWestvaco to realize improvements in operating earnings from the company’s ongoing cost reduction initiatives; the ability of MeadWestvaco to close announced and pending transactions, including divestitures; the reorganization of the company’s packaging business units; competitive pricing for the company’s products; impact from inflation on raw materials, energy and other costs; fluctuations in demand and changes in production capacities; relative growth or decline in the United States and international economies; government policies and regulations, including, but not limited to those affecting the environment and the tobacco industry; the company’s continued ability to reach agreement with its unionized employees on collective bargaining agreements; the company’s ability to execute its plans to divest or otherwise realize the greater value associated with its land holdings; adverse results in current or future litigation; currency movements; volatility and further deterioration of the capital markets; and other risk factors discussed in this Annual Report on Form 10-K and in other filings made from time to time with the SEC. MeadWestvaco undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise. Investors are advised, however, to consult any further disclosures made on related subjects in the company’s reports filed with the SEC.

Item 7A.

Quantitative and qualitative disclosures about market risk

Interest rates

Foreign currency

The company has foreign-based operations, primarily in South America, Canada, Mexico, Europe and Asia, which accounted for approximately 34% of its 2008 net sales. In addition, certain of the company’s domestic operations have sales to foreign customers. In the conduct of its foreign operations, the company also makes intercompany sales and receives royalties and dividends denominated in many different currencies. All of this exposes the company to the effect of changes in foreign currency exchange rates.

Flows of foreign currencies into and out of the company’s domestic operations are generally stable and regularly occurring and are recorded at fair market value in the company’s financial statements. The company’s foreign currency management policy permits it to enter into foreign currency hedges when these flows exceed a threshold, which is a function of these cash flows and forecasted annual operations. During 2008 and 2007, the company entered into foreign currency hedges to partially offset the foreign currency impact of these flows on operating income. See Note G of Notes to Financial Statements included in Part II, Item 8 for related discussion.

The company also issues intercompany loans to its foreign subsidiaries in their local currencies, exposing it to the effect of changes in spot exchange rates between loan issue and loan repayment dates. Generally, management uses foreign-exchange hedge contracts with terms of less than one year to hedge these exposures. When applied to the company’s derivative and other foreign currency sensitive instruments at December 31, 2008, a 10% adverse change in currency rates would have about a $25 million effect on the company’s results.

Natural gas

In order to better predict and control the future cost of natural gas consumed at the company’s mills and plants, the company engages in financial hedging of future gas purchase prices. Gas usage is relatively predictable month-by-month. The company hedges primarily with financial instruments that are priced based on New York Mercantile Exchange (NYMEX) natural gas futures contracts. See Note G of Notes to Financial Statements included in Part II, Item 8 for related discussion.

Item 8.

Financial statements and supplementary data

Index


		Page
Report of Independent Registered Public Accounting Firm		46

Consolidated Statements of Operations for the Years Ended December 31, 2008, 2007 and 2006		47

Consolidated Balance Sheets at December 31, 2008 and 2007		48

Consolidated Statements of Shareholders’ Equity for the Years Ended December 31, 2008, 2007 and 2006		49

Consolidated Statements of Cash Flows for the Years Ended December 31, 2008, 2007 and 2006		50

Notes to Consolidated Financial Statements		51

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of MeadWestvaco Corporation

In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of operations, shareholders’ equity, and cash flows present fairly, in all material respects, the financial position of MeadWestvaco Corporation and its subsidiaries at December 31, 2008 and 2007, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2008 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2008, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company’s management is responsible for these financial statements, for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control over Financial Reporting under Item 9A. Our responsibility is to express opinions on these financial statements and on the Company’s internal control over financial reporting based on our integrated audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

As discussed in Note N to the consolidated financial statements, the Company changed the manner in which it accounts for uncertain tax positions effective January 1, 2007. As discussed in Note K to the consolidated financial statements, the Company changed the manner in which it accounts for defined benefit pension and other postretirement plans effective December 31, 2006.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ PricewaterhouseCoopers LLP

PricewaterhouseCoopers LLP

Richmond, Virginia

February 24, 2009

FINANCIAL STATEMENTS

CONSOLIDATED STATEMENTS OF OPERATIONS


	Years ended December 31,
*In millions, except per share data*	2008			2007			2006
Net sales	$	6,637		$	6,407		$	6,050

Cost of sales		5,573			5,262			4,964
Selling, general and administrative expenses		809			870			894
Interest expense		210			205			195
Other income, net		(34	)		(301	)		(83	)


Income from continuing operations before income taxes		79			371			80
Income tax (benefit) provision		(1	)		105			(1	)


Income from continuing operations		80			266			81
Income from discontinued operations, net of income taxes		10			19			12


Net income	$	90		$	285		$	93


Net income per share – basic and diluted:
Income from continuing operations	$	0.46		$	1.45		$	0.45
Income from discontinued operations		0.06			0.11			0.07

Net income	$	0.52		$	1.56		$	0.52


Shares used to compute net income per share:
Basic		172.3			182.6			180.8
Diluted		172.7			183.6			181.2

The accompanying notes are an integral part of these financial statements.

MEADWESTVACO CORPORATION AND CONSOLIDATED SUBSIDIARY COMPANIES

FINANCIAL STATEMENTS

CONSOLIDATED BALANCE SHEETS


	December 31,
*In millions, except share and per share data*	2008			2007
ASSETS
Cash and cash equivalents	$	549		$	245
Accounts receivable, net		799			975
Inventories		695			745
Other current assets		118			122
Current assets of discontinued operations		—			80

Current assets		2,161			2,167

Property, plant, equipment and forestlands, net		3,518			3,790

Prepaid pension asset		634			1,214
Goodwill		805			840
Other assets		1,337			1,404
Non-current assets of discontinued operations		—			422

	$	8,455		$	9,837


LIABILITIES AND SHAREHOLDERS’ EQUITY
Accounts payable	$	567		$	622
Accrued expenses		618			720
Notes payable and current maturities of long-term debt		89			68
Current liabilities of discontinued operations		—			45

Current liabilities		1,274			1,455

Long-term debt		2,309			2,375
Other long-term obligations		986			1,056
Deferred income taxes		919			1,227
Non-current liabilities of discontinued operations		—			16

Commitments and Contingencies

Shareholders’ equity:
Common stock, $0.01 par
Shares authorized: 600,000,000
Shares issued and outstanding: 2008 – 170,813,516 (2007 – 173,839,186)		2			2
Additional paid-in capital		3,108			3,080
Retained earnings		207			276
Accumulated other comprehensive (loss) income		(350	)		350

		2,967			3,708

	$	8,455		$	9,837

The accompanying notes are an integral part of these financial statements.

MEADWESTVACO CORPORATION AND CONSOLIDATED SUBSIDIARY COMPANIES

FINANCIAL STATEMENTS

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY


*In millions*	Outstanding shares		Common stock		Additional paid-in Capital			Retained earnings			Accumulated other comprehensive (loss) income			Total shareholders’ equity
Balance at December 31, 2005	181.4		$	2	$	3,294		$	243		$	(56	)	$	3,483
Comprehensive income:
Net income	—			—		—			93			—			93
Foreign currency translation	—			—		—			—			109			109
Minimum pension liability adjustment	—			—		—			—			(7	)		(7	)
Unrealized loss on derivative instruments, net instruments, net	—			—		—			—			(5	)		(5	)
Unrealized gain on investment in debt security, net	—			—		—			—			9			9


Comprehensive income															199


Adoption of FASB Statement No. 158	—			—		—			—			(57	)		(57	)
Tax benefit on nonqualified stock options	—			—		2			—			—			2
Cash dividends	—			—		—			(167	)		—			(167	)
Foreign operations concurrent reporting	—			—		—			(1	)		—			(1	)
Share-based employee compensation	—			—		21			—			—			21
Share put option	(1.3	)		—		—			—			—			—
Exercise of stock options	2.0			—		53			—			—			53


Balance at December 31, 2006	182.1			2		3,370			168			(7	)		3,533
Comprehensive income:
Net income	—			—		—			285			—			285
Foreign currency translation	—			—		—			—			187			187
Adjustments related to pension and other benefit plans	—			—		—			—			171			171
Unrealized loss on derivative instruments, net	—			—		—			—			(1	)		(1	)
Adoption of FASB Interpretation No. 48	—			—		—			(8	)		—			(8	)


Comprehensive income															634


Tax benefit on nonqualified stock options	—			—		8			—			—			8
Cash dividends	—			—		—			(169	)		—			(169	)
Stock repurchased	(13.7	)		—		(486	)		—			—			(486	)
Share-based employee compensation	—			—		26			—			—			26
Exercise of stock options	5.4			—		162			—			—			162


Balance at December 31, 2007	173.8			2		3,080			276			350			3,708
Comprehensive loss:
Net income	—			—		—			90			—			90
Foreign currency translation	—			—		—			—			(251	)		(251	)
Adjustments related to pension and other benefit plans	—			—		—			—			(441	)		(441	)
Unrealized loss on derivative instruments, net	—			—		—			—			(8	)		(8	)


Comprehensive loss															(610	)


Cash dividends	—			—		—			(159	)		—			(159	)
Stock repurchased	(3.0	)		—		—			—			—
Share-based employee compensation	—			—		28			—			—			28


Balance at December 31, 2008	170.8		$	2	$	3,108		$	207		$	(350	)	$	2,967

The accompanying notes are an integral part of these financial statements.

MEADWESTVACO CORPORATION AND CONSOLIDATED SUBSIDIARY COMPANIES

FINANCIAL STATEMENTS

CONSOLIDATED STATEMENTS OF CASH FLOWS


*In millions*	2008			2007			2006
Cash flows from operating activities
Net income	$	90		$	285		$	93
Discontinued operations		(10	)		(19	)		(12	)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion and amortization		472			482			477
Deferred income taxes		(92	)		(8	)		(52	)
Gains on sales of assets		(13	)		(270	)		(60	)
Gain on sale of a debt security		—			—			(21	)
Pension income		(93	)		(58	)		(54	)
Impairment of long-lived assets		16			46			43
Changes in working capital, excluding the effects of acquisitions and dispositions		24			128			138
Other, net		(30	)		(12	)		(29	)

Net cash provided by operating activities of continuing operations		364			574			523
Discontinued operations		12			67			44

Net cash provided by operating activities		376			641			567

Cash flows from investing activities
Additions to property, plant and equipment		(288	)		(329	)		(285	)
Payments for acquired businesses, net of cash acquired		(18	)		(52	)		(714	)
Proceeds from sale of a debt security		—			—			109
Proceeds from dispositions of assets		67			182			165
Contributions to joint ventures		(15	)		(13	)		—
Other		(10	)		(15	)		(19	)
Discontinued operations		456			(9	)		(17	)

Net cash provided by (used in) investing activities		192			(236	)		(761	)

Cash flows from financing activities
Proceeds from issuance of long-term debt		3			12			7
Proceeds from secured borrowing (non-recourse to MeadWestvaco)		—			338			—
Notes payable and other short-term borrowings, net		(11	)		(128	)		148
Repayment of long-term debt		(36	)		(43	)		4
Stock repurchases		—			(486	)		(47	)
Dividends paid		(159	)		(169	)		(167	)
Changes in book overdrafts		(2	)		(21	)		43
Proceeds from issuance of common stock and exercises of stock options		—			162			53
Other financing activities		5			3			—
Discontinued operations		—			(7	)		(6	)

Net cash (used in) provided by financing activities		(200	)		(339	)		35

Effect of exchange rate changes on cash		(64	)		23			18

Increase (decrease) in cash and cash equivalents		304			89			(141	)

Cash and cash equivalents:
At beginning of period		245			156			297

At end of period	$	549		$	245		$	156

The accompanying notes are an integral part of these financial statements.

MEADWESTVACO CORPORATION AND CONSOLIDATED SUBSIDIARY COMPANIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Summary of significant accounting policies

Basis of consolidation and preparation of financial statements: The consolidated financial statements include all majority-owned or controlled entities of MeadWestvaco Corporation (“MeadWestvaco”, “MWV”, or the “company”), and all significant intercompany transactions are eliminated. MWV’s business segments are (i) Packaging Resources, (ii) Consumer Solutions, (iii) Consumer & Office Products, (iv) Specialty Chemicals, and (v) Community Development and Land Management.

Estimates and assumptions: The preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of some assets and liabilities and, in some instances, the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.

Translation of foreign currencies: The local currency is the functional currency for substantially all of the company’s significant operations outside the U.S . The assets and liabilities of the company’s foreign subsidiaries are translated into U.S. dollars using period-end exchange rates, and adjustments resulting from these financial statement translations are included in accumulated other comprehensive income or loss in the consolidated balance sheets. Revenues and expenses are translated at average rates prevailing during the period.

Cash equivalents: Highly liquid securities with an original maturity of three months or less are considered to be cash equivalents.

Accounts receivable and allowance for doubtful accounts : Trade accounts receivable are recorded at the invoice amount and generally do not bear interest. The allowance for doubtful accounts is the company’s best estimate of the amount of probable loss in the existing accounts receivable. The company determines the allowance based on historical write-off experience by industry. Past due balances over a specified amount are reviewed individually for collectibility. Account balances are charged off against the allowance when it is probable that the receivable will not be recovered.

Inventories: Inventories are valued at the lower of cost or market. Cost is determined using the last-in, first-out method for substantially all raw materials, finished goods and production materials of U.S. manufacturing operations. Cost of all other inventories, including stores and supplies inventories and inventories of non-U.S. manufacturing operations, is determined by the first-in, first-out or average cost methods.

Property, plant, equipment and forestlands: Owned assets are recorded at cost. Also included in the cost of these assets is interest on funds borrowed during the construction period. When assets are sold, retired or disposed of, their cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in cost of sales. Gains and losses on sales of corporate real estate are recorded in other income, net. Costs of renewals and betterments of properties are capitalized; costs of maintenance and repairs are charged to expense. Costs of reforestation of forestlands are capitalized. Reforestation costs include the costs of seedlings, site preparation, planting of seedlings and early-stage fertilization.

Depreciation and depletion: The cost of plant and equipment is depreciated, utilizing the straight-line method, over the estimated useful lives of the assets, which range from 20 to 40 years for buildings and 5 to 30 years for machinery and equipment. Timber is depleted as timber is cut at rates determined annually based on the relationship of undepleted timber costs to the estimated volume of recoverable timber. Timber volumes used in calculating depletion rates are based upon merchantable timber volumes at a specific point in time. The depletion rates for company-owned land do not include an estimate of either future reforestation costs associated with a stand’s final harvest or future volume in connection with replanting of a stand subsequent to the final harvest.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Impairment of long-lived assets: The company periodically evaluates whether current events or circumstances indicate that the carrying value of its long-lived assets, including intangible assets with finite lives, to be held and used may not be recoverable. If such circumstances are determined to exist, an estimate of undiscounted future cash flows produced by the long-lived asset, or the appropriate grouping of assets, is compared to carrying value to determine whether impairment exists .

If an asset is determined to be impaired, the loss is measured based on quoted market prices in active markets, if available. If quoted market prices are not available, the estimate of fair value is based on various valuation techniques, including a discounted value of estimated future cash flows. The company reports an asset to be disposed of at the lower of its carrying value or its estimated net realizable value.

As required by Statement of Financial Accounting Standards (“SFAS”) No. 142, Goodwill and Other Intangible Assets, intangible assets assigned indefinite lives are to be tested at least annually or more often if events or changes in circumstances indicate that the fair value of an intangible asset is below its carrying value. The fair values of the company’s indefinite-lived intangible assets (primarily Calmar trademarks and trade names) are estimated using an income approach (the relief from royalty method). Although the estimate of the fair values of the company’s indefinite-lived intangible assets under the income approach exceed the respective carrying values, different assumptions regarding projected performance and other factors could result in significant non-cash impairment charges in the future. Based on the company’s annual review of the indefinite-lived intangible assets in the fourth quarter of 2008, there was no indication of impairment.

Goodwill: Goodwill represents the excess of cost of an acquired business over the fair value of the identifiable tangible and intangible assets acquired and liabilities assumed in a business combination. In accordance with SFAS No. 142, the company reviews the recorded value of goodwill at least annually in the fourth quarter, or sooner if events or changes in circumstances indicate that the fair value of a reporting unit is below its carrying value. SFAS No. 142 requires that goodwill be tested for impairment using a two-step process. The first step is to identify a potential impairment and the second step is to measure the amount of the impairment loss, if any. Goodwill is deemed to be impaired if the carrying amount of a reporting unit’s goodwill exceeds its estimated fair value. Goodwill has been allocated to the company’s respective reporting units based on its nature and synergies expected to be achieved. The fair value of each reporting unit is estimated primarily using an income approach, specifically the discounted cash flow method.

In applying the income approach in assessing goodwill for impairment, changes in assumptions could materially affect the determination of fair value for a reporting unit. Although the fair value estimates of the company’s reporting units under the income approach exceed the respective carrying values, different assumptions regarding projected performance and other factors could result in significant non-cash impairment charges in the future. The following assumptions are key to the company’s income approach:

•

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

•

Tax rates – Tax rates are based on estimates of the tax rates in the respective primary markets and geographic areas in which the reporting units operate.

Based on management’s annual evaluation of the recorded value of goodwill during the fourth quarter of 2008, there was no indication of impairment. However, changes to any of the above assumptions could lead to impairment of goodwill in the future. See Note C and Note P for further information.

Other assets: Capitalized software, equipment leased to customers and other amortizable and indefinite-lived intangible assets are included in other assets. Capitalized software and other amortizable intangibles are amortized using the straight-line and cash flows methods over their estimated useful lives of 3 to 21 years. Equipment leased to customers is amortized using the sum-of-the-years-digits method over the estimated useful life of the machine, generally 10 years. Revenue is recognized for the leased equipment on a straight-line basis over the life of the lease and is included in net sales. The company records software development costs in accordance with the American Institute of Certified Public Accountants’ Statement of Position 98-1, Accounting for the Costs of Computer Software Developed or Obtained for Internal Use. See Note C and Note D for further information.

Financial instruments: The company utilizes well-defined financial derivatives in the normal course of its operations as a means to manage some of its interest rate, foreign currency and commodity risks. All derivative instruments are required to be recorded in the consolidated balance sheets as assets or liabilities, measured at fair value. The fair value estimates are based on relevant market information, including market rates and prices. If the derivative is designated as a fair-value hedge, the changes in the fair value of the derivative and of the hedged item attributable to the hedged risk are recognized in earnings. If the derivative is designated as a cash-flow hedge, the effective portion of the change in the fair value of the derivative is recorded in accumulated other comprehensive income (loss) and is recognized in the consolidated statements of operations when the hedged item affects earnings. Ineffective portions of changes in the fair value of cash-flow hedges are recognized in earnings. If a derivative is not designated as a qualifying hedge, changes in the fair value are recognized in earnings. See Note G for further information.

Environmental and legal liabilities: Environmental expenditures that increase useful lives of assets are capitalized, while other environmental expenditures are expensed. Liabilities are recorded when remedial efforts are probable and the costs can be reasonably estimated. The company recognizes a liability for other legal contingencies when a loss is probable and reasonably estimable. Liabilities recorded for claims are limited to pending cases based on the company’s historical experience, consultation with outside counsel and consultation with an actuarial specialist concerning the feasibility of reasonably estimating liabilities associated with claims that may arise in the future. The company recognizes insurance recoveries when collection is reasonably assured. See Note O for further information.

Asset retirement obligations: The company has certain conditional and unconditional asset retirement obligations associated with owned or leased property, plant and equipment, including surface impoundments, asbestos, and water supply wells. The company records a liability for the fair value of an asset retirement obligation when incurred if the fair value of the liability can be reasonably estimated. Management does not have sufficient information to estimate the fair value of certain obligations, primarily associated with surface impoundments and asbestos, because the settlement date or range of potential settlement dates have not been specified and information is not available to apply expected present value techniques. Subsequent to initial measurement, the company recognizes changes in the amounts of the obligations, as necessary, resulting from the passage of time and revisions to either the timing or amount of estimated cash flows.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Revenue recognition: The company recognizes revenues at the point when title and the risk of ownership passes to the customer. Substantially all of the company’s revenues are generated through product sales and shipping terms generally indicate when title and the risk of ownership have passed. Revenue is recognized at shipment for sales where shipping terms are FOB (free on board) shipping point unless risk of loss is maintained under freight terms. For sales where shipping terms are FOB destination, revenue is recognized when the goods are received by the customer. The company provides allowances for estimated returns and other customer credits such as discounts and volume rebates, when the revenue is recognized, based on historical experience, current trends and any notification of pending returns. Also included in net sales is service revenue which is recognized as the service is performed. Revenue is recognized for leased equipment to customers on a straight-line basis over the estimated term of the lease and is included in net sales of the company. In 2008, sales of landholdings are included in net sales in the consolidated statements of operations to reflect the strategic view and structure of the operations of the Community Development and Land Management segment established in 2008. For periods prior to 2008, gains from sales of landholdings are included in other income, net in the consolidated statements of operations.

Shipping and handling costs: Shipping and handling costs are classified as a component of cost of sales. Amounts billed to a customer in a sales transaction related to shipping and handling are classified as revenue.

Research and development: Included in cost of sales and selling, general and administrative expense are expenditures for research and development of $61 million, $62 million and $63 million for the years ended December 31, 2008, 2007 and 2006, respectively, which were expensed as incurred.

Income taxes: Deferred income taxes are recorded for temporary differences between financial statement carrying amounts and the tax basis of assets and liabilities. Deferred tax assets and liabilities reflect the enacted tax rates in effect for the years the differences are expected to reverse. The company evaluates the need for a deferred tax asset valuation allowance by assessing whether it is more likely than not that it will realize its deferred tax assets in the future.

The company recognizes tax benefits from an uncertain tax position only if it is more likely than not that the tax position will be sustained upon examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such a position are measured based upon the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement.

The company recognizes interest and penalties related to unrecognized tax benefits in income taxes in the consolidated statements of operations.

Share-based compensation: The company adopted SFAS No. 123R as of January 1, 2006 using the modified prospective method. The cumulative effect of a change in accounting principle associated with the adoption of SFAS No. 123R was not material to the consolidated financial statements. Under this Statement in the year of adoption, pre-tax compensation expense for the year ended December 31, 2006 was $21 million. The incremental impact of adopting this Statement was a reduction to net income of $6 million, or $0.03 per share, for the year ended December 31, 2006.

The company records compensation expense for graded and cliff vesting awards on a straight-line basis over the vesting period, which is generally three years. The company uses the “long-haul” method to determine the pool of tax benefits or deficiencies resulting from tax deductions related to awards of equity instruments that exceed or are less than the cumulative compensation cost for those instruments recognized for financial reporting. Substantially all compensation expense related to share-based awards is recorded as a component of selling, general and administrative expenses in the consolidated statements of operations. For stock-settled awards, the company issues previously authorized new shares. See Note J for further detail on share-based compensation.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Net income per share: Basic net income per share for all the periods presented has been calculated using the company’s weighted average shares outstanding. In computing diluted net income per share, incremental shares issuable upon the assumed exercise of stock options and other share-based compensation awards have been added to weighted average shares outstanding, if dilutive. For the years ended December 31, 2008, 2007, and 2006, 9.0 million, 2.1 million and 12.4 million equity awards, respectively, were excluded from the calculation of weighted average shares outstanding, as the exercise price per share was greater than the average market value, resulting in an anti-dilutive effect on diluted earnings per share.

Related party transactions: The company has certain related party transactions in the ordinary course of business that are insignificant.

Discontinued operations: Certain prior period amounts have been reclassified in the consolidated financial statements to conform to the 2008 presentation of discontinued operations for the company’s North Charleston, South Carolina kraft paper mill and related assets (collectively, the “Kraft business”), previously included in the Packaging Resources segment. On July 1, 2008, the company completed the sale of the Kraft business for net cash proceeds of $466 million. See Note P for additional information.

New accounting standards


*In millions*	December 31, 2008			Level 1 ⁽¹⁾		Level 2 ⁽²⁾			Level 3 ⁽³⁾
Derivatives-liabilities	$	(21	)	$	—	$	(21	)	$	—
Cash equivalents		381			381		—			—

Total	$	360		$	381	$	(21	)	$	—

⁽¹⁾

Quoted prices in active markets for identical assets.

⁽²⁾

Quoted prices for similar assets and liabilities in active markets.

⁽³⁾

Significant unobservable inputs.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities – Including an Amendment of FASB Statement No. 115 . This Statement permits an entity to measure certain financial assets and financial liabilities at fair value, which would result in the reporting of unrealized gains and losses in earnings at each subsequent reporting date. The fair value option may be elected on an instrument-by-instrument basis, with few exceptions, as long as it is applied to the instrument in its entirety. The Statement establishes presentation and disclosure requirements to help financial statement users understand the effect of an entity’s election on its earnings, but does not eliminate the disclosure requirements of other accounting standards. This Statement will be effective as of the beginning of the first fiscal year that begins after November 15, 2007, and is to be applied prospectively as of the beginning of the year in which it is initially applied. The company did not exercise the fair value option available under SFAS 159, and therefore the adoption of SFAS 159 did not have an effect on the company’s consolidated financial position or results of operations.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

There were no other accounting standards issued in 2008 that had or are expected to have a material impact on the company’s financial position or results of operations.

A. Current assets

Cash equivalents of $381 million and $57 million at December 31, 2008 and 2007, respectively, are valued at cost, which approximates fair value. Trade receivables have been reduced by an allowance for doubtful accounts of $19 million and $18 million at December 31, 2008 and 2007, respectively. Receivables also include $60 million and $65 million from sources other than trade at December 31, 2008 and 2007, respectively. Inventories at December 31, 2008 and 2007 are comprised of:


	December 31,
*In millions*	2008		2007
Raw materials	$	174	$	179
Production materials, stores and supplies		90		97
Finished and in-process goods		431		469

	$	695	$	745

Approximately 58% and 57% of inventories at December 31, 2008 and 2007, respectively, are valued using the last-in, first-out (“LIFO”) method. If inventories had been valued at current cost, they would have been $841 million and $882 million at December 31, 2008 and 2007, respectively. The effects of LIFO layer decrements were not significant to the company’s results of operations for the years ended December 31, 2008, 2007 and 2006.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

B. Property, plant, equipment and forestlands

Depreciation and depletion expense was $381 million, $392 million and $394 million for the years ended December 31, 2008, 2007 and 2006, respectively.

Property, plant, equipment and forestlands consisted of the following:


	December 31,
*In millions*	2008			2007
Land and land improvements	$	254		$	265
Buildings		846			806
Machinery and other		5,519			5,414

		6,619			6,485
Less: accumulated depreciation		(3,478	)		(3,118	)

		3,141			3,367
Forestlands		245			247
Construction in progress		132			176

	$	3,518		$	3,790

C. Goodwill and other intangible assets

At December 31, 2008, goodwill allocated to each of the company’s business segments was $68 million to Packaging Resources, $556 million to Consumer Solutions, $172 million to Consumer & Office Products and $9 million to Specialty Chemicals. At December 31, 2007, goodwill allocated to each of the company’s business segments was $68 million to Packaging Resources, $573 million to Consumer Solutions, $190 million to Consumer & Office Products and $9 million to Specialty Chemicals.

The changes in the carrying amount of goodwill for the years ended December 31, 2008 and 2007 are as follows:


*In millions*	2008			2007
Beginning balance	$	840		$	851
Acquired goodwill ¹		—			24
Adjustments ²		(35	)		(35	)

Ending balance	$	805		$	840

Represents goodwill associated with certain acquisitions included in the Consumer Solutions segment. See Note P for discussion of acquired goodwill.

Represents adjustments to tax contingencies, foreign currency translation and certain purchase price allocations.

The following table summarizes intangible assets subject to amortization included in other assets:


	December 31, 2008				December 31, 2007
*In millions*	Gross carrying amount		Accumulated amortization		Gross carrying amount		Accumulated amortization
Trademarks and trade names	$	203	$	80	$	212	$	67
Customer contracts and lists		301		64		293		62
Patents		63		37		73		38
Other – primarily licensing rights		44		31		29		19

	$	611	$	212	$	607	$	186

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In connection with the company’s acquisition of Saint-Gobain Calmar in 2006, the company acquired indefinite-lived intangible assets which had net book values of $96 million and $97 million at December 31, 2008 and 2007, respectively, with the year-over-year change reflecting the impact of foreign currency exchange. See Note P for further discussion.

The company recorded amortization expense of $42 million, $43 million and $37 million for the years ending December 31, 2008, 2007 and 2006, respectively, relating to intangible assets subject to amortization. Intangible assets subject to amortization are amortized over their estimated useful lives which range from 3 to 21 years. Intangible assets that have been determined to have indefinite lives are not subject to amortization and are reviewed at least annually for impairment.

Based on the current carrying values of intangible assets subject to amortization, estimated amortization expense for the next five years is as follows: 2009 -$42 million, 2010 -$40 million, 2011 -$37 million, 2012 -$36 million, and 2013 -$36 million.

D. Other assets

Other assets consisted of the following:


	December 31,
*In millions*	2008		2007
Identifiable intangible assets	$	495	$	518
Restricted asset ¹		398		398
Cash surrender value of life insurance, net of borrowings		144		193
Capitalized software, net		66		63
Equipment leased to customers, net		81		102
Other		153		130

	$	1,337	$	1,404

As part of the consideration for the sale of certain large-tract forestlands in 2007, the company received an installment note in the amount of $398 million (the “Timber Note”). The Timber Note does not require any principal payments until its maturity in October 2027 and bears interest at a rate approximating the London Interbank Offered Rate (“LIBOR”). In addition, the Timber Note is supported by a bank-issued irrevocable letter of credit obtained by the buyer of the forestlands.

Using the Timber Note as collateral, the company received $338 million in proceeds under a secured financing agreement with a bank. Under the terms of the agreement, the liability from this transaction is non-recourse to MeadWestvaco and shall be paid from the Timber Note proceeds upon its maturity. As a result, the Timber Note is not available to satisfy the obligations of MeadWestvaco. The non-recourse liability does not require any principal payments until its maturity in October 2027 and bears interest at a rate approximating LIBOR. The $338 million non-recourse liability is included in other long-term obligations in the consolidated balance sheet at December 31, 2008 and 2007.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

E. Accounts payable and accrued expenses

Accounts payable and accrued expenses consisted of the following:


	December 31,
*In millions*	2008		2007
Accounts payable:
Trade	$	503	$	556
Other		64		66

	$	567	$	622

Accrued expenses:
Taxes, other than income	$	33	$	34
Interest		62		66
Payroll and employee benefit costs		197		253
Accrued rebates and allowances		73		106
Environmental and litigation		28		27
Income taxes payable		69		79
Freight		10		11
Restructuring charges		44		29
Other		102		115

	$	618	$	720

F. Notes payable and long-term debt

Notes payable and current maturities of long-term debt and capital lease obligations consisted of the following:


	December 31,
*In millions*	2008		2007
Short-term bank loans	$	31	$	45
Other short-term borrowings		3		2
Current maturities of long-term debt and capital lease obligations		55		21

	$	89	$	68

MeadWestvaco has a $750 million bank credit agreement that matures on December 1, 2010. Borrowings under the agreement can be unsecured domestic or eurodollar notes at rates approximating prime or LIBOR at the company’s option. The $750 million credit agreement contains a financial covenant limiting the percentage of total debt (including a $338 million liability non-recourse to MeadWestvaco) to total capitalization (including deferred taxes) to 55%, as well as certain other covenants with which the company was in compliance at December 31, 2008. The credit facility was undrawn at December 31, 2008 and 2007.

During 2008, the company entered into a one-year term $200 million secured revolving credit facility with a third-party financial institution, which includes an option to extend the term for an additional period of up to one year if specified conditions are satisfied. Proceeds from the revolver are available for working capital and other general corporate purposes. Borrowings under this facility are secured by a portion of the company’s trade receivables and bear interest at LIBOR plus a margin. The secured revolving credit facility was undrawn at December 31, 2008.

During 2007, the company obtained access to certain uncommitted credit lines. Short-term borrowings under these agreements at December 31, 2008 and 2007 were $31 million and $45 million, respectively. Interest rates for these agreements ranged from 2.8% to 7.2% and 5.3% to 7.3% for the years ended December 31, 2008 and 2007, respectively. Other short-term borrowings of $3 million and $2 million at December 31, 2008 and 2007, respectively, are related to certain foreign operations.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The maximum amounts of combined commercial paper borrowings outstanding during the years ended December 31, 2008 and 2007 were $82 million and $279 million, respectively. The average amounts of commercial paper borrowings outstanding during the years ended December 31, 2008 and 2007 were $13 million and $118 million, respectively, with an average interest rate of 3.6 % and 5.4%, respectively. There were no commercial paper borrowings outstanding at December 31, 2008 and 2007.

Long-term debt consisted of the following:


	December 31,
*In millions*	2008			2007
Debentures, rates from 6.80% to 9.75%, due 2017-2047	$	1,181		$	1,181
Notes, rates from 6.85% to 7.10%, due 2009-2012		697			696
Sinking fund debentures, rates from 7.50% to 7.65%, due 2010-2027		270			299
Capital lease obligations:
Industrial Development Revenue Bonds, rate 7.67%, due 2027		80			80
Industrial Development Revenue Bonds, rate 6.35%, due 2035		51			51
Industrial Development Revenue Bonds, rate 6.10%, due 2030		7			7
Pollution Control Revenue Bonds, rate 6.375%, due 2026		6			6
Other capital lease obligations		5			8
Other long-term debt		67			68

		2,364			2,396
Less: amounts due within one year		(55	)		(21	)

Long-term debt	$	2,309		$	2,375

As of December 31, 2008, outstanding debt maturing in the next five years is as follows: 2009 – $86 million, 2010 – $16 million, 2011 – $15 million, 2012 – $648 million, and 2013 – $28 million.

As of December 31, 2008, capital lease obligations maturing in the next five years are as follows: 2009 – $3 million, 2010 – $2 million, 2011 – $0 million, 2012 – $0 million, and 2013 – $0 million.

The weighted average interest rate on the company’s fixed-rate long-term debt was 7.9% for 2008 and 8.7% for 2007. The weighted average interest rate on the company’s variable-rate long-term debt was 3.5 % for 2008 and 5.3% for 2007. The percentage of debt to total capital was 44.7 % at December 31, 2008, and 39.7 % at December 31, 2007.

At December 31, 2008, the book value of financial instruments included in long-term debt was $2.3 billion and the fair value was estimated to be $1.8 billion. At December 31, 2007, the book value of financial instruments included in long-term debt was $2.4 billion and the fair value was estimated to be $2.5 billion. The difference between book value and fair value is derived from the difference between the period-end market interest rate and the stated rate for the company’s fixed-rate, long-term debt. The company has estimated the fair value of financial instruments based upon quoted market prices for the same or similar issues or on the current interest rates available to the company for debt of similar terms and maturities.

G. Financial instruments

The company uses various derivative financial instruments as part of an overall strategy to manage exposure to market risks associated with interest rate, foreign currency exchange rate and natural gas price fluctuations. The company does not hold or issue derivative financial instruments for trading purposes. The risk of loss to the company in the event of nonperformance by any counterparty under derivative financial instrument agreements is not considered significant by management. Although the derivative financial instruments expose the company to market risk, fluctuations in the value of the derivatives are mitigated by expected offsetting fluctuations in the matched exposures.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Natural gas

In order to better predict and control the future cost of natural gas consumed at the company’s mills and plants, the company engages in financial hedging of future gas purchase prices. Gas usage is relatively predictable month-by-month. The company hedges primarily with financial instruments that are priced based on New York Mercantile Exchange (NYMEX) natural gas futures contracts. The company does not hedge basis ( the effect of varying delivery points or locations) or transportation (the cost to transport the gas from the delivery point to a company location) under these transactions.

Unrealized gains and losses on contracts maturing in future months are recorded in accumulated other comprehensive income and are charged or credited to earnings for the ineffective portion of the hedge. Once a contract matures, the company has a realized gain or loss on the contract up to the quantities of natural gas in the forward swap agreements for that particular period, which are charged or credited to earnings when the related hedged item affects earnings. The ineffective portion of these cash flow hedges, as well as realized hedge gains and losses, are recorded within cost of sales in the consolidated statements of operations. The estimated pre-tax loss to be recognized in earnings is $16 million and $3 million in 2009 and 2010, respectively. As of December 31, 2008, the maximum remaining term of existing hedges was less than two years. For the years ended December 31, 2008, 2007 and 2006, no amounts of gains or losses were recognized in earnings due to the probability that forecasted transactions will not occur.

Natural gas hedging activities in accumulated other comprehensive (loss) income, net of tax:


*In millions*	2008			2007			2006
Balance at January 1	$	(1	)	$	(3	)	$	—
Net losses associated with current period hedging transactions		(11	)		(1	)		(4	)
Reclassified to earnings due to realized hedge losses		1			3			1

Balance at December 31	$	(11	)	$	(1	)	$	(3	)

Interest rate risk

The company has developed a targeted mix of fixed-rate and variable-rate debt as part of an overall strategy to maintain an appropriate level of exposure to interest-rate fluctuations. To efficiently manage this mix, the company may utilize interest-rate swap agreements. During 2008, the company terminated its interest-rate swaps on its fixed-rate debt to mitigate any counterparty credit risk and realized approximately $20 million in net cash proceeds, which will be recognized as a reduction to interest expense over the remaining term of the respective debt instruments. As a result, at December 31, 2008 there were no outstanding interest-rate swaps. During 2007, the company participated in interest-rate swap agreements designated as fair-value hedges of certain fixed-rate borrowings. At December 31, 2007 the notional amount of swapped debt was $525 million and the fair value of the swaps was $16 million. The maturity dates on these swaps match the maturity dates of the underlying debt. For the year ended December 31, 2007, the interest-rate swaps were an effective hedge and, therefore, required no charge to earnings due to ineffectiveness in accordance with SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities. For these fair value hedges, the changes in the fair value of both the hedge instruments and the hedged items are recorded in interest expense.

Foreign currency risk

The company uses foreign currency forward contracts to manage some of the foreign currency exchange risks associated with certain short-term foreign intercompany loans, some foreign currency sales and purchases of its international operations, and some foreign sales of its U.S. operations. Using such forward contracts, the company receives or pays the difference between the contracted forward rate and the exchange rate at the settlement date. These contracts are used to hedge the variability of exchange rates on the company’s cash flows. For foreign currency forward contracts that are designated as cash flow hedges under SFAS No. 133, realized gains and losses are recorded in net sales in the consolidated statements of operations. For foreign currency forward contracts not designated as hedging instruments under SFAS No.133, realized gains and losses are recorded in other income, net in the consolidated statements of operations.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The forward contracts related to certain intercompany loans are short term in duration and are not designated as hedging instruments under SFAS No. 133. Information about these forward contracts is presented below:


	December 31,
*In millions*	2008			2007
Notional amount of foreign currency forward contracts	$	170		$	115
Fair value of foreign currency forward contracts		(2	)		(1	)

Other forward contracts, which are for terms of up to one year, are designated as cash-flow hedges under SFAS No. 133. The notional amount of those forward contracts was $78 million and $150 million at December 31, 2008 and 2007, respectively. The estimated pre-tax loss to be recognized in earnings in 2009 is not expected to be significant. For the years ended December 31, 2008, 2007 and 2006, no amounts of gains or losses were recognized in earnings due to the probability that forecasted transactions will not occur.

Foreign currency hedging activities in accumulated other comprehensive (loss) income, net of tax:


*In millions*	2008			2007			2006
Balance at January 1	$	(3	)	$	—		$	2
Net losses associated with current period hedging transactions:		—			(7	)		(3	)
Reclassified to earnings due to realized hedge losses		3			4			1

Balance at December 31	$	—		$	(3	)	$	—

H. Lease commitments

The company leases a variety of assets for use in its operations. Leases for administrative offices, converting plants and storage facilities generally contain options, which allow the company to extend lease terms for periods up to 25 years or to purchase the properties. Certain leases provide for escalation of the lease payments as maintenance costs and taxes increase. Minimum rental payments pursuant to agreements as of December 31, 2008 under operating leases that have non-cancelable lease terms in excess of 12 months and under capital leases are as follows:


*In millions*	Operating leases		Capital leases
2009	$	58	$	13
2010		66		12
2011		48		11
2012		39		10
2013		30		10
Later years		221		308

Minimum lease payments	$	462		364

Less: amount representing interest				215

Capital lease obligations			$	149

Rental expense under operating leases was $88 million, $82 million and $77 million for the years ended December 31, 2008, 2007 and 2006, respectively.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

I. Shareholders’ equity

The value included in common stock at December 31, 2008 and 2007 reflects the outstanding shares of common stock at $0.01 par value per share.

On November 20, 2007, the company entered into an accelerated share repurchase agreement with a financial institution counterparty (the “Counterparty”) to purchase $400 million of MeadWestvaco’s common stock. This program was funded by proceeds from sales of forestlands that closed in 2007. On November 21, 2007 and December 14, 2007, the Counterparty delivered 10 million shares and 1.1 million shares, respectively. Upon the conclusion of the program on June 19, 2008, the company received and retired another 2,933,369 shares resulting in a total number of shares of 14,029,157 received and retired at a volume weighted average price of $28.51 per share. The purchased shares through December 31, 2007 were retired and recorded as a $400 million reduction to additional paid-in capital in the consolidated balance sheet pursuant to regulations of the State of Delaware, the state of incorporation of MeadWestvaco, and the approval by the company’s Board of Directors.

In October of 2005, the company’s Board of Directors authorized the future purchase of up to 5 million shares of MeadWestvaco’s common stock, primarily to avoid dilution of earnings per share relating to the exercise of employee stock options. The number of shares available for purchase under this program at December 31, 2008 was 2.1 million.

The cumulative components at year end of accumulated other comprehensive (loss) income for 2008 and 2007 are as follows:


	December 31,
*In millions*	2008			2007
Foreign currency translation	$	6		$	257
Adjustments related to pension and other benefit plans		(344	)		97
Unrealized loss on derivative instruments		(12	)		(4	)

	$	(350	)	$	350

At December 31, 2008, there were authorized and available for issue 30 million shares of preferred stock, par value $0.01 per share, of which six million shares were designated as Series A Junior Participating Preferred Stock and reserved for issuance upon exercise of the rights.

Dividends declared were $0.92 per share in each of the years ended December 31, 2008, 2007 and 2006. Dividends paid were $159 million, $169 million and $167 million for the years ended December 31, 2008, 2007 and 2006, respectively.

The company had an original obligation to the former owner of a subsidiary to buy back 1.6 million shares (share put) of MeadWestvaco stock issued as part of the purchase price at a fixed rate; the value of this share repurchase approximated $58 million. During 2005, the company purchased and retired 0.3 million of these shares for $11 million. In 2006, the company repurchased and retired the remaining 1.3 million shares for $47 million.

J. Share-based compensation

The company adopted SFAS No. 123R as of January 1, 2006 using the modified prospective method. The cumulative effect of a change in accounting principle associated with the adoption of SFAS No. 123R was not material to the consolidated financial statements. Under this Statement in the year of adoption, pre-tax compensation expense for the year ended December 31, 2006 was $21 million. The incremental impact of adopting this Statement was a reduction to net income of $6 million, or $0.03 per share, for the year ended December 31, 2006.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Officers and key employees have been granted share-based awards under various stock-based compensation plans, all of which have been approved by the company’s shareholders. At December 31, 2008, MeadWestvaco had five such plans under which share-based awards are available for grant. Initially, there was an aggregate of 28 million shares reserved under the 1991 and 1996 Stock Option Plans, the 1995 Salaried Employee Stock Incentive Plan, the 1999 Salaried Employee Stock Incentive Plan and the 2005 Performance Incentive Plan for the granting of stock options, stock appreciation rights (“SARs”), restricted stock and restricted stock units to key employees. For all of the employee plans, there were approximately 7 million shares available for grant at December 31, 2008. The vesting of such awards may be conditioned upon either a specified period of time or the attainment of specific performance goals as determined by the plan. Grants of stock options and other share-based compensation awards are approved by the Compensation and Organization Development Committee of the Board of Directors. The exercise price of all stock options equals the market price of the company’s stock on the date of grant. Stock options and SARs are exercisable after a period of three years and expire no later than 10 years from the date of grant. Under certain employee plans, stock options may be granted with or without SARs or limited SARs, which are exercisable upon the occurrence of certain events related to changes in corporate control. Granting of SARs is generally limited to employees of the company who are located in countries where the issuance of stock options is not advantageous.

The MeadWestvaco Corporation Compensation Plan for Non-Employee Directors provides for the grant of stock awards up to 500,000 shares to outside directors in the form of stock options or restricted stock units. Non-employee members of the Board of Directors are currently granted restricted stock units, which vest immediately and are distributed in the form of stock shares on the date that a director ceases to be a member of the Board of Directors. In 2008, 2007 and 2006, the total annual grants consisted of 32,153, 29,241, and 25,558 restricted stock units, respectively, for non-employee directors. There were 264,085 shares remaining for grant under this plan at December 31, 2008.

Stock options and stock appreciation rights

The company estimates the fair value of its stock option and SAR awards granted after January 1, 2006, using a lattice-based option valuation model. Lattice-based option valuation models utilize ranges of assumptions over the expected term of the options and SARs. Expected volatilities are based on the historical and implied volatility of the company’s stock. The company uses historical data to estimate option and SAR exercises and employee terminations within the valuation model. The expected term of options and SARs granted is derived from the output of the valuation model and represents the period of time that options and SARs granted are expected to be outstanding. The company measures compensation expense related to the SARs at the end of each period.

Changes in the fair value of options (in the event of an award modification) and SARs are reflected as an adjustment to compensation expense in the periods in which the changes occur. The risk-free rate for the period within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of the grant. A summary of the assumptions is as follows:


Lattice-based option valuation assumptions	2008			2007			2006
Weighted average fair value of stock options granted during the period	$	6.67		$	9.01		$	7.64
Weighted average fair value of SARs granted during the period		6.46			8.07			7.06
Expected dividend yield for stock options		3.39	%		2.86	%		3.27	%
Expected dividend yield for SARs		3.38	%		2.98	%		3.38	%
Expected volatility		29.00	%		28.00	%		28.00	%
Average risk-free interest rate for stock options		3.02	%		4.83	%		4.71	%
Average risk-free interest rate for SARs		2.50	%		4.72	%		4.78	%
Average expected term for stock options and SARs (in years)		7.4			7.4			8.0

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table summarizes stock option and SAR activity in the plans.


*Shares in thousands*	Options		Weighted average exercise price		SARs		Weighted average exercise price		Weighted average remaining contractual term	Aggregate intrinsic value (in millions)
Outstanding at January 1, 2006	15,013		$	29.27	227		$	28.75
Granted	1,050			28.13	309			27.46
Exercised	(2,096	)		26.90	(2	)		25.51		$	4.9
Cancelled	(972	)		30.21	(44	)		29.28


Outstanding at December 31, 2006	12,995			29.49	490			29.55
Granted	1,138			32.21	84			32.11
Exercised	(5,540	)		29.42	(33	)		27.14			21.9
Cancelled	(653	)		31.61	(45	)		29.20


Outstanding at December 31, 2007	7,940			29.75	496			28.91			18.7
Granted	1,758			27.18	113			27.20
Exercised	(8	)		24.00	—			—			—
Cancelled	(894	)		30.79	(73	)		28.52


Outstanding at December 31, 2008	8,796			29.16	536			28.62	5.2 years		—
Exercisable at December 31, 2008	6,180			29.14	325			28.62	3.6 years		—
Exercisable at December 31, 2007	5,982			29.70	214			28.88	3.5 years		15.6

At December 31, 2008, there was approximately $12 million of unrecognized pre-tax compensation cost related to nonvested stock options and SARs, which is expected to be recognized over a weighted-average period of 1.7 years. Pre-tax compensation expense for stock options and SARs was $5 million, $11 million and $10 million for 2008, 2007 and 2006, respectively, and the tax benefit associated with this expense was $1 million in 2008 and $4 million in both 2007 and 2006.

Total cash received from the exercise of share-based awards in 2008 was not significant.

Restricted stock and restricted stock units

A restricted stock unit is the right to receive a share of company stock. Employee restricted stock and restricted stock units vest over a three-year period. Awards granted in 2008, 2007 and 2006 consisted of both service and performance vesting restricted stock units. Under the employee plans, the owners of the stock are entitled to voting rights and to receive dividends, but will forfeit the accrued stock and accrued dividends if the individual holder separates from the company during the three-year vesting period or if predetermined goals are not accomplished relative to return on invested capital, revenue from new products, total procurement savings and reduction in selling, general and administrative expenses. The fair value of each share of restricted stock and restricted stock unit is the closing market price of the company’s stock on the date of grant, and the compensation expense is charged to operations over the vesting period. Performance-based awards granted to employees in 2008, 2007 and 2006 were 616,320, 510,000 and 510,170, respectively. None of these grants were vested at December 31, 2008.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table summarizes restricted stock and restricted stock unit activity in the employee and director plans.


*Shares in thousands*	Shares		Average grant date fair market value
Outstanding at January 1, 2006	599		$	29.00
Granted	851			28.03
Forfeited	(77	)		27.70
Released	(40	)		28.74


Outstanding at December 31, 2006	1,333			28.88
Granted	909			28.96
Forfeited	(117	)		29.77
Released	(223	)		27.43


Outstanding at December 31, 2007	1,902			30.41
Granted	1,021			26.84
Forfeited	(183	)		29.37
Released	(237	)		30.23


Outstanding at December 31, 2008	2,503			29.51

At December 31, 2008, there was approximately $30 million of unrecognized pre-tax compensation cost related to non-vested restricted stock and restricted stock units, respectively, which is expected to be recognized over a weighted-average period of 1.3 years. Pre-tax compensation expense for restricted stock and restricted stock units was $22 million, $15 million and $11 million for 2008, 2007 and 2006, respectively, and the tax benefit associated with this expense was $7 million, $5 million and $4 million, respectively. Dividends, which are payable in stock, accrue on the restricted stock unit grants and are subject to the same terms as the original grants.

K. Employee retirement, postretirement and postemployment benefits

Retirement plans

MeadWestvaco provides retirement benefits for substantially all U.S. and certain non-U.S. employees under several noncontributory trusteed plans and also provides benefits to employees whose retirement benefits exceed maximum amounts permitted by current tax law under unfunded benefit plans. Benefits are based on either a final average pay formula or a cash balance formula for the salaried plans and a unit benefit formula for the bargained hourly plans. Contributions are made to the funded plans in accordance with ERISA requirements.

In August 2006, the President signed into law the Pension Protection Act of 2006 (“PPA”). The PPA establishes new minimum funding rules for defined benefit pension plans beginning in 2008. The company does not anticipate any required funding to the U.S. qualified retirement plans as a result of this legislation in the foreseeable future due to the overfunded status of the plans.

In September 2006, the FASB issued SFAS No. 158 , Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans—An Amendment of FASB Statement Nos. 87, 88, 106, and 132(R). SFAS No. 158 requires an employer to recognize the overfunded or underfunded status of a defined benefit and postretirement plan in its balance sheet and to recognize the changes in the plan’s funded status in comprehensive income in the year in which the change occurs. These provisions of the Statement are effective as of the end of the first fiscal year ending after December 15, 2006. SFAS No. 158 also requires an employer to measure the funded status of a plan as of the date of its fiscal year end, which is consistent with the Company’s measurement date. The impact of adopting SFAS No. 158 as of December 31, 2006 was a net increase to accumulated other comprehensive loss in the amount of $57 million, net of tax.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In October 2006, the Board of Directors approved the creation of a cash balance formula within the Company’s existing retirement plans for salaried and non-bargained hourly employees. The formula provides cash balance credits at the rate of 4%-8% of eligible earnings, depending upon age and years of service points, with interest credited annually at the 30-year Treasury rate. Effective July 1, 2006, all U.S. Calmar employees began accruing cash balance credits under this new formula. Effective January 1, 2007, all newly hired U.S. employees began accruing benefits under this new formula. Effective January 1, 2008, all U.S. employees age 40 and over at that time were provided the opportunity to make a one-time choice between the existing final average pay and cash balance formulas and all U.S. employees less than age 40 at that time began accruing cash balance credits under this formula. The adoption of this change reduced retirement plan liabilities by $25 million as of December 31, 2006 and increased net periodic pension income by $1 million and $10 million in 2006 and 2007, respectively.

Net periodic pension income relating to employee retirement benefits was $91 million, $54 million and $49 million for the years ended December 31, 2008, 2007 and 2006, respectively. As a result of restructuring activities and in accordance with the provisions of SFAS No. 88 , Employers’ Accounting for Settlements and Curtailments of Defined Benefit Pension Plans and for Termination Benefits, a curtailment gain of $11 million was recorded in 2008 and termination benefits of $1 million were recorded in 2006. No such items were incurred during 2007. Net periodic pension income reflects cumulative favorable investment returns on plan assets. Prior service cost and actuarial gains and losses subject to amortization are amortized on a straight-line basis over the average remaining service, which is about 10 years.

In July, 2008, the company completed the sale of its Kraft business. The components of net pension income, as presented in the table below for 2008, 2007 and 2006 were not adjusted for discontinued operations resulting from the sale. Net pension income from continuing operations was $93 million, $58 million and $54 million in 2008, 2007 and 2006, respectively.


	Years ended December 31,
*In millions*	2008			2007			2006
Service cost-benefits earned during the period	$	44		$	53		$	59
Interest cost on projected benefit obligation		152			147			142
Expected return on plan assets		(283	)		(265	)		(262	)
Amortization of prior service cost		6			6			7
Amortization of net actuarial loss		1			5			4

Pension income before settlements, curtailments and termination benefits		(80	)		(54	)		(50	)
Curtailments		(11	)		—			—
Termination benefits		—			—			1

Net periodic pension income	$	(91	)	$	(54	)	$	(49	)

The components of other changes in plan assets and benefit obligations recognized in other comprehensive (loss) income:


	2008			2007
Net actuarial (gain) loss	$	687		$	(260	)
Amortization of net actuarial loss		(1	)		(5	)
Amortization of prior service cost		(6	)		(6	)
Curtailments		8			—

Total recognized in other comprehensive (loss) income	$	688		$	(271	)


Total recognized in net periodic pension income and other comprehensive (loss) income	$	597		$	(325	)

The estimated net actuarial loss and prior service cost for the defined benefit retirement plans that will be amortized from accumulated other comprehensive (loss) income into net periodic benefit cost in 2009 is $2 million and $6 million, respectively.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Postretirement benefits

MeadWestvaco provides life insurance for substantially all retirees and medical benefits to certain retirees in the form of cost subsidies until Medicare eligibility is reached and to certain other retirees, medical benefits up to a maximum lifetime amount. The company funds certain medical benefits on a current basis with retirees paying a portion of the costs. Certain retired employees of businesses acquired by the company are covered under other medical plans that differ from current plans in coverage, deductibles and retiree contributions. Prior service cost and actuarial gains and losses subject to amortization are amortized over the average remaining service, which is about 5 years. In 2004, the company modified certain postretirement healthcare benefits to be provided to future retirees. This change reduced the postretirement benefit obligation by about $68 million, and is being amortized over the remaining life of the eligible employees, which is approximately 24 years.

The components of net postretirement benefits cost for each of the periods presented are as follows:


	Years ended December 31,
*In millions*	2008			2007			2006
Service cost-benefits earned during the period	$	3		$	3		$	3
Interest cost		7			7			8
Net amortization		(1	)		(1	)		(1	)

Net periodic postretirement benefits cost	$	9		$	9		$	10

The components of other changes in plan assets and benefit obligations recognized in other comprehensive (loss) income:


	2008			2007
Net actuarial gain	$	(3	)	$	—
Net amortization		1			1

Total recognized in other comprehensive (loss) income	$	(2	)	$	1


Total recognized in net periodic postretirement benefits cost and other comprehensive (loss) income	$	7		$	10

The estimated net actuarial gain and prior service benefit for the postretirement plans that will be amortized from accumulated other comprehensive income into net periodic postretirement benefit cost in 2009 is $2 million, allocated equally between components.

The following table also sets forth the funded status of the plans and amounts recognized in the consolidated balance sheets at December 31, 2008 and 2007, based on a measurement date of December 31 for each period.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Obligations, assets and funded status


	Qualified U.S. Retirement Plans						Nonqualified U.S. and Non - U.S. Retirement Plans						Postretirement Benefits
	Years ended December 31,						Years ended December 31,						Years ended December 31,
*In millions*	2008			2007			2008			2007			2008			2007
Change in benefit obligation:
Benefit obligation at beginning of period	$	2,324		$	2,438		$	188		$	201		$	124		$	131
Service cost		40			47			4			6			3			3
Interest cost		142			136			10			11			7			7
Actuarial loss (gain)		56			(136	)		6			(28	)		(3	)		(1	)
Plan amendments		2			—			—			—			—			—
Foreign currency exchange rate changes		—			—			(18	)		7			—			1
Employee contributions		—			—			—			—			14			15
Termination benefit costs		9			16			—			—			—			—
Settlements		—			—			—			(1	)		—			—
Curtailments		(2	)		—			—			—			—
Benefits paid (including termination benefits)		(167	)		(177	)		(10	)		(8	)		(29	)		(32	)

Benefit obligation at end of year	$	2,404		$	2,324		$	180		$	188		$	116		$	124


Change in plan assets:
Fair value of plan assets at beginning of period	$	3,538		$	3,358		$	69		$	60		$	—		$	—
Actual return on plan assets		(333	)		357			(6	)		3			—			—
Company contributions		—			—			12			11			15			17
Foreign currency exchange rate changes		—			—			(16	)		4			—			—
Employee contributions		—			—			—			—			14			15
Settlements		—			—			—			(1	)		—			—
Benefits paid (including termination benefits)		(167	)		(177	)		(10	)		(8	)		(29	)		(32	)

Fair value of plan assets at end of year	$	3,038		$	3,538		$	49		$	69		$	—		$	—


Over (under) funded status at end of year	$	634		$	1,214		$	(131	)	$	(119	)	$	(116	)	$	(124	)

Amounts recognized in the balance sheet consist of:
Noncurrent assets – prepaid pension asset	$	634		$	1,214		$	—		$	—		$	—		$	—
Current liabilities		—			—			(6	)		(6	)		(14	)		(15	)
Noncurrent liabilities		—			—			(125	)		(113	)		(102	)		(109	)

Total net pension asset (liability)	$	634		$	1,214		$	(131	)	$	(119	)	$	(116	)	$	(124	)


Amounts recognized in accumulated other comprehensive (loss) income (pre-tax) consist of:
Net actuarial loss (gain)	$	516		$	(159	)	$	34		$	20		$	(18	)	$	(15	)
Prior service cost (benefit)		36			38			(2	)		(3	)		(31	)		(32	)

Total recognized in accumulated other comprehensive (loss) income	$	552		$	(121	)	$	32		$	17		$	(49	)	$	(47	)

The accumulated benefit obligation for all defined benefit plans was $2.49 billion and $2.70 billion at December 31, 2008 and 2007, respectively.

Information for pension plans with an accumulated benefit obligation in excess of plan assets as of December 31:


*In millions*	2008		2007
Projected benefit obligation	$	148	$	165
Accumulated benefit obligation		130		156
Fair value of plan assets		16		47

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Assumptions

The weighted average assumptions used to determine the company’s benefit obligations at December 31:


	2008		2007
Retirement benefits:
Discount rate	6.25	%	6.22	%
Rate of compensation increase	3.98	%	3.97	%

Postretirement benefits:
Discount rate	6.26	%	6.23	%
Healthcare cost increase	7.99	%	8.48	%
Prescription drug cost increase	9.47	%	10.21	%

The weighted average assumptions used to determine net periodic pension cost and net postretirement benefits cost for the years presented:


	Years ended December 31,
	2008		2007		2006
Retirement benefits:
Discount rate	6.35	%	5.71	%	5.48	%
Rate of compensation increase	3.97	%	3.97	%	3.99	%
Expected return on plan assets	8.47	%	8.46	%	8.47	%

Postretirement benefits:
Discount rate	6.23	%	5.74	%	5.50	%
Healthcare cost increase	8.48	%	8.97	%	10.00	%
Prescription drug cost increase	10.21	%	12.92	%	14.00	%

MeadWestvaco’s approach to developing capital market assumptions combines an analysis of historical performance, the drivers of investment performance by asset class and current economic fundamentals. For returns, the company utilizes a building block approach starting with an inflation expectation and adds an expected real return to arrive at a long-term nominal expected return for each asset class. Long-term expected real returns are derived in the context of future expectations for the U.S. Treasury real yield curve. The company derives return assumptions for all other equity and fixed income asset classes by starting with either the U.S. Equity or U.S. Fixed Income return assumption and adding a risk premium, which reflects any additional risk inherent in the asset class.

The company determined the discount rates for 2008 and 2007 by referencing the Citigroup Pension Discount Curve. The company believes that using a yield curve approach more accurately reflects changes in the present value of liabilities over time since each cash flow is discounted at the rate at which it could effectively be settled. For 2006, the company referenced indices for long-term, high quality bonds, ensuring that the durations of those indices were not materially different from the duration of the plans’ liabilities, or if different, that adjusting the discount rate would not have produced results that were materially different from using a common discount rate for all of its plans.

The annual rate of increase in healthcare and prescription drug costs is assumed to decline ratably each year until reaching 5% in 2018 and thereafter. The effect of a 1% increase in the assumed combined cost trend rate would increase the December 31, 2008 accumulated postretirement benefit obligation by $4 million and the total service and interest cost for 2008 by $0.5 million. The effect of a 1% decrease in the assumed healthcare cost trend rate would decrease the December 31, 2008 accumulated postretirement benefit obligation by $4 million and the total service and interest cost for 2008 by $0.5 million.

The company also has defined contribution plans that cover substantially all U.S. and certain non-U.S. based employees. Expense for company matching contributions under these plans was $28 million, $30 million and $28 million for the years ended December 31, 2008, 2007 and 2006, respectively.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Retirement plan assets

The MeadWestvaco U.S. retirement plan asset allocation at December 31, 2008 and 2007, long-term target allocation, and expected long-term rate of return by asset category are as follows:


	Target allocation		Percentage of plan assets at December 31,				Weighted average expected long-term rate of return
			2008		2007		2008
Asset category:
Equity securities	40	%	38	%	45	%	10.1	%
Debt securities	50	%	56	%	51	%	6.3	%
Real estate and private equity	10	%	6	%	4	%	12.5	%

Total	100	%	100	%	100	%

The MeadWestvaco Master Retirement Trust maintains a well-diversified investment program through both the long-term allocation of trust fund assets among asset classes and the selection of investment managers whose various styles are fundamentally complementary to one another and serve to achieve satisfactory rates of return. Active management of assets is used in asset classes and strategies where there is the potential to add value over a benchmark. The long-term trust fund asset allocation policy emphasizes protecting the plans’ funded status. The equity class of securities is expected to provide the long-term growth necessary to cover the growth of the plans’ obligations. The policy may also allocate funds to other asset classes that serve to enhance long-term, risk-adjusted return expectations. Long-duration fixed income securities and interest rate swaps are used to better match the interest rate sensitivity of plan assets and liabilities. As a result, when interest rates fell during 2008, the value of the swap agreements increased. At December 31, 2008, the portfolio was hedged at approximately 100% of the value of the plans’ accumulated benefit obligation. Investment risk is measured and monitored on an ongoing basis through annual liability measurements, periodic asset/liability studies and quarterly investment portfolio reviews. A portion of the overall result will remain in short-term fixed income investments in order to meet the ongoing operating cash requirements of the plans. The tabular percentages above exclude the market value of the interest rate hedge used in rebalancing the asset allocation targets.

Cash flows

Contributions:

The company does not anticipate any required contributions to the U.S. qualified retirement plans in the foreseeable future as the plans are not required to make any minimum regulatory funding contributions. However, the company expects to contribute $3 million to the funded non-U.S. pension plans in 2009.

The company expects to pay $20 million in benefits to participants of the nonqualified and unfunded non-U.S. retirement and postretirement plans in 2009. The table below presents estimated future benefits payments, substantially all of which are expected to be funded from plan assets.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Estimated future benefit payments:


*In millions*	Retirement benefits		Postretirement benefits before Medicare Part D subsidy		Medicare Part D subsidy
2009	$	155	$	15	$	(1	)
2010		166		15		(1	)
2011		165		15		(1	)
2012		179		14		(1	)
2013		178		13		(1	)
2014 – 2018		995		54		(3	)

Postemployment benefits

MeadWestvaco provides limited postemployment benefits to former or inactive employees, including short-term and long-term disability, workers’ compensation, severance, and health and welfare benefit continuation.

L. Restructuring charges

Year ended December 31, 2008

During 2005, the company launched a cost initiative to improve the efficiency of its business model. The goal of this initiative was to reduce the overall cost structure of the company by $175 million to $200 million, before inflation, on an annual run-rate basis. In January 2009, the company announced a series of broad cost reduction actions including further reducing corporate and business unit overhead expense and closing or restructuring certain manufacturing locations. Restructuring costs incurred during 2008 were pursuant to both the 2005 cost initiative and the 2008 strategic cost management initiative.


*In millions*	Employee costs		Asset write-downs and other costs		Total
Consumer Solutions	$	30	$	14	$	44
Consumer & Office Products		6		2		8
Packaging Resources		2		2		4
Specialty Chemicals		1		3		4
All other		5		4		9

	$	44	$	25	$	69


*In millions*	Employee costs		Asset write-downs and other costs		Total
2005 cost initiative	$	19	$	21	$	40
2008 strategic cost management initiative		25		4		29

	$	44	$	25	$	69

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Consumer Solutions:

Consumer & Office Products:

Packaging Resources:

Specialty Chemicals:

All other:

Year ended December 31, 2007

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Year ended December 31, 2006

Summary of restructuring accruals

The activity in the accrued restructuring balances was as follows for the year ended December 31, 2006 to the year ended December 31, 2008:


	Employee Costs								Other Costs								Total
*In millions*	2005 Cost Initiative			2008 Cost Initiative		Total			2005 Cost Initiative			2008 Cost Initiative		Total			2005 Cost Initiative			2008 Cost Initiative		Total
Balance at December 31, 2005	$	7		$	—	$	7		$	4		$	—	$	4		$	11		$	—	$	11
Current charges		50			—		50			17			—		17			67			—		67
Payments		(27	)		—		(27	)		(6	)		—		(6	)		(33	)		—		(33	)
Acquisition reserve ⁽¹⁾		5			—		5			—			—		—			5			—		5

Balance at December 31, 2006		35			—		35			15			—		15			50			—		50
Current charges		19			—		19			8			—		8			27			—		27
Payments		(38	)		—		(38	)		(10	)		—		(10	)		(48	)		—		(48	)

Balance at December 31, 2007		16			—		16			13			—		13			29			—		29
Current charges		19			25		44			5			—		5			24			25		49
Payments		(21	)		—		(21	)		(13	)		—		(13	)		(34	)		—		(34	)

Balance at December 31, 2008	$	14		$	25	$	39		$	5		$	—	$	5		$	19		$	25	$	44

⁽¹⁾	In connection with the acquisition of Calmar, the company established a reserve under purchase accounting for restructuring actions. See Note P for further discussion.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

M. Other income, net

Components of other income, net are as follows:


	Years ended December 31,
*In millions*	2008			2007			2006
Gains on sales of large-tract forestlands ¹	$	—		$	(250	)	$	—
Gains on sales of small-tract forestlands ¹		—			(24	)		(29	)
Gains on sales of other assets		(16	)		—			(29	)
Gain on sale of PIK note		—			—			(21	)
Interest income		(39	)		(19	)		(20	)
Asset impairments		—			2			20
Foreign currency exchange losses (gains)		23			(12	)		(1	)
Other, net		(2	)		2			(3	)

	$	(34	)	$	(301	)	$	(83	)

N. Income taxes

Earnings from continuing operations before income taxes are comprised of the following:


	Years ended December 31,
*In millions*	2008			2007		2006
U.S. (loss) earnings	$	(154	)	$	201	$	(68	)
Foreign earnings		233			170		148

	$	79		$	371	$	80

The significant components of the income tax (benefit) provision are as follows:


	Years ended December 31,
*In millions*	2008			2007			2006
Current:
U.S. federal	$	(3	)	$	43		$	6
State and local		1			13			16
Foreign		52			42			39

		50			98			61

Deferred:
U.S. federal		(44	)		18			(38	)
State and local		—			5			(18	)
Foreign		(1	)		(6	)		—

(Benefit) provision for deferred income taxes		(45	)		17			(56	)


Allocation to discontinued operations		6			10			6

Income tax (benefit) provision ¹	$	(1	)	$	105		$	(1	)

¹	Related to continuing operations.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table summarizes the major differences between taxes computed at the U.S. federal statutory rate and the actual income tax (benefit) provision attributable to continuing operations:


	Years ended December 31,
*In millions*	2008			2007			2006
Income tax provision computed at the U.S. federal statutory rate of 35%	$	28		$	130		$	29
State and local income taxes, net of federal benefit		6			5			(9	)
Foreign income tax rate differential		(10	)		(24	)		(12	)
Valuation allowances		(1	)		3			6
Credits		(12	)		(1	)		(3	)
Settlement of tax audits and other		(12	)		(8	)		(12	)

Income tax (benefit) provision ¹	$	(1	)	$	105		$	(1	)

Effective tax rate ¹		(0.9	)%		28.2	%		(1.9	)%

¹	Related to continuing operations.

The principal current and non-current deferred tax assets and liabilities were as follows:


	December 31,
*In millions*	2008			2007
Deferred tax assets:
Employee benefits	$	157		$	177
Postretirement benefit accrual		39			40
Other accruals and reserves		96			95
Net operating loss and other credit carry forwards		181			195
Other		13			6

Total deferred tax assets		486			513
Valuation allowance		(123	)		(125	)

Net deferred tax assets		363			388


Deferred tax liabilities:
Depreciation and depletion		(878	)		(928	)
Nontaxable pension asset		(243	)		(456	)
Amortization of identifiable intangibles		(100	)		(105	)
Other		(17	)		(2	)

Total deferred tax liabilities		(1,238	)		(1,491	)

Net deferred liability	$	(875	)	$	(1,103	)


Included in the balance sheet:
Current assets - deferred tax asset	$	44		$	124
Noncurrent net deferred tax liability		(919	)		(1,227	)

Net deferred liability	$	(875	)	$	(1,103	)

The company has a $2 million federal net operating loss carryover subject to certain limitations on utilization imposed by the Internal Revenue Code. In addition, the company has state and foreign tax net operating loss carryforwards which are available to reduce future taxable income in various state and foreign jurisdictions. The company’s valuation allowance against deferred tax assets primarily relates to the state and foreign tax net operating losses for which the ultimate realization of future benefits is uncertain.

At December 31, 2008 and 2007, no deferred income taxes have been provided for the company’s share of undistributed net earnings of foreign operations due to management’s intent to reinvest such amounts indefinitely. The determination of the amount of such unrecognized tax liability is not practical. Those earnings, including foreign currency translation adjustments, totaled $1.51 billion and $1.35 billion for the years ended December 31, 2008 and 2007, respectively.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As a result of the adoption of FIN 48 on January 1, 2007, the company reduced opening retained earnings and goodwill in the amounts of $8 million and $39 million, respectively. A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows for the years ended December 31, 2008 and 2007 (in millions):


Balance at January 1, 2007	$	186
Additions based on tax positions related to the current year		14
Additions for tax positions of prior years		32
Reductions for tax positions of prior years		(15	)
Reductions for tax positions due to lapse of statute		(2	)
Settlements		(64	)

Balance at December 31, 2007		151
Additions based on tax positions related to the current year		11
Additions for tax positions of prior years		21
Reductions for tax positions of prior years		(24	)
Reductions for tax positions due to lapse of statute		(7	)
Settlements		(25	)

Balance at December 31, 2008	$	127

The company has operations in many areas of the world and is subject, at times, to tax audits in these jurisdictions. These tax audits by their nature are complex and can require several years to resolve. The final resolution of any such tax audits could result in either a reduction in the company’s accruals or an increase in its income tax provision, both of which could have an impact on the results of operations in any given period. With a few exceptions, the company is no longer subject to U.S. federal, state and local, or foreign income tax examinations by tax authorities for years prior to 2004. The company regularly evaluates, assesses and adjusts these accruals in light of changing facts and circumstances, which could cause the effective tax rate to fluctuate from period to period. Of the total $127 million liability for unrecognized tax benefits at December 31, 2008, $76 million could impact the annual effective tax rate in future periods. The remaining balance of this liability would be adjusted through the consolidated balance sheet without impacting the company’s annual effective tax rate.

During 2008, the company settled audits with the Internal Revenue Service for tax years 2002-2003. The Internal Revenue Service examination for tax years 2004-2006 is open and currently is not expected to close in 2009. Management does not anticipate any potential settlement for tax years 2004-2006 to result in a material change to the company’s financial position. In addition, the company is in advanced stages of audits in certain foreign jurisdictions and certain domestic states. Based on the resolution of the various audits mentioned above, it is reasonably possible that the balance of unrecognized tax benefits may change by $27 million to $41 million during 2009.

Pursuant to agreements for the purchase of certain businesses, the company is indemnified by the sellers for tax costs and contingencies related to pre-acquisition periods for such businesses. The company estimates such pre-acquisition tax, interest and penalty costs and contingencies to be $5 million at December 31, 2008.

The company recognizes interest and penalties accrued related to unrecognized tax benefits in income tax expense in the consolidated statements of operations, which is consistent with the recognition of these items in reporting periods prior to the adoption of FIN 48. During the years ended December 31, 2008, 2007 and 2006, the company recognized $3 million, $16 million and $10 million, respectively, in interest expense and penalties. The company accrued $43 million and $57 million for the payment of interest and penalties at December 31, 2008 and 2007, respectively.

Approximately $245 million of deferred income tax benefit and $94 million of deferred income tax expense was provided for in components of other comprehensive income (loss) during the years ended December 31, 2008 and 2007, respectively.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

O. Environmental and legal matters

The company has been notified by the U.S. Environmental Protection Agency or by various state or local governments that it may be liable under federal environmental laws or under applicable state or local laws with respect to the cleanup of hazardous substances at sites previously operated or used by the company. The company is currently named as a potentially responsible party (“PRP”), or has received third-party requests for contribution under the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”) and similar state or local laws with respect to numerous sites. There are other sites which may contain contamination or which may be potential Superfund sites, but for which MeadWestvaco has not received any notice or claim. The potential liability for all these sites will depend upon several factors, including the extent of contamination, the method of remediation, insurance coverage and contribution by other PRPs. The company regularly evaluates its potential liability at these various sites. At December 31, 2008, MeadWestvaco had recorded liabilities of approximately $19 million for estimated potential cleanup costs based upon its close monitoring of ongoing activities and its past experience with these matters. The company believes that it is reasonably possible that costs associated with these sites may exceed amounts of recorded liabilities by an amount that could range from an insignificant amount to as much as $10 million. This estimate is less certain than the estimate upon which the environmental liabilities were based. After consulting with legal counsel and after considering established liabilities, it is our judgment that the resolution of pending litigation and proceedings is not expected to have a material adverse effect on the company’s consolidated financial condition or liquidity. In any given period or periods, however, it is possible such proceedings or matters could have a material effect on the results of operations.

As with numerous other large industrial companies, the company has been named a defendant in asbestos-related personal injury litigation. Typically, these suits also name many other corporate defendants. All of the claims against the company resolved to date have been concluded before trial, either through dismissal or through settlement with payments to the plaintiff that are not material to the company. To date, the costs resulting from the litigation, including settlement costs, have not been significant. As of December 31, 2008, there were approximately 591 lawsuits. Management believes that the company has substantial indemnification protection and insurance coverage, subject to applicable deductibles and policy limits, with respect to asbestos claims. The company has valid defenses to these claims and intends to continue to defend them vigorously. Additionally, based on its historical experience in asbestos cases and an analysis of the current cases, the company believes that it has adequate amounts accrued for potential settlements and judgments in asbestos-related litigation. At December 31, 2008, the company had recorded litigation liabilities of approximately $21 million, a significant portion of which relates to asbestos. Should the volume of litigation grow substantially, it is possible that the company could incur significant costs resolving these cases. After consulting with legal counsel and after considering established liabilities, it is our judgment that the resolution of pending litigation and proceedings is not expected to have a material adverse effect on the company’s consolidated financial condition or liquidity. In any given period or periods, however, it is possible such proceedings or matters could have a material effect on the results of operations.

MeadWestvaco is involved in various other litigation and administrative proceedings arising in the normal course of business. Although the ultimate outcome of such matters cannot be predicted with certainty, management does not believe that the currently expected outcome of any matter, lawsuit or claim that is pending or threatened, or all of them combined, will have a material adverse effect on the company’s consolidated financial condition or liquidity. In any given period or periods, however, it is possible such proceedings or matters could have a material effect on the results of operations.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

P. Acquisitions and dispositions

2008 acquisitions

During 2008, acquisitions were made in North America and India to enhance the company’s performance chemical and consumer and office products businesses, strengthen the company’s capabilities in the pharmaceutical and beverage packaging markets, and expand the company’s presence in emerging markets. The aggregate purchase price of these acquisitions including direct transaction costs was $18 million. These acquisitions resulted in $16 million of identifiable intangible assets that will be amortized over a weighted-average amortization period of 6 years with the remainder allocated to fixed assets and working capital items. For all acquisitions, the total purchase price was allocated based on the fair values of the assets acquired and liabilities assumed, in accordance with SFAS No. 141. The purchase price allocations associated with these acquisitions were complete at December 31, 2008. Results of operations for these acquisitions are included in the consolidated financial statements periods subsequent to their acquisition dates and are included in the Consumer & Office Products, Consumer Solutions, and Packaging Resources segments. These acquisitions did not have a material effect on the company’s consolidated financial statements and as such, pro forma results for these acquisitions are not presented.

2007 acquisitions

During the third quarter of 2007, the company acquired two manufacturers of high-quality, innovative dispensing and sprayer systems to strengthen the company’s dispensing and spraying systems business. The aggregate purchase price of these acquisitions was $52 million and resulted in $17 million of identifiable intangible assets that will be amortized over their estimated useful lives of 3 to 16 years, and goodwill of $24 million with the remainder allocated to fixed assets and working capital items. For both acquisitions, the total purchase price was allocated based on the fair values of the assets acquired and liabilities assumed, in accordance with SFAS No. 141. The amount of goodwill was determined by comparing the total cash purchase price to the total fair values of the assets acquired and liabilities assumed. Approximately $2 million of goodwill resulting from these transactions is deductible for tax purposes. The amount paid for these acquisitions that resulted in goodwill was primarily due to these businesses providing the company with new technologies and increased access to customers in growing and important end markets. The technologies from these acquisitions will be integrated with the company’s North American, European and Asian production facilities to extend the company’s growth in critical markets such as personal care and home and garden. Results of operations for these acquisitions are included in the consolidated financial statements periods subsequent to their acquisition dates and are included in the Consumer Solutions segment. These acquisitions did not have a material effect on the company’s consolidated financial statements and as such, pro forma results for these acquisitions are not presented.

2006 acquisitions

During the third quarter of 2006, the company acquired Saint-Gobain Calmar (“Calmar”) from Compagnie de Saint-Gobain. Calmar is a leading global manufacturer of high-quality and innovative dispensing and spraying systems, with manufacturing facilities in North America, Europe, Latin America and Asia.

Excluding cash acquired, the purchase price including direct transaction costs was $714 million. The results of Calmar are included in the consolidated financial statements from the acquisition date and are included in the company’s Consumer Solutions segment. The acquisition was recorded by allocating the total consideration to the assets acquired, including intangible assets, and liabilities assumed, based on their estimated fair values at the acquisition date. Goodwill associated with this acquisition is not deductible for tax purposes.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The acquisition of Calmar was the culmination of a very competitive auction process. The amount paid for the business that resulted in goodwill was primarily due to Calmar’s status in its markets and the enviable relationships it has with its many customers throughout the world. The acquisition of Calmar provides the company with increased access to growing and important end markets, geographies and strategic customers, valuable product pipeline and commercial synergies. These synergies include the combined entities’ ability to provide broader product and packaging solutions offerings. The total purchase price was allocated based on the fair values of the assets acquired and liabilities assumed, in accordance with SFAS No. 141.

The following table summarizes the purchase price allocation based on the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition (in millions):


Accounts receivable	$	76
Inventories		57
Property, plant, equipment and land		197
Amortizable and indefinite-lived intangible assets		277
Goodwill		302
Other assets		21
Accounts payable and accrued liabilities		(68	)
Long-term deferred income taxes		(127	)
Debt and other long-term obligations		(21	)

	$	714

The components of the amortizable and indefinite-lived intangible assets listed in the above table as of the acquisition date were as follows (in millions):


	Amount		Life
Customer contracts and lists	$	168	21 years
Trademarks and tradenames		91	Indefinite
Patents		18	3-7 years

	$	277

The trademarks and tradenames were deemed to have indefinite lives and, accordingly, are not being amortized, but will be subject to periodic impairment testing. The customer contracts and lists and the patents are being amortized on a method based upon estimated future cash flows associated with these assets.

Dispositions

On July 1, 2008, the company completed the sale of its Kraft business for net cash proceeds of $466 million. The sale resulted in a pre-tax gain of $13 million ($8 million after-tax) in the third quarter of 2008. For 2008, the after-tax gain on sale as well as the after-tax operating results of the Kraft business are being reported as income from discontinued operations in the consolidated statements of operations. Prior period amounts have been recast on a comparable basis. The results of operations and assets and liabilities of the Kraft business were previously included in the Packaging Resources segment.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table shows the major categories for discontinued operations in the consolidated statements of operations for the years ended December 31, 2008, 2007 and 2006:


	Year ended December 31,
In millions, except per share amounts	2008			2007			2006
Net sales	$	253		$	499		$	480

Cost of sales		238			448			435
Selling, general and administrative expenses		6			12			11
Interest expense		7			14			16
Other expense (income), net		(14	)		(4	)		—


Income before income taxes		16			29			18

Income tax provision		6			10			6


Net income	$	10		$	19		$	12


Net income per share	$	0.06		$	0.11		$	0.07

There were no assets and liabilities classified as discontinued operations in the consolidated balance sheet at December 31, 2008. The following table shows the major categories of assets and liabilities that are classified as discontinued operations in the consolidated balance sheet at December 31, 2007:


In millions	December 31, 2007
Accounts receivable, net	$	34
Inventories		45
Other current assets		1

		80

Property, plant, equipment, net		421
Other assets		1

		422

Accounts payable		19
Accrued expenses		26

		45

Other long-term liabilities		16

In connection with the sale of the Kraft business in 2008, the sale of certain large-tract landholdings in 2007 and the sale of the printing and writing papers business in 2005, the company provided certain guarantees and indemnities to the respective buyers and other parties. These obligations include both potential environmental matters as well as certain contracts with third parties. The company has evaluated these guarantees and indemnifications in accordance with FASB Interpretation No. 45, Guarantor’s Accounting and Disclosure Requirements for Guarantees , Including Indirect Guarantees of Indebtedness of Others , which did not result in a material impact on the company’s consolidated financial statements. The total aggregate exposure to the company for these matters could be up to about $50 million; however, the company currently considers there to be a remote possibility of being required to make any payments related to these guarantees.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Q. Cash flows

Changes in current assets and liabilities, net of acquisitions and dispositions, were as follows:


	Years ended December 31,
*In millions*	2008			2007			2006
Decrease (increase) in:
Receivables	$	125		$	44		$	(2	)
Inventories		2			(39	)		74
Prepaid expenses		(1	)		(2	)		(6	)

(Decrease) increase in:
Accounts payable and accrued expenses		(99	)		53			68
Income taxes payable		(3	)		72			4

	$	24		$	128		$	138


	Years ended December 31,
*In millions*	2008			2007			2006
Cash paid for:
Interest	$	195		$	205		$	193
Less capitalized interest		(3	)		(2	)		(2	)

Interest paid, net	$	192		$	203		$	191


Income taxes paid (refunded), net	$	81		$	19		$	(4	)

In connection with the sale of certain large-tract forestlands in 2007, the company received a $398 million long-term installment note which does not require any principal payments until its maturity in May 2027. See Note B and Note D for related discussion.

R. Business segment information

MWV’s business segments are (i) Packaging Resources, (ii) Consumer Solutions, (iii) Consumer & Office Products, (iv) Specialty Chemicals, and (v) Community Development and Land Management. During 2008, MWV established a real estate business to maximize the value of its land holdings. As a result, the company is presenting the Community Development and Land Management business as a separate segment for the year ended December 31, 2008, which was previously included in Corporate and Other. This change aligns segment disclosures with management’s analysis of results of operations and the process to allocate resources adopted in the third quarter 2008. Results for 2007 and 2006 have been recast to reflect the new segment structure.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Community Development and Land Management segment is responsible for maximizing the value of the company’s landholdings. Operations of the segment include real estate development, forestry operations and leasing activities. Real estate development includes (i) improving and selling rural tracts primarily for recreational and residential uses, (ii) entitling and improving high-value tracts through joint ventures and other ownership arrangements, (iii) master planning select forestlands, and (iv) monetizing non-core forestlands. Forestry operations include growing and harvesting softwood and hardwood on the company’s forestlands for external consumption and for use by the company’s mill-based business. Leasing activities include fees from third parties undertaking mineral extraction operations, as well as fees from recreational leases on the company’s forestlands.

Corporate and Other includes corporate support staff services and related assets and liabilities, including merger-related goodwill, and the Specialty Papers business. The results include income and expense items not directly associated with segment operations, such as certain legal settlements, net pension income, interest income and expense, sales of corporate real estate, restructuring charges and one-time costs and other activities.

The segments are measured on operating profits before restructuring charges and one-time costs, interest expense and income, minority interest income and losses and income taxes. The segments follow the same accounting principles described in the Summary of Significant Accounting Policies . Sales between the segments are recorded primarily at market prices.

No single customer or foreign country accounted for 10% or more of consolidated trade sales or assets in the periods presented. The below table reflects amounts on a continuing operations basis.


	Years ended December 31,
*In millions*	2008		2007		2006
Total sales outside of the U.S.	$	2,243	$	2,131	$	1,842
Export sales from the U.S.		853		790		710
Long-lived assets located outside the U.S.		1,179		1,396		1,176
Long-lived assets located in the U.S.		5,115		5,852		5,647

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Financial information by business segment follows:


*In millions*	Trade sales		Inter-segment sales			Total sales			Segment profit (loss)			Depreciation, depletion and amortization		Segment assets		Capital expenditures
Year ended December 31, 2008
Packaging Resources	$	2,285	$	382		$	2,667		$	195		$	186	$	2,496	$	100
Consumer Solutions ¹		2,509		2			2,511			56			186		2,529		111
Consumer & Office Products		1,063		—			1,063			96			32		635		11
Specialty Chemicals		547		—			547			48			27		391		28
Community Development and Land Management ⁴		128		7			135			59			10		318		5
Corporate and Other ^2,3		105		—			105			(375	)		31		2,086		33

Total		6,637		391			7,028			79			472		8,455		288
Intersegment eliminations		—		(391	)		(391	)		—			—		—		—

Consolidated totals ⁷	$	6,637	$	—		$	6,637		$	79		$	472	$	8,455	$	288


Year ended December 31, 2007
Packaging Resources ⁶	$	2,134	$	370		$	2,504		$	281		$	183	$	2,706	$	104
Consumer Solutions ¹		2,430		1			2,431			86			180		2,742		144
Consumer & Office Products		1,147		—			1,147			139			35		803		10
Specialty Chemicals		493		1			494			37			23		371		33
Community Development and Land Management ⁴ ^,6		74		13			87			294			16		287		7
Corporate and Other ^2,3 ^,6		129		1			130			(466	)		45		2,426		31

Total		6,407		386			6,793			371			482		9,335		329
Assets of discontinued operations ⁵		—		—			—			—			—		502		—
Intersegment eliminations		—		(386	)		(386	)		—			—		—		—

Consolidated totals ⁷	$	6,407	$	—		$	6,407		$	371		$	482	$	9,837	$	329


Year ended December 31, 2006
Packaging Resources ⁶	$	2,067	$	388		$	2,455		$	244		$	183	$	2,652	$	109
Consumer Solutions		2,169		1			2,170			93			160		2,571		96
Consumer & Office Products		1,143		—			1,143			127			39		824		11
Specialty Chemicals		468		25			493			51			21		342		26
Community Development and Land Management ⁴ ^,6		73		33			106			53			17		517		10
Corporate and Other ^2,3 ^,6		130		—			130			(488	)		57		1,842		33

Total		6,050		447			6,497			80			477		8,748		285
Assets of discontinued operations ⁵		—		—			—			—			—		537		—
Intersegment eliminations		—		(447	)		(447	)		—			—		—		—

Consolidated totals ⁷	$	6,050	$	—		$	6,050		$	80		$	477	$	9,285	$	285

¹	Full-years 2008 and 2007 and the third and fourth quarters of 2006 include the results of Calmar, which was acquired on July 1, 2006.

²	Revenue included in Corporate and Other includes specialty papers sales.

³	Corporate and Other includes minority interest income and losses, restructuring charges and one-time costs, pension income, interest expense and income, and gains and losses on certain asset sales.

⁴

⁵	Assets of discontinued operations represent the assets of the Kraft business, which was sold on July 1, 2008.

⁶	Results for 2007 and 2006 have been recast pursuant to the discontinued operations of the Kraft business and to conform to the new segment structure adopted in 2008 reflecting the separate presentation of the Community Development and Land Management business.

⁷	Consolidated totals represent results from continuing operations, except as otherwise noted.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

S. Selected quarterly information (unaudited)


	Years ended December 31,
*In millions, except per share data*	2008 ¹			2007 ²
Sales:
First	$	1,518		$	1,428
Second		1,709			1,580
Third		1,811			1,678
Fourth		1,599			1,721

Year	$	6,637		$	6,407


Gross profit:
First	$	225		$	228
Second		303			300
Third		321			329
Fourth		215			288

Year	$	1,064		$	1,145


Net income (loss):
First	$	(4	)	$	(16	)
Second		56			32
Third		54			121
Fourth		(16	)		148

Year	$	90		$	285


Net income (loss) per common share, basic and diluted:
First	$	(0.02	)	$	(0.09	)
Second		0.33			0.17
Third		0.31			0.66
Fourth		(0.09	)		0.82

First quarter 2008 results include after-tax restructuring charges of $5 million, or $0.03 per share, an after-tax gain of $6 million, or $0.04 per share, related to the recognition of a curtailment gain associated with the company’s U.S. pension plan due to employee reductions from the company’s 2005 cost initiative, and after-tax income from discontinued operations of $4 million, or $0.02 per share, related to the disposition of the Kraft business. Second quarter 2008 results include after-tax restructuring charges of $6 million, or $0.03 per share, an after-tax gain of $9 million, or $0.05 per share, related to the sale of corporate real estate, and an after-tax loss from discontinued operations of $2 million, or $0.01 per share, related to the disposition of the Kraft business. Third quarter 2008 results include after-tax income from discontinued operations of $8 million, or $0.05 per share, related to the disposition of the Kraft business. Restructuring charges were not significant to third quarter 2008 results. Fourth quarter 2008 results include after-tax restructuring charges of $33 million, or $0.19 per share.

First quarter 2007 results include after-tax restructuring charges of $10 million, or $0.05 per share, after-tax one-time costs of $3 million, or $0.02 per share, related to the company’s 2005 cost initiative, and after-tax income from discontinued operations of $7 million, or $0.04 per share, related to the disposition of the Kraft business. Second quarter 2007 results include after-tax restructuring charges of $5 million, or $0.03 per share, after-tax one-time costs of $5 million, or $0.03 per share, related to the company’s 2005 cost initiative, and after-tax income from discontinued operations of $4 million, or $0.02 per share, related to the disposition of the Kraft business. Third quarter 2007 results include an after-tax gain of $53 million, or $0.29 per share, related to a sale of non-strategic large-tract forestlands. The results for the third quarter of 2007 also include after-tax restructuring charges of $13 million, or $0.07 per share, after-tax one-time costs of $4 million, or $0.02 per share, related to the company’s 2005 cost initiative, and after-tax income from discontinued operations of $6 million, or $0.03 per share, related to the disposition of the Kraft business. Fourth quarter 2007 results include an after-tax gain of $102 million, or $0.56 per share, related to a sale of non-strategic large-tract forestlands. Fourth quarter 2007 results also include after-tax restructuring charges of $26 million, or $0.14 per share, after-tax one-time costs of $3 million, or $0.02 per share, related to the company’s 2005 cost initiative, and after-tax income from discontinued operations of $2 million, or $0.02 per share, related to the disposition of the Kraft business.

Item 9.

Changes in and disagreements with accountants on accounting and financial disclosure

None.

Item 9A.

Controls and procedures

Management’s report on internal control over financial reporting.

Management is responsible for establishing and maintaining adequate internal control over financial reporting for the company. In order to evaluate the effectiveness of internal control over financial reporting, management has conducted an assessment, including testing, using the criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). The company’s internal control over financial reporting, as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934 (“Exchange Act”), is a process designed to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Based on our assessment, under the criteria established in Internal Control – Integrated Framework, issued by the COSO, management has concluded that the company maintained effective internal control over financial reporting as of December 31, 2008. In addition, the effectiveness of the company’s internal control over financial reporting as of December 31, 2008 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears in Part II, Item 8.

Evaluation of the company’s disclosure controls and procedures.

As of the end of the period covered by this Annual Report on Form 10-K, we evaluated the effectiveness of our “disclosure controls and procedures” (as defined in Rule 13a-15(e) of the Exchange Act). This evaluation was conducted under the supervision and with the participation of management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”). Based on the evaluation of disclosure controls and procedures, our CEO and CFO have concluded that the disclosure controls and procedures were effective, as of December 31, 2008, to ensure that information required to be disclosed in the reports that we file or submit under the Securities Exchange Act of 1934 have been accumulated and communicated to management, including our CEO and CFO, and other persons responsible for preparing such reports to allow timely decisions regarding required disclosure and that it is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

Changes in internal control over financial reporting.

During the fiscal year ended December 31, 2008, there was no change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially effect, our internal control over financial reporting.

Item 9B.

Other information

None.

Part III

Item 10.

Directors, executive officers and corporate governance

Information required by this item for MeadWestvaco’s directors will be contained in MeadWestvaco’s 2009 Proxy Statement, pursuant to Regulation 14A, to be filed with the SEC on or before March 27, 2009, and is incorporated herein by reference. A portion of the information required by this item for MeadWestvaco’s executive officers is also contained in Part I of this report under the caption “Executive officers of the registrant.”

Item 11.

Executive compensation

Information required by this item will be contained in MeadWestvaco’s 2009 Proxy Statement, pursuant to Regulation 14A, to be filed with the SEC or before March 27, 2009, and is incorporated herein by reference.

Item 12.

Security ownership of certain beneficial owners and management and related stockholder matters

Information required by this item will be contained in MeadWestvaco’s 2009 Proxy Statement, pursuant to Regulation 14A, to be filed with the SEC on or before March 27, 2009, and is incorporated herein by reference.

Item 13.

Certain relationships and related transactions, and director independence

Item 14.

Principal accounting fees and services

Part IV

Item 15.

Exhibits, financial statement schedules

(a)	Documents filed as part of this report:

1.	Consolidated financial statements

The consolidated financial statements of MeadWestvaco Corporation and consolidated subsidiaries are listed in the index which is included in Part II, Item 8.

2.	Consolidated financial statement schedules

All financial statement schedules have been omitted because they are inapplicable, not required, or shown in the consolidated financial statements and notes thereto contained herein.

3.	Exhibits


3.1		Amended and Restated Certificate of Incorporation of the Registrant, previously filed as Exhibit 99.1 to the company’s Form 8-K on May 1, 2008, and incorporated herein by reference.

3.2		Amended and Restated By-laws of the Registrant dated October, 2008, previously filed as Exhibit 99.2 to the company’s Form 8-K on October 23, 2008, and incorporated herein by reference.

4.1		Indenture dated as of April 2, 2002 by and among the Registrant, Westvaco Corporation, The Mead Corporation and The Bank of New York, as Trustee, previously filed as Exhibit 4(a) to the company’s Form 8-K on April 2, 2002, and incorporated herein by reference.

4.2		Form of Indenture, dated as of March 1, 1983, between Westvaco Corporation (SEC file number 001-03013) and The Bank of New York (formerly Irving Trust Company), as trustee, previously filed as Exhibit 2 to Westvaco’s Registration Statement on Form 8-A on January 24, 1984, and incorporated herein by reference.

4.3		First Supplemental Indenture by and among Westvaco Corporation, the Registrant, The Mead Corporation and The Bank of New York dated January 31, 2002, previously filed as Exhibit 4.1 to the company’s Form 8-K on February 1, 2002, and incorporated herein by reference.

4.4		Second Supplemental Indenture between the Registrant and The Bank of New York dated December 31, 2002, previously filed as Exhibit 4.1 to the company’s Form 8-K on January 7, 2003, and incorporated herein by reference.

4.5		Indenture dated as of February 1, 1993 between The Mead Corporation and The First National Bank of Chicago, as Trustee, previously filed as Exhibit 4.vv to the company’s Annual Report on Form 10-K for the Transition Period ended December 31, 2001, and incorporated herein by reference.

4.6		First Supplemental Indenture between The Mead Corporation, the Registrant, Westvaco Corporation and Bank One Trust Company, NA dated January 31, 2002, previously filed as Exhibit 4.3 to the company’s Form 8-K on February 1, 2002, and incorporated herein by reference.

4.7		Second Supplemental Indenture between MW Custom Papers, Inc. and Bank One Trust Company, NA dated December 31, 2002, previously filed as Exhibit 4.4 to the company’s Form 8-K on January 7, 2003, and incorporated herein by reference.

4.8		Third Supplemental Indenture between the Registrant and Bank One Trust Company, NA dated December 31, 2002, previously filed as Exhibit 4.5 to the company’s Form 8-K on January 7, 2003, and incorporated herein by reference.



4.9		Rights Agreement dated as of January 29, 2002 between the Registrant and The Bank of New York, previously filed as Item 2 to the company’s Form 8-A on January 29, 2002, and incorporated herein by reference.

4.10		Amendment to Rights Agreement dated as of December 21, 2007 between Registrant and the Bank of New York filed as Exhibit 4.2 to the company’s Form 8-A/A on December 26, 2007, and incorporated herein by reference.

4.11		$1 Billion Five-Year Credit Agreement, dated as of December 1, 2004, among the Registrant, The Bank of New York, as agent, and the banks named therein, previously filed as Exhibit 10.29 to the company’s Annual Report on Form 10-K for the year ended December 31, 2004, and incorporated herein by reference.

4.12		Amendment No. 1, dated as of December 1, 2005, to the Credit Agreement, dated as of December 1, 2004, among the Registrant, The Bank of New York, as agent, and the banks named therein, to reduce the Credit Facility from $1 billion to $750 million and to extend the maturity date to December 1, 2010, previously filed as Exhibit 99.1 on the company’s Form 8-K on December 19, 2005, and incorporated herein by reference.

10.1+		The Mead Corporation 1991 Stock Option Plan, as amended through June 24, 1999, previously filed as Exhibit 10.xxvii to the company’s Annual Report on Form 10-K for the transition period ended December 31, 2001, and incorporated herein by reference.

10.2+		The Mead Corporation (SEC file number 001-02267) 1996 Stock Option Plan, as amended through June 24, 1999 and amended February 22, 2001, previously filed as Exhibit 10.3 to Mead’s Quarterly Report on Form 10-Q for the period ended July 4, 1999 and Appendix 2 to Mead’s definitive proxy statement for the 2001 Annual Meeting of Shareholders, and incorporated herein by reference.

10.3+		Amendment to The Mead Corporation 1996 Stock Option Plan, effective April 23, 2002, previously filed as Exhibit 10.3 to the company’s Quarterly Report on Form 10-Q for the period ended June 30, 2002, and incorporated herein by reference.

10.4+		Amendment to The Mead Corporation 1996 Stock Option Plan effective January 23, 2007, as previously filed as Exhibit 10.4 to the company’s Annual Report on Form 10-K for the year ended December 31, 2007, and incorporated herein by reference.

10.5+		1985 Supplement to The Mead Corporation Incentive Compensation Election Plan, as amended November 17, 1987, and as further amended October 29, 1988; as amended effective June 24, 1998; as amended effective October 26, 2001, previously filed as Exhibit 10.xxix to the company’s Annual Report on Form 10-K for the Transition Period ended December 31, 2001, and incorporated herein by reference.

10.6+		The Mead Corporation Supplemental Executive Retirement Plan effective January 1, 1997; as amended effective June 24, 1998; as amended effective August 28, 2001, previously filed as Exhibit 10.xxxii to the company’s Annual Report on Form 10-K for the Transition Period ended December 31, 2001, and incorporated herein by reference.

10.7+		Third Amendment to The Mead Corporation Supplemental Executive Retirement Plan in which executive officers participate, previously filed as Exhibit 10.1 to the company’s Quarterly Report on Form 10-Q for the period ended March 30, 2002, and incorporated herein by reference.

10.8+		Benefit Trust Agreement dated August 27, 1996 between The Mead Corporation and Key Trust Company of Ohio, N.A.; as amended effective June 24, 1998; as amended effective October 28, 2000; as amended effective June 28, 2001; as amended August 28, 2001, previously filed as Exhibit 10.xxxiv to the company’s Annual Report on Form 10-K for the Transition Period ended December 31, 2001, and incorporated herein by reference.

10.9+		The Mead Corporation Restricted Stock Plan effective December 10, 1987, as amended through June 24, 1999, previously filed as Exhibit 10.xxxv to the company’s Annual Report on Form 10-K for the Transition Period ended December 31, 2001, and incorporated herein by reference.



10.10+		Amendment to The Mead Corporation Restricted Stock Plan effective January 23, 2007, as previously filed as Exhibit 10.10 to the company’s Annual Report on Form 10-K for the year ended December 31, 2007, and incorporated herein by reference.

10.11+		Ninth Amendment to The Mead Corporation Restricted Stock Plan, previously filed as Exhibit 10.5 to the company’s Quarterly Report on Form 10-Q for the period ended March 31, 2002, and incorporated herein by reference.

10.12+		The Mead Corporation Deferred Compensation Plan for Directors, as amended through October 29, 1988; as amended effective June 24, 1998; as amended effective October 26, 2001, previously filed as Exhibit 10.xxxvi to the company’s Annual Report on Form 10-K for the Transition Period ended December 31, 2001, and incorporated herein by reference.

10.13+		1985 Supplement to The Mead Corporation Deferred Compensation Plan for Directors, as amended through October 29, 1988; as amended effective June 24, 1998; as amended effective October 26, 2001, previously filed as Exhibit 10.xxxvii to the company’s Annual Report on Form 10-K for the Transition Period ended December 31, 2001, and incorporated herein by reference.

10.14+		The Mead Corporation Directors Capital Accumulation Plan as Amended and Restated effective January 1, 2000; as amended effective October 26, 2001, previously filed as Exhibit 10.xxxviii to the company’s Annual Report on Form 10-K for the Transition Period ended December 31, 2001, and incorporated herein by reference.

10.15+		Westvaco Corporation 1995 Salaried Employee Stock Incentive Plan, effective February 28, 1995, previously filed at Exhibit 99 to Westvaco’s Registration Statement on Form S-8 on February 28, 1995, and incorporated herein by reference.

10.16+		Amendment to Westvaco Corporation 1995 Salaried Employee Stock Incentive Plan, effective April 23, 2002, previously filed as Exhibit 10-2 to the company’s Quarterly Report on Form 10-Q for the period ended June 30, 2002, and incorporated herein by reference.

10.17+		Westvaco Corporation (SEC file number 001-03013) 1999 Salaried Employee Stock Incentive Plan, effective September 17, 1999, previously filed as Appendix A to Westvaco’s definitive proxy statement for the 1999 Annual Meeting of Shareholders, and incorporated herein by reference.

10.18+		Amendment to Westvaco Corporation 1999 Salaried Employee Stock Incentive Plan effective as of April 23, 2002, previously filed as Exhibit 10.1 to the company’s Quarterly Report on Form 10-Q for the period ended June 30, 2002, and incorporated herein by reference.

10.19+		Amendment to Westvaco Corporation 1999 Salaried Employee Stock Incentive Plan effective January 23, 2007, as previously filed as Exhibit 10.19 to the company’s Annual Report on Form 10-K for the year ended December 31, 2007, and incorporated herein by reference.

10.20+*		MeadWestvaco Corporation Compensation Plan for Non-Employee Directors as Amended and Restated effective January 1, 2009 except as otherwise provided.

10.21+		Amendment to MeadWestvaco Corporation Compensation Plan for Non-Employee Directors effective January 23, 2007, as previously filed as Exhibit 10.21 to the company’s Annual Report on Form 10-K for the year ended December 31, 2007, and incorporated herein by reference.

10.22		Equity and Asset Purchase Agreement dated as of January 14, 2005 between the Registrant and Maple Acquisition LLC, previously filed as Exhibit 99.1 on the company’s Form 8-K on January 21, 2005, for the sale of its papers business and associated assets, and incorporated herein by reference.



10.23+*		MeadWestvaco Corporation 2005 Performance Incentive Plan effective April 22, 2005 and as amended February 26, 2007 and January 1, 2009.

10.24+*		MeadWestvaco Corporation Executive Retirement Plan, as amended and restated effective January 1, 2009 except as otherwise provided.

10.25+*		MeadWestvaco Corporation Deferred Income Plan Restatement effective January 1, 2007 except as otherwise provided.

10.26+*		MeadWestvaco Corporation Retirement Restoration Plan effective January 1, 2009, except as otherwise provided.

10.27+		MeadWestvaco Corporation Compensation Program for Non-Employee Directors effective January 23, 2007, previously filed as Exhibit 10.35 to the company’s Annual Report on Form 10-K for the year ended December 31, 2006, and incorporated herein by reference.

10.28+		Form of Employment Agreement dated January 1, 2008, for Mark T. Watkins, as previously filed as Exhibit 10.33 to the company’s Annual Report on Form 10-K for the year ended December 31, 2007, and incorporated herein by reference.

10.29		Form of Employment Agreement dated January 1, 2008, for John A. Luke, Jr., James A. Buzzard, E. Mark Rajkowski and Wendell L. Willkie, II, as previously filed as Exhibit 10.32 to the company’s Annual Report on Form 10-K for the year ended December 31, 2007, and incorporated herein by reference.

10.30+*		Amendments to The Mead Corporation Incentive Compensation Election Plan, The Mead Corporation Deferred Compensation Plan for Directors, The Mead Corporation Directors Capital Accumulation Plan, Westvaco Corporation Deferred Compensation Plan, Westvaco Corporation Savings and Investment Restoration Plan, Westvaco Corporation Deferred Compensation Plan for Non-Employee Outside Directors, and Westvaco Corporation Retirement Plan for Outside Directors.

		Westvaco Corporation Retirement Plan for Outside Directors, as previously filed as Exhibit 10.i to the company’s Annual Report on Form 10-K for the year ended October 31, 1996, and incorporated herein by reference.

10.31+*		Summary of MeadWestvaco Corporation Long-Term Incentive Plan under 2005 Performance Incentive Plan, as amended.

10.32+*		Summary of MeadWestvaco Corporation Annual Incentive Plan under 2005 Performance Incentive Plan, as amended.

21.*		Subsidiaries of the Registrant.

23.1*		Consent of PricewaterhouseCoopers LLP.

31.1*		Rule 13a-14(a) Certification by Chief Executive Officer.

31.2*		Rule 13a-14(a) Certification by Chief Financial Officer.

32.1*		Section 1350 Certification by Chief Executive Officer.

32.2*		Section 1350 Certification by Chief Financial Officer.

*	Filed herewith.

+	Management contract or compensatory plan or arrangement.

We agree to furnish copies of other instruments defining the rights of holders of long-term debt to the Commission upon its request.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	MEADWESTVACO CORPORATION
	(Registrant)

February 24, 2009
		/s/ E. Mark Rajkowski
	Name:	E. Mark Rajkowski
	Title:	Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.


Signatures	Title	Date

/s/ John A. Luke, Jr.	Chairman of the Board of Directors	February 24, 2009
John A. Luke, Jr.	and Chief Executive Officer
	(Principal Executive Officer and Director)

/s/ E. Mark Rajkowski	Senior Vice President	February 24, 2009
E. Mark Rajkowski	(Chief Financial Officer)

/s/ John E. Banu	Controller	February 24, 2009
John E. Banu	(Principal Accounting Officer)

/s/ Michael E. Campbell	Director	February 24, 2009
Michael E. Campbell

/s/ Dr. Thomas W. Cole, Jr.	Director	February 24, 2009
Dr. Thomas W. Cole, Jr.

/s/ James G. Kaiser	Director	February 24, 2009
James G. Kaiser

/s/ Richard B. Kelson	Director	February 24, 2009
Richard B. Kelson

/s/ James M. Kilts	Director	February 24, 2009
James M. Kilts

/s/ Susan J. Kropf	Director	February 24, 2009
Susan J. Kropf

/s/ Douglas S. Luke	Director	February 24, 2009
Douglas S. Luke

/s/ Robert C. McCormack	Director	February 24, 2009
Robert C. McCormack

/s/ Timothy H. Powers	Director	February 24, 2009
Timothy H. Powers

/s/ Edward M. Straw	Director	February 24, 2009
Edward M. Straw

/s/ Jane L. Warner	Director	February 24, 2009
Jane L. Warner

EXHIBIT INDEX


10.20		MeadWestvaco Corporation Compensation Plan for Non-Employee Directors as Amended and Restated effective January 1, 2009 except as otherwise provided.

10.23		MeadWestvaco Corporation 2005 Performance Incentive Plan effective April 22, 2005 and as amended February 26, 2007 and January 1, 2009.

10.24		MeadWestvaco Corporation Executive Retirement Plan, as amended and restated effective January 1, 2009 except as otherwise provided.

10.25		MeadWestvaco Corporation Deferred Income Plan Restatement effective January 1, 2007 except as otherwise provided.

10.26		MeadWestvaco Corporation Retirement Restoration Plan effective January 1, 2009, except as otherwise provided.

10.30		Amendments to The Mead Corporation Incentive Compensation Election Plan, The Mead Corporation Deferred Compensation Plan for Directors, The Mead Corporation Directors Capital Accumulation Plan, Westvaco Corporation Deferred Compensation Plan, Westvaco Corporation Savings and Investment Restoration Plan, Westvaco Corporation Deferred Compensation Plan for Non-Employee Outside Directors, and Westvaco Corporation Retirement Plan for Outside Directors. Westvaco Corporation Retirement Plan for Outside Directors, as previously filed as Exhibit 10.i to the company’s Annual Report on Form 10-K for the year ended October 31, 1996, and incorporated herein by reference.

10.31		Summary of MeadWestvaco Corporation Long-Term Incentive Plan under 2005 Performance Incentive Plan, as amended.

10.32		Summary of MeadWestvaco Corporation Annual Incentive Plan under 2005 Performance Incentive Plan, as amended.

21.		Subsidiaries of the Registrant.

23.1		Consent of PricewaterhouseCoopers LLP.

31.1		Rule 13a-14(a) Certification by Chief Executive Officer.

31.2		Rule 13a-14(a) Certification by Chief Financial Officer.

32.1		Section 1350 Certification by Chief Executive Officer.

32.2		Section 1350 Certification by Chief Financial Officer.

Exhibit 10.20

MEADWESTVACO CORPORATION COMPENSATION PLAN

FOR NON-EMPLOYEE DIRECTORS

Amended and Restated

Effective January 1, 2009 (except as otherwise provided)

Article I

Purpose and General Provisions

Section 1.1 Purpose of Plan; Shareholder Approval; Shares Available.

(a) The purpose of the Plan is to provide members of the Board of Directors of MeadWestvaco Corporation (the “Company”) who are not employed by the Company with an opportunity to defer cash compensation and provide long-term supplemental compensation in the form of Stock Units and Options with respect to Common Stock.

(b) As approved by the Company’s shareholders, and subject to adjustment as provided in Section 7.2 of the Plan, the total number of shares that may be subject to Stock Units and Options is 500,000 shares of the Common Stock. The source of shares for the Plan may be treasury shares or newly issued shares, at the discretion of the Board. Any share which is subject to an Option which for any reason expires or is terminated unexercised may again be subject to an Option or a Stock Unit under the Plan. Shares of Common Stock available for the grant of Options and Stock Units under the Plan shall not be diminished by any grants of any kind under any plan created or maintained by any company acquired by the Company or with which the Company is merged or combined.

(c) The Plan became effective January 30, 2002, subject to approval by the Company’s shareholders of Articles IV and VI of the Plan (providing for Stock Units and Options, respectively), which occurred on April 23, 2004. The Plan is amended and restated, effective January 1, 2009, to comply with the requirements of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), described below.

Section 1.2 Section 409A Compliance.

(a) Effective January 1, 2005, certain benefits under the Plan are subject to Section 409A of the Code; with respect to such benefits, the Plan shall comply with the requirements of, and shall be operated, administered, and interpreted in accordance with, Section 409A of the Code.

(b) For the period from January 1, 2005 through December 31, 2008, the Company and the Administration Committee had sole discretion to override the terms set forth in the plan document for the Plan to the extent that either the Company or the Administration Committee determined to be necessary to comply with a good-faith, reasonable interpretation of the requirements of Section 409A of the Code.

(c) If the Company or Administration Committee determines that any provision of the Plan is or might be inconsistent with the restrictions imposed by Section 409A of the Code, such provision shall be deemed to be amended to the extent that the

Company or Administration Committee determines is necessary to bring it into compliance with Section 409A of the Code. Any such deemed amendment shall be effective as of the earliest date such amendment is necessary under Section 409A of the Code.

(d) No provision in the Plan shall be interpreted or construed to (1) create any liability for the Company or any of its employees, officers, directors, or other service providers, related to a failure to comply with Section 409A of the Code, or (2) transfer any liability for a failure to comply with Section 409A of the Code from a Participant or other individual to the Company or any of their employees, officers, directors, or other service providers.

Section 1.3 Definitions. The following terms shall have the meanings set forth below for purposes of the Plan.

Account: a Deferral Account or a Stock Unit Account.

Administration Committee: a committee of management employees designated by the Chief Executive Officer of the Company from time to time to serve as the body charged with serving as such under the Plan.

Annual Meeting Date: any date on which an annual meeting of the Company’s stockholders occurs.

Average Fair Market Value: the average of the Fair Market Values of a share of Common Stock of the Company during the period of 10 trading days ending on the designated date.

Beneficiary: in the case of any Participant who dies, the person or persons named on the most recent Beneficiary Election Form filed and not revoked by the Participant, in each case, in accordance with procedures established by the Administration Committee or, if no such procedures have been established or the Participant has not properly filed any Beneficiary Election Form, the Participant’s estate.

Board: the Board of Directors of the Company.

Code: the Internal Revenue Code of 1986, as amended.

Common Stock: shares of Common Stock of the Company, subject to adjustments made under Section 7.2 of the Plan or by operation of law.

Company: MeadWestvaco Corporation, a Delaware corporation.

Compensation Committee: the Compensation Committee of the Board or any subcommittee thereof, or any other committee or subcommittee of the Board, as determined by the Board from time to time; provided , that such committee or subcommittee shall consist solely of two or more members of the Board who are “Non-Employee Directors” within the meaning of Rule 16b-3 promulgated under the Exchange Act.

-2-

Deferral Account: a bookkeeping account for a Participant representing the Eligible Compensation that the Participant has elected to defer under Article II of the Plan, as adjusted to reflect earnings, losses, contributions and distributions in accordance with Article III and Article V of the Plan.

Deferral Election: an election by an Eligible Director to defer Eligible Compensation pursuant to Article II of the Plan.

Deferred Compensation: an amount of Eligible Compensation that an Eligible Director elects to defer under Article II of the Plan in accordance with the provision of the Plan.

Distribution Election: an election by a Participant of the time(s) and manner in which he or she wishes to receive distributions from his or her Deferral Account.

Dividend Equivalent: the amount of any cash dividend or other cash distribution paid by the Company, or the Fair Market Value of any dividend or other distribution in the form of property other than Common Stock distributed by the Company, on a number of shares of Common Stock equal to the number of Stock Units credited, as of the applicable record date, to an Eligible Director’s Stock Unit Account.

Effective Date: with respect to the exercise of any Option, the last business day preceding (1) in the case of delivery of a completed exercise form, the date received by the person designated by the Administration Committee to receive such forms, or (2) in the case of mailed forms, the postmark date for such mailing.

Election Form: a form effecting a Beneficiary Election (a “Beneficiary Election Form”), a form effecting a Deferral Election (a “Deferral Election Form”), a form effecting a Distribution Election (a “New Distribution Election Form” or a “Change of Distribution Election Form”), or a form effecting an Investment Election (an “Investment Election Form”), or a single form combining one or more of such elections.

Eligible Compensation: with respect to any Eligible Director, 100% of the Eligible Director’s total cash compensation from the Company for service on the Board and/or on any committee of the Board.

Eligible Director: any member of the Board who is not employed by the Company or any of its subsidiaries or affiliates.

Exchange Act: the Securities Exchange Act of 1934.

Fair Market Value: with respect to the Common Stock, the mean of the high and low prices at which the Common Stock is traded on the New York Stock Exchange during normal business hours on the designated date; with respect to any other security that is traded on any national securities exchange, or on NASDAQ, the mean of the high and low prices at which Company’s common stock is thus traded during normal business hours on the designated date; and with respect to any other property, the fair market value thereof as reasonably and prudently determined by the Compensation Committee.

Finance Committee: a committee of management employees designated by the Chief Executive Officer of the Company from time to time to serve as the body charged with serving as such under the Plan.

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Investment Election: an election by an Eligible Director to have Deferred Compensation invested in an Investment Fund as defined in Section 3.3(a) of the Plan.

Option: an option to acquire Common Stock granted pursuant to Article VI of the Plan.

Optionee: the Eligible Director to whom any Option is granted and any other person who may be entitled to exercise such Option pursuant to the Plan.

Participant: an Eligible Director who has elected to defer Eligible Compensation under the Plan or to whose Stock Unit Account Stock Units have been credited and who has a positive balance in his or her Account(s).

Plan: the MeadWestvaco Corporation Compensation Plan for Non-Employee Directors, as set forth herein and amended from time to time.

Plan Year: generally, the calendar year; provided , that the first Plan Year was the period from January 30, 2002 through December 31, 2002.

Stock Unit: a unit credited to a Participant’s Stock Unit Account representing one hypothetical share of Common Stock. Fractional Stock Units shall be permitted.

Stock Unit Account: a bookkeeping account for a Participant representing the Stock Units that have been credited to the Participant under Article IV of the Plan.

Stock Unit Value: as defined in Section 4.1 of the Plan.

Termination Distribution: a distribution from a Participant’s Account following the Participant’s Termination of Board Membership.

Termination of Board Membership: with respect to any Participant, the date of the Participant’s separation from service (within the meaning of Section 409A(a)(2)(A)(i) of the Code), as determined by the Company in accordance with Treas. Reg. § 1.409A-1(h)(1).

Section 1.4 Administration. Except as specifically provided in the Plan, the Administration Committee shall be responsible for administering the Plan in all respects, including establishing rules and regulations for the operation of the Plan, preparing, distributing, collecting and administering Election Forms, and interpreting the Plan and all associated documentation (including without limitation Election Forms). The Administration Committee may delegate any or all of their respective responsibilities to one or more of their members or to appropriate employees of the Company. Notwithstanding the foregoing, to the extent necessary to ensure the exemption of transactions pursuant to the Plan from Section 16 of the Exchange Act, the Board or the Compensation Committee shall be responsible for such administration.

Section 1.5 Unfunded Plan. The Plan is intended to be an unfunded plan providing current and deferred compensation. Participants are and shall at all times be general creditors of the Company with respect to their Account balances. If the Finance Committee or the Company chooses to set aside funds in a trust or otherwise for the payment of Account balances under the Plan, such funds shall at all times be subject to the claims of the creditors of the Company in the event of its bankruptcy or insolvency.

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Section 1.6 Non-Transferability. None of the rights of Participants under the Plan or with respect to their Accounts or Options shall be transferable, except as specifically provided in Section 5.3 and Section 6.6 of the Plan.

Article II

Deferral Elections

Section 2.1 Eligible Compensation. All Eligible Directors shall be provided with the opportunity to elect to defer all or a portion of their Eligible Compensation (but not Stock Units, Options, or other compensation). The Administration Committee may establish such minimum deferral amounts, specified percentages of Eligible Compensation that may be deferred, and similar requirements and limitations, as it may determine to be appropriate for convenience of administration of the Plan.

Section 2.2 Deferral Election Forms. Deferral Election Forms shall be in such form, and shall be filed and revoked in such manner as the Administration Committee shall from time to time determine.

Section 2.3 Time for Filing Deferral Election Forms.

(a) First Year of Eligibility . An individual who first becomes an Eligible Director during any Plan Year (as determined in accordance with this Section 2.3(a)) may file a Deferral Election Form within 30 days after first becoming an Eligible Director; provided , that such Deferral Election shall apply only to Eligible Compensation for services performed after the Deferral Election is filed.

For purposes of the Plan an individual shall be treated as first becoming an Eligible Director if (and only if) he has not been eligible to defer compensation under the Plan or another any other nonqualified “account balance plan” described in Treas. Reg. § 1.409A-1(c)(2)(i)(A) or (B) that is maintained by the Company or any entity that would be required to be combined with MeadWestvaco as a single employer under Section 414(b) or (c) of the Code.

(b) After First Year of Eligibility . Except to the extent permitted by subsection (a), above, any Deferral Election shall be filed by the deadline established by the Administration Committee, which shall be no later than December 31st of the Plan Year before the Plan Year in which the services giving rise to the Eligible Compensation to be deferred will be performed.

(c) Deferral Elections Remain in Effect for Subsequent Plan Years . Once filed, a Deferral Election shall be irrevocable for the remainder of the Plan Year with respect to which it applies, and shall remain in effect until the Plan Year after the Plan Year (if any) during which the Participant files a new Deferral Election or revokes such Deferral Election.

Article III

Deferral Accounts and Investments

Section 3.1 Establishment and Maintenance of Deferral Account. The Administration Committee shall cause the Company to establish and maintain a Deferral Account for each Participant who elects to defer Eligible Compensation pursuant to Article II of the

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Plan. A Participant’s Deferral Account shall be credited and debited from time to time as provided in Section 3.2, below, adjusted for investment experience from time to time as provided in Section 3.3, below, and debited for amounts distributed in accordance with Article V.

Section 3.2 Contributions to Deferral Accounts. A Participant’s Deferral Account shall be credited from time to time with his or her Deferred Compensation, as of the day on which such Deferred Compensation would otherwise be paid to him or her. Such amounts shall be vested at all times.

Section 3.3 Earnings and Losses on Deferral Accounts.

(a) Investment Elections. The Finance Committee shall from time to time establish one or more hypothetical investment funds (each, an “Investment Fund”) based upon such criteria as it may from time to time determine. The Administration Committee shall establish procedures to permit Participants to make Investment Elections from time to time indicating in which of the available Investment Funds their Deferral Accounts shall be deemed invested. Unless and until the Finance Committee provides otherwise, all Deferral Accounts shall be deemed invested in the CitiStreet Money Market Fund.

(b) Adjustment of Accounts. The Administration Committee shall cause Participants’ Deferral Accounts to be adjusted upwards or downwards, at such intervals as it may from time to time determine, to reflect the net investment return (whether positive or negative) of the particular Investment Fund(s) elected; provided , that no Deferral Account may at any time have a balance less than zero.

Section 3.4 Reports. The Administration Committee shall provide, or cause to be provided, to each Participant at regular intervals, but at least annually, a statement of his or her Deferral Account balance and the activity therein since the date of the last such statement.

Article IV

Stock Unit Accounts

Section 4.1 Credits of Stock Units. On each Annual Meeting Date, the Stock Unit Account of each person who is an Eligible Director at the adjournment of the stockholders’ meeting occurring on that Annual Meeting Date shall be credited with a number of Units (including fractions thereof) determined by dividing the Stock Unit Value by the Average Fair Market Value of the Common Stock on such Annual Meeting Date. The “Stock Unit Value” shall mean $80,000 (as of January 2007) or such other amount as the Board may hereafter establish by resolution.

Section 4.2 Dividend Equivalents. Each Stock Unit Account shall be credited with additional Stock Units (including fractions thereof) on each payment date for any dividend or distribution made with respect to the Common Stock with a record date that occurs while there is a positive balance in such Stock Unit Account. The number of Stock Units so credited shall equal the amount of the applicable Dividend Equivalent, divided by the Fair Market Value of a share of Common Stock as of the applicable payment date for the dividend or distribution in question.

Section 4.3 Vesting of Share Units. The rights of each Eligible Director in respect of Stock Units credited to his or her Stock Unit Account shall be vested at all times.

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Article V

Distributions

Section 5.1 Termination of Board Membership. The balance of each Participant’s Account(s) shall be paid within 90 days after the end of the calendar quarter in which the Participant’s Termination of Board Membership occurs (unless a later date is required by Section 5.5 of the Plan), in a single distribution; provided , that a Participant may elect a different time and/or form of payment of all or part of his Deferral Account (but not his Stock Unit Account) in accordance with Section 5.2, below.

Section 5.2 Distribution Election Form. The Administration Committee may from time to time, in its discretion, establish rules and procedures for participants to file a Distribution Election Form, on which they may make elections to receive distributions of their Deferral Accounts in installments rather than a lump sum and at a time or times other than as provided in Section 5.1, above. Such procedures may include rules for designating a Beneficiary, and such other rules, limitations and conditions as the Administration Committee may determine to be appropriate; provided , that such procedures shall comply with the following requirements:

(a) New Distribution Election Form . Except to the extent that a change is permitted by subsection (b) or (c), below, a New Distribution Election Form with respect to any Eligible Compensation (as adjusted for investment return in accordance with Section 3.3 of the Plan) shall be filed no later than the deadline required by Section 2.3 of the Plan for filing the Deferral Election with respect to such Eligible Compensation. Once filed, a Distribution Election shall remain in effect until the Participant files a New Distribution Election Form for future deferrals. Any New Distribution Election Form shall be effective with respect to Eligible Compensation (as adjusted for investment return in accordance with Section 3.3 of the Plan) for services performed during the Plan Year after the Plan Year in which the New Distribution Election Form is filed.

(b) Changes to Distribution Elections Before 2009 . Before January 1, 2009, the Administration Committee had discretion to allow a Participant to change the time and form of payment of any portion of his Deferral Account after the deadline required by subsection (a), above, if (and only if) (1) the Participant filed a Change of Distribution Election Form no later than six months before his Termination of Board Membership, and (2) after December 31, 2005, the change did not result in acceleration of any payment into the tax year in which the change was filed or delay until a later tax year any payment that was otherwise scheduled to be made in the year in which the change was filed.

(c) Changes to Distribution Elections After 2008 . Effective on and after January 1, 2009, a Participant may change the time or form of payment of any portion of his Deferral Account after the deadline required by subsection (a), above, only if:

(1)

He files a Change of Distribution Election Form no later than (A) six months before his Termination of Board Membership, and (B) 12 months before the date on which distribution of his Deferral Account would commence if not for the change; and

(2)

The date on which distribution of his Deferral Account commences is at least five years after the date on which distribution would have commenced if not for the change.

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Section 5.3 Form of Distributions. All distributions from a Participant’s Deferral Account shall be made in cash. All distributions from a Participant’s Stock Unit Account shall be made in shares of Common Stock, except that any fractional shares that would otherwise be distributable shall be paid in cash based on the Fair Market Value of the Common Stock on the most recent practicable date preceding the date of payment.

Section 5.4 Death. If a Participant dies before the balance of his Account(s) is fully distributed, the remaining balance of the Participant’s Account(s) shall be distributed (in the form required by Section 5.3, above) to his Beneficiary within 90 days after the Participant’s death.

Section 5.5 Special Delayed Payment Rule. If a Participant is a “specified employee” (as determined by the Company in accordance with Section 409A(a)(2)(B) of the Code and Treas. Reg. § 1.409A-1(i)), any amount that becomes payable as a result of the Participant’s Termination of Board Membership shall be paid on the later of (a) the payment date prescribed by this Article V, and (b) the first day of the seventh month that begins after the Participant’s Termination of Board Membership.

Article VI

Stock Options

Section 6.1 Grants of Options. On each Annual Meeting Date before January 1, 2004, Options to purchase 1,500 shares of Common Stock shall automatically be granted to each individual who, at the adjournment of the stockholders’ meeting occurring, is an Eligible Director. All Options shall be evidenced by written agreements and shall be granted on the terms hereafter set forth, together with such other terms, not inconsistent with the terms of the Plan, as the Board or the Compensation Committee, in its discretion, may from time to time approve. Effective January 1, 2004, the automatic grant of options under this Section is suspended pending further action by the Board.

Section 6.2 Option Price. The per-share exercise price for each Option shall be 100% of the Fair Market Value of a share of Common Stock on the date the Option is granted.

Section 6.3 Medium and Time of Payment. Stock purchased pursuant to an Option shall be paid for in full at the time of purchase in such manner as the Administration Committee or the Compensation Committee shall determine. The medium of payment shall be cash, Common Stock valued at Fair Market Value, or any other property satisfactory to the Company, valued as of the Effective Date of the exercise; provided , that any such Common Stock shall have been either purchased by the Eligible Director on the open market or held for more than six months. In addition, if the Compensation Committee so provides, payment may be made through a broker cashless exercise program. Following receipt of payment, the Company shall deliver to the Optionee a certificate or certificates for such shares due upon exercise of an Option.

Section 6.4 Period of Exercise of Options. Each Option shall be vested and exercisable from and after the date on which it is granted. Unless the Compensation Committee provides otherwise in connection with the grant of an Option, the Option shall remain exercisable as follows. Generally, the Option shall expire on the tenth anniversary of the date of grant. However, if the Eligible Director to whom it is granted has a Termination of Board Membership for any reason, each of his or her then-outstanding Options shall expire on earlier of the fifth anniversary of the date of such Termination of Board Membership or the tenth anniversary of the date of grant; provided that the exercise period for any Option shall not be extended past the expiration date set forth in the Option agreement. All of the periods within which Options are exercisable are subject always to such further limitations as may be required to maintain favorable treatment under the securities and tax laws.

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Section 6.5 Rights as a Stockholder. An Optionee shall have no rights as a stockholder with respect to any shares issuable or transferable upon exercise thereof until the date of issuance of a stock certificate for such shares. Except as provided in Section 7.2 of the Plan, no adjustment shall be made for dividends or other rights for which the record date is prior to the date as of which such stock certificate is issued.

Section 6.6 Non-Assignability. No Option shall be assignable or transferable except by will or by the laws of descent and distribution, by operation of law, or, if permitted by law and under uniform standards adopted by the Compensation Committee, to immediate family members of the Optionee, or to trusts whose beneficiaries are the Optionee or immediate family members.

Article VII

General

Section 7.1 General Restriction. The grant or exercise of any Option or the issuance or transfer of any Common Stock pursuant to this Plan is conditioned upon such listing, registration, qualification and regulatory approvals as the Board, the Compensation Committee or the Administration Committee, in their respective discretion, may deem necessary or desirable. The Board, the Compensation Committee or the Administration Committee, respectively, may also place such restrictions or legends or additional legends on stock issued or transferred as it determines to be required or advisable to comply with applicable laws or regulations, or the listing requirements of any exchange upon which the Common Stock is traded or intended to be traded.

Section 7.2 Adjustment for Changes in Capitalization. In the event of any change in corporate capitalization (including, but not limited to, a change in the number of shares of Common Stock outstanding), such as a stock split or a corporate transaction, such as any merger, consolidation, separation, including a spin-off, or other distribution of stock or property of the Company, any reorganization (whether or not such reorganization comes within the definition of such term in Section 368 of the Code) or any partial or complete liquidation of the Company, the Compensation Committee or Board shall make an equitable adjustment in the aggregate number and kind of shares provided for under Section 1.1 of the Plan, in the number of Options to be granted automatically pursuant to Article VI, and in the number, kind and option price of shares subject to outstanding Stock Units and Options; provided , that:

(a) No such adjustment shall be made to outstanding Stock Units with respect to any dividend or other distribution for which Dividend Equivalents are credited to the applicable Stock Unit Account as provided in Section 4.2 of the Plan;

(b) Any resulting fractional share that would otherwise be subject to an Option shall be eliminated; and

(c) Any such adjustment shall be subject to such restrictions and conditions as may be required to avoid being subject to Section 409A of the Code.

Section 7.3 Compliance with Section 16 of the Exchange Act. Notwithstanding any other provision of the Plan, the Administration Committee may impose such restrictions, rules and regulations on the terms and conditions of participation in the Plan as it may

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determine to be necessary or appropriate to avoid subjecting Eligible Directors to liability or potential liability under Section 16. Any transaction pursuant to the Plan (including without limitation elections to move Deferred Compensation into or out of any Common Stock Fund) that would result in liability or potential liability under said Section 16 shall be void ab initio .

Section 7.4 Governing Law. The Plan shall be governed by the law of the state of Delaware.

Article VIII

Amendment and Termination of Plan

The Company may amend or terminate the Plan at any time; provided , that unless necessary to comply with an applicable law (including the requirements of Section 409A of the Code), no such amendment or termination may reduce the balance of any Participant’s Accounts, change the requirements for vesting of any unvested portion of any Option previously granted, or change the timing of distributions from any Account, unless (a) the Company determines that such change would not cause a violation of the requirements of Section 409A of the Code and (b) the affected Participant or Beneficiary, as applicable, consents to the change.

Any amendment to the Plan may be adopted by resolution of the Board of Directors. In addition, the Chairman of the Board of Directors or the Chief Executive Officer of the Company may adopt any amendment in writing which (i) may be necessary or desirable to improve the administration of the Plan, so long as such amendment does not materially affect the substance of the Plan or the level of benefits the Plan provides, or (ii) may be required to comply with any applicable federal or state law (including any tax law that might result in any adverse tax consequences to any Participant or Beneficiary, or to the Company or any of its affiliates). All amendments shall be filed with the Secretary of the Company.

* * *

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IN WITNESS WHEREOF the undersigned has executed this restatement of the Plan.

/s/ John A. Luke, Jr.

John A. Luke, Jr.

Chairman and Chief Executive Officer

APPROVALS

LAW DEPARTMENT


By		/s/ John J. Carrara
		John J. Carrara
		Associate General Counsel and Assistant Secretary

FILED: December 30, 2008


By		/s/ Wendell L. Willkie, II
		Wendell L. Willkie, II
		Senior Vice President, General Counsel and Secretary

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Exhibit 10.23

MeadWestvaco Corporation

2005 Performance Incentive Plan

Effective April 22, 2005

As Amended February 26, 2007 and January 1, 2009

Article I

Purpose and General Provisions

Section 1.1 Purpose of Plan . The purpose of the MeadWestvaco Corporation 2005 Performance Incentive Plan (the “Plan”) is to advance the interests of MeadWestvaco Corporation (the “Company”) by attracting, retaining and motivating its employees and by further aligning the interests of the Company’s employees with those of the stockholders of the Company through providing for or increasing their proprietary interest in the Company.

The Plan provides for the grant of Incentive and Non-Qualified Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Shares, Performance Share Units and Incentive Compensation arrangements, which may be paid in cash or stock or a combination thereof, as determined by the Committee. Any of these Awards may be performance-based, in the discretion of the Committee.

Section 1.2 Definitions . The following terms shall have the meanings set forth below for purposes of the Plan.

(a) “Award” means an Incentive Stock Option, Non-Qualified Stock Option, Stock Appreciation Right, Restricted Stock, Restricted Stock Unit, Performance Share, Performance Share Unit, or Incentive Compensation arrangement or program granted to or covering a Participant pursuant to the provisions of the Plan, any of which the Committee may structure to qualify in whole or in part as an Award that is intended to satisfy the requirements for “performance-based compensation” under Code Section 162(m).

(b) “Award Agreement” means a written agreement or other instrument as may be approved from time to time by the Committee implementing the grant of each Award. An Award Agreement may be in the form of an agreement to be executed by both the Participant and the Company (or an authorized representative of the Company) or certificates, notices or similar instruments approved by the Committee.

(d) “Code” means the Internal Revenue Code of 1986, as amended from time to time, and the rulings and regulations issues thereunder.

(e) “Committee” has the meaning set forth in Section 1.3.

(f) “Company” means MeadWestvaco Corporation, a Delaware corporation and its successors and assigns.

(g) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

(h) “Incentive Compensation” means a bonus opportunity awarded under Section 3.4 pursuant to which a Participant may become entitled to receive an amount based on satisfaction of such performance criteria as are specified in the Award Agreement.

(i) “Incentive Stock Option” or “ISO” means a stock option that is intended to qualify as an incentive stock option within the meaning of Section 422 of the Code.

(j) “Market Price” on a date means the average of the high and low trading price for the Company’s Shares on the New York Stock Exchange for that date, unless the Committee provides otherwise.

(k) “Non-Qualified Stock Option” or “NQSO” means a stock option that does not qualify as an incentive stock option within the meaning of Section 422 of the Code.

(l) “Option” means an ISO and/or a NQSO granted pursuant to Section 3.1 of the Plan.

(m) “Participant” means any individual described in Section 2.1 to whom Awards have been granted from time to time by the Committee and any authorized transferee of such individual.

(n) “Performance Share” means an Award of Restricted Stock, the grant, issuance, vesting, transferability and/or retention of which is conditioned in whole or in part upon performance conditions established by the Committee.

(o) “Performance Share Unit” means a Restricted Stock Unit Award, the grant, issuance, vesting or settlement of which is conditioned in whole or in part upon performance conditions established by the Committee.

(p) “Plan” means The MeadWestvaco Corporation 2005 Performance Incentive Plan as set forth herein and as amended from time to time.

(q) “Prior Plans” means The Mead Corporation Restricted Stock Plan, the MeadWestvaco Corporation 1999 Salaried Employee Stock Incentive Plan, the MeadWestvaco Corporation 1995 Salaried Employee Stock Incentive Plan and the MeadWestvaco Corporation 1996 Stock Option Plan.

(r) “Qualifying Performance Criteria” has the meaning set forth in Section 5.1(b).

(s) “Restricted Stock” means Shares granted pursuant to Section 3.3 of the Plan.

(t) “Restricted Stock Unit” means an Award granted to a Participant under Section 3.3 pursuant to which Shares may be issued in the future.

(u) “Shares” means shares of the Company’s common stock, par value $0.01, subject to adjustment as provided in Section 4.1.

(v) “Stock Appreciation Right” means a right granted pursuant to Section 3.2 of the Plan that entitles the Participant to receive, in cash or Shares or a combination thereof, as determined by the Committee, value equal to or otherwise based on the excess of (i) the market price of a specified number of Shares at the time of exercise over (ii) the exercise price of the Stock Appreciation Right.

(w) “Subsidiary” means any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company where each of the corporations in the unbroken chain other than the last corporation owns stock possessing at least 50 percent or more of the total combined voting power of all classes of stock in one of the other corporations in the chain, and if specifically determined by the Committee in the context other than with respect to Incentive Stock Options, may include an entity in which the Company has a significant ownership interest or that is directly or indirectly controlled by the Company.

(x) “Substitute Award” means an Award granted or issued by the Company in assumption of, or in substitution or exchange for, awards previously granted, or the right or obligation to make future awards by a company or acquired by the Company or any Subsidiary or with which the Company or any Subsidiary combines.

Section 1.3 Administration .

(a) Administration of the Plan . The Plan shall be administered by the Compensation and Organization Development Committee of the Board of Directors or such other committee of two or more directors as established from time to time by the Board of Directors. Any power of the Committee may also be exercised by the Board of Directors, except to the extent that the grant or exercise of such authority would cause any Award or transaction to become subject to (or lose an exemption under) the short-swing profit recovery provisions of Section 16 of the Exchange Act, or cause an Award that is contingent on the satisfaction of Qualifying Performance Criteria to not qualify for treatment as “performance based compensation” under Code Section 162(m). To the extent that any permitted action taken by the Board conflicts with action taken by the Committee, the Board action shall control.

(b) Delegation of Authority by the Committee . The Committee may delegate to one or more separate committees (any such committee a “Subcommittee”) composed of one or more officers of the Company (who may but need not be members of the Board of Directors) the ability to grant Awards and take the same actions as the Committee described in Section 1.3(c) or elsewhere in the Plan with respect to Participants who are not “executive officers” as defined in Exchange Act Rule 16a-1; provided, however, that the

resolution so authorizing such Subcommittee shall specify the total number of Awards (if any) such Subcommittee may award pursuant to such delegated authority, and any such Award shall be subject to the form of Award Agreement theretofore approved by the Committee. No officer or officers who are members of any such Subcommittee shall designate himself or herself as a recipient of any Awards granted under authority delegated to such Subcommittee. Any action by any such Subcommittee within the scope of such delegation shall be treated for all purposes as if taken by the Committee and references in this Plan to the Committee shall include any such Subcommittee. In addition, the Committee may delegate the administration of the Plan to one or more officers or employees of the Company, and such administrator(s) may have the authority to execute and distribute Award Agreements or other documents evidencing or relating to Awards granted by the Committee under this Plan, to maintain records relating to Awards, to process or oversee the issuance of Shares under Awards, to interpret and administer the terms of Award Agreements and to take such other actions as may be necessary or appropriate for the administration of the Plan and of Awards under the Plan, provided that in no case shall any such administrator be authorized to grant Awards under the Plan. Any action by any such administrator within the scope of its delegation shall be deemed for all purposes to have been taken by the Committee and, except as otherwise specifically provided, references in this Plan to the Committee shall include any such administrator. The Committee established pursuant to Section 1.3(a) and, to the extent it so provides, any Subcommittee, shall have sole authority to determine whether to review any actions and/or interpretations of any such administrator, and if the Committee shall decide to conduct such a review, any such actions and/or interpretations of any such administrator shall be subject to approval, disapproval or modification by the Committee.

(c) Powers of the Committee . Subject to the express provisions of this Plan, the Committee shall be authorized and empowered to do all things that it determines to be necessary or appropriate in connection with the administration of this Plan, including, without limitation: (i) to prescribe, amend and rescind rules and regulations relating to this Plan and to define terms not otherwise defined herein; (ii) to determine which persons are eligible to be granted Awards under Section 2.1, to which of such persons, if any, Awards shall be granted hereunder and the timing of any such Awards; (iii) to grant Awards to Participants and determine the terms and conditions of Awards, including the number of Shares subject to Awards and the exercise or exercise price of such Shares and the circumstances under which Awards become exercisable, vested or settled or are forfeited or expire, which terms may but need not be conditioned upon the passage of time, continued employment, the satisfaction of performance criteria, the occurrence of certain events (including events which the Board or the Committee determine constitute a Change of Control), or other factors; (iv) to establish and certify the extent of satisfaction of any performance goals or other conditions applicable to the grant, issuance, exercisability, vesting and/or ability to retain any Award; (v) to prescribe and amend the terms of Award Agreements or other documents relating to Awards made under this Plan (which need not be identical) and the terms of or form of any document or notice required to be delivered to the Company by Participants under this Plan; (vi) to determine whether, and the extent to which, adjustments are required pursuant to Section 4.1; (vii) to interpret and construe this Plan, any rules and regulations under this Plan and

the terms and conditions of any Award granted hereunder, and to make exceptions to any such provisions in good faith and for the benefit of the Company; and (viii) to make all other determinations deemed necessary or advisable for the administration of this Plan.

(d) Determinations by the Committee . All decisions, determinations and interpretations by the Committee (including by any Subcommittee or by any administrators designated pursuant to Section 1.3(b)) regarding the Plan, any rules and regulations under the Plan and the terms and conditions of or operation of any Award granted hereunder, shall be final and binding on all Participants, beneficiaries, heirs, assigns or other persons holding or claiming rights under the Plan or any Award. The Committee shall consider such factors as it deems relevant, in its sole and absolute discretion, to making such decisions, determinations and interpretations including, without limitation, the recommendations or advice of any officer or other employee of the Company and such attorneys, consultants and accountants as it may select.

(e) Subsidiary Awards . In the case of a grant of an Award to any Participant employed by a Subsidiary, such Award may, if the Committee so directs, be implemented by the Company issuing any subject Shares to the Subsidiary, for such lawful consideration as the Committee may determine, upon the condition or understanding that the Subsidiary will transfer the Shares to the Participant in accordance with the terms of the Award specified by the Committee pursuant to the provisions of the Plan. Notwithstanding any other provision hereof, such Award may be issued by and in the name of the Subsidiary and shall be deemed granted on such date as the Committee shall determine.

Section 1.4 Unfunded Plan . The Plan is intended to be an unfunded plan. Participants are and shall at all times be general creditors of the Company with respect to their Awards. If the Committee or the Company chooses to set aside funds in a trust or otherwise for the payment of Awards under the Plan, such funds shall at all times be subject to the claims of the creditors of the Company in the event of its bankruptcy or insolvency.

Section 1.5 Effective Date . This Plan was adopted by the Board of Directors of the Company and became effective on February 22, 2005 (the “Effective Date”), subject to approval by the Company’s stockholders. All Awards granted under this Plan are subject to, and may not be exercised before, the approval of this Plan by the stockholders prior to the first anniversary date of the effective date of the Plan, by the affirmative vote of the holders of a majority of the outstanding Shares of the Company present, or represented by proxy, and entitled to vote, at a meeting of the Company’s stockholders in which the total number of votes cast on the matter represent a majority of the outstanding shares; provided that if such approval by the stockholders of the Company is not forthcoming, all Awards previously granted under this Plan shall be void. The Plan shall remain available for the grant of Awards until the tenth (10th) anniversary of the Effective Date. Notwithstanding the foregoing, the Plan may be terminated at such earlier time as the Board of Directors may determine. Termination of the Plan will not affect the rights and obligations of the Participants and the Company arising under Awards theretofore granted and then in effect.

Article II

Eligibility; Shares Subject to Awards

Section 2.1 Eligibility . Any person who is a current or prospective officer or employee (including any director who is also an employee, in his or her capacity as such) of the Company or of any Subsidiary shall be eligible for selection by the Committee for the grant of Awards hereunder. Options intending to qualify as ISOs may only be granted to employees of the Company or any Subsidiary within the meaning of the Code, as selected by the Committee. For purposes of this Plan, the Chairman of the Board’s status as an employee shall be determined by the Committee.

Section 2.2 Shares Subject to the Plan and Limitations on Awards .

(a) Aggregate Limits . The aggregate number of Shares issuable pursuant to all Awards shall not exceed 12,000,000, plus any Shares subject to awards made under Prior Plans that are outstanding on the Effective Date of this Plan and become available pursuant to Section 2.2(b). The aggregate number of Shares available for grant under this Plan and the number of Shares subject to outstanding Awards shall be subject to adjustment as provided in Section 4.1. The Shares issued pursuant to Awards granted under this Plan may be Shares that are authorized and unissued or Shares that were reacquired by the Company, including Shares purchased in the open market.

(b) Issuance of Shares . Shares subject to Awards that have been canceled, expired or forfeited or settled in cash and Shares subject to Awards that have been delivered or applied to the Company in payment or satisfaction of the exercise price or tax withholding obligation of an Award shall again become available for issuance under this Plan. Likewise, Shares subject to awards made under any of the Prior Plans that on or after the Effective Date are not issued as a result of such awards being canceled, expired, forfeited or settled in cash or that are delivered or applied to the Company in payment or satisfaction of the exercise price or tax withholding obligations of an award under a Prior Plan, as well as shares acquired by the Company on the open market or otherwise with the proceeds from the exercise or settlement price of an Award or a Prior Plan award shall be available for grant under this Plan. Shares issued in connection with a Substitute Award shall not count against the limits of this Section 2.2(b).

(c) Tax Code Limits . The aggregate number of Shares subject to Options and Stock Appreciation Rights that may be granted under this Plan during any three fiscal year period to any one Participant shall not exceed 3,000,000. The aggregate number of Shares subject to any Award intended to qualify as “performance-based compensation” under Code Section 162(m), other than Options or Stock Appreciation Rights, that may be granted under this Plan in any one fiscal year to any one Participant shall not exceed 400,000. The Share numbers set forth in this Section 2.2(c) shall be calculated and adjusted pursuant to Section 4.1 only to the extent that such calculation or adjustment will not affect the status of any Award intended to qualify as “performance based compensation” under

Code Section 162(m). The maximum amount payable pursuant to that portion of an Incentive Compensation Award granted under this Plan in any calendar year to any Participant that is denominated in dollars (as opposed to Shares) and is intended to satisfy the requirements for “performance based compensation” under Code Section 162(m) shall not exceed the following separate and distinct limitations: (i) six million dollars ($6,000,000), if performance is measured with respect to a fiscal year, and (ii) six million dollars ($6,000,000), if performance is measured with respect to a period longer than a fiscal year.

(d) Substitute Awards . Substitute Awards shall not be subject to the limits described in Section 2.2(a) above and shall not be subject to any other terms and conditions (for example, vesting and pricing) that apply to shares subject to Awards under the Plan.

Article III

Terms of Awards

Section 3.1 Options .

(a) Option Awards . The Committee may grant an Option or provide for the grant of an Option, either from time-to-time in the discretion of the Committee or automatically upon the occurrence of specified events, including, without limitation, the achievement of performance goals. Except to the extent provided herein, no Participant shall have any rights as a stockholder with respect to any Shares subject to an Option granted hereunder until said Shares have been issued. Each Option shall be evidenced by an Award Agreement. Options granted pursuant to the Plan need not be identical, but each Option must contain and be subject to the terms and conditions set forth below.

(b) Price . The exercise price under each Option shall be established by the Committee and shall not be less than the Market Price of Shares on the date of grant, provided, however, that the exercise price per Share with respect to an Option that is granted in connection with a merger or other acquisition as a substitute or replacement award for options held by optionees of the acquired entity may be less than 100% of the Market Value on the date such Option is granted if based on a formula set forth in the terms of the options held by such optionees or in the terms of the agreement providing for such merger or other acquisition. The exercise price of any Option may be paid in cash or, to the extent allowed by the Committee, an irrevocable commitment by a broker to pay over such amount from a sale of the Shares issuable under an Option, the delivery of previously owned Shares, withholding of Shares deliverable upon exercise or a combination thereof.

(c) No Repricing . Other than in connection with a change in the Company’s capitalization (as described in Section 4.1), an Option may not be repriced without stockholder approval (including canceling previously awarded Options and regranting them with a lower exercise price).

(d) Provisions Applicable to Options . In no event shall any Option become exercisable sooner than one (1) year after the date of grant except to the extent provided by the Committee in the event of: (i) the Participant’s death, disability or retirement, (ii) an award to a Participant upon his or her first becoming an employee of the Company (to replace prior employer forfeited compensation), or (iii) subject to Section 4.2, a Change of Control. The Committee may provide at the time of grant that the exercise price of an Option is adjusted after the date of grant based on the performance of the Company’s Common Stock price relative to a pre-established index. Unless provided otherwise in the applicable Award Agreement, the vesting period and/or exercisability of an Option shall be adjusted by the Committee during or to reflect the effects of any period during which the Participant is on an approved leave of absence or is employed on a less than full-time basis. Each Option shall expire within a period of not more than ten (10) years from the date of grant.

(e) Incentive Stock Options . Notwithstanding anything to the contrary in this Section 3.1, in the case of the grant of an Option intending to qualify as an ISO: (i) if the Participant owns stock possessing more than 10 percent of the combined voting power of all classes of stock of the Company (a “10% Shareholder”), the exercise price of such Option must be at least 110 percent of the Market Price of Shares on the date of grant and the Option must expire within a period of not more than five (5) years from the date of grant, and (ii) termination of employment will be deemed to occur when the person to whom an Award was granted ceases to be an employee (as determined in accordance with Code Section 3401(c) and the regulations promulgated thereunder) of the Company and its Subsidiaries. Notwithstanding anything in this Section 3.1 to the contrary, options designated as ISOs shall not be eligible for treatment under the Code as ISOs to the extent that either (a) the aggregate Market Price of Shares (determined as of the time of grant) with respect to which such Options are exercisable for the first time by the Participant during any calendar year (under all plans of the Company and any Subsidiary) exceeds $100,000, taking Options into account in the order in which they were granted, and (b) such Options otherwise remain exercisable but are not exercised within three (3) months of termination of employment (or such other period of time provided in Code Section 422).

Section 3.2 Stock Appreciation Rights .

(a) General . Stock Appreciation Rights may be granted to Participants from time to time either in tandem with or as a component of other Awards granted under the Plan (“tandem SARs”) or not in conjunction with other Awards (“freestanding SARs”) and may, but need not, relate to a specific Option granted under Section 3.1. The provisions of Stock Appreciation Rights need not be the same with respect to each grant or each recipient. Any Stock Appreciation Right granted in tandem with an Option may be granted at the same time such Option is granted or at any time thereafter before exercise or expiration of such Option. All Stock Appreciation Rights under the Plan shall be granted subject to the same terms and conditions applicable to Options as set forth in Section 3.1; provided, however, that Stock Appreciation Rights granted in tandem with a previously granted Option shall have the

terms and conditions of such Option. Subject to the provisions of Section 3.1, the Committee may impose such other conditions or restrictions on any Stock Appreciation Right as it shall deem appropriate. Stock Appreciation Rights may be settled in Shares, cash or a combination thereof, as determined by the Committee. Other than in connection with a change in the Company’s capitalization (as described in Section 4.1) the exercise price of a Stock Appreciation Rights may not be repriced without stockholder approval (including canceling previously awarded Stock Appreciation Rights and regranting them with a lower exercise price).

(b) Award Agreement . Each Stock Appreciation Right shall be evidenced by an Award Agreement. Stock Appreciation Rights granted pursuant to the Plan need not be identical, but each Stock Appreciation Right must contain and be subject to the terms and conditions set forth below.

(c) Provisions Applicable to Stock Appreciation Rights . The Committee may grant a Stock Appreciation Right or provide for the grant of a Stock Appreciation Right, either from time-to-time in the discretion of the Committee or automatically upon the occurrence of specified events, including, without limitation, the achievement of performance goals (which may include Qualifying Performance Criteria). In no event shall any freestanding SAR become exercisable sooner than one (1) year after the date of grant except to the extent provided by the Committee in the event of (i) the Participant’s death, disability or retirement, (ii) an award to a Participant upon his or her first becoming an employee of the Company (to replace forfeited prior employer compensation) or (iii) subject to Section 4.2, a Change of Control. Unless provided otherwise in the applicable Award Agreement, the vesting period and/or exercisability of a Stock Appreciation Right shall be adjusted by the Committee during or to reflect the effects of any period during which the Participant is on an approved leave of absence or is employed on a less than full-time basis. Each Stock Appreciation Right shall expire within a period of not more than ten (10) years from the date of grant.

Section 3.3 Restricted Stock and Restricted Stock Units .

(a) General . Restricted Stock and Restricted Stock Units may be granted at any time and from time to time prior to the termination of the Plan to Participants selected by the Committee. Restricted Stock is an award or issuance of Shares the grant, issuance, retention, vesting and/or transferability of which is subject during specified periods of time to such conditions and terms as the Committee deems appropriate. The Committee may specify that all of any part of an Award shall consist of Performance Shares, which shall be subject to the provisions of this Plan applicable to Restricted Stock except that the grant, issuance, vesting and/or transferability of the Shares thereunder are subject in whole or in part to performance conditions established by the Committee. To the extent determined by the Committee, Restricted Stock may be satisfied or settled in Shares, cash or a combination thereof. Restricted Stock Units are Awards denominated in units under which the issuance of Shares is subject to such conditions and terms as the Committee deems appropriate. Unless determined otherwise by the Committee, each Restricted Stock Unit will be equal to one Share and will entitle a Participant to either the issuance of Shares or payment of an amount of cash determined with reference to the value

of Shares. The Committee may specify that all of any part of an Award shall consist of Performance Share Units, which shall be subject to the provisions of this Plan applicable to Restricted Stock Units except that the grant, issuance, vesting or settlement of the Award is subject in whole or in part to performance conditions established by the Committee. Restricted Stock and Restricted Stock Units granted pursuant to the Plan need not be identical but each grant of Restricted Stock and Restricted Stock Units must contain and be subject to the terms and conditions set forth below.

(b) Award Agreement . Each grant of Restricted Stock and Restricted Stock Units shall be evidenced by an Award Agreement. Each Award Agreement shall contain provisions regarding (i) the number of Shares or Restricted Stock Units subject to such Award or a formula for determining such number, (ii) the purchase price of the Shares, if any, and the means of payment, (iii) the performance criteria, if any, and level of achievement versus these criteria that shall determine the number of Restricted Stock or Restricted Stock Units granted, issued, retainable and/or vested, (iv) such terms and conditions on the grant, issuance, vesting, settlement and/or forfeiture of the Restricted Stock or Restricted Stock Units as may be determined from time to time by the Committee, (v) the term of the performance period, if any, as to which performance shall be measured for such Restricted Stock or Restricted Stock Units, (vi) restrictions on the transferability of the Restricted Stock or Restricted Stock Units, and (vii) such further terms and conditions in each case not inconsistent with this Plan as may be determined from time to time by the Committee. Shares issued under a Restricted Stock Award may be issued in the name of the Participant and held by the Participant or held by the Company, in each case as the Committee may provide.

(c) Vesting and Performance Criteria . The grant, issuance, retention, vesting and/or settlement of shares of Restricted Stock and Restricted Stock Units (including Performance Shares and Performance Share Units) shall occur at such time and in such installments as determined by the Committee or under criteria established by the Committee, which may include Qualifying Performance Criteria. The grant, issuance, retention, vesting and/or settlement of Shares under any such Award that is based on performance criteria and level of achievement versus such criteria shall be subject to a performance period of not less than one year, and the grant, issuance, retention, vesting and/or settlement of Shares under any Restricted Stock or Restricted Stock Unit Award that is based solely upon continued employment or the passage of time shall not vest or be settled in full over a period of less than three years. Notwithstanding the other provisions of this Section 3.3(c), the Committee may provide for the satisfaction and/or lapse of all conditions under any such Award in less than the time provided under this Section 3.3(c) in the event of: (i) the Participant’s death, disability or retirement, (ii) an award to a Participant upon his or her first becoming an employee of the Company (to replace prior employer forfeited compensation), (iii) subject to Section 4.2, a Change of Control or (iv) a Restricted Stock or Restricted Stock Unit Award that is issued in payment or settlement of compensation that has been earned by the Participant.

(e) Voting Rights . Unless otherwise determined by the Committee, Participants holding Shares of Restricted Stock granted hereunder may exercise full voting rights with respect to those Shares during the period of restriction. Participants shall have no voting rights with respect to Shares underlying Restricted Stock Units unless and until such Shares are reflected as issued and outstanding Shares on the Company’s stock ledger.

Section 3.4 Incentive Compensation .

(a) General . The Committee may grant or establish a program for Incentive Compensation under which an individual Award or a funding pool from which Participants are paid is contingent upon such performance criteria (including Qualifying Performance Criteria) as the Committee may specify. Under any such arrangement, the Committee shall establish performance criteria and the level of achievement versus such criteria that shall determine the amount payable or available as Incentive Compensation, which criteria may be based on financial performance and/or personal performance evaluations but shall apply to a performance period of not less than one year.

(b) Incentive Compensation Arrangements . Each “covered employee” of the Company (as defined and determined under Code Section 162(m)) shall be a Participant in any Incentive Compensation arrangement or program established by the Committee, provided that the amount payable to any Participant pursuant to any such Incentive Compensation arrangement or program shall be subject to reduction as provided in Section 3.4(d). In establishing an Incentive Compensation arrangement or program, the Committee shall set forth terms, to the extent applicable, regarding: (i) the maximum amount payable as Incentive Compensation or a formula for determining such; (ii) the performance criteria and level of achievement versus these criteria that shall determine the amount of such payment; (iii) subject to the one year minimum set forth in Section 3.4(a), the term of the performance period as to which performance shall be measured for determining the amount of any payment; (iv) the timing of any payment earned by virtue of performance; (v) any forfeiture provisions; and (vi) such further terms and conditions, in each case not inconsistent with this Plan as may be determined from time to time by the Committee. The terms of any Incentive Compensation arrangement or program shall be set forth in writing and may take the form of an Award Agreement or Award Agreements, term sheet or other document or documents as the Committee shall determine.

(c) Timing and Form of Payment . The Committee shall determine the timing of payment of any Incentive Compensation. Subject to the limitations described in Section 2.2(c), payment of the amount due any Participant as Incentive Compensation may be made in cash or in Shares, as determined by the Committee. The Committee may, but need not, allow a Participant to defer under any plan or arrangement established by it receipt of any amounts or Shares otherwise payable as Incentive Compensation.

(d) Discretionary Adjustments . Notwithstanding satisfaction of any performance goals, the amount paid under an Incentive Compensation arrangement on account of either financial performance or personal performance evaluations may be reduced by the Committee on the basis of such further considerations as the Committee shall determine.

Article IV

Adjustment of and Changes to Common Stock; Change of Control

Section 4.1 Adjustment of and Changes to Common Stock .

(a) In the event of a reorganization, reclassification, combination of shares, stock split, reverse stock split, spin-off, dividend (other than regular, quarterly cash dividends), or another such transaction or event, then the number and kind of Shares that have been authorized for issuance under the Plan, whether such Shares are then currently subject to or may become subject to an Award under the Plan, as well as the per share limits set forth in Section 2.2 of this Plan, shall be equitably adjusted by the Committee to reflect such increase or decrease or change in the kind of securities outstanding. The terms of each outstanding Award shall also be equitably adjusted by the Committee as to price, number and kind of Shares subject to such Award and other terms to reflect the foregoing events.

(b) In the event there shall be any other change in the number or kind of outstanding Shares, or any stock or other securities into which such Shares shall have been changed, or for which Shares shall have been exchanged, whether by reason of a change of control, other merger, consolidation or otherwise, then the Committee shall make such equitable adjustments to the number and kind of Shares that have been authorized for issuance under the Plan, whether such Shares are then currently subject to or may become subject to an Award under the Plan, as well as the per share limits set forth in Section 2.2 of this Plan. The terms of each outstanding Award shall also be equitably adjusted by the Committee as to price, number and kind of Shares subject to such Award and other terms to reflect the foregoing events. In addition, in the event of a change described in this paragraph that does not occur in connection with a Change of Control, the Committee may accelerate the time or times at which any Award may be exercised and may provide for cancellation of such accelerated Awards that are not exercised within a time prescribed by the Committee in its sole discretion. Notwithstanding anything to the contrary herein, any adjustment to ISOs granted pursuant to this Plan shall comply with the requirements, provisions and restrictions of section 424 of the Code, and any adjustment to NQSOs granted pursuant to this Plan shall comply with the requirements, provisions and restrictions of section 409A of the Code.

(c) No right to purchase fractional shares shall result from any adjustment in Awards pursuant to this Section 4.1. In case of any such adjustment, the Shares subject to the Award shall be rounded down to the nearest whole Share. Notice of any adjustment shall be given by the Company to the holder of each Award that shall have been so adjusted and such adjustment (whether or not notice is given) shall be effective and binding for all purposes of the Plan.

Section 4.2 Change of Control .

(a) Effect of Change of Control upon Certain Stock Awards . Unless the Committee or the Board specifies otherwise in the terms of an Award prior to a Change of Control event, this Section 4.2(a) shall govern the treatment upon or following a Change of Control of any Option, Stock Appreciation Right, Restricted Stock or Restricted Stock Unit, the vesting and/or settlement of which is based solely upon continued employment or the passage of time. In the case of an Award subject to this Section 4.2(a) that the acquiring or surviving company in the Change of Control assumes upon and maintains immediately following the Change of Control (which Award shall be adjusted as to the number and kind of shares as may be determined appropriate by the Committee prior to the Change in Control), if there occurs an involuntary termination without Cause of the Participant holding such Award (excluding voluntary resignation, death, disability or retirement) within twenty four months following the Change of Control such Award shall be treated as provided in clause (i) or (ii) of this Section 4.2(a), as applicable. In the case of an Award subject to this Section 4.2(a) that the acquiring or surviving company in the Change of Control does not assume upon the Change of Control, immediately prior to the Change of Control such Award shall be treated as provided in clause (i) or (ii) of this Section 4.2(a), as applicable. The treatment provided for under this Section 4.2(a) is as follows:

(i) in the case of an Option or a Stock Appreciation Right, the Participant shall have the ability to exercise such Option or Stock Appreciation Right, including any portion of the Option not previously exercisable, until the earlier of the expiration of the Option or Stock Appreciation Right under its original term and a date that is two years (or such longer post-termination exercisability term as may be specified in the Option or Stock Appreciation Right) following such date of termination of employment; and

(ii) in the case of Restricted Stock or Restricted Stock Units, the Award shall become fully vested and shall be settled in full.

The Committee may also, through the terms of an Award or otherwise, provide for an absolute or conditional exercise, payment or lapse of conditions or restrictions on an Award which shall only be effective if, upon the announcement of a transaction intended to result in a Change of Control, no provision is made in such transaction for the assumption and continuation of outstanding Awards.

(b) Effect of Change of Control upon Performance-Based Awards . Unless the Committee or the Board specifies otherwise in the terms of an Award prior to a Change of Control event, the treatment of any Award in which the grant, issuance, retention, vesting and/or settlement of such Award is based in whole or in part on performance criteria and level of achievement versus such criteria shall be as specified in this Section 4.2(b). In the case of an Award subject to this Section 4.2(b) in which fifty percent (50%) or more of the performance period applicable to the Award has elapsed as of the date of the Change of Control, the Participant shall be entitled to payment, vesting or settlement of such Award based upon performance through a date occurring within three months prior to the

date of the Change of Control, as determined by the Committee prior to the Change of Control, and pro-rated based upon the percentage of the performance period that has elapsed between the date such Award was granted and the date of the Change of Control. In the case of an Award subject to this Section 4.2(b) in which less than fifty percent (50%) of the performance period applicable to the Award has elapsed as of the date of the Change of Control, the Participant shall be entitled to payment, vesting or settlement of the target amount of such Award, as determined by the Committee prior to the Change of Control, pro-rated based upon the percentage of the performance period that has elapsed between the date such Award was granted and the date of the Change of Control. The Committee may determine either prior or after such Change of Control event the treatment of the pro-rata portion of an Award attributable to the portion of the performance period occurring after the date of the Change of Control.

(c) Definition of “Change of Control” . Unless the Committee or the Board shall provide otherwise, “Change of Control” shall mean an occurrence of any of the following events:

(i) The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (i) the then outstanding Shares (the “Outstanding Company Common Stock”) or (ii) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that for purposes of this subsection (i), the following acquisitions shall not constitute a Change of Control: (A) any acquisition directly from the Company, (B) any acquisition by the Company, (C) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company or (D) any acquisition by any corporation pursuant to a transaction that constitutes a “Merger of Equals” as defined in Section 4.2(c)(iii) of this Plan; or

(ii) Individuals who, as of the Effective Date, constitute the Board of Directors (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board of Directors; provided, however, that any individual becoming a director subsequent to the Effective Date whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board of Directors; or

(iii) Consummation of a reorganization, merger, statutory share exchange or consolidation or similar corporate transaction involving the Company or any of its subsidiaries, or a sale or other disposition of all or substantially all of the assets of the Company

(each, a “Business Combination”), in each case, unless such Business Combination constitutes a “Merger of Equals.” A Business Combination shall constitute a “Merger of Equals” if, following such Business Combination, either:

(A)(1) all or substantially all of the individuals and entities that were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 60% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) (the “Resulting Corporation”) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (2) no Person (excluding the Resulting Corporation and its affiliates or any employee benefit plan (or related trust) of the Resulting Corporation and its affiliates) beneficially owns, directly or indirectly, 20% or more of, respectively, the then-outstanding shares of common stock of the Resulting corporation or the combined voting power of the then outstanding voting securities of the Resulting Corporation except to the extent that such ownership existed with respect to the Company prior to the Business Combination, and (3) at least a majority of the members of the board of directors of the Resulting Corporation (the “Resulting Board”) were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board of Directors, providing for such Business Combination; or

(B) immediately after such Business Combination (1) at least 50% of the members of the Resulting Board are individuals who were members of the Incumbent Board (as defined in Section 4.2(c)(ii)) at the time of the execution of the initial agreement, or of the action of the Board of Directors, providing for such Business Combination, and (2) either (x) the position of chief executive officer of the Resulting Corporation is occupied by an individual who was employed by the Company immediately before such Business Combination, or (y) a majority of the leadership positions reporting directly to the chief executive officer of the Resulting Corporation are occupied by individuals who were employed by the Company immediately before such Business Combination.

or (iv) Approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.

Article V

Performance-Based Compensation

Section 5.1 Qualifying Performance-Based Compensation .

(a) General . The Committee may specify that an Award or a portion of an Award is intended to satisfy the requirements for “performance-based compensation” under Code Section 162(m), provided that the performance criteria for any portion of an Award that is intended by the Committee to satisfy the requirements for “performance-based compensation” under Code Section 162(m) shall be a measure based on one or more Qualifying Performance Criteria selected by the Committee. Within the first 90 days of the start of a fiscal year, the Committee will establish the Qualifying Performance Criteria for the performance period and the formula or payout that is contingent upon satisfaction of the Qualifying Performance Criteria. This may take the form of a matrix under which threshold, target and amounts in excess of target are payable based upon satisfaction of the Qualifying Performance Criteria. The Committee shall certify the extent to which any Qualifying Performance Criteria has been satisfied, and the amount payable as a result thereof, prior to payment, settlement or vesting of any Award that is intended to satisfy the requirements for “performance-based compensation” under Code Section 162(m). Notwithstanding satisfaction of any performance goals, the number of Shares issued under or the amount paid under an Award intended by the Committee to satisfy the requirements for “performance-based compensation” under Code Section 162(m) may, to the extent specified by the Committee with respect to the Award, be reduced by the Committee on the basis of such further considerations as the Committee in its sole discretion shall determine. Awards based on Qualifying Performance Criteria can be granted in the same fiscal year and be based on overlapping performance periods.

(b) Qualifying Performance Criteria . For purposes of this Plan, the term “Qualifying Performance Criteria” shall mean any one or more of the following performance criteria, either individually, alternatively or in any combination, applied to either the Company as a whole or to a business unit or Subsidiary, either individually, alternatively or in any combination, and measured either annually or cumulatively over a period of years, on an absolute basis or relative basis, on a per-share basis and/or against a target, past performance or peer group performance, in each case as specified by the Committee: (i) net sales; (ii) working capital; (iii) net profit after tax; (iv) EBIT; (v) EBITA; (vi) EBITDA; (vii) OBIT; (viii) OBITDA; (ix) gross profit; (x) operating income or operating profit; (xi) cash generation; (xii) cash flow; (xiii) unit volume; (xiv) stock price; (xv) market share; (xvi) asset quality; (xvii) return on equity; (xviii) return on assets; (xix) return on operating assets; (xx) cost saving levels; (xxi) operating income; (xxii) marketing-spending efficiency; (xxiii) core non-interest income; (xxiv) change in working capital; (xxv) return on invested capital; (xxvi) return on capital employed; (xxvii) shareholder return; (xxviii) shareholder value; (xxix) safety case incident rates; and (xxx) innovation factor (including revenue from new products, number of new products, granting of patents and/or market penetration of new products measurable by pre-established objective criteria).

(c) Adjustments . Subject to the limits imposed under Code Section 162(m) for Awards that are intended to qualify as “performance based compensation,” notwithstanding the satisfaction of any performance goals, the number of Shares granted, issued, retainable and/or vested under an Award of Restricted Stock or Restricted Stock Units on account of either financial performance or personal performance evaluations may be reduced by the Committee on the basis of such further considerations as the Committee shall determine. Moreover, to the extent consistent with Code Section 162(m), the Committee may appropriately adjust any evaluation of performance under a Qualifying Performance Criteria to exclude any of the following events that occurs during a performance period: (i) asset write-downs; (ii) litigation, claims, judgments or settlements; (iii) the effect of changes in tax law, accounting principles or other such laws or provisions affecting reported results; (iv) accruals for reorganization and restructuring programs; (v) discontinued operations; (vi) the effect of mergers and acquisitions; and (vii) any extraordinary, unusual or non-recurring items as described in Accounting Principles Board Opinion No. 30 and/or in management’s discussion and analysis of financial condition and results of operations appearing in the Company’s Forms 10-K or 10-Q for the applicable year.

(d) Administration . To the extent consistent with Code Section 162(m), the Committee may delegate to one or more of its members or to appropriate employees of the Company the responsibility to carry out any purely ministerial responsibilities in connection with the Plan; provided, that in no event shall the following responsibilities be considered ministerial, and they shall be carried out by only the Committee acting by decision of the majority of its members: (i) the designation of Participants; (ii) the establishment of the terms and conditions of Award Opportunities; (iii) the certification of the achievement of Performance Goals; (iv) the determination of the actual Awards intended to satisfy the requirements for “performance-based compensation” under Code Section 162(m) to be made to Participants; and (v) any other responsibilities that must be carried out by a committee of outside directors for purposes of Code Section 162(m).

Article VI

Additional Terms Applicable to Awards

Section 6.1 Dividends and Distributions . The Committee may, but need not, provide that dividends or dividend equivalents shall be payable in connection with or as an arrangement separate from any Awards except that, unless the Committee provides otherwise, Shares of Restricted Stock that remain subject to any restriction shall accrue dividends. The Committee may provide that any dividends or dividend equivalents may be paid in cash or in Shares or may be deemed reinvested into additional Shares, and may provide that such dividends or dividend equivalents will be paid at the same time dividends are paid to the Company’s shareholders or made subject to the same terms, conditions and restrictions as the Awards with respect to which they accrued or to such other terms and conditions as the Committee may specify.

Section 6.2 Conditions and Restrictions Upon Securities Subject to Awards . The Committee may provide that the Shares issued upon exercise of an Option or Stock Appreciation Right or otherwise subject to or issued under an Award shall be subject to such further agreements, restrictions, conditions or limitations as the Committee in its discretion may specify prior to the exercise of such Option or Stock Appreciation Right or the grant, vesting or settlement of such Award, including without limitation, conditions on vesting or transferability, forfeiture or repurchase provisions and method of payment for the Shares issued upon exercise, vesting or settlement of such Award (including the actual or constructive surrender of Shares already owned by the Participant) or payment of taxes arising in connection with an Award. Without limiting the foregoing, such restrictions may address the timing and manner of any resales by the Participant or other subsequent transfers by the Participant of any Shares issued under an Award, including without limitation (a) restrictions under an insider trading policy or pursuant to applicable law, (b) restrictions designed to delay and/or coordinate the timing and manner of sales by Participant and holders of other Company equity compensation arrangements, and (c) restrictions as to the use of a specified brokerage firm for such resales or other transfers.

Section 6.3 Transferability . Unless the Committee specifies otherwise, each Award may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated by a Participant other than by will or the laws of descent and distribution, and each Option or Stock Appreciation Right shall be exercisable only by the Participant during his or her lifetime.

Section 6.4 Suspension or Termination of Awards . Except as otherwise provided by the Committee, if at any time (including after a notice of exercise has been delivered or an Award has vested) the Chief Executive Officer or any other person designated by the Committee (each such person, an “Authorized Officer”) reasonably believes that a Participant may have committed an Act of Misconduct as described in this Section 6.4, the Authorized Officer or the Committee may suspend the Participant’s rights to exercise any Option, to vest in an Award, and/or to receive payment for or receive Shares in settlement of an Award pending a determination of whether an Act of Misconduct has been committed.

If the Committee or an Authorized Officer determines a Participant has violated the Company’s Code of Conduct or has committed an act of embezzlement, fraud, dishonesty, nonpayment of any obligation owed to the Company or any Subsidiary, breach of fiduciary duty or deliberate disregard of Company or Subsidiary rules resulting in loss, damage or injury to the Company or any Subsidiary, or if a Participant makes an unauthorized disclosure of any Company or Subsidiary trade secret or confidential information, engages in any conduct constituting unfair competition, breaches any non-competition agreement, induces any Company or Subsidiary customer to breach a contract with the Company or any Subsidiary, or induces any principal for whom the Company or any Subsidiary acts as agent to terminate such agency relationship (any of the foregoing acts, an “Act of Misconduct”), then except as otherwise provided by the Committee or Authorized Officer, (a) neither the Participant nor his or her estate nor transferee shall be entitled to exercise any Option whatsoever, vest in or have the restrictions on an Award lapse, or otherwise receive payment of an

Award, (b) the Participant will forfeit all outstanding Awards, and (c) the Participant may be required to return and/or repay to the Company any then unvested Shares previously issued under the Plan. In making such determination, the Committee or an Authorized Officer may give the Participant an opportunity to submit written comments, documents, information and arguments to be considered by the Authorized Officer and/or the Committee.

Section 6.5 Compliance with Laws and Regulations . This Plan, the grant, issuance, vesting, exercise and settlement of Awards thereunder, and the obligation of the Company to sell, issue or deliver Shares under such Awards, shall be subject to all applicable foreign, federal, state and local laws, rules and regulations and to such approvals by any governmental or regulatory agency as may be required. The Company shall not be required to register in a Participant’s name or deliver any Shares prior to the completion of any registration or qualification of such Shares under any foreign, federal, state or local law or any ruling or regulation of any government body that the Committee shall determine to be necessary or advisable. To the extent the Company is unable to or the Committee deems it infeasible to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any Shares hereunder, the Company and its Subsidiaries shall be relieved of any liability with respect to the failure to issue or sell such Shares as to which such requisite authority shall not have been obtained.

No Option shall be exercisable and no Shares shall be issued and/or transferable under any other Award unless a registration statement with respect to the Shares underlying such Stock Option is effective and current or the Company has determined that such registration is unnecessary.

In the event an Award is granted to or held by a Participant who is employed or providing services outside the United States, the Committee may, in its sole discretion, modify the provisions of the Plan or of such Award as they pertain to such individual to comply with applicable foreign law or to recognize differences in local law, currency or tax policy. The Committee may also impose conditions on the grant, issuance, exercise, vesting, settlement or retention of Awards in order to comply with such foreign law and/or to minimize the Company’s obligations with respect to tax equalization for Participants employed outside their home country.

Section 6.6 Tax Treatment of Awards . To the extent required by applicable federal, state, local or foreign law, a Participant shall be required to satisfy, in a manner satisfactory to the Company, any withholding tax obligations that arise by reason of an Option exercise, disposition of Shares issued under an ISO, the vesting of or settlement of Shares under an Award, an election pursuant to Section 83(b) of the Code or otherwise with respect to an Award. The Company and its Subsidiaries shall not be required to issue Shares, make any payment or to recognize the transfer or disposition of Shares until such obligations are satisfied. The Committee may permit or require these obligations to be satisfied by having the Company withhold a portion of the Shares that otherwise would be issued to a Participant upon exercise of the Option or the vesting or settlement of an Award, or by tendering Shares previously

acquired, in each case having a Market Price equal to the amount required or elected to be withheld or paid, or by having such Shares sold on the New York Stock Exchange. Any such elections are subject to such conditions or procedures as may be established by the Committee and may be subject to disapproval by the Committee. Unless the Committee specifies otherwise in the terms of an Award Agreement, as a condition to receiving any Award, Participants shall waive and not be entitled to make an election to be taxed currently under Code Section 83(b).

Section 6.7 Amendment of the Plan or Awards . The Board may amend, alter or discontinue this Plan, and the Committee may amend or alter any agreement or other document evidencing an Award made under this Plan but, except as provided pursuant to the provisions of Section 4.1, no such amendment shall, without the approval of the stockholders of the Company:

(a) increase the maximum number of Shares for which Awards may be granted under this Plan;

(b) reduce the price at which Options may be granted below the price provided for in Section 3.1(b);

(d) extend the term of this Plan;

(e) change the class of persons eligible to be Participants;

(f) otherwise amend the Plan in any manner requiring stockholder approval by law or under the New York Stock Exchange listing requirements; or

(g) increase the individual maximum limits in Section 2.2(c).

No amendment or alteration to the Plan, an Award or an Award Agreement shall be made which would impair the rights of the holder of an Award, without such holder’s consent, provided that no such consent shall be required if the Committee determines in its sole discretion and prior to the date of any Change of Control (as defined herein or in the applicable Award Agreement) that such amendment or alteration either is required or advisable in order for the Company, the Plan or the Award to satisfy any law or regulation or to meet the requirements of or avoid adverse financial accounting consequences under any accounting standard.

Section 6.8 No Liability of Company . The Company and any Subsidiary or affiliate which is in existence or hereafter comes into existence shall not be liable to a Participant or any other person as to: (i) the non-issuance or sale of Shares as to which the Company has been unable to obtain from any regulatory body having jurisdiction the authority deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any Shares hereunder; and (ii) any tax consequence to any Participant or other person due to the receipt, exercise, vesting, settlement or forfeiture of any Award granted hereunder.

Section 6.9 Non-Exclusivity of Plan . Neither the adoption of this Plan by the Board of Directors nor the submission of this Plan to the stockholders of the Company for approval shall be construed as creating any limitations on the power of the Board of Directors or the Committee to adopt such other incentive arrangements as either may deem desirable, including without limitation, the granting of restricted stock or stock options otherwise than under this Plan, and such arrangements may be either generally applicable or applicable only in specific cases.

Section 6.10 Governing Law . This Plan and any agreements or other documents hereunder shall be interpreted and construed in accordance with the laws of the Delaware and applicable federal law. Any reference in this Plan or in the agreement or other document evidencing any Awards to a provision of law or to a rule or regulation shall be deemed to include any successor law, rule or regulation of similar effect or applicability.

Section 6.11 Arbitration of Disputes . In the event a Participant or other holder of an Award or person claiming a right under an Award or the Plan believes that a decision by the Committee with respect to such person or Award was arbitrary or capricious, the person may request arbitration with respect to such decision. The review by the arbitrator shall be limited to determining whether the Participant or other Award holder has proven that the Committee’s decision was arbitrary or capricious. This arbitration shall be the sole and exclusive review permitted of the Committee’s decision. Participants, Award holders and persons claiming rights under an Award or the Plan explicitly waive any right to judicial review.

Notice of demand for arbitration shall be made in writing to the Company within thirty (30) days after the applicable decision by the Committee. The arbitrator shall be selected by the Company. Such arbitrator shall be neutral within the meaning of the Commercial Rules of Dispute Resolution of the American Arbitration Association; provided, however, that the arbitration shall not be administered by the American Arbitration Association. Any challenge to the neutrality of the arbitrator shall be resolved by the arbitrator whose decision shall be final and conclusive. The arbitration shall be administered and conducted by the arbitrator pursuant to the Commercial Rules of Dispute Resolution of the American Arbitration Association. Each side shall bear its own fees and expenses, including its own attorney’s fees, and each side shall bear one half of the arbitrator’s fees and expenses. The decision of the arbitrator on the issue(s) presented for arbitration shall be final and conclusive and may be enforced in any court of competent jurisdiction.

Section 6.12 No Right to Employment, Reelection or Continued Service . Nothing in this Plan or an Award Agreement shall interfere with or limit in any way the right of the Company, its Subsidiaries and/or its affiliates to terminate any Participant’s employment, service on the Board or service for the Company at any time or for any reason not prohibited by law, nor confer upon any Participant any right to continue his or her employment or service for any specified period of time. Neither an Award nor any benefits arising

under this Plan shall constitute an employment contract with the Company, any Subsidiary and/or its affiliates. Accordingly, subject to Sections 1.5 and 6.7, this Plan and the benefits hereunder may be terminated at any time in the sole and exclusive discretion of the Board of Directors without giving rise to any liability on the part of the Company, its Subsidiaries and/or its affiliates.

Section 6.13 Section 409A Addendum .

(a) Compliance With Law . The Plan is intended to comply with the requirements of Code Section 409A, to the extent applicable. Each Award shall be construed and administered such that the Award either (i) qualifies for an exemption from the requirements of Code Section 409A or (ii) satisfies the requirements of Code Section 409A. If an Award is subject to Code Section 409A, (i) distributions shall only be made in a manner and upon an event permitted under Section 409A, (ii) payments to be made upon a termination of employment shall only be made upon a “separation from service” under Section 409A, (iii) unless the Award specifies otherwise, each installment payment shall be treated as a separate payment for purposes of Section 409A, and (iv) in no event shall a Participant, directly or indirectly, designate the calendar year in which a distribution is made except in accordance with Section 409A.

(b) Section 409A Distribution Date for Key Employees . Any Award that is subject to Code Section 409A and that is to be distributed to a Key Employee (as defined below) upon separation from service shall be administered so that any distribution with respect to such Award shall be postponed for six months following the date of the Participant’s separation from service, if required by Code Section 409A. If a distribution is delayed pursuant to Section 409A, the distribution shall be paid within 15 days after the end of the six-month period. If the Participant dies during such six-month period, any postponed amounts shall be paid within 90 days of the Participant’s death. The determination of Key Employees, including the number and identity of persons considered Key Employees and the identification date, shall be made by the Committee or its delegate each year in accordance with Code Section 416(i) and the “specified employee” requirements of Code Section 409A.

(c) Change of Control – Restricted Stock Units . Upon a Change of Control, outstanding Restricted Stock Units shall vest and be payable in accordance with Section 4.2(a), provided that if a Restricted Stock Unit is subject to Code Section 409A, distributions with respect to such Restricted Stock Unit shall be made in accordance with Code Section 409A. If required under Code Section 409A, the Restricted Stock Unit shall vest as and to the extent provided in Section 4.2(a) with respect to the Change of Control, but distribution shall be made upon the earlier of (i) the date of the Participant’s separation from service or (ii) the date on which the distribution would otherwise have been made upon vesting of the Restricted Stock Unit had no Change of Control occurred. If distribution is delayed after a Change of Control, the Committee may determine that (x) the Restricted Stock Unit will be converted into the right to receive the same consideration per Share as is payable to the other stockholders of the Company upon the consummation of the Change of Control and (y) the cash consideration the Participant is entitled to receive upon such conversion will be placed in an interest bearing account until paid upon the relevant date.

(d) No Representations or Warranties . Notwithstanding anything in the Plan or any Award agreement to the contrary, each Participant shall be solely responsible for the tax consequences of Awards under the Plan, and in no event shall the Company have any responsibility or liability if an Award does not meet any applicable requirements of Code Section 409A. Although the Company intends to administer the Plan to prevent taxation under Code Section 409A, the Company does not represent or warrant that the Plan or any Award complies with any provision of federal, state, local or other tax law.

Exhibit 10.24

MEADWESTVACO CORPORATION EXECUTIVE RETIREMENT PLAN

Amended and Restated

Effective January 1, 2009, except as otherwise provided

TABLE OF CONTENTS


A RTICLE 1. I NTRODUCTION			1

	1.01.	History of the Plan	1
	1.02.	Purposes of the Plan	1
	1.03.	Section 409A of the Internal Revenue Code of 1986, as Amended (“Section 409A”)	1
	1.04.	Appendices	2
	1.05.	Effective Date	3

A RTICLE 2. D EFINITIONS AND C ONSTRUCTION			4

	2.01.	Definitions	4
	2.02.	Construction	7
	2.03.	Timing of Payments	8

A RTICLE 3. P ARTICIPATION			9

	3.01.	Active Participation	9
	3.02.	Inactive Participation	9

A RTICLE 4. A MOUNT AND P AYMENT OF B ENEFITS			10

	4.01.	Amount of Benefits	10
	4.02.	Normal and Early Retirement	10
	4.03.	Pre-2004 Participants	11
	4.04.	Form and Time of Benefit Payments to Participant	12
	4.05.	Disability	14
	4.06.	Pre-Retirement Death Benefits	14

A RTICLE 5. V ESTING , N ON -C OMPETITION AND C HANGE OF C ONTROL			16

	5.01.	Vesting	16
	5.02.	Forfeiture	16
	5.03.	Change of Control	17

A RTICLE 6. P LAN A DMINISTRATION			20

	6.01.	Plan Administrator	20
	6.02.	Interpretations	20
	6.03.	Elections and Designations	20
	6.04.	Funding Policy	20

A RTICLE 7. A MENDMENT , M ERGER , AND T ERMINATION OF P LAN			21

	7.01.	Amendment of the Plan	21
	7.02.	Termination of the Plan	21
	7.03.	Design Decisions	21

A RTICLE 8. M ISCELLANEOUS P ROVISIONS			22

	8.01.	Employment Rights Not Affected by Plan	22
	8.02.	Integration Clause	22
	8.03.	Doubt as to Identity	22


8.04.	Discretion to Accelerate Payments	22
8.05.	Payment Medium	23
8.06.	Obligations to Make Payments	23
8.07.	Liability Limited	23
8.08.	Overpayments	23
8.09.	Incapacity and Minor Status	23
8.10.	Assignment and Liens	23
8.11.	Withholding Taxes	23
8.12.	Titles and Headings Not to Control	24
8.13.	Notice of Process	24
8.14.	Governing Law and Limitation on Actions	24
8.15.	Class Action Forum Selection Clause	24
8.16.	Severability	25
8.17.	Complete Statement of Plan	25


A PPENDIX A.		P ARTICIPANTS WHO P ARTICIPATED IN THE P RE -2004 P LAN AND W ERE A CTIVE
		P ARTICIPANTS AS OF J ANUARY 1, 2005

A PPENDIX B.		P ARTICIPANTS WHO B ECAME A CTIVE P ARTICIPANTS ON J ANUARY 29, 2004

A PPENDIX C.		N ONQUALIFIED D EFERRED C OMPENSATION P LANS M ERGED INTO
		THE M EAD W ESTVACO C ORPORATION R ETIREMENT
		R ESTORATION P LAN

A PPENDIX D.		P ROVISIONS FOR P ARTICIPANTS WITH P RE -AJCA B ENEFITS

A PPENDIX E.		T ERMS OF THE P RE -2004 P LAN

ARTICLE 1. INTRODUCTION

1.01.

H ISTORY OF THE P LAN

(a)

The Mead Corporation and Westvaco Corporation became wholly owned subsidiaries of MW Holding Corporation, the name of which was subsequently changed to MeadWestvaco Corporation, effective January 29, 2002. In connection with this event, MeadWestvaco Corporation (the “Company”) assumed sponsorship of the benefit plans maintained by the Mead Corporation and Westvaco Corporation.

(b)	Before the events described in Section 1.01(a) above, the Mead Corporation sponsored a supplemental executive retirement plan for its eligible employees and the eligible employees of certain of its subsidiaries, known as the Mead Corporation Supplemental Executive Retirement Plan (the “Mead SERP”).

(c)

The Board of Directors of the Company adopted resolutions in 2004 providing for participation by certain senior executives of the Company and its Affiliates in a supplemental executive retirement plan having terms approved by the Compensation and Organizational Development Committee of the Board of Directors. The Board of Directors further authorized certain officers of the Company, including the Chief Executive Officer, to take all actions deemed by such officers to be necessary or appropriate to effectuate the resolutions. The Mead SERP has been amended and restated in accordance with these resolutions and has been renamed as the MeadWestvaco Corporation Executive Retirement Plan (the “Plan”).

(d)	Effective January 1, 2007, the Plan was frozen to new entrants. As a result of this freeze, no individual who was not a Participant in the Plan as of December 31, 2006 shall be a Participant in the Plan.

1.02.

P URPOSES OF THE P LAN

(a)

The purposes of the Plan are to attract mid-career senior executive hires, retain talented senior executives, and provide recognition to long-service senior executives by providing them with competitive supplementary retirement income, in addition to that provided under the Company’s tax-qualified and other non-qualified defined benefit plans.

(b)

The Plan is intended to be and shall be operated and administered as a plan primarily providing deferred compensation to a “select group of management or highly compensated employees” within the meaning of Sections 201(2), 301(a)(3), or 401(a)(1) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and shall not be subject to the participation and vesting requirements, funding provisions, or the fiduciary duty rules of ERISA.

1.03.

S ECTION 409A OF THE I NTERNAL R EVENUE C ODE OF 1986, AS A MENDED (“S ECTION 409A”)

(a)	Effective January 1, 2005, with respect to any individual who is an Active Participant in the Plan after January 29, 2004:

(1)

All benefits under the Plan shall be subject to the requirements of Section 409A.

(2)

The Plan shall comply with the requirements of, and shall be operated, administered, and interpreted in accordance with Section 409A;

(3)

For the period from January 1, 2005 through December 31, 2008, the Company and the Plan Administrator had sole discretion to override the terms set forth in the plan document for the Plan to the extent that the Company or the Plan Administrator determined to be necessary or appropriate to comply with a good-faith, reasonable interpretation of the requirements of Section 409A.

(4)

If the Company determines that any provision of the Plan is or might be inconsistent with the restrictions imposed by Section 409A, such provision shall be deemed to be amended to the extent that the Company and the Plan Administrator determines is necessary to bring it into compliance with the requirements of Section 409A. Any such deemed amendment shall be effective as of the earliest date such amendment is necessary under Section 409A.

(b)

No provision in the Plan shall be interpreted or construed to (1) create any liability for the Company or any Affiliate, or any of their employees, officers, directors, or other service providers, related to a failure to comply with Section 409A, or (2) transfer any liability for a failure to comply with section 409A from a Participant or other individual to the Company or any Affiliate, or any of their employees, officers, directors, or other service providers.

(c)

The provisions of this restatement of the Plan, including the requirement to comply with Section 409A, shall not apply with respect to any individual who was not an Active Participant in the Plan after January 29, 2004. All benefits payable to any individual who was an Inactive Participant as of January 29, 2004 (as listed in Appendix D) shall be paid in accordance with the terms of the Pre-2004 Plan, which are reproduced at Exhibit E. With respect to such Inactive Participants:

(1)

The terms of the Pre-2004 Plan shall not be “materially modified” (within the meaning of Section 885(d)(2)(B) of the American Jobs Creation Act of 2004), whether by amendment to the Plan or otherwise, unless (and only to the extent that) the amendment or other action that would materially modify the Plan expressly states that it is intended to constitute a “material modification” of the Plan with respect to such Inactive Participants; and

(2)

Unless expressly stated otherwise, any amendment or other action that would be deemed to constitute a “material modification” with respect to such Inactive Participants shall be null and void.

1.04.

A PPENDICES

The Plan includes the following Appendices:

(a)

Appendix A lists Active Participants who participated in the version of the Plan that was in effect before January 29, 2004, their service as of December 31, 2004 (“Years of Appendix A Service”), and the amount of their Grandfathered Benefits (as defined in Section 2.01(o) and Grandfathered CIC Benefits (as defined in Section 2.01(p)).

(b)	Appendix B lists individuals who became Participants in the Plan on January 29, 2004.

(c)	Appendix C lists the nonqualified deferred compensation plans that have been merged into the MeadWestvaco Corporation Retirement Restoration Plan.

(d)	Appendix D lists individuals who were Inactive Participants as of January 29, 2004.

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(e)	Appendix E sets forth the terms of the Plan that were in effect on January 28, 2004 (the “Pre-2004 Plan”).

1.05.

E FFECTIVE D ATE

Unless a particular provision of the Plan specifies a different effective date for that provision, this restatement of the Plan shall be effective January 1, 2009. Except as expressly provided in this restatement of the Plan (including Section 1.03(a)(3)), the benefits payable to any individual who ceased to be an Active Participant before January 1, 2009, shall be determined in accordance with the terms of the Plan in effect as of the individual’s Termination Date.

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ARTICLE 2. DEFINITIONS AND CONSTRUCTION

2.01.

D EFINITIONS

For purposes of the Plan, unless the context clearly or necessarily indicates the contrary, the following words and phrases shall have the meaning set forth in the definitions below:

(a)	“Actual Commencement Date” shall mean, for any Participant, the later of (1) the first day of the seventh month that begins after his Termination Date or (2) the first day of the month coincident with or next following his 55th birthday.

(b)

“Affiliate” shall mean, with respect to each Employer, any person or entity that is required to be combined with such Employer as a single employer under Section 414(b) or (c) of the Code, except that the 80 percent ownership standard prescribed by Section 1563(a)(1), (2), and (3) of the Code and Treas. Reg. § 1.414(c)-2 shall be replaced with a 50 percent ownership standard.

(c)	“All-MERP Benefit” shall have the meaning set forth in Section 4.03(b)(1).

(d)	“Authorized Party” shall mean, (1) for the Chief Executive Officer and any Participant who reports directly to the Chief Executive Officer, the Committee, and (2) for any Participant who does not report directly to the Chief Executive Officer, the Chief Executive Officer or his designee.

(e)	“Board of Directors” shall mean the Board of Directors of the Company.

(f)	“Cause” shall mean:

(1)

the willful and continued failure of the Participant to perform substantially the Participant’s duties with the Company or Affiliates (other than any such failure resulting from incapacity due to physical or mental illness), after a written demand for substantial performance is delivered to the Participant by the Authorized Party which specifically identifies the manner in which the Authorized Party believes that the Participant has not substantially performed the Participant’s duties;

(2)

the willful engaging by the Participant in illegal conduct or gross misconduct; or

(3)

a clearly established violation by the Participant of the Company’s Code of Conduct that the Authorized Party determines to be materially and demonstrably injurious to the Company or any Affiliate;

provided that no act or failure to act on the part of the Participant shall be considered “willful” unless it is done, or omitted to be done, by the Participant in bad faith or without reasonable belief that the Participant’s action or omission was in the best interests of the Company. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board of Directors or upon the instructions of the Chief Executive Officer or a senior officer of the Company or based upon the advice of counsel for the Company shall be conclusively presumed to be done, or omitted to be done, by the Participant in good faith and in the best interests of the Company.

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(g)	“Change of Control” shall have the meaning set forth in Section 5.03. This definition of Change of Control is different than the Pre-2004 Plan’s definition of “Change in Control,” which is set forth in Section E-10.3.

(h)	“Chief Executive Officer” shall mean the chief executive officer of the Company.

(i)	“Code” shall mean the Internal Revenue Code of 1986, as amended.

(j)	“Committee” shall mean the Compensation and Organizational Development Committee of the Board of Directors.

(k)	“Company” shall mean MeadWestvaco Corporation, a Delaware corporation.

(l)	“Early Retirement Date” for a Participant shall mean his 62nd birthday.

(m)	“Employer” shall mean the Company and any Affiliate that, with the consent of the Board of Directors, has adopted the Plan. For purposes of Section 2.01(jj), the term “Employer” shall include the Mead Corporation and Westvaco Corporation.

(n)	“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended.

(o)

“Grandfathered Benefit” shall mean, for any Participant listed in Appendix A, the “Grandfathered Benefit” for such Participant set forth in Appendix A. (Persons not listed in Appendix A do not have Grandfathered Benefits.) A Participant’s Grandfathered Benefit is based on the benefit he would have received under the terms of the Pre-2004 Plan (disregarding any required offset for benefits earned any plan maintained by a previous employer) if he had: (A) terminated employment involuntarily without Cause on December 31, 2004; and (B) begun receiving his benefit on the first day of the month coincident with or next following his 62nd birthday (or December 31, 2004, if later).

(p)

“Grandfathered CIC Benefit” shall mean, for any Participant, the “Grandfathered CIC Benefit” for such Participant set forth in Appendix A. (Persons not listed in Appendix A do not have Grandfathered CIC Benefits.) A Participant’s Grandfathered CIC Benefit is based on the annual benefit he would have received under the terms of the Pre-2004 Plan (disregarding any required offset for benefits earned any plan maintained by a previous employer) if a “Change in Control” (as defined in Section E-10.3) had occurred less than 24 months before December 31, 2004 and he had terminated employment on December 31, 2004, if such benefit were paid in the form of a single-life annuity commencing on the first day of the month coincident with or next following his 62nd birthday.

(q)	“Nominal Commencement Date” shall mean, for any Participant, the first day of the month coincident with or next following the later of (1) his Termination Date or (2) his 55th birthday.

(r)	“Normal Retirement Date” for a Participant shall mean his 65th birthday.

(s)	“Ongoing-SERP Benefit” shall have the meaning set forth in Section 4.03(b)(2).

(t)

“Participant” shall mean an individual who satisfies the requirements for participation in the Plan in Section 3.01 and whose accrued benefit under the Plan has not been forfeited or paid in full. An “Active Participant” shall mean a person who is an Active Participant as described in Section 3.01 and an “Inactive Participant” shall mean a person who is an Inactive Participant as described in Section 3.02.

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(u)	“PIA” shall mean the Participant’s Primary Insurance Amount, as defined in the applicable Qualified Plan.

(v)	“Plan” shall mean the MeadWestvaco Corporation Executive Retirement Plan, as in effect and amended from time to time.

(w)	“Plan Administrator” shall mean the plan administrator appointed pursuant to Section 6.01(a).

(x)	“Plan FAP” shall mean a Participant’s “Final Average Pay” as defined in the applicable Qualified Plan, but calculated without regard to the provisions of the applicable Qualified Plan implementing Section 401(a)(17) of the Code.

(y)

“Plan Interest Rate” shall mean the interest rate that is required by the applicable Qualified Plan for purposes of converting a single-life annuity to a lump-sum payment commencing as of the first day of the month coincident with or next following his Termination Date. If the rate required by the Qualified Plan is determined by reference to a yield curve, the Plan Interest Rate shall mean the first segment of such yield curve.

(z)	“Pre-2004 Plan” shall mean the Plan as in effect as of January 28, 2004, as set forth in Appendix E.

(aa)

“Qualified Plan” shall mean the MeadWestvaco Corporation Retirement Plan for Salaried and Non-Bargained Hourly Employees, the MeadWestvaco Corporation Envelope Division Retirement Plan for Salaried and Non-Bargained Employees and any other “defined benefit plan” (as defined in Section 3 of ERISA) sponsored by the Company or an Affiliate that is qualified under Section 401(a) of the Code and that is designated by the Board of Directors or the Committee as a “Qualified Plan” for purposes of this Plan. For purposes of Section 4.01(a)(2) (and for any other purposes established by the Board of Directors or the Committee in accordance with the preceding sentence), the term “Qualified Plan” shall include the MeadWestvaco Corporation Retirement Plan for Bargained Hourly Employees.

(bb)

“Qualified Plan Assumptions” shall mean the actuarial tables and interest rates (including variations that apply for specific purposes, such as converting benefits to a lump sum amount) set forth in the most recent Qualified Plan covering the Participant for purposes of calculating actuarial equivalence and present value.

(cc)	“Retirement Plan” shall mean the MeadWestvaco Corporation Retirement Plan for Salaried and Non-Bargained Hourly Employees or any successor thereto.

(dd)	“Spouse” shall have the meaning set forth in the applicable Qualified Plan.

(ee)	“Termination Date” means the date of an individual’s “separation from service” (within the meaning of section 409A(a)(2)(A)(i) of the Code) with MeadWestvaco and its Affiliates, as determined by MeadWestvaco in accordance with Treas. Reg. § 1.409A-1(h)(1). For purposes of the Plan:

(1)

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impairment causes the individual to be unable to perform the duties of his position of employment or any substantially similar position of employment, the preceding sentence shall be deemed to refer to a 29-month period rather than to a six-month period; and

(2)

A sale of assets to an unrelated buyer that results in an individual working for the buyer or one of its affiliates shall not, by itself, constitute a “separation from service” for such individual unless MeadWestvaco, with the buyer’s written consent, so provides in writing 60 or fewer days before the closing of such sale.

(ff)	“Totally and Permanently Disabled” shall have the same meaning as under the last Qualified Plan covering the Participant.

(gg)	“Vested Benefit” shall mean a Participant’s benefit under Sections 4.01 and 4.02, or Section 4.03, as applicable, that has become vested under Section 5.01 or Section 4.05(b) and has not been forfeited under Section 5.02 or any other provision of the Plan.

(hh)	“Years of Appendix A Service” shall mean, with respect to a Participant listed in Appendix A, the number of years of service (in years and months) through December 31, 2003 shown for the Participant in Appendix A.

(ii)

“Years of Benefit Service” shall mean the Participant’s “Years of Benefit Service” under the applicable Qualified Plan; provided that a Participant who becomes an Inactive Participant and does not subsequently become an Active Participant shall not accrue Years of Benefit Service for the period after he ceased to be an Active Participant.

(jj)

“ Years of Plan Benefit Service” shall mean, for any Participant who is an Active Participant on or after September 1, 2006, the Participant’s Years of Benefit Service; provided that the Participant’s Years of Plan Benefit Service shall not exceed the number determined by subtracting 30 from his age (in years and completed months) on the date he commenced employment with the Employer or an Affiliate.

(kk)	“Years of Plan Vesting Service” shall mean the Participant’s “Years of Benefit Service” under the Qualified Plan.

2.02.

C ONSTRUCTION

For purposes of the Plan, unless the contrary is clearly indicated by the context:

(a)	The use of the masculine gender shall also include within its meaning the feminine and vice versa;

(b)	The use of the singular shall also include within its meaning the plural and vice versa;

(c)	The word “include” shall mean to include, but not to be limited to; and

(d)	Any reference to a statute or section of a statute shall further be a reference to any successor or amended statute or section, and any regulations or other guidance of general applicability issued thereunder.

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2.03.

T IMING OF P AYMENTS

(a)

The phrase “as soon as practicable after” or any similar phrase shall mean the earliest administratively practicable date after the relevant date or event; provided that, in accordance with Treas. Reg. § 1.409A-3(b), such date shall be no later than the later of (1) the last day of the calendar year in which the relevant date or event occurs or (2) the 90th day following the occurrence of the relevant date or event.

(b)

To the extent that any payment under the Plan may be made within a specified number of days, or as soon as practicable, on or after any date or the occurrence of any date or event, the date of payment shall be determined by the Company in its sole discretion, and not by any Participant, beneficiary, or other individual.

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ARTICLE 3. PARTICIPATION

3.01.

A CTIVE P ARTICIPATION

(a)	The persons listed in Appendix A (all of whom accrued benefits under the Pre-2004 Plan) who are employed by the Employer on January 29, 2004 shall continue to be Active Participants as of January 29, 2004.

(b)

Any other senior executive of the Employer who has been designated as eligible to participate in the Plan by a resolution adopted by the Committee shall become an Active Participant as of the date set forth in such resolution. The persons listed in Appendix B became Active Participants on January 29, 2004.

(c)	An Active Participant shall remain an Active Participant until the earlier of (1) his Termination Date or (2) such date as of which the Committee determines that he is no longer eligible to accrue benefits under the Plan.

(d)	No individual who is a “Cash Balance Participant” (as defined in an applicable Qualified Plan) shall be eligible to participate in the Plan.

3.02.

I NACTIVE P ARTICIPATION

(a)	An Active Participant shall become an “Inactive Participant” as of the date he ceases to be an Active Participant in accordance with Section 3.01(c).

(b)	The persons listed in Appendix D who are no longer accruing benefits under the Plan on January 29, 2004 shall continue to be Inactive Participants as of January 29, 2004.

(c)	An Inactive Participant shall remain an Inactive Participant for so long as his benefits under the Plan have not been paid.

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ARTICLE 4. AMOUNT AND PAYMENT OF BENEFITS

4.01.

A MOUNT OF B ENEFITS

(a)

Unless he is listed in Appendix A (in which case Section 4.03 applies), the amount of the benefit under the Plan for any Participant who is an Active Participant on or after September 1, 2006, expressed as an annual amount payable beginning on the first day of the month coincident with or next following his Normal Retirement Date (or the first day of the month coincident with or next following his Termination Date, if later), shall be equal to the amount determined under paragraph (1), below, less the sum of the amounts determined under paragraphs (2) and (3), below, where:

(1)

The amount determined under this paragraph (1) equals (A) minus (B), where—

(A)

equals 1.6 percent of the Participant’s Plan FAP, multiplied by the sum, not to exceed 40, of (i) 75 percent of his Years of Plan Benefit Service and (ii) his Years of Benefit Service; and

(B)

equals 1.25 percent of his PIA multiplied by his Years of Benefit Service;

(2)

The amount determined under this paragraph (2) equals the total amount determined to be payable to the Participant under the Qualified Plans, expressed as an annual amount payable as a single-life annuity beginning on his Nominal Commencement Date, but not including any restructuring or other supplemental benefits payable to the Participant under such Qualified Plans.

(3)

The amount determined under this paragraph (3) equals the total amount, if any, determined to be payable to the Participant under the MeadWestvaco Corporation Retirement Restoration Plan (the “RRP,” including benefits accrued under any of the plans listed in Appendix C, which were merged into the RRP), and expressed as an annual amount payable as a single-life annuity beginning on his Nominal Commencement Date.

(b)

For purposes of Section 4.01(a), the amount payable to a Participant under the Qualified Plans and the RRP shall be determined without regard to any qualified domestic relations order (as defined in Section 414(p)(1)(A) of the Code) or other order or settlement agreement that reduces or divides the Participant’s benefit under such plans.

4.02.

N ORMAL AND E ARLY R ETIREMENT

Unless he is listed in Appendix A (in which case Section 4.03 applies):

(a)

A Participant whose Termination Date occurs on or after his Normal Retirement Date shall be entitled to receive his Vested Benefit under the Plan (if any) at the time and in the manner prescribed by Section 4.04 without any reduction for early commencement of benefits or any increase for late commencement of benefits (except as required by Section 4.04(a) with respect to delayed payments).

(b)	A Participant whose Termination Date occurs before his Normal Retirement Date, and who attains the Rule of 80 before his Termination Date, shall be entitled to receive his Vested Benefit (if any) at the time and in the manner prescribed by Section 4.04, but subject to the following:

(1)

If the Participant’s Termination Date occurs on or after his Early Retirement Date, such Vested Benefit shall be paid without any reduction for early commencement of benefits.

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(2)

If the Participant’s Termination Date occurs before his Early Retirement Date, the amount determined under Section 4.01(a)(1) shall be reduced by 0.25 percent for each month by which his Nominal Commencement Date precedes the first day of the month coincident with or next following his Early Retirement Date; provided, however, that the reduction required by this paragraph shall be no greater than 21 percent.

(c)	A Participant whose Termination Date occurs before his Normal Retirement Date, and who does not attain the Rule of 80 before his Termination Date, shall be entitled to receive his Vested Benefit (if any) at the time and in the manner prescribed by Section 4.04, but subject to the following:

(1)

The amount determined under Section 4.01(a)(1) shall be reduced pursuant to the rules applicable to him under Section 5.2(a) of the Retirement Plan (including the proviso for any Participant who terminates employment with 20 or more Years of Benefit Service and after he has attained age 55), or any successor provision thereto (or the comparable provision of the applicable Qualified Plan, if the Retirement Plan is not the applicable Qualified Plan with respect to him).

(2)

The amount of the reduction required by paragraph (1), above, shall be calculated as if the Participant’s benefit commencement date were his Nominal Commencement Date.

(d)	For purposes of this Article 4:

(1)

A Participant attains the “Rule of 80” when the sum of his Age and Rule of 80 Service equals 80.

(2)

A Participant’s “Age” shall mean his complete years of age, plus the number of complete and partial calendar months starting after his most recent birthday, divided by 12.

(3)

“Rule of 80 Service” shall mean the Participant’s Years of Plan Vesting Service under the applicable Qualified Plan.

4.03.

P RE -2004 P ARTICIPANTS

This Section 4.03 shall apply only to Participants listed in Appendix A.

(a)	Notwithstanding any provision of Section 4.01 or 4.02, the benefits of a Participant listed in Appendix A shall be as follows:

(1)

If the Participant’s Termination Date occurs on or after his Normal Retirement Date and after his benefit under the Plan becomes vested under Section 5.01(a) or (b), the amount of his benefit shall equal the greatest of: (A) the Participant’s All-MERP Benefit; (B) the Participant’s Grandfathered Benefit; or (C) the Participant’s Average Benefit.

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(2)

If the Participant’s Termination Date occurs before his Normal Retirement Date but after his benefit under the Plan becomes vested under Section 5.01(a) or (b), the amount of his benefit shall equal the greatest of:

(A)

The Participant’s All-MERP Benefit, reduced by applying the rules set forth in Section 4.02(b) through (d);

(B)

The Participant’s Grandfathered Benefit, without any adjustment to account for termination of employment before or after age 62; or

(C)

The average of (i) and (ii), where:

(i)

equals the greater of (I) the amount determined under subparagraph (A), above; and (II) the amount determined under subparagraph (B), above; and

(ii)

equals the Participant’s Ongoing-SERP Benefit, reduced by applying Section E-4.2, based on the assumption that his benefit commencement date is his Nominal Commencement Date.

(3)

If the Participant’s Termination Date occurs before his benefit under the Plan becomes vested under Section 5.01(a) or (b), but after his Grandfathered Benefit becomes vested under Section 5.01(c), he shall receive his Grandfathered Benefit, without any adjustment to account for termination of employment before or after age 62.

(b)	For purposes of this Section 4.03:

(1)

A Participant’s All-MERP Benefit equals the amount described in Section 4.01(a).

(2)

A Participant’s Ongoing-SERP Benefit equals the amount determined by applying Section E-3 (not including Section E-3.3) to the Participant’s Final Average Earnings (as defined in Section E-3.4) as of his Termination Date.

(3)

A Participant’s Average Benefit equals the average of the amounts in subsections (A) and (B), where:

(A)

equals the greater of (i) the Participant’s All-MERP Benefit; or (ii) the Participant’s Grandfathered Benefit; and

(B)

equals the Participant’s Ongoing-SERP Benefit.

4.04.

F ORM AND T IME OF B ENEFIT P AYMENTS TO P ARTICIPANT

(a)

Participants Not Listed in Appendix A . The Vested Benefit, if any, of a Participant not listed in Appendix A shall be paid in the annuity form in which his benefit under the MeadWestvaco Corporation Retirement Restoration Plan (the “RRP”) is paid, commencing on the Participant’s Actual Commencement Date.

(1)

The first payment to any such Participant shall include the sum of all payments (if any) that would have been made up to his Actual Commencement Date if payments had commenced on his Nominal Commencement Date, plus interest on the delayed payments at the Plan Interest Rate.

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(2)

If a Participant is not eligible to receive an annuity under the RRP, his benefit shall be paid in any annuity form permitted under the RRP, as elected by the Participant in accordance with the annuity election provisions of the RRP.

(b)	Participants Listed in Appendix A . The Vested Benefit, if any, of a Participant listed in Appendix A shall be paid at the time and in the form set forth below:

(1)

The Participant’s Grandfathered Benefit (if vested) shall be paid in the following form, as long as the Participant is living:


Participant		Form and Time of Payment
William J. Biedenharn (per election made in 2007)		• Monthly installments, each equal to ¹ / ₁₂ th of the Participant’s monthly Grandfathered Benefit (without reduction for commencement before age 62), starting on the Participant’s Actual Commencement Date and continuing through the earlier of (a) the month in which he dies or (b) the month in which he attains age 62. The first payment shall include the sum of all payments that would have been made up to his Actual Commencement Date if payments had commenced on his Nominal Commencement Date, plus interest on the delayed payments at the Plan Interest Rate; and • If the Participant is living, a lump-sum payment on the first day of the first month that starts after his 62nd birthday.

Dr. Jack C. Goldfrank		Lump sum on his Actual Commencement Date.

Gary M. Curtis James C. Tyrone		Lump sum on the first day of the month coincident with or next following the Participant’s 62nd birthday.

Mark T. Watkins Neil A. McLachlan (per election made in 2008)		• If the Participant’s Termination Date occurs on or after his 62nd birthday, a lump sum on his Actual Commencement Date, with interest at the Plan Interest Rate for the period from his Nominal Commencement Date to his Actual Commencement Date. • If the Participant’s Termination Date occurs before his 62nd birthday: • Monthly installments, each equal to ¹ / ₁₂ th of the Participant’s monthly Grandfathered Benefit (without reduction for commencement before age 62), starting on the Participant’s Actual Commencement Date and continuing through the earlier of (a) the month in which he dies or (b) the month in which he attains age 62. The first payment shall include the sum of all payments that would have been made up to his Actual Commencement Date if payments had commenced on his Nominal Commencement Date, plus interest on the delayed payments at the Plan Interest Rate; and • If the Participant is living, a lump-sum payment on the first day of the first month that starts after his 62nd birthday.

Except as otherwise provided in Appendix A, the amount of any lump-sum payment required by the schedule above shall be equal to:

(A)

The actuarial present value (determined using the Qualified Plan Assumptions) of the Participant’s Grandfathered Benefit determined as of the later of (i) the first day of the month next following the Participant’s 62nd birthday or (ii) the Participant’s Nominal Commencement Date; plus

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(B)

Interest at the rate required by subparagraph (A), above, for any period from the later date described in subparagraph (A), above, to the date on which the lump-sum payment is actually made; minus

(C)

The sum of the monthly Grandfathered Benefit payments previously made to him and interest on each such monthly payment, at the rate required by subparagraph (A), above, from the date of the monthly payment to the date on which the lump-sum payment is made.

(2)

The portion (if any) of the Participant’s Vested Benefit that exceeds the value of the Participant’s Grandfathered Benefit shall be paid at the time and in the form prescribed by Section 4.04(a).

(c)

Continuing Payments after Rehire . The form and time of payment of benefits to any Participant who has had a Termination Date shall not be affected in any way by a subsequent rehire. For example, payments that are required by the schedule set forth in this Section 4.04 shall not be suspended or otherwise delayed by reason of a Participant’s rehire.

4.05.

D ISABILITY

If a Participant becomes Totally and Permanently Disabled, then:

(a)	If, with or without reasonable accommodation, he is unable to continue working in his then-current position, he shall become an Inactive Participant pursuant to Sections 3.01(c) and 3.02(a);

(b)	If he has not satisfied the vesting requirements set forth in Section 5.01 and he remains Totally and Permanently Disabled, his benefit under the Plan shall become 100 percent vested as of the later of (i) his 55th birthday or (ii) his Termination Date; and

(c)	He shall receive his Vested Benefit under the Plan in the form prescribed by Section 4.04, commencing on his Actual Commencement Date.

4.06.

P RE -R ETIREMENT D EATH B ENEFITS

(a)

Death Before Nominal Commencement Date; Not Vested . Except as required by subsection (f), below (with respect to Grandfathered Benefits), if a Participant’s death occurs before his Nominal Commencement Date and (1) he has not completed at least five Years of Plan Vesting Service or (2) his Termination Date occurs before his 55th birthday and before his death, his benefit shall be forfeited and no death benefit shall be paid under the Plan with respect to him.

(b)

Death Before Nominal Commencement Date; Vested and Married . If a Participant has completed five or more Years of Plan Vesting Service and either (i) dies before his Termination Date or (ii) reaches age 55 before his Termination Date and dies before his Nominal Commencement Date, his surviving Spouse (if any) shall receive a preretirement death benefit under the Plan, commencing on the first day of the month next following the Participant’s death (or as soon as practicable thereafter), and calculated as follows:

(1)

If the Participant’s Termination Date occurred on or after his 55th birthday, his Spouse shall receive a preretirement survivor annuity, calculated in the same manner as the qualified preretirement survivor annuity payable to such Spouse under Section 7.1(a)(i) of the Retirement Plan (pre-retirement survivor pension if participant

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dies at age 55 or older) or any successor provision thereto (or the comparable provision of the applicable Qualified Plan, if the Retirement Plan is not the applicable Qualified Plan with respect to the Participant).

(2)

If the Participant’s death occurs before his 55th birthday (and before his Termination Date), his Spouse shall receive a preretirement survivor annuity, calculated in the same manner as the qualified retirement survivor annuity payable to such Spouse under Section 7.1(a)(ii) of the Retirement Plan (pre-retirement survivor pension if participant dies before age 55) or any successor provision thereto (or the comparable provision of the applicable Qualified Plan, if the Retirement Plan is not the applicable Qualified Plan with respect to the Participant).

For purposes of the Plan, a Participant who dies before his Termination Date shall be deemed to have a Termination Date immediately after his death.

(c)

Death Before Nominal Commencement Date; Vested but Not Married . If a Participant meets all of the requirements set forth in Section 4.06(b) except that he does not have a Spouse at the time of his death, the benefit set forth in Section 4.06(b) shall be payable to a living beneficiary elected by the Participant in accordance with procedures established by the Plan Administrator. The death benefit described in this Section 4.06(c) shall not be paid on behalf of any Participant with respect to whom the Plan Administrator (or its designee) determines there is no valid beneficiary election (on the form designated by the Plan Administrator) on file.

(d)

Death After Nominal Commencement Date but Before Actual Commencement Date . If a Participant with a Vested Benefit dies after his Nominal Commencement Date but before his Actual Commencement Date, the Company shall pay to the Participant’s estate an amount equal to (1) the sum of the payments that would have been made to the Participant before his death if payments had started on his Nominal Commencement Date, plus (2) interest on each payment, at the Plan Interest Rate, from the date on which the payment would have been made if payments had commenced on the Participant’s Nominal Commencement Date to the actual payment date. In addition, if any portion of the Participant’s Vested Benefit was scheduled to be paid in the form of an annuity with a survivor benefit, such survivor benefit shall be paid in accordance with the terms of the annuity form.

(e)

Death After Actual Commencement Date . Except as required by subsection (f), below (with respect to Grandfathered Benefits), if a Participant dies after his Actual Commencement Date, no death benefit shall be paid on the Participant’s behalf unless payment of any portion of the Participant’s Vested Benefit had commenced in the form of an annuity with a survivor benefit. If payment of any portion of the Participant’s benefit had commenced in the form of an annuity with a survivor benefit, such survivor benefit shall be paid in accordance with the terms of the annuity form.

(f)

Grandfathered Death Benefit for Appendix A Participants . If (and only if) (1) a Participant listed in Appendix A dies before the commencement date for his Grandfathered Benefit, (2) the provisions of subsections (a)-(e), above, do not provide for any death benefit with respect to a Participant’s Grandfathered Benefit, and (3) the Participant is survived by a Spouse who satisfies the eligibility criteria set forth in Section E-9.1, such surviving Spouse shall receive a pre-retirement death benefit with respect to the Participant’s Grandfathered Benefit, calculated in accordance with subsection (b), above.

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ARTICLE 5. VESTING, NON-COMPETITION AND CHANGE OF CONTROL

5.01.

V ESTING

Except as otherwise required by Section 4.06 or Section 5.02:

(a)	A Participant shall become 100 percent vested in his benefit under the Plan if he attains age 55 before his Termination Date and he has five or more Years of Plan Vesting Service.

(b)	If a Participant’s Termination Date occurs by reason of an involuntary termination within 24 months after a Change of Control, he shall become 100 percent vested in his benefit under the Plan as of his Termination Date.

(c)	If the Termination Date of a Participant listed in Appendix A occurs under any of the following circumstances, he shall become 100 percent vested in his Grandfathered Benefit only:

(1)

The Participant’s Termination Date occurs after his 55th birthday but before he has five Years of Plan Vesting Service;

(2)

The Participant’s Termination Date occurs before his 55th birthday by reason of an involuntary termination that is not for Cause; or

(3)

A “Change in Control” (as defined in Section E-10.3) occurs, in which case he shall become 100 percent vested in his Grandfathered CIC Benefit (rather than in his Grandfathered Benefit).

5.02.

F ORFEITURE

(a)

Forfeiture of Benefits. A Participant shall not have any right to a benefit or payment under the Plan if his benefit under the Plan (including any benefit that has otherwise vested pursuant to Section 5.01) is forfeited under Section 5.02(a), (b) or (c), or Section 4.06. A Participant shall forfeit any portion of his benefit under the Plan that is not vested in accordance with the terms of the Plan as of his Termination Date, and such forfeiture shall not be reinstated if he is rehired unless provided otherwise in a resolution adopted by the Committee.

(b)	Termination for Cause. If a Participant’s employment with an Employer or Affiliate is terminated for Cause, his benefits under the Plan shall be automatically and permanently forfeited.

(c)

Competitive Activities, Solicitation, and Disparagement. If the Authorized Party determines that after a Participant’s Termination Date but before the Participant has received his entire Vested Benefit and without the express prior written consent of the Authorized Party, a Participant directly or indirectly, individually or as an agent, officer, director, employee, shareholder, partner or in any other capacity whatsoever:

(1)

has engaged, or is engaging, in any activity competitive with or adverse to the Employer’s or Affiliate’s businesses or in the sale, distribution, production, or attempted sale, distribution or production, of any goods, products or services then sold or being developed by any Employer or Affiliate;

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(2)

personally engages in Competitive Activities or works for, owns, manages, operates, controls, or participates in the ownership, management, operation or control of, or provides consulting or advisory services to, any individual, partnership, firm, corporation, or institution engaged in Competitive Activities (provided that the Participant’s purchase or holding, for investment purposes, of securities of a publicly traded company shall not constitute “ownership” or “participation in ownership” for purposes of this Section 5.02(c)(2) so long as the Participant’s equity interest in any such company is less than a controlling interest);

(3)

solicits, induces, or attempts to induce any of the Company’s or an Affiliate’s employees to leave the employ of such Company or Affiliate;

(4)

makes disparaging remarks with respect to the Company, an Affiliate, any of the Company’s or Affiliates’ products or businesses, or any of the Company’s or Affiliates’ employees, directors, consultants, independent contractors, or other service providers;

(5)

communicates or reveals any secret or confidential information, knowledge, or data related to the Company or an Affiliate, and their respective businesses, except to the extent that the right to make such a communication or revelation is expressly protected by applicable law; or

(6)

otherwise violates the Company’s Code of Conduct in a manner that the Authorized Party determines to be materially and demonstrably injurious to the Company,

such Participant’s benefits under the Plan shall be automatically and permanently forfeited and payment of such benefits to the Participant or any other person, if commenced, shall cease.

For purposes of this Section 5.02(c), “Competitive Activity” shall mean a business activity relating to products or services of the same or similar type as the products or services that (x) are sold (or, pursuant to an existing business plan, will or might be sold) to paying customers of the Company or an Affiliate; and (y) for which the Participant had responsibility to plan, develop, manage, market, or oversee within the prior 24 months or within the 24 months preceding his Termination Date.

5.03.

C HANGE OF C ONTROL

(a)	For purposes of the Plan, a “Change of Control” shall mean, except as provided in subsection (b), below (relating to a Merger of Equals):

(1)

The acquisition by any Person of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20 percent or more of either (i) the Outstanding Company Common Stock or (ii) the Outstanding Company Voting Securities; provided, however, that the following acquisitions shall not constitute a Change of Control: (A) any acquisition directly from the Company, (B) any acquisition by the Company, (C) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company, or (iv) any acquisition by any corporation pursuant to a transaction which complies with clauses (i), (ii) and (iii) of Section 5.03(a)(3); or

(2)

Individuals who constitute the Incumbent Board cease for any reason to constitute at least a majority of the Board of Directors; or

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(3)

Consummation of a Business Combination unless, following such Business Combination: (i) all or substantially all of the individuals and entities that were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 60 percent of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Resulting Corporation in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (ii) no Person (excluding the Resulting Corporation and its affiliates or any employee benefit plan (or related trust) of the Resulting Corporation and its affiliates) beneficially owns, directly or indirectly, 20 percent or more of, respectively, the then outstanding shares of common stock of the Resulting Corporation or the combined voting power of the then outstanding voting securities of the Resulting Corporation except to the extent that such ownership existed with respect to the Company prior to the Business Combination, and (iii) at least a majority of the members of the Resulting Board were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board of Directors, providing for such Business Combination; or

(4)

Approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.

(b)

Notwithstanding any provision of subsection (a), above, a transaction or event shall not constitute a “Change of Control” if the conditions of a Merger of Equals are met at all times from the date of the transaction or event until the first anniversary of such transaction or event. If the conditions of a Merger of Equals are met at the time of the transaction or event, but cease to be met prior to the first anniversary of such transaction or event, then such transaction or event shall constitute a Change of Control as of the date the conditions of a Merger of Equals cease to be met. For purposes of this Section 5.03, the requirements of a “Merger of Equals” are that:

(1)

the event or transaction is a Business Combination;

(2)

at least 50 percent of the members of the Resulting Board are individuals who were members of the Incumbent Board at the time of the execution of the initial agreement or of the action of the Board of Directors providing for such Business Combination; and

(3)

either (A) the position of chief executive officer of the Resulting Corporation is occupied by an individual who was employed by the Company immediately before such Business Combination, or (B) a majority of the leadership positions reporting directly to the chief executive officer of the Resulting Corporation are occupied by individuals who were employed by the Company immediately before such Business Combination.

(c)	For purposes of this Section 5.03:

(1)

“Business Combination” shall mean a reorganization, merger, statutory share exchange or consolidation, or similar corporate transaction involving the Company or any of its subsidiaries, or a sale or other disposition of all or substantially all of the assets of the Company.

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(2)

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

(3)

“Incumbent Board” shall mean the Board of Directors as of January 29, 2004, (the “Incumbent Board”); provided, however, that any individual becoming a director subsequent to January 29, 2004 whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board.

(4)

“Person” shall mean any individual, entity or group within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act.

(5)

“Resulting Board” shall mean the board of directors of the Resulting Corporation.

(6)

“Resulting Corporation” shall mean the corporation resulting from a Business Combination (including a corporation which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries).

(7)

“Outstanding Company Common Stock” shall mean outstanding shares of the common stock of the Company as of the acquisition described in Section 5.03(a)(1).

(8)

“Outstanding Company Voting Securities” shall mean outstanding voting securities of the Company entitled to vote generally in the election of directors as of the acquisition described in Section 5.03(a)(1).

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ARTICLE 6. PLAN ADMINISTRATION

6.01.

P LAN A DMINISTRATOR

(a)	The committee appointed by the Chief Executive Officer to administer the Retirement Plan shall also administer this Plan, unless the Chief Executive Officer appoints different individuals to administer this Plan.

(b)

The Plan Administrator shall adopt such procedures and rules as it deems necessary or advisable to administer the Plan, including providing a claims procedure to provide adequate notice to any Participant or beneficiary whose claim is denied setting forth the specific reasons for a denial, written in a manner calculated to be understood by such person and offering a reasonable opportunity for a full and fair review of such denial by the appropriate individual or committee. In the absence of a separate written claims procedure, the claims procedure under the Retirement Plan shall apply under the Plan.

(c)	Any administrator under this Plan may employ one or more persons to render advice with regard to any responsibility such administrator has under the Plan.

(d)	All costs and expenses and fees of the Plan Administrator shall be borne by the Employer, which also shall bear all other costs and expenses incurred in administering the Plan.

6.02.

I NTERPRETATIONS

All interpretations pertaining to facts or provisions of the Plan made by the Plan Administrator, the Authorized Party, or the Committee shall be made in the complete and exclusive discretion of the Committee, the Plan Administrator, or the Authorized Party, as applicable, and shall be binding and conclusive on all parties. The Plan Administrator shall have the complete and exclusive discretion to resolve ambiguities and inconsistencies in the language of the Plan and to supply omissions in the language of the Plan.

6.03.

E LECTIONS AND D ESIGNATIONS

All elections and designations that Participants are required or permitted to make under the Plan shall be made in writing or electronically in the form prescribed by the Plan Administrator (or its designees).

6.04.

F UNDING P OLICY

The Plan shall be unfunded and the benefits due under the Plan shall be payable, when due, from the general assets of the Employer or, in the sole discretion of the Plan Administrator, from the assets of a specified trust, the assets of which shall be subject to the claims of the unsecured creditors of the Employer. The Plan shall not be funded through a trust or other arrangement described in Section 409A(b)(1) of the Code and no assets of the Company or any Affiliate shall become restricted in the manner described in Section 409A(b)(2) of the Code in connection with a change in the financial health of the Company or any Affiliate, as described in Section 409A(b)(2) of the Code.

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ARTICLE 7. AMENDMENT, MERGER, AND TERMINATION OF PLAN

7.01.

A MENDMENT OF THE P LAN

(a)

The Company reserves the right, at any time and from time to time, to amend in whole or in part, either retroactively or prospectively, any or all of the provisions of this Plan without notice to or the consent of any Participant or beneficiary hereunder; provided, however, that no amendment shall have any retroactive effect to deprive any Participant of his vested benefit already accrued, other than an amendment that the Company determines is necessary or appropriate to conform the Plan to mandatory provisions of applicable federal or state laws, regulations, or rulings, or to secure or maintain favorable tax treatment of benefits accrued under the Plan.

(b)

Any amendment of this Plan may be adopted by written resolution of the Board of Directors. In addition, the Chairman of the Board of Directors, the Chief Executive Officer of the Company, the President of the Company, and the Senior Vice President of the Company with responsibility for Human Resources may make any amendment in writing which: (1) may be necessary or desirable to improve the administration of the Plan, so long as such amendment does not materially affect the substance of the Plan or the level of benefits the Plan provides; or (2) may be required to comply with various federal and state laws (including tax laws that might result in any adverse tax consequences to any Participant, Employer, or any of their Affiliates). All amendments shall be filed with the Secretary of the Company.

7.02.

T ERMINATION OF THE P LAN

(a)

Although the Company expects to continue the Plan and any corresponding trust indefinitely, the Company reserves the right to terminate either or both at any time in whole or in part without the consent of any Participant, surviving spouse, joint annuitant, alternate payee or beneficiary hereunder. Such termination shall be effected by resolution of the Board of Directors.

(b)

In the event of a termination or partial termination of the Plan, benefits under the Plan shall cease to accrue. However, service after the termination date may count for vesting purposes and the form and time of payment of benefits under the Plan shall not change, unless the Company determines that the change would not result in adverse tax consequences under section 409A of the Code ( e.g. , the change is permitted by Treas. Reg. § 1.409A-3(j)(4)(ix)).

7.03.

D ESIGN D ECISIONS

Decisions regarding the design of the Plan shall be made in a settlor capacity. The act of modifying, altering, amending, or terminating the Plan and any corresponding trust shall be taken on behalf of the Company as employer sponsor of the Plan, and settlor of any trust, and shall not be construed under any circumstance as an act taken in a fiduciary capacity under or with respect to the Plan.

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ARTICLE 8. MISCELLANEOUS PROVISIONS

8.01.

E MPLOYMENT R IGHTS N OT A FFECTED BY P LAN

The adoption and maintenance of the Plan shall not be deemed to constitute a contract between the Employer and any employee or other service provider. Nothing herein contained shall be deemed to give to any individual the right to be retained in the employ of the Employer or to interfere with the right of the Employer to discharge any service provider.

8.02.

I NTEGRATION C LAUSE

No Participant, surviving spouse, beneficiary, alternate payee, or any other person shall be entitled to or have any vested right in or claim to a benefit under the Plan, except as expressly provided herein. The Employer may from time to time issue to Participants one or more booklets or brochures or make presentations summarizing the Plan. In the event of any conflict between the terms of the Plan document or any trust agreement and the terms of any such booklets, brochures, and presentations summarizing the Plan, the terms of the Plan document and any trust agreement shall control.

8.03.

D OUBT AS TO I DENTITY

(a)

If, after reasonable efforts, the Plan Administrator is unable to determine the whereabouts of any person entitled to payment hereunder, the required payment to such person shall be deemed made at the time prescribed by the applicable payment schedule, and the Plan Administrator shall take (or cause to be taken) all steps that it determines to be reasonably appropriate to avoid a violation of Section 409A of the Code ( e.g. , withholding income taxes at the time of each deemed payment, and depositing the amount withheld with the Internal Revenue Service). For purposes of the preceding sentence, notice by registered mail sent to such person’s most recent address (as reflected in the Plan records) shall be deemed to constitute reasonable efforts to locate such person. Subject to the requirements of Section 409A of the Code, if such person subsequently makes a proper claim to the Company for such sum, the Company may in its discretion pay to such person the net amount (after withholding) of the deemed payment described in this Section 8.03.

(b)

If a payment is made to a Participant, beneficiary, or former Spouse as provided under the Plan, the payment is not returned as being undeliverable, and the check on which the payment is made is not presented for payment before such time as the check expires, then the amount of the check may be forfeited. However, subject to the requirements of section 409A of the Code, if such Participant, Beneficiary, or former Spouse subsequently makes a proper claim for the amount of the uncashed benefit check, the Company may in its discretion issue a replacement check.

8.04.

D ISCRETION TO A CCELERATE P AYMENTS

Effective January 1, 2005, notwithstanding any other provision of the Plan, an Authorized Party shall have discretion to accelerate payments of benefits under the Plan to the extent (and only to the extent) permitted by Treas. Reg. § 1.409A-3(j)(i) through (xiv). For example, payment may be accelerated to the extent necessary to pay Federal Insurance Contributions Act (FICA) taxes under Sections 3101, 3121(a), and 3121(v)(2) of the Code on benefits payable under the Plan.

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8.05.

P AYMENT M EDIUM

All payments under this Plan shall be made in cash.

8.06.

O BLIGATIONS TO M AKE P AYMENTS

Any obligation to make a payment under the Plan shall be an obligation of the Company; provided, however, that the Company may satisfy any obligation hereunder by causing another party, such as an Affiliate or the trustee of an unsecured trust, to make the payment.

8.07.

L IABILITY L IMITED

Except as otherwise provided by applicable law, no liability shall attach to or be incurred by the shareholders, directors, officers, or employees of the Company or any Affiliate under or by reason of any of the terms and conditions contained in the Plan or in any of the contracts procured pursuant thereto or implied therefrom.

8.08.

O VERPAYMENTS

To the extent permitted by Section 409A of the Code, if any overpayment of benefits is made under the Plan, the amount of the overpayment may be set off against further amounts payable to or on behalf of the person who received the overpayment until the overpayment has been recovered. The foregoing remedy is not intended to be exclusive.

8.09.

I NCAPACITY AND M INOR S TATUS

If any person is a minor or unable to care for his affairs because of illness or accident, unless a duly qualified guardian or other legal representative has been appointed, any payment due from the Plan to that person may be paid, for the benefit of such person, to his spouse, parent, brother, sister, or other person deemed by the Plan Administrator to have incurred expenses for such person. Such payment, to the extent thereof, shall discharge all liability for such payment under the Plan.

8.10.

A SSIGNMENT AND L IENS

(a)

Subject to Section 8.10(b), the right of any person to any benefit or payment under the Plan shall not be subject to alienation, transfer, assignment, or encumbrance, or otherwise subject to lien, and any such attempt to alienate, transfer, assign, or encumber any benefit or payment under the Plan shall be null and void.

(b)

Section 8.10(a) shall not apply to payments made pursuant to a qualified domestic relations order (as defined by Section 414(p)(1)(A) of the Code) applicable to this Plan. Any domestic relations order shall be subject to the terms of the applicable Qualified Plan with respect to any such order, except that all qualified domestic relations orders shall be construed and executed in a manner consistent with the terms of the Plan and the requirements of Section 409A of the Code.

8.11.

W ITHHOLDING T AXES

The Plan Administrator may make any appropriate arrangements to deduct from all amounts paid under the Plan, or to collect, any taxes reasonably determined to be required to be withheld under applicable laws. Irrespective of whether withholding is required, the Participant, surviving spouse, beneficiary, or alternate payee, as the case may be, shall bear all taxes on amounts paid under the Plan, on any imputed income resulting from the operation of the Plan, and on any other payments or compensation from the Company or an Affiliate.

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8.12.

T ITLES AND H EADINGS N OT TO C ONTROL

The titles to articles and the headings of sections, subsections, paragraphs, and clauses in the Plan are placed herein for convenience of reference only, and in the event of any conflict, the text of the Plan, rather than such titles or headings, shall control.

8.13.

N OTICE OF P ROCESS

In any action or proceeding involving the Plan, the Company and the Plan Administrator are the only necessary parties, and no Participant, beneficiary, former Spouse, or other person having or claiming an interest under the Plan shall be entitled to any notice of process unless such notice is required by applicable law.

8.14.

G OVERNING L AW AND L IMITATION ON A CTIONS

(a)

Effective July 17, 2006, the Plan shall be construed, administered, and regulated in accordance with the provisions of federal law, and, to the extent not preempted thereby, in accordance with the laws of the Commonwealth of Virginia, excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of the Plan to the substantive law of another jurisdiction.

(b)

No claim for non-payment or underpayment of benefits allegedly owed under the Plan (regardless of whether such benefits are allegedly due under the terms of the Plan or by reason of any law) may be filed in court until the claimant has exhausted the claims review procedures established in accordance with Section 6.01(b). Claims for underpayment of benefits must be filed in a court with jurisdiction to hear the claim no later than 36 months after the date when the payment of the benefit commenced. Claims for non-payment of benefits must be filed in a court with jurisdiction to hear the claim no later than 36 months after the date when the first payment was allegedly due. The running of the 36 month limitations period shall be suspended during the time that any request for review of the claim pursuant to Section 6.01(b) is pending before the Plan Administrator. The foregoing limitations period is expressly intended to replace and to supersede any limitations period that might otherwise be deemed applicable under state or federal law in the absence of this Section 8.14. Claims filed after the expiration of the limitations period prescribed by this Section 8.14 shall be deemed to be time-barred.

8.15.

C LASS A CTION F ORUM S ELECTION C LAUSE

(a)

To the fullest extent permitted by law, any lawsuit associated with a putative class action lawsuit relating in any way to the Plan or the administration of the Plan shall be filed in one of the following jurisdictions: (1) the jurisdiction in which the Plan is principally administered or (2) the jurisdiction in which the largest number of putative class members resides (or if that jurisdiction cannot be determined, the jurisdiction in which the largest number of class members is reasonably believed to reside). If any such lawsuit is filed in a jurisdiction other than the one described in the previous sentence, then the Plan, any Plan affiliates, and all alleged Plan participants shall take all necessary steps to have the lawsuit removed to, transferred to, or re-filed in the jurisdiction described in the previous sentence.

(b)

This Section 8.15 does not relieve the Plan or any putative litigant or class member of any obligation existing under the Plan or by law to exhaust administrative remedies (including the applicable claims procedures) before initiating litigation or to comply with the limitation of actions provision set forth in Section 8.14(b).

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8.16.

S EVERABILITY

If any provision of the Plan should be held illegal or invalid for any reason, such illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if such illegal or invalid provision had never been inserted herein.

8.17.

C OMPLETE S TATEMENT OF P LAN

This document is a complete statement of the Plan and, as of the effective date hereof, supersedes all prior plan documents.

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IN WITNESS WHEREOF the undersigned has executed this restatement of the Plan.

/s/ John A. Luke, Jr.

John A. Luke, Jr.

Chairman and Chief Executive Officer


APPROVALS

LAW DEPARTMENT

By		/s/ John J. Carrara
		John J. Carrara
		Associate General Counsel and Assistant Secretary

FILED:		February 6, 2009

By		/s/ Wendell L. Willkie, II
		Wendell L. Willkie, II
		Senior Vice President, General Counsel and Secretary

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APPENDIX A

PARTICIPANTS WHO PARTICIPATED IN THE PRE-2004 PLAN

AND WERE ACTIVE PARTICIPANTS AS OF JANUARY 1, 2005


Participant	Appendix A Service (Years of Service Through December 31, 2003)*	Grandfathered Benefit (Expressed as an Annual Single-Life Annuity Beginning at Age 62)**			Grandfathered CIC Benefit (Expressed as an Annual Single-Life Annuity Beginning at Later of Age 62 or Termination of Employment)
Mark T. Watkins	3.083	$	54,306		$	82,333
William J. Biedenharn	5.417	$	79,831		$	97,623
Neil A. McLachlan	4.917	$	19,133		$	58,969
Dr. Jack C. Goldfrank	9.417	$	174,399	¹	$	174,399	¹
Robert A. Feeser	3.583	$	0	²	$	0	²
Peter H. Vogel, Jr.	7.000	$	0	³		N/A	³
Gary M. Curtis ⁴	21.500	$	17,374			N/A
James C. Tyrone ⁴	13.750	$	14,730			N/A

As set forth in Section 2.01(o) and (p), although Appendix A Service refers only to service through December 31, 2003, the Grandfathered Benefit and Grandfathered CIC Benefit are based on the benefit the Participant would have received if he had terminated employment involuntarily on December 31, 2004.

**	If a Participant’s Termination Date occurs after a Change in Control (as defined in Section E-10.3) and before his 55th birthday, his Grandfathered Benefit shall be replaced with his Grandfathered CIC Benefit.

The

Grandfathered Benefit (if vested) shall be paid in the form prescribed by Section 4.04(b)(1).

When expressed in the form of a lump sum, the Grandfathered Benefit and Grandfathered CIC Benefit for Dr. Goldfrank shall be equal to the amount set forth in Section D-3.01 of the January 29, 2004 restatement of the Plan (filed on February 28, 2006), which is $2,161,469 plus interest for the period after December 31, 2004 until paid in full, at a rate of 5.06 percent per year.

²	Mr. Feeser’s age as of December 31, 2004, was 43.25 years. As a result of the reduction described in Section E-5.2(a), if Mr. Feeser had terminated employment involuntarily on December 31, 2004, his benefit under the terms of the Pre-2004 Plan would have been $0.

Mr. Vogel terminated employment involuntarily (not for Cause) before age 55 on May 1, 2005, as a result of the Company’s divestiture of its Papers group. The amount of his Grandfathered Benefit is $0 because the amount of the offsets required by Section E-3.2(b) and (c) is greater than the amount described in Section E-3.2(a).

⁴

Messrs. Curtis and Tyrone terminated employment involuntarily (not for Cause) before age 55 on May 1, 2005, as a result of the Company’s divestiture of its Papers group. As set forth in Section 5.01(c), each is entitled to receive his Grandfathered Benefit (but no additional benefit) at the time required by Section 4.04(b)(1).

APPENDIX B

PARTICIPANTS WHO BECAME ACTIVE

PARTICIPANTS ON JANUARY 29, 2004


		Participant
		John A. Luke
		James A. Buzzard
		Wendell L. Willkie, II
		Linda V. Schreiner
		Rita V. Foley*
		James M. McGrane
		Benjamin F. Ward
		Richard N. Burton
		David A. Reinhart
		Daniel J. McIntyre**

*	Ms. Foley terminated employment with a Termination Date before she reached age 55. Pursuant to Section 5.02(a) of the Plan, she therefore does not have a right to any benefit or payment under the Plan.

Mr. McIntyre terminated employment with the Employer and Affiliates before September 1, 2006, with fewer than five Years of Plan Service. Pursuant to Section 5.02(a) of the Plan (as in effect at the time of Mr. McIntyre’s termination), he therefore does not have a right to any benefit or payment under the Plan.

APPENDIX C

NONQUALIFIED DEFERRED COMPENSATION PLANS

MERGED INTO THE

MEADWESTVACO CORPORATION RETIREMENT RESTORATION PLAN

1. The Mead Corporation Section 415 Excess Benefit Plan

2. The Mead Corporation Excess Earnings Benefit Plan

3. Westvaco Corporation Excess Benefit Plan

4. Westvaco Corporation Retirement Income Restoration Plan

APPENDIX D

PARTICIPANTS WHO WERE INACTIVE

PARTICIPANTS ON JANUARY 29, 2004


Participant	Benefit (Annual Single- Life Annuity)		Benefit Commencement Date
Robinson	$	17,408	December 1, 2014
Rosetti	$	60,245	February 1, 2008
Simpson	$	110,162	September 1, 2003
Snowball	$	26,247	September 1, 2016

With respect to the Participants listed in this Appendix D, all rights and features set forth in the Pre-2004 Plan shall be preserved, except that the right to an ECAP Credit in Lieu of a Distribution (as set forth in Section E-10.5) shall be available only if the required election was made before January 1, 2005.

APPENDIX E: TERMS OF THE PRE-2004 PLAN

TABLE OF CONTENTS


E-1.	G ENERAL		E-1

	E-1.1	History and Effective Date	E-1
	E-1.2	Purpose of Plan	E-1
	E-1.3	Purpose of Appendix E	E-1
	E-1.4	Plan Funding and Administration	E-2
	E-1.5	Applicable Law	E-2
	E-1.6	Gender and Number	E-2
	E-1.7	Assignment	E-2
	E-1.8	Notices	E-2

E-2.	P ARTICIPATION		E-2

	E-2.1	Eligibility for Participation	E-2
	E-2.2	Participation Not Contract of Employment	E-3

E-3.	B ASIC B ENEFIT		E-3

	E-3.1	Eligibility for Basic Benefit	E-3
	E-3.2	Amount of Basic Benefit	E-3
	E-3.3	Form and Time of Payment of Basic Benefit	E-3
	E-3.4	Final Average Earnings	E-3
	E-3.5	Earnings	E-4
	E-3.6	Other Benefits	E-4

E-4.	E ARLY B ENEFIT		E-4

	E-4.1	Eligibility for Early Benefit	E-4
	E-4.2	Amount of Early Benefit	E-5
	E-4.3	Form and Time of Payment of Early Benefit	E-5

E-5.	P RE -A GE 55 B ENEFIT		E-5

	E-5.1	Eligibility for Pre-Age 55 Benefit	E-5
	E-5.2	Amount of Pre-Age 55 Benefit	E-5
	E-5.3	Form and Time of Payment of Pre-Age 55 Benefit	E-6
	E-5.4	Involuntary Termination	E-6
	E-5.5	Termination for Cause	E-6

E-6.	D ISABILITY B ENEFIT		E-7

	E-6.1	Eligibility for Disability Benefit	E-7
	E-6.2	Amount of Disability Benefit	E-7
	E-6.3	Form and Time of Payment of Disability Benefit	E-7

E-7.	O PTIONAL F ORMS OF B ENEFIT		E-7

	E-7.1	Request for Optional Payment Form	E-7
	E-7.2	Optional Forms of Benefit Payment	E-7
	E-7.3	Limitations on Optional Forms of Payment	E-8



E-8.	D EATH B ENEFIT		E-8

	E-8.1	Eligibility for Death Benefit	E-8
	E-8.2	Amount of Death Benefit	E-8
	E-8.3	Beneficiary	E-8

E-9.	S POUSAL S URVIVOR B ENEFIT		E-9

	E-9.1	Eligibility for Spousal Survivor Benefit	E-9
	E-9.2	Amount of Spousal Survivor Benefit	E-9
	E-9.3	Form and Time of Payment of Spousal Survivor Benefit	E-9
	E-9.4	Reduction for Spousal Survivor Benefit	E-9

E-10.	S PECIAL P ROVISIONS A FFECTING P AYMENT OF B ENEFITS		E-10

	E-10.1	Competition	E-10
	E-10.2	Termination for Cause	E-10
	E-10.3	Payments After a Change in Control	E-10
	E-10.4	Emergency Payments	E-13
	E-10.5	ECAP Credit in Lieu of Distribution	E-13
	E-10.6	Payment to Incapacitated Persons	E-14
	E-10.7	Withholding	E-14

E-11.	D ISPUTE R ESOLUTION		E-14

	E-11.1	Claims Procedures	E-14
	E-11.2	Records, Data and Information	E-14

E-12.	A MENDMENT AND T ERMINATION		E-14

	E-12.1	Amendment and Termination	E-14
	E-12.2	Contingencies Affecting the Employers	E-14
	E-12.3	Protected Benefits	E-14

E-ii

E-1.

G ENERAL

E-1.1. History and Effective Date . Effective January 1, 1982, The Mead Corporation, an Ohio corporation (“Mead”) established The Mead Corporation Supplemental Executive Retirement Plan, then known as “The Mead Management Income Parity Plan,” (the “Plan”). The Plan was subsequently amended and restated, effective January 1, 1985, amended, effective November 1, 1986, October 1, 1987, October 28, 1989 and February 28, 1991, again amended and restated, effective July 1, 1992, again amended and restated, effective January 1, 1997, and again amended, effective January 25, 2002. Following the transactions described in Section 1.01(a) of the Plan, MeadWestvaco Corporation (“MeadWestvaco”) assumed sponsorship of the Plan. This Appendix E sets forth the provisions of the Plan as in effect on January 28, 2004.

The Plan is intended to be a “top hat plan” (within the meaning of the Employee Retirement Income Security Act of 1974).

E-1.2. Purpose of Plan . The purpose of the Plan is to supplement the amount of the “Pension” (as defined in the MeadWestvaco Corporation Retirement Plan for Salaried and Non-Bargained Hourly Employees, which is the successor to The Mead Retirement Plan) payable from the MeadWestvaco Corporation Retirement Plan for Salaried and Non-Bargained Hourly Employees (the “MeadWestvaco Retirement Plan”) to or on account of certain executives of MeadWestvaco or of certain “Affiliates” (as defined below) of MeadWestvaco and, thereby, enhance MeadWestvaco’s ability to:

(a) recruit mid-career executives;

(b) retain and motivate employed executives; and

The term “Affiliate” means any entity during the period that it is, along with MeadWestvaco, a member of a controlled group of corporations, a controlled group of trades and businesses, an affiliated service group or any other entity designated by the Secretary of the Treasury as described in sections 414(b), 414(c), 414(m), and 414(o), respectively, of the Internal Revenue Code of 1986 (the “Code”). MeadWestvaco and any Affiliate designated by the Compensation and Organizational Development Committee of MeadWestvaco’s Board of Directors (the “Committee”) and employing a “Participant” (as described in subsection E-2.1) hereunder are sometimes referred to below, individually, as an “Employer” and, collectively, as the “Employers.”

E-1.3. Purpose of Appendix E . The purpose of this Appendix E is to set forth the terms of the Plan as in effect on January 28, 2004. This Appendix E shall not be construed in a manner that results in a “material modification” (within the meaning of Section 885(d) of the American Jobs Creation Act of 2004) of the Plan. Where a term of this Appendix E is inconsistent with any other provision of the Plan, the other provision of the Plan shall govern.

E-1.4. Plan Funding and Administration . The benefits payable under the Plan are unfunded and are payable, when due, from the general assets of MeadWestvaco; provided, however, that MeadWestvaco, in its discretion, may establish or maintain a trust to pay such amounts, which trust shall be subject to the claims of MeadWestvaco’s unsecured general creditors in the event of MeadWestvaco’s bankruptcy or insolvency; and provided, further, that MeadWestvaco shall remain responsible for the payment of any such amounts which are not so paid by any such trust. The Plan shall be administered by the Senior Vice President of MeadWestvaco with responsibility for human resources or such other person as is hereafter named by the Committee (the “Administrator”) who shall have the rights, powers and duties with respect to the Plan that are hereinafter set forth and the authority to establish such rules, regulations and interpretations with respect to the Plan as are reasonably necessary to administer the Plan. Any such rules, regulations and interpretations shall be uniformly applied to all persons similarly situated.

E-1.5. Applicable Law . The Plan will be construed and administered in accordance with the laws of the State of Ohio to the extent that those laws are not preempted by the laws of the United States of America.

E-1.6. Gender and Number . Where the context admits, words in any gender include any other gender, words in the singular will include the plural and words in the plural include the singular.

E-1.7. Assignment . No Plan right or interest of any person under the Plan shall be assignable or transferable, in whole or in part, either directly or otherwise, including without limitation thereto, by execution, levy, attachment, garnishment, pledge or in any other manner, but excluding transfers by reason of death or mental incompetency; no attempted assignment or transfer thereof shall be effective; and no such right or interest shall be liable for, or subject to, any obligation or liability of any Participant or Beneficiary; except that a Participant may direct that payments be made during his lifetime, when due, to a trust established by him and evidenced to the Administrator to be a trust created as a grantor trust within the meaning of section 671 of the Code.

E-1.8. Notices . Any notice required or permitted to be given to any person under the Plan will be properly given if delivered or mailed, postage prepaid, to that person at his last post office address as shown on his Employer’s records. Any notice to the Committee or the Administrator shall be properly given if delivered or mailed, postage prepaid, to the Corporate Secretary of MeadWestvaco Corporation at its principal place of business. Any notice required under the Plan may be waived by the person entitled to notice.

E-2.

P ARTICIPATION

E-2.1. Eligibility for Participation . Each individual who was a participant in the Plan on January 29, 2002 shall continue as a Participant, subject to the terms and conditions of the Plan.

Subject to the terms and conditions of the Plan, an individual who has once become a Participant in the Plan shall continue as such, notwithstanding his transfer to employment with an Employer in a non-designated job classification or with an Affiliate.

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E-2.2. Participation Not Contract of Employment . The Plan does not constitute a contract of employment and participation in the Plan will not give any employee the right to be retained in the employ of the Employers or Affiliates nor give any person any right or claim to any benefit under the terms of the Plan unless such right or claim has specifically accrued under the terms of the Plan.

E-3.

B ASIC B ENEFIT

E-3.1. Eligibility for Basic Benefit . If a Participant’s employment with the Employers and the Affiliates is terminated (for a reason other than his death) at or after he has attained age 62 years, he shall be entitled to receive a “Basic Benefit” in an amount determined pursuant to the provisions of subsection E-3.2 and paid in the form and at the time provided in subsection E-3.3.

E-3.2. Amount of Basic Benefit . A Participant’s Basic Benefit is an amount that, when expressed as an annual amount payable as a single life annuity commencing on the first day of the calendar month coincident with or next following the date of his termination of employment, is equal to:

(a) 55 percent of his “Final Average Earnings” (as defined in subsection E-3.4);

REDUCED BY

(b) the amount of the Participant’s “Other Benefits” (as defined in subsection E-3.6); and

FURTHER REDUCED BY

(c) the reduction, if any, required by subsection E-9.4 which relates to “Spousal Survivor Benefits” (as described in subsection E-9.1).

E-3.3. Form and Time of Payment of Basic Benefit . Except as otherwise specifically provided by Section E-7, relating to optional forms of payment, the “Actuarial Present Value” (as defined in the MeadWestvaco Retirement Plan) of the amount of a Participant’s Basic Benefit will be distributed to him in the form of a single, lump sum payment, on or as soon as practicable after the date on which the Participant’s employment with the Employers and the Affiliates is terminated.

E-3.4. Final Average Earnings . The term “Final Average Earnings” means, with respect to any Participant, the average of his annual “Earnings” (as defined in subsection E-3.5) for the highest 3 calendar years of his employment with the Employers (or his average monthly Earnings if less than 3 calendar years of such employment) selected from the 11 calendar years during which he received Earnings commencing with the earlier of the calendar year in which the Participant attains age 62 years or terminates his employment with the Employers and the 10 preceding calendar years. Notwithstanding the foregoing, for purposes of determining the amount of a Spousal Survivor Benefit payable pursuant to Section E-9 on account of a Participant who has not attained age 55 years on the date of his death, it shall be assumed that the amount of his Final Average Earnings is equal to the amount of his “Earnings” (as defined in the MeadWestvaco Retirement Plan) during the calendar year next preceding the year of his death.

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E-3.5. Earnings . For any calendar year, the term “Earnings” means, with respect to any Participant, the cash remuneration and the value of property given to him in lieu of cash (without regard to any restriction or risk of forfeiture), payable to him in that year by the Employers in the form of base pay, bonuses, short term incentive compensation and amounts payable in lieu of short term incentive compensation in that year (and any portion of any such amounts deferred by the Participant pursuant to the terms of any deferred compensation arrangement maintained by the Employers). In no event shall a Participant’s Earnings:

(a) include payments from long term incentive compensation plans, stock option plans, stock appreciation rights, severance payments, special agreements, contracts or payments, expense reimbursements or relocation allowances; or

(b) exceed 2 times his base pay.

E-3.6. Other Benefits . The term “Other Benefits” means, with respect to any Participant, the sum of:

(a) 50 percent of the annual primary Social Security benefit payable (or, in the case of a Participant whose benefit is being determined prior to the date he attains age 62 years, estimated by the Administrator, in his absolute discretion, to be payable) to the Participant at age 62;

(b) the annual amounts (expressed as single life annuities) determined to be payable to the Participant under The MeadWestvaco Retirement Plan, The Mead Corporation Section 415 Excess Benefit Plan, The Mead Corporation Excess Earnings Benefit Plan, and the MeadWestvaco Corporation Retirement Restoration Plan (the “MeadWestvaco Plans”), but determined without taking into account any restructuring or other supplemental benefits payable to the Participant under the MeadWestvaco Plans, as of his termination date, or such other determination date as is specifically provided with respect to a particular Plan Benefit and disregarding any reduction on account of a “qualified domestic relations order” (as defined in section 414(p) of the Code); and

(c) the annual amount (expressed as a single life annuity) payable to the Participant from the employer-funded portion of any deferred, vested or lump sum benefit earned under a “Prior Retirement Plan” (that is, any defined benefit plan or similar primary retirement plan intended to meet the requirements of section 401(a) of the Code (including any governmental plan) maintained by any previous employer of the Participant) prior to age 55 and payable no earlier than 10 years prior to the date on which the Participant was employed by the Employers and Affiliates, but disregarding any reduction on account of a qualified domestic relations order.

E-4.

E ARLY B ENEFIT

E-4.1. Eligibility for Early Benefit . If a Participant’s employment with the Employers and the Affiliates is terminated (for a reason other than

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his death) at or after he has attained age 55 years, but prior to the date on which he attains age 62 years, he shall be entitled to receive an “Early Benefit” in an amount determined pursuant to the provisions of subsection E-4.2 and paid in the form and at the time provided in subsection E-4.3.

E-4.2. Amount of Early Benefit . A Participant’s Early Benefit is an amount determined in accordance with the provisions of subsection E-3.2, but computed by reducing the percentage “55 percent” found in paragraph E-3.2(a) by ¹ / 4 of one percent for each full month by which the commencement of payment of the Participant’s Early Benefit precedes the first day of the calendar month coincident with, or next following, the date on which he attains age 62 years.

E-4.3. Form and Time of Payment of Early Benefit . Except as otherwise specifically provided by Section E-7, relating to optional forms of payment, the amount of a Participant’s Early Benefit shall be payable monthly, in the form of a single life annuity, from the first day of the calendar month next following his termination of employment through the calendar month during which the Participant attains age 62 years. As of the first day of the calendar month next following the date on which the Participant attains age 62 years, an amount equal to the Actuarial Present Value of his Early Benefit, (which Actuarial Present Value shall be reduced by the aggregate amount of the monthly payments previously made to him and increased by interest on the undistributed portion of his Early Benefit calculated from his termination date to the payment date), determined as of his termination date, will be distributed to the Participant in the form of a single, lump sum payment.

E-5.

P RE -A GE 55 B ENEFIT

E-5.1. Eligibility for Pre-Age 55 Benefit . If a Participant’s employment with the Employers and the Affiliates is “Involuntarily Terminated” (as described in subsection E-5.4) prior to the date on which he attains age 55 years, or if his employment is terminated prior to that date for any other reason approved for purposes of the Plan by MeadWestvaco’s Chief Executive Officer, he shall be entitled to receive a “Pre-Age 55 Benefit” in an amount determined pursuant to the provisions of subsection E-5.2 and paid in the form and at the time provided in subsection E-5.3.

E-5.2. Amount of Pre-Age 55 Benefit . A Participant’s Pre-Age 55 Benefit is an amount determined in accordance with the provisions of subsection E-3.2 as of the date he attains age 62, but computed by:

(a) reducing the percentage “55 percent” found in paragraph E-3.2(a) by ¹ / 4 of one percent for each full month by which the date of the Participant’s termination of employment with the Employers and the Affiliates precedes the first day of the calendar month coincident with, or next following, the date on which he will attain age 62 years; and

(b) by assuming, for purposes of determining the amount of his Other Benefits attributable to the MeadWestvaco Plans, that he will continue as a Participant under those Plans until the date on which he will attain age 55 years and that his benefits under the MeadWestvaco Plans will be payable on that date.

E-5

E-5.3. Form and Time of Payment of Pre-Age 55 Benefit . Except as otherwise specifically provided by Section E-7, an amount equal to the Actuarial Present Value of a Participant’s Pre-Age 55 Benefit will be distributed to the Participant, in a single, lump sum payment as of the first day of the calendar month coincident with or next following the date on which the Participant attains age 62 years.

E-5.4. Involuntary Termination . The term “Involuntary Termination” means, with respect to any Participant, the termination of the Participant’s employment with the Employers and the Affiliates, either:

(a) at the option of his employer, for a reason other than “Cause” (as defined in subsection E-5.5); or

(b) at the Participant’s option, exercised within the 24-month period following the occurrence, without the express consent of the Participant, of any one or more of the following events:

(i) the assignment of duties to the Participant which are substantially inconsistent with the Participant’s duties, responsibilities and status at the time of the assignment, or that constitute a substantial reduction or alteration in the nature or status of such duties and responsibilities;

(ii) a reduction in the amount of the Participant’s base pay;

(iii) the transfer of the work location of the Participant to a place that is in excess of 25 miles from his work location at the time the transfer is made;

(iv) the failure of the Participant’s Employer or Affiliate employer to continue in effect any of its employee benefit plans, policies, practices or arrangements, including, but not limited to, those plans, policies and arrangements maintained solely for the benefit of key management personnel in which the Participant participates, or the failure of it to continue the Participant’s participation therein on substantially the same basis, both in terms of the amount of benefits provided and the level of participation relative to other participants, unless such benefits, policies and arrangements are replaced by one or more alternative or substitute plans, policies or arrangements providing substantially equivalent benefits in the aggregate.

The determination of whether an event described in paragraph (b) above has occurred shall be made by the Committee, based on its comparison of circumstances existing after the alleged occurrence with the circumstances prevailing immediately prior thereto.

E-5.5. Termination for Cause . For purposes of the Plan, a termination of a Participant’s employment for “Cause” shall mean termination as a result of the Participant’s:

(a) willful and continued failure to perform duties with the Employers and Affiliates (other than any such failure resulting from an

E-6

Involuntary Termination) after a written demand for substantial performance has been delivered to the Participant specifically identifying the manner in which the Employer or Affiliate, as the case may be, believes the Participant has not substantially performed such duties and the Participant has failed to resume substantial performance on a continuous basis within 14 days of receiving such demand;

(b) willfully engaging in conduct which the Committee determines is demonstrably and materially injurious to the Employers or Affiliates, monetarily or otherwise; or

(c) conviction of a felony, or conviction of a misdemeanor which impairs the Participant’s ability to perform his duties with the Employer or Affiliate employing him.

E-6.

D ISABILITY B ENEFIT

E-6.1. Eligibility for Disability Benefit . If a Participant’s employment with the Employers and the Affiliates is terminated by reason of his becoming “Disabled” (as defined in the MeadWestvaco Retirement Plan) prior to the date on which he attains age 62 years and he continues to be Disabled until age 62, he shall be eligible to receive a “Disability Benefit” in an amount determined pursuant to the provisions of subsection E-6.2 and paid in the form and at the time provided in subsection E-6.3.

E-6.2. Amount of Disability Benefit . A Participant’s Disability Benefit is an amount determined in accordance with the provisions of subsection E-3.2, but expressed as a single life annuity commencing as of the later of the date the Participant attains age 62 or the date as of which Pension payments to him commence under the MeadWestvaco Retirement Plan.

E-6.3. Form and Time of Payment of Disability Benefit . Except as otherwise specifically provided by Section E-7, relating to optional forms of payment, the Actuarial Present Value of the amount of a Participant’s Disability Benefit will be distributed to him in the form of a single, lump sum payment as soon as practicable after the later of the date on which the Participant attains age 62 years or the date as of which Pension payments to him commence under the MeadWestvaco Retirement Plan.

E-7.

O PTIONAL F ORMS OF B ENEFIT

E-7.1. Request for Optional Payment Form . A Participant, by writing filed with the Administrator at least one year prior to his termination date (or within 60 days after becoming Disabled) in such form as the Administrator may require, may request to have his Plan Benefit paid in an optional form permitted by subsection E-7.2. Any such request shall be deemed to be approved by the Administrator unless disapproved within 15 days of its receipt. Any such approved request shall be void and of no force or effect if the Participant dies before payment in the optional form requested begins.

E-7.2. Optional Forms of Benefit Payment . Subject to the provisions of subsection E-7.3, the optional forms of payment under the Plan are:

(a) a single life annuity in the amount calculated under subsection E-3.2, E-4.2, E-5.2 or E-6.2, whichever is applicable, payable commencing at the time permitted under subsection E-3.3, E-4.3, E-5.3 or E-6.3, whichever is applicable;

E-7

(b) any optional form of benefit permitted (assuming, for this purpose, that election of an optional form of Disability Pension is permitted) under the provisions of the MeadWestvaco Retirement Plan at the time the request is made, the amount of which shall be determined by applying the actuarial assumptions utilized under that plan; and

(c) in the case of an Early Benefit payable monthly pursuant to subsection E-4.3, by forgoing those monthly amounts and instead receiving the Actuarial Present Value of the Early Benefit computed as of age 62, but without regard to the percentage reduction otherwise required by subsection E-4.2, payable in a single, lump sum distribution as of the first day of the month coincident with, or next following, the date on which the Participant attains age 62 years.

E-7.3. Limitations on Optional Forms of Payment . No optional form of payment shall permit:

(a) payment of any single, lump sum amount to a Participant prior to the first day of the month coincident with, or next following, the date on which the Participant attains age 62 years; or

(b) payment of a Disability Benefit prior to the time specified in subsection E-6.3.

E-8.

D EATH B ENEFIT

E-8.1. Eligibility for Death Benefit . If a Participant dies after payment of monthly amounts of his Early Benefit begins under subsection E-4.3 and prior to receiving his entire Early Benefit, a Death Benefit, in an amount determined under subsection E-8.2, shall be paid, as soon as practicable, in a single, lump sum, to his “Beneficiary” (as defined in subsection E-8.3). Except as specifically provided by an optional form of payment permitted by subsection E-7.2 and by Section E-9, relating to “Spousal Survivor Benefits,” no other amount shall be payable to any person from the Plan on account of the death of a Participant.

E-8.2. Amount of Death Benefit . The Death Benefit payable on account of a deceased Participant shall be an amount equal to the Actuarial Present Value of his Early Benefit (which Actuarial Present Value shall be reduced by the aggregate amount of the monthly payments previously made to him and increased by interest on the undistributed portion of his Early Benefit calculated from his termination date to the payment date), determined as of his termination date.

E-8.3. Beneficiary . The term “Beneficiary” means, with respect to any Participant, such natural or legal person or persons as may be designated by him (who may be designated contingently or successively) to receive the Death Benefit payable if he dies before a total payment of his Early Benefit is made to him. A Beneficiary designation will be effective with respect to a Participant only when a signed and dated beneficiary designation form is filed with the Committee while the Participant is alive, which form will cancel any beneficiary designation form signed and filed earlier. If a Participant is not survived by a Beneficiary the Committee shall pay the

E-8

Death Benefit to his “Spouse” (as defined in the MeadWestvaco Retirement Plan) or, if he is not survived by a Spouse, to the legal representative or representatives of the estate of the Participant.

E-9.

S POUSAL S URVIVOR B ENEFIT

E-9.1. Eligibility for Spousal Survivor Benefit . Subject to the reduction required by subsection E-9.4, if a Participant dies while employed by the Employers or after his termination of employment with the Employers, but, prior to the date on which he is first receives payment of a Benefit to which he is entitled under Section E-3, E-4 or E-5, his Spouse, if any, shall be eligible to receive a Spousal Survivor Benefit, in an amount determined under subsection E-9.2, if she has a right to receive a Pre-Retirement Survivor Pension under the MeadWestvaco Retirement Plan and has not waived that right.

E-9.2. Amount of Spousal Survivor Benefit . The Spousal Survivor Benefit payable to a Spouse on account of a deceased Participant is an amount determined by:

(a) calculating the amount, expressed as a joint and survivor annuity of 50, 66 ² / 3 or 75 percent (whichever is payable to the Spouse as a Pre-Retirement Survivor Pension under the MeadWestvaco Retirement Plan), which is of Actuarial Equivalent Value to a single life annuity computed with respect to the deceased Participant pursuant to subsection E-3.1, E-4.1 or E-5.1, whichever is applicable; and

(b) then determining the annual amount that would be payable to the surviving Spouse on the basis of the joint and survivor annuity computed under paragraph (a) above.

Notwithstanding the provisions of paragraph E-3.2(b) to the contrary, in computing the amount of a “Spousal Survivor Benefit” with respect to the surviving Spouse of a deceased Participant who had not attained age 55 years on the date of his death, the Other Benefit attributable to the MeadWestvaco Retirement Plan shall be an amount equal to the Participant’s “Accrued Benefit” (as defined under that plan) as of the date of his death, assuming that the amount of his Final Average Earnings used in computing his Accrued Benefit equaled the “Earnings” (as defined in the MeadWestvaco Retirement Plan) payable to him by the Employers during his last full calendar year of employment by them and that his “Pension” under the MeadWestvaco Retirement Plan would be payable at the date the deceased Participant would have attained age 55 years.

E-9.3. Form and Time of Payment of Spousal Survivor Benefit . The Actuarial Present Value (determined taking into account the date on which a Benefit would have commenced under Section E-3, E-4 or E-5, whichever would have been applicable, and the surviving Spouse’s age on that date) of the amount determined under paragraph E-9.2(b) will be distributed to the surviving Spouse, in the form of a single, lump sum payment, as soon as practicable after the date of the Participant’s death.

E-9.4. Reduction for Spousal Survivor Benefit . As provided by paragraph E-3.2(c), the amount of a Participant’s Plan Benefit will be reduced by a percentage thereof, determined in accordance with the following table, for the portion of the calendar period beginning on the date on which

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the Participant attains age 55 years and ending on the earlier of the date payment of his Benefit begins or the date on which he attains age 62 years, during which his Spouse is eligible to receive a Pre-Retirement Survivor Pension under the MeadWestvaco Retirement Plan. The percentage reduction will be computed on a pro rata basis for completed months of coverage which are less than a whole year.


Percentage of Benefit Payable to Spouse		Percentage Reduction for Each Full Year of Coverage
50 percent		¹ / 2 of one percent
66 ² / 3 percent		² / 3 of one percent
75 percent		³ / 4 of one percent

Notwithstanding the foregoing table, in no event will a percentage reduction under this Plan be greater than the percentage reduction for a Pre-Retirement Survivor Pension of a like amount under the MeadWestvaco Retirement Plan.

E-10.

S PECIAL P ROVISIONS A FFECTING P AYMENT OF B ENEFITS .

E-10.1. Competition . Subject to his right of appeal under Section E-11, if the Committee determines that a Participant, without the express prior written consent of MeadWestvaco, directly or indirectly, individually or as an agent, officer, director, employee, shareholder (other than being the holder of any stock which represents a less than one percent interest in a corporation), partner or in any other capacity whatsoever, after termination of employment and prior to attainment of age 62, has engaged, or is engaging, in any activity competitive with or adverse to the Employer’s and Affiliate’s businesses or in the sale, distribution, production, or attempted sale, distribution or production, of any goods, products or services then sold or being developed by any Employer or Affiliate, all Benefits otherwise payable at any time under the Plan shall be permanently forfeited and payment of Benefits, if commenced, shall cease. This subsection E-10.1 shall not apply to a Participant whose employment with the Employers and Affiliates terminates on or after a “Change in Control” (as defined in subsection E-10.3) of MeadWestvaco.

E-10.2. Termination for Cause . Subject to his right of appeal under Section E-11, if the employment of a Participant with the Employers and Affiliates is terminated for Cause, all Benefits otherwise payable to any person, at any time, under the Plan shall be automatically and permanently forfeited.

E-10.3. Payments After a Change in Control . Upon the occurrence of a Change in Control of MeadWestvaco, the accrued benefit of an employee who is a Participant on the date of the Change in Control shall immediately and fully vest; provided, however, that such benefit shall be forfeited pursuant to subsection E-10.2 hereof if the employment of the employee shall be terminated for “Cause” as that term is defined in this Plan immediately prior to the Change in Control. If the employment of a Participant whose benefit has vested in accordance with the immediately preceding sentence is terminated within 24 months after the date of a Change in Control for a reason other than death or Cause (as that term is defined in this Plan immediately prior to the Change in Control), he shall be entitled to receive a “Termination Benefit,” payable within 30 days after his termination date.

E-10

A Participant’s Termination Benefit is a single lump sum amount equal to the “Actuarial Present Value” of the amounts that would have been his Plan Benefit if determined as of the date of his termination of employment pursuant to the provisions of the Plan in effect immediately prior to the Change in Control. The Actuarial Present Value of those amounts shall be determined for purposes of this Section by applying the actuarial assumptions and methods being utilized for that purpose under the MeadWestvaco Retirement Plan on the day prior to the date of the Change in Control. For purposes of computing the amount of the Plan Benefit:

(a) a Participant who has not attained age 55 years on the date of his actual termination of employment will be deemed to have had his employment with the Employers and Affiliates Involuntarily Terminated on the date of his termination and his Pre-Age 55 Benefit shall be computed pursuant to subsection E-5.2 hereof without applying the assumption contained in subsection E-5.2(b) but, instead, determining the Other Benefits attributable to MeadWestvaco Plans based on the Deferred Vested Pension on a Participant’s employment termination with the Employers and Affiliates; and

(b) in the case of a Participant terminated on account of becoming Disabled, it shall be assumed that he will continue to be Disabled until he attains age 62 years.

If a Participant, surviving Spouse or Beneficiary is receiving payment of periodic Plan Benefits on the date of a Change in Control, the Actuarial Present Value of any remaining payments (determined as of the day immediately preceding that date) shall be payable to him, in a single, lump sum, within 30 days of the date of the Change in Control. For purposes of the Plan, a “Change in Control” shall be deemed to have occurred if an event set forth in any of the following paragraphs shall have occurred:

(i) the date of expiration of a Tender Offer (other than an offer by MeadWestvaco ), if the offeror acquires Shares pursuant to such Tender Offer;

(ii) the date of approval by the shareholders of MeadWestvaco of a definitive agreement: (x) for the merger or consolidation of MeadWestvaco or any direct or indirect subsidiary of MeadWestvaco into or with another corporation, other than (1) a merger or consolidation which would result in the voting securities of MeadWestvaco outstanding immediately prior thereto continuing to represent (i) in the case of a merger or consolidation of MeadWestvaco, either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof, or (ii) in the case of a merger or consolidation of any direct or indirect subsidiary of MeadWestvaco, either by remaining outstanding if MeadWestvaco continues as a parent of the merged or consolidated subsidiary or by being converted into voting securities of the surviving entity or any parent thereof) at least 51% of the combined voting power of the voting securities of MeadWestvaco or such surviving or parent entity outstanding immediately after such merger or consolidation, or (2) a merger or consolidation effected to implement a recapitalization of MeadWestvaco (or similar transaction) in which no Person (as defined below) is or becomes

E-11

the Beneficial Owner (as defined below), directly or indirectly, of securities of MeadWestvaco (not including in the securities Beneficially Owned by such Person any securities acquired directly from MeadWestvaco or its Affiliates) representing 25% or more of the combined voting power of MeadWestvaco’s then outstanding securities, or (y) for the sale or disposition of all or substantially all of the assets of MeadWestvaco, other than a sale or disposition by MeadWestvaco of all or substantially all of MeadWestvaco’s assets to an entity, at least 51% of the combined voting power of the voting securities of which are owned (directly or indirectly) by shareholders of MeadWestvaco in substantially the same proportions as their ownership of MeadWestvaco immediately prior to such sale or disposition;

(iii)(x) any Person is or becomes the Beneficial Owner of 25% or more of the voting power of the then outstanding securities of MeadWestvaco (not including in the securities beneficially owned by such Person any securities acquired directly from MeadWestvaco or its affiliates), excluding any Person who becomes such a Beneficial Owner in connection with a transaction described in clause (x) (1) of paragraph (ii) above or (y) the date of authorization, by both a majority of the voting power of MeadWestvaco and a majority of the portion of such voting power excluding the voting power of interested Shares, of a control share acquisition (as such term is defined in Chapter 1701 of the Ohio Revised Code); and

(iv) a change in the composition of the Board of Directors such that individuals who were members of the Board of Directors on the date two years prior to such change (and any new directors (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of MeadWestvaco) who were elected, or were nominated for election, by MeadWestvaco’s shareholders with the affirmative vote of at least two-thirds of the directors then still in office who either were directors at the beginning of such two year period or whose election or nomination for election was previously so approved) no longer constitute a majority of the Board of Directors.

Notwithstanding the foregoing, a “Change in Control” shall not be deemed to have occurred by virtue of the consummation of any transaction or series of integrated transactions immediately following which the record holders of the common stock of MeadWestvaco immediately prior to such transaction or series of transactions continue to have substantially the same proportionate ownership in an entity which owns all or substantially all of the assets of MeadWestvaco immediately following such transaction or series of transactions.

“Affiliate” shall have the meaning set forth in Rule 12b-2 promulgated under Section 12 of the Exchange Act.

“Beneficial Owner” shall have the meaning defined in Rule 13d-3 under the Exchange Act.

E-12

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended from time to time.

“Person” shall have the meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, except that such term shall not include (i) MeadWestvaco or any of its subsidiaries, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of MeadWestvaco or any of its Affiliates, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities, or (iv) a corporation owned, directly or indirectly, by the shareholders of MeadWestvaco in substantially the same proportions as their ownership of stock of MeadWestvaco.

“Shares” shall mean shares of common stock, without par value, of MeadWestvaco Corporation.

“Tender Offer” shall mean a tender offer or a request or invitation for tenders or an exchange offer subject to regulation under Section 14(d) of the Exchange Act and the rules and regulations thereunder, as the same may be amended, modified or superseded from time to time.

E-10.4. Emergency Payments . If it is determined (as provided below) that a Participant or Beneficiary has experienced an “Unforeseeable Emergency” (as defined below), the terms and manner of payment of Benefits provided in the Plan or selected by a Participant may be changed to the extent appropriate to satisfy the Participant’s or Beneficiary’s emergency need. The term “Unforeseeable Emergency” means severe financial hardship to the Participant or Beneficiary resulting from a sudden and unexpected illness or accident of the Participant or Beneficiary or of a “dependent” (as defined in section 152(a) of the Code) of the Participant or Beneficiary, loss of the Participant’s or Beneficiary’s property due to a casualty, or other similar extra-ordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant or Beneficiary. A determination with respect to whether a Participant or Beneficiary has experienced an Unforeseeable Emergency shall be made:

(a) in the case of a Participant employed, or last employed, by an Employer as other than an elected officer of the Employer and his Beneficiary, the Chairperson of the Committee; and

(b) in the case of a Participant employed, or last employed, by an Employer as an elected officer of the Employer and his Beneficiary, the Committee.

The provisions of Section E-11 of the Plan shall not be applicable with respect to any determination made pursuant to this subsection E-10.4.

E-10.5. ECAP Credit in Lieu of Distribution . A Participant who is also a Participant in The Mead Corporation Executive Capital Accumulation Plan (“ECAP”) may elect to waive his right to receive any amount otherwise distributable to him pursuant to the provisions of the Plan and to have the same amount credited for his benefit (as of the date distribution would have been made) and subsequently distributed to him under the terms of the ECAP. An election made by a Participant in accordance with the provisions of this subsection must be in such written form as the Committee shall decide and filed with the Administrator at least three months prior to the Participant’s

E-13

employment termination with the Employers and Affiliates with respect to distributions made on or after employment termination or, as an additional alternative, filed prior to a Change in Control with respect to distributions made on or after a Change in Control. An election made by a Participant pursuant to the foregoing sentence is revocable at any time that is at least three months prior to the date of employment termination with the Employer and Affiliates or a Change in Control, as appropriate. In no event shall this subsection be applicable to any amount distributable to any person other than a Participant.

E-10.6. Payment to Incapacitated Persons . Notwithstanding any other provision of the Plan, if a Participant or other person entitled to a Benefit payment under the Plan is determined by a court of competent jurisdiction to be physically, mentally or legally incapacitated and unable to manage his financial affairs and claim is made by a conservator or other person legally charged by such court with the care of his person, the Committee shall make distributions to such conservator or other person. Any distribution made in accordance with this subsection shall fully acquit and discharge all persons from all further liability on account thereof.

E-10.7. Withholding . The Administrator shall cause to be withheld from the amount of any Benefit paid to a Participant or Beneficiary pursuant to the terms of the Plan any amount required to be withheld by federal, state or local law.

E-11.

D ISPUTE R ESOLUTION

E-11.1. Claims Procedures . All disputes relating to benefits under the Plan shall be reviewed and resolved in accordance with claims procedures established by the Administrator. Such claims procedures shall offer a reasonable opportunity for a full and fair review of each claim and shall be consistent with the requirements of 29 C.F.R. § 2560.503-1.

E-11.2. Records, Data and Information . Unless proven to the satisfaction of the Administrator to be in error, the records, data and information of the Employers, Affiliates and administrators of the MeadWestvaco Plans shall be conclusive on all Participants, surviving Spouses and Beneficiaries with respect to all matters relating to the Plan.

E-12.

A MENDMENT AND T ERMINATION

E-12.1. Amendment and Termination . MeadWestvaco expects the Plan to be permanent, but since future conditions affecting MeadWestvaco cannot be anticipated or foreseen, MeadWestvaco must necessarily and does hereby reserve the right to amend, modify or terminate the Plan at any time by action of its Board of Directors.

E-12.2. Contingencies Affecting the Employers . In the event of a merger or consolidation of the Employer, or the transfer of substantially all of the assets of the Employer to another corporation, such successor corporation shall be substituted for the Employer under the terms and provisions of the Plan.

E-12.3. Protected Benefits . If the Plan is terminated, revoked, or amended so as to decrease benefits provided under the Plan, the full benefits earned by each terminated Participant and Beneficiary shall not be reduced.

E-14

A Participant who is in active service at the time of a Plan termination, revocation or amendment shall be entitled to full Benefits under the prior provisions of the Plan; provided, however, that his Earnings for periods subsequent to such termination, revocation or amendment shall not be used in determining the amount of benefits based on Final Average Earnings that are protected by this subsection. The time and manner of payment of Benefits protected by this subsection shall remain subject to the prior terms and conditions of the Plan.

E-15

Exhibit 10.25

MEADWESTVACO CORPORATION DEFERRED INCOME PLAN

Restatement Effective January 1, 2007 (except as otherwise provided)

TABLE OF CONTENTS


A RTICLE 1 . I NTRODUCTION		1
1.01.	History of the Plan	1
1.02.	Purposes of the Plan	1
1.03.	American Jobs Creation Act of 2004 (“AJCA”)	2
1.04.	Effective Date	3

A RTICLE 2 . D EFINITIONS AND C ONSTRUCTION		3
2.01.	Definitions	3
2.02.	Construction	7
2.03.	Timing of Payments	7

A RTICLE 3 . P ARTICIPATION		7
3.01.	Commencing Participation	7
3.02.	Ending Participation	8

A RTICLE 4 . C REDITS TO P ARTICIPANTS ’ A CCOUNTS		8
4.01.	Eligible Employee Deferrals	8
4.02.	Employer Non-Qualified Matching Credits	10

A RTICLE 5 . I NVESTMENTS AND A CCOUNTS		11
5.01.	Participant Allocation of Accounts Among Book-Entry Investment Funds	11
5.02.	Change in Allocation	11
5.03.	Valuation of Investment Funds	12
5.04.	Sub-Accounts	12
5.05.	Risk of Loss	13
5.06.	Interests in the Plan	13
5.07.	Special Provisions Applicable to the Company Stock Portion of the Plan	13

A RTICLE 6 . V ESTING AND F ORFEITURE		13
6.01.	Vesting	13
6.02.	Forfeiture	14

A RTICLE 7 . P AYMENTS		14
7.01.	Distribution Election Process	14
7.02.	Types of Distributions	14
7.03.	Form of Payment of Distributions	16
7.04.	Changes to the Time and Form of Distribution	17
7.05.	Pre-AJCA Accounts	19


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A RTICLE 8 . H ARDSHIP W ITHDRAWALS AND P AYMENTS U PON D EATH		19
8.01.	Hardship Withdrawal.	19
8.02.	Payments Upon Death	20
8.03.	Designation of Beneficiary	21
8.04.	Pre-AJCA Accounts	21

A RTICLE 9 . P LAN A DMINISTRATION		21
9.01.	Plan Administrator	21
9.02.	Delegation and Employment of Agents	21
9.03.	Interpretations	21
9.04.	Elections and Designations	22
9.05.	Claims	22
9.06.	Postponement of Action	22

A RTICLE 10 . A MENDMENT AND T ERMINATION OF P LAN		22
10.01.	Amendment of the Plan	22
10.02.	Termination of the Plan	23
10.03.	Design Decisions	23

A RTICLE 11 . M ISCELLANEOUS P ROVISIONS		23
11.01.	Employment Rights Not Affected by Plan	23
11.02.	Doubt as to Identity	24
11.03.	Payment Medium	24
11.04.	Obligations to Make Payments	24
11.05.	Liability Limited	24
11.06.	Overpayments	24
11.07.	Incapacity and Minor Status	25
11.08.	Assignment and Liens	25
11.09.	Withholding Taxes	25
11.10.	Titles and Headings Not to Control	25
11.11.	Notice of Process	25
11.12.	Plan Expenses	26
11.13.	Governing Law and Limitation on Actions	26
11.14.	Class Action Forum Selection Clause	26
11.15.	Severability	27
11.16.	Integration Clause and Complete Statement of Plan	27

A PPENDIX A. T RANSFER OF E X -CAP B ALANCES		A-1

A PPENDIX B. D ISTRIBUTION OF P RE -AJCA DIP A CCOUNTS		B-1

A PPENDIX C. D ISTRIBUTION OF P RE -AJCA E X -CAP A CCOUNTS		C-1


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ARTICLE 1. INTRODUCTION

1.01.

H ISTORY OF THE P LAN

(a)

Immediately before January 1, 2003, two operating subsidiaries of MeadWestvaco (The Mead Corporation and Westvaco Corporation) sponsored five non-qualified defined contribution plans for their eligible employees. These plans were then known as (1) the Westvaco Corporation Deferred Compensation Plan, (2) the Westvaco Corporation Savings and Investment Restoration Plan, (3) the Westvaco Corporation Excess Benefit Plan, (4) The Mead Corporation Executive Capital Accumulation Plan, and (5) The Mead Corporation Incentive Compensation Election Plan.

(b)

Deferrals to the plans listed in paragraph (a), above, were discontinued before January 1, 2003. In place of those plans, MeadWestvaco created the MeadWestvaco Corporation Deferred Income Plan (the “Plan”). Before 2005, participants in those plans were permitted, but not required, to “roll over” their balances under those plans into the Plan. Such rolled-over balances are subject to the terms of the Plan.

(c)

The remaining account balances under the Westvaco Corporation Deferred Compensation Plan, Westvaco Corporation Savings and Investment Restoration Plan, Westvaco Corporation Excess Benefit Plan and Mead Corporation Incentive Compensation Election Plan— i.e. , those not “rolled over” to the Plan before 2005—remain subject to the terms and conditions of those plans.

(d)

The remaining account balances under the Mead Corporation Executive Capital Accumulation Plan— i.e. , those not “rolled over” to the Plan before 2005—remained subject to the terms and conditions of the Mead Corporation Executive Capital Accumulation Plan in 2005 and 2006. However, effective January 1, 2007, MeadWestvaco merged the Mead Corporation Executive Capital Accumulation Plan into this Plan. As a result of the merger, the remaining account balances under the Mead Corporation Executive Capital Accumulation Plan— i.e. , those not “rolled over” to the Plan before 2005—are governed by (i) Appendix A of the Plan, which applies to Participants who were employed by the Company or an 80% Affiliate on or after January 1, 2005; or (ii) Appendix C of the Plan, which applies to Participants who terminated employment before January 1, 2005.

1.02.

P URPOSES OF THE P LAN

(a)

The purposes of the Plan are to enable Participants to defer voluntarily the receipt of certain amounts, including compensation not otherwise eligible for deferral under the MeadWestvaco Corporation Savings and Employee Stock Ownership Plan for Salaried and Non-Bargained Employees (the “Qualified Plan”), to provide matching credits on certain deferrals, to restore certain benefits that cannot be provided under the Qualified Plan, and to provide retirement and other benefits to Participants through an individual account program.


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(b)

The Plan is unfunded and benefits due under the Plan remain subject to the claims of the Company’s general creditors in the event of the Company’s bankruptcy or insolvency. Benefits due under the Plan shall be payable from the general assets of the Company or from any unsecured (“rabbi”) trust or similar arrangement, the assets of which shall be subject to the claims of the Company’s general creditors in the event of the Company’s bankruptcy or insolvency.

(c)

The Plan is maintained primarily for the purpose of providing deferred compensation for a select group of management and/or highly compensated employees of the Company. The Plan shall not be subject to the participation and vesting requirements, funding provisions, or fiduciary duty rules (Parts 2, 3, and 4 of Title I) of ERISA.

1.03.

A MERICAN J OBS C REATION A CT OF 2004 (“AJCA”)

(a)	Effective January 1, 2005, except as provided in Section 1.03(c):

(1)

All benefits under the Plan shall be subject to section 409A of the Internal Revenue Code of 1986, as amended (the “Code”);

(2)

The Plan shall comply with the requirements of, and shall be operated, administered, and interpreted in accordance with, (A) before January 1, 2009, a reasonable good-faith interpretation of section 409A of the Code and (B) after December 31, 2008, section 409A of the Code; and

(3)

For the period from January 1, 2005 through December 31, 2008, the Company and the Administration Committee had sole discretion to override the terms set forth in the plan document for the Plan to the extent that either the Company or the Committee determined to be necessary or appropriate to comply with a good-faith, reasonable interpretation of the requirements of section 409A of the Code.

(4)

If the Company or Administration Committee determines that any provision of the Plan is or might be inconsistent with the restrictions imposed by section 409A, such provision shall be deemed to be amended to the extent that the Company or Administration Committee determines is necessary to bring it into compliance with the requirements of section 409A of the Code. Any such deemed amendment shall be effective as of the earliest date such amendment is necessary under section 409A of the Code.

(b)

No provision in the Plan shall be interpreted or construed to (1) create any liability for the Company or any Affiliate, or any of their employees, officers, directors, or other service providers, related to a failure to comply with section 409A or (2) transfer any liability for a failure to comply with section 409A from a Participant or other individual to the Company or any Affiliate, or any of their employees, officers, directors, or other service providers.

(c)

Pre-AJCA Accounts (as defined in Section 2.01(dd)) are not subject to section 409A of the Code. Notwithstanding any provision of this Section 1.03 to the contrary, Pre-AJCA Accounts shall be administered in accordance with the special provisions set forth in Appendix B and Appendix C, as applicable, which reflect terms that have been in effect since before October 4, 2004. With respect to such Pre-AJCA Accounts, no amendment shall be made to the Plan that would constitute or result in a “material modification” of the Plan (within the meaning of section 885(d) of the AJCA) unless, and only to the extent that, such amendment expressly states that it is intended to constitute a “material modification” with respect to one or more Pre-AJCA Accounts.


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1.04.

E FFECTIVE D ATE

Unless a particular provision of the Plan specifies a different effective date for that provision, this restatement of the Plan shall be effective January 1, 2007.

ARTICLE 2. DEFINITIONS AND CONSTRUCTION

2.01.

D EFINITIONS

For purposes of the Plan, unless the context clearly or necessarily indicates the contrary, the following words and phrases shall have the meanings set forth in the definitions below:

(a)

“Account” means an unfunded book-entry account for a Participant, representing deferrals and other credits to the Plan, as adjusted to reflect earnings, losses, and payments. Each Account shall be divided into sub-accounts in accordance with Section 5.04. Accounts established under the Plan shall hold no actual funds or assets.

(b)	“Administration Committee” means the individuals constituting the Benefit Plans Administration Committee designated by MeadWestvaco’s Chief Executive Officer, or similar committee appointed pursuant to Section 9.01.

(c)

“Affiliate” means, with respect to the MeadWestvaco or a Designated Subsidiary, any person or entity that is required to be combined with MeadWestvaco or the Designated Subsidiary as a single employer under section 414(b) or (c) of the Code, except that the 80 percent ownership standard prescribed by section 1563(a)(1), (2), and (3) of the Code and Treas. Reg. § 1.414(c)-2 shall be replaced with a 50 percent ownership standard.

(d)	“AJCA” means the American Jobs Creation Act of 2004, as amended.

(e)	“Base Salary” means the gross amount of base salary, before reduction for tax withholding and pre-tax or after-tax contributions to any employee benefit plan, and before any other payroll deductions. Base Salary shall not include any pay offered in lieu of vacation.

(f)	“Beneficiary” means, in the case of any Participant who dies, the person or persons designated in accordance with Section 8.03.

(g)	“Board of Directors” means the Board of Directors of MeadWestvaco.

(h)	“Code” means the Internal Revenue Code of 1986, as amended.

(i)	“Commission” means compensation that consists of either a portion of the purchase price for a product or services or an amount substantially all of which is calculated by reference to volume of sales, where payment of the compensation is


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contingent upon the employing Company or any of its 80% Affiliates receiving payment from an unrelated customer for such product or services. Any Commission shall be attributable to the Plan Year in which the customer remits to the applicable Company or 80% Affiliate the payment that gives rise to the Commission.

(j)	“Company” means MeadWestvaco and/or each Designated Subsidiary.

(k)	“Deferral Election” means an Eligible Employee’s election to defer compensation pursuant to Section 4.01.

(l)

“Designated Subsidiary” means any entity of which at least 50 percent of the outstanding ordinary voting stock or control is owned directly or indirectly by MeadWestvaco, and that has been designated by the Chief Executive Officer of MeadWestvaco or the Board of Directors as having employees who are eligible to participate in the Plan as of a date determined by such designation.

(m)	“Distribution Election” means a Participant’s election of the timing and manner of payment of all or part of his Account, filed in accordance with Section 7.01.

(n)

“ 80% Affiliate ” means, with respect to MeadWestvaco or a Designated Subsidiary, any person or entity that is required to be combined with MeadWestvaco or the Designated Subsidiary as a single employer under section 414(b) or (c), using the 80 percent ownership standard prescribed by section 1563(a)(1), (2), and (3) of the Code and Treas. Reg. § 1.414(c)-2.

(o)	“Eligible Employee” means any individual who is part of the select group of management or highly-paid employees of the Company who are designated by the Administration Committee as eligible to participate in the Plan.

(p)	“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

(q)	“ Excess Compensation ” means, for any Plan Year, the excess of a Participant’s Gross Compensation for such Plan Year over his “eligible compensation” (as defined in the Qualified Plan) for such Plan Year.

(r)	“ 409A Account Plan ” means any nonqualified “account balance plan” described in Treas. Reg. § 1.409A-1(c)(2)(i)(A) or (B) that is maintained by the Company or an 80% Affiliate.

(s)	“ Gross Compensation ” means, for any period, “eligible compensation” for such period as defined in the Qualified Plan, without regard to the limit required by section 401(a)(17) of the Code, plus the amount deferred for such period under the Plan.

(t)	“Investment Fund” means a book-entry investment fund maintained pursuant to Section 5.01.

(u)	“Investment Policy Committee” means the Benefit Plans Investment Policy Committee designated by MeadWestvaco’s Chief Executive Officer or similar committee appointed pursuant to Section 9.01.


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(v)	“MeadWestvaco” means MeadWestvaco Corporation, a Delaware Corporation.

(w)	“MeadWestvaco Common Stock” means shares of common stock of MeadWestvaco Corporation.

(x)	“Open Enrollment” means the period or periods established by the Administration Committee during which Eligible Employees may make or change their Deferral Elections.

(y)	“Participant” means an Eligible Employee who satisfies the eligibility requirements set forth in Article 3, or who has a positive balance in his Account.

(z)

“Performance-Based Compensation” means compensation that qualifies as “performance-based compensation” under Treas. Reg. § 1.409A-1(e). In general, Performance-Based Compensation includes wages and other compensation the amount or entitlement to which is contingent on the satisfaction of preestablished organizational or individual performance criteria relating to a performance period of at least 12 consecutive months. Performance-Based Compensation shall not include any amount or portion of any amount that is (1) payable regardless of performance or (2) based upon criteria that are substantially certain to be met at the time such criteria are established.

(aa)	“Plan” means the MeadWestvaco Corporation Deferred Income Plan, as set forth herein and as amended from time to time.

(bb)	“Plan Administrator” means any plan administrator appointed pursuant to Section 9.01. The Plan Administrator shall be a member of the Administration Committee.

(cc)	“Plan Year” means the calendar year.

(dd)	“Pre-AJCA Account” means a Pre-AJCA DIP Account or a Pre-AJCA Ex-CAP Account.

(1)

“Pre-AJCA DIP Account” means the portion of any Account of a Participant who terminated employment with the Company and Affiliates before January 1, 2005 that (A) is not a Pre-AJCA Ex-CAP Account and (B) constitutes amounts “deferred” (within the meaning of section 885(d) of the AJCA) before January 1, 2005.

(2)

“Pre-AJCA Ex-CAP Account” means the portion of any Ex-CAP Account (as defined in Section A-1) of a Participant who terminated employment with the Company and Affiliates before January 1, 2005 that constitutes amounts “deferred” (within the meaning of section 885(d) of Code and the AJCA) before January 1, 2005.

No Participant shall have a Pre-AJCA Account unless he terminated employment with the Company and Affiliates before January 1, 2005.

(ee)	“Qualified Plan” means the MeadWestvaco Corporation Savings and Employee Stock Ownership Plan for Salaried and Non-Bargained Hourly Employees.


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(ff)	“Qualified Plan Limits” means the limits required by sections 401(a)(17), 401(k)(3), 402(g), and 415 of the Code, each as adjusted pursuant to section 414(v) of the Code.

(gg)	“Restorative Savings Amount” means—

(1)

For any Plan Year that begins after December 31, 2006, any Base Salary for services performed during such Plan Year that an Eligible Employee irrevocably elected before such Plan Year to defer under the Qualified Plan as a “before-tax contribution” (within the meaning of the Qualified Plan), but that cannot be contributed to the Qualified Plan by reason of the Qualified Plan Limits.

(2)

For the 2006 Plan Year, any compensation for services performed during such Plan Year that an Eligible Employee irrevocably elected before such Plan Year to defer under the Qualified Plan as a “before-tax contribution” (within the meaning of the Qualified Plan), but that cannot be contributed to the Qualified Plan during such Plan Year by reason of the Qualified Plan Limits.

(3)

For the 2005 Plan Year, any amount that an Eligible Employee irrevocably elected before such Plan Year to defer under the Qualified Plan as a “before-tax contribution” (within the meaning of the Qualified Plan), but that cannot be contributed to the Qualified Plan by reason of the Qualified Plan Limits.

(hh)	“Specified Date Distribution” means a payment of all or part of a Participant’s Account that is scheduled to commence during a specified Plan Year in the future, as described in Section 7.02(a).

(ii)	“Spouse” means the person, if any, to whom a Participant is legally married under the laws of the state in which the Participant resides, and who qualifies as a “spouse” within the meaning of 1 U.S.C. § 7.

(jj)	“Termination Distribution” means a payment of all or part of a Participant’s Account that commences at a time based on the Participant’s Termination Date, as described in Section 7.02(b).

(kk)

“ Termination Date ” means the date of an individual’s “separation from service” (within the meaning of section 409A(a)(2)(A)(i) of the Code) with (x) MeadWestvaco or the Designated Subsidiary with which he is employed and (y) its Affiliates, as determined by MeadWestvaco in accordance with Treas. Reg. § 1.409A-1(h)(1). For purposes of the Plan:

(1)

An individual who is on a leave of absence (with the expectation that he will return) and does not have a statutory or contractual right to reemployment shall be deemed to have had a “separation for service” on the first date that is more than six months after the commencement of such leave of absence. However, if the leave of absence is due to any medically determinable physical or mental impairment that can be expected to last for a continuous period of six months or more, and such impairment causes the individual to be unable to perform the duties of his position of employment or any substantially similar position of employment, the preceding sentence shall be deemed to refer to a 29-month period rather than to a six-month period; and


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(2)

(ll)	“Valuation Date” means any date or time designated by the Administration Committee for the valuation of Accounts.

2.02.

C ONSTRUCTION

Effective January 1, 2003, for purposes of the Plan, unless the contrary is clearly indicated by the context:

(a)	The use of the masculine gender shall also include within its meaning the feminine and vice versa;

(b)	The use of the singular shall also include within its meaning the plural and vice versa;

(c)	The word “include” shall mean to include, but not to be limited to; and

(d)	Any reference to a statute or section of a statute shall further be a reference to any successor or amended statute or section, and any regulations or other guidance of general applicability issued thereunder.

2.03.

T IMING OF P AYMENTS

(a)

(b)

ARTICLE 3. PARTICIPATION

3.01.

C OMMENCING P ARTICIPATION

(a)	Each individual who was a Participant in the Plan on January 1, 2007 shall remain a Participant until his participation ends pursuant to Section 3.02.

(b)	Any individual who was not a Participant in the Plan on January 1, 2007 and who becomes an Eligible Employee on or after January 1, 2007 shall be a Participant as of the date an amount is first credited to his Account.


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(c)	Any individual who is not already a Participant in the Plan and whose account under the Mead Corporation Executive Capital Accumulation Plan was transferred to the Plan effective January 1, 2007, shall be a Participant in the Plan as of January 1, 2007.

3.02.

E NDING P ARTICIPATION

An individual who becomes a Participant shall remain a Participant until the earlier of (a) his death or (b) the entire balance of his Account has been paid.

ARTICLE 4. CREDITS TO PARTICIPANTS’ ACCOUNTS

4.01.

E LIGIBLE E MPLOYEE D EFERRALS

(a)	Nature of Deferrals . For any Plan Year, subject to the rules and restrictions set forth in this Section 4.01, each Eligible Employee may elect to defer under the Plan receipt of any or all of the following amounts attributable to such Plan Year:

(1)

His Restorative Savings Amount for such Plan Year;

(2)

Up to 80 percent of his Base Salary for services performed during such Plan Year;

(3)

Up to 80 percent of his Commissions for such Plan Year; and

(4)

Up to 80 percent of his annual incentive awards (A) for services performed during such Plan Year or (B) that constitute Performance-Based Compensation for which the performance period ends during such Plan Year.

If an Eligible Employee makes a Deferral Election pursuant to this Section 4.01, his earnings for the applicable payroll period shall be reduced by the amount that he elects to defer, and the amount he elects to defer shall be credited to his Account on or before the fifteenth day of the first month after the month in which the applicable amount would otherwise be payable, in accordance with such procedures as the Administration Committee may establish. Such Eligible Employee shall waive any right to receive the amount deferred and shall receive instead only any amounts payable pursuant to Article 7 and Article 8.

(b)	Time and Manner of Deferral Elections .

Effective for Plan Years that begin after December 31, 2004:

(1)

Except as provided in subparagraph (2) or (3):

(A)

An Eligible Employee must file his Deferral Election (or any change to such election) with the Plan’s recordkeeper, in a manner acceptable to the Administration Committee, during Open Enrollment in the Plan Year immediately preceding the Plan Year in which the services giving rise to the amount to be deferred are performed; and


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(B)

Except as required by Section 8.01(d), each Deferral Election (or change to the Deferral Election) shall be irrevocable during the Plan Year in which the services giving rise to the amount deferred are performed.

(2)

With respect to Performance-Based Compensation, the Administration Committee shall have discretion to allow Eligible Employees to file Deferral Elections (or changes to such elections) after the deadline prescribed by subparagraph (1), above; provided that:

(A)

The Eligible Employee performs services for the Company and/or its Affiliates continuously from the later of (i) the beginning of the performance period or (ii) the date the performance criteria are established (in accordance with the requirements of Treas. Reg. § 1.409A-1(e)) through the date his Deferral Election is filed; and

(B)

Such Deferral Election (or change thereto) is filed and irrevocable—

(i)

No later than six months before the end of the applicable performance period, and

(ii)

Before such Performance-Based Compensation is both substantially certain to be paid and readily ascertainable.

(3)

For the first Plan Year in which an individual is eligible to participate in the Plan, if such Eligible Employee has not been eligible to participate in any other 409A Account Plan, such Eligible Employee’s properly executed Deferral Election may be delivered to the Plan’s recordkeeper after the deadline prescribed by subparagraph (1), above; provided that: (A) such Deferral Election is delivered to the recordkeeper no later than 30 days after such individual first becomes eligible to participate in a 409A Account Plan, (B) such Deferral Election applies only to compensation for services performed after such Deferral Election is delivered to the recordkeeper, and (C) such Deferral Election is irrevocable during such Plan Year.

(4)

If a Participant does not file an election before the first day of any Plan Year after the first Plan Year in which he was eligible to participate in the Plan, his Deferral Election from the prior Plan Year (if any) shall remain in effect as if it had been re-filed and shall be irrevocable during such Plan Year. (If the Participant does not have an election in effect for the prior Plan Year, he shall be deemed to have made a Deferral Election of zero.)

(c)	Amount of Deferrals .

(1)

An Eligible Employee who elects to defer his Restorative Savings Amount must defer 100 percent of such Restorative Savings Amount for the applicable Plan Year.

(2)

An Eligible Employee who elects to defer any amount other than his Restorative Savings Amount must elect to defer at least $5,000, not including his Restorative Savings Amount (and disregarding the possibility that the Eligible Employee could terminate employment before deferring $5,000), for the applicable Plan Year.


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(3)

All Deferral Elections pursuant to this Section 4.01 shall be subject to such other rules as the Administration Committee may establish; provided that such rules and regulations are not inconsistent with the provisions of the Plan.

(d)

Limitation on Employee Deferrals . An Eligible Employee’s Deferral Election for any payroll period shall be ineffective to the extent that the amount deferred will reduce his non-deferred earnings to a level insufficient to pay applicable employment and payroll taxes (including FICA and Medicare taxes).

4.02.

E MPLOYER N ON -Q UALIFIED M ATCHING C REDITS

(a)	For each Plan Year with respect to which an Eligible Employee has made a Deferral Election, in accordance with such procedures as the Administration Committee may establish, a non-qualified matching credit shall be added to each Eligible Employee’s Account, equal to—

(1)

100 percent of the amount such Eligible Employee deferred for such Plan Year pursuant to Section 4.01(a) up to a maximum of 3 percent of his Excess Compensation for such payroll period; plus

(2)

50 percent of the amount such Eligible Employee deferred for such Plan Year pursuant to Section 4.01(a) to the extent such amount exceeds 3 percent of his Excess Compensation for such Plan Year and does not exceed 5 percent of his Excess Compensation for such Plan Year.

(b)

Effective for any Plan Year beginning after December 31, 2006, and subject to the requirements of this subsection (b), the Administration Committee shall have discretion to add an additional non-qualified matching credit to the Account of any Eligible Employee who timely filed an irrevocable election to defer his Restorative Savings Amount for such Plan Year.

(1)

The amount of any matching credit added pursuant to this subsection (b) shall be no greater than the excess, if any, of—

(A)

The amount of the Employer Matching Contributions (as defined in the Qualified Plan) that would have been added to the Eligible Employee’s Qualified Plan account if the Eligible Employee had deferred under the Qualified Plan the full amount of compensation that he elected to defer under the Qualified Plan for such Plan Year (pursuant to an irrevocable election filed before the beginning of such Plan Year), determined without regard to the Qualified Plan Limits, over

(B)

The sum of (i) the Employer Matching Contributions (as defined in the Qualified Plan) actually added to the Eligible Employee’s Qualified Plan account for such Plan Year, and (ii) the amount of the Eligible Employee’s non-qualified matching credit for such Plan Year prescribed by subsection (a), above.


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(2)

No matching credit pursuant to this subsection (b) shall be added to any Participant’s Account before the last day of the Plan Year for which it applies. In order to be eligible to receive any matching credit pursuant to this subsection (b), the Participant must be actively employed by the Company or one of its Affiliates on the last day of such Plan Year.

(3)

Any matching credit added to a Participant’s Account pursuant to this subsection (b) (adjusted for earnings, interest, gains, and losses) shall be paid at the same time and in the same form as the Participant’s Restorative Savings Amount for the Plan Year with respect to which such additional matching credit is added to the Participant’s Account.

(c)

The Administration Committee shall have discretion to determine when non-qualified matching credits are added to Eligible Employees’ Accounts. Such discretion shall include the discretion to credit all or part of the matching credit required by this Section 4.02 on a payroll period or monthly basis, and to credit matching credits for any Plan Year after the end of such Plan Year. No credit shall be adjusted for earnings, interest, gains, or losses with respect to any period before the date on which such credit is added to the Eligible Employee’s Account.

ARTICLE 5. INVESTMENTS AND ACCOUNTS

5.01.

P ARTICIPANT A LLOCATION OF A CCOUNTS A MONG B OOK -E NTRY I NVESTMENT F UNDS

(a)	The Investment Policy Committee shall establish book-entry Investment Funds, which shall include the MeadWestvaco Stock Unit Fund (an Investment Fund that mirrors the MeadWestvaco Stock Fund under the Qualified Plan), for measuring earnings or losses on Account balances.

(b)

Amounts recorded in a Participant’s Account may be allocated by the Participant, in any proportion (in 1 percent increments), among the book-entry Investment Funds available under the Plan. Allocation requests shall be made by a notification submitted in such manner and form, and at such time, as the Administration Committee prescribes.

(c)	If a Participant fails to make any allocation in accordance with this Section 5.01, such unallocated funds shall be allocated to the Investment Fund selected by the Investment Policy Committee.

(d)	All non-qualified matching credits pursuant to Section 4.02 shall be allocated initially to the MeadWestvaco Stock Unit Fund but may be transferred from the MeadWestvaco Stock Unit Fund to other Investment Funds to the extent permitted under Section 5.02.

5.02.

C HANGE IN A LLOCATION

(a)	At any time (but no more than once per day unless permitted by the Plan’s recordkeeper),


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(1)

a Participant may change a previous investment election with respect to future deferrals (not including matching credits, which are subject to Section 5.01(d)) by submitting a notification to the Plan’s recordkeeper, in such manner and form, and at such time, as the Administration Committee prescribes, directing such a change; and

(2)

a Participant may direct that all or part of his Account allocated to a particular Investment Fund be transferred to any of the other available Investment Funds by submitting a notification to the Company in such manner and form, and at such time, as the Administration Committee prescribes.

(b)

A Participant may continue to direct the book-entry investment of his Accounts in accordance with this Section 5.02 until the entire balance of his Account is paid pursuant to Article 7 and Article 8. In addition, a Beneficiary or former Spouse may continue to direct the investment of the portion of the Participant’s Account to which such person is entitled in accordance with this Section 5.02 until his interest in the Participant’s Account is fully paid.

(c)	Any change in allocation (including any transfer) shall be specified in either whole dollar or whole percentage increments and shall otherwise be subject to such rules and procedures as the Administration Committee shall establish.

5.03.

V ALUATION OF I NVESTMENT F UNDS

(a)	At the discretion of the Administration Committee, the Investment Funds available under the Plan may be valued on a unitized basis.

(b)

As of each Valuation Date, the Plan’s recordkeeper shall determine the book-entry fair market value of the balances allocated to each Investment Fund. Such value shall reflect (1) earnings (or losses) on each Investment Fund, (2) new credits, (3) payments, and (4) expenses allocated to each Investment Fund since the most recent Valuation Date.

5.04.

S UB -A CCOUNTS

(a)	The Plan’s recordkeeper shall establish sub-accounts for each Participant’s Account as the Administration Committee or recordkeeper deems appropriate for any Participant, such as sub-accounts to track Specified Date Distributions and Pre-AJCA Accounts.

(b)	Expenses and book-entry investment gains (and losses) shall be allocated among the sub-accounts that comprise each Participant’s Account at such time and in such manner as the Administration Committee shall prescribe.

(c)

The balance of each Participant’s Account (and of each of the several sub-accounts comprising the Participant’s Account) shall be updated as of each Valuation Date to reflect all gains, losses, income, and expenses of the Investment Funds to which the Account is allocated, and any payments and expenses with respect to such Participant.


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5.05.

R ISK OF L OSS

Neither the Plan nor the Company guarantees that the fair market value of the Investment Funds, or of any particular Investment Fund, will not decrease in value or that the fair market value of any Participant’s Account will not decline as a result of negative performance of book-entry investments pursuant to this Article 5. Each Participant shall assume all risk of any decrease in the balance of the Investment Funds and their Accounts, without regard to whether such decrease results from an investment election made by the Company or by the Participant.

5.06.

I NTERESTS IN THE P LAN

No Participant, Beneficiary, or former Spouse shall have any claim, right, title, or interest in or to any specific assets until a payment is made to the Participant, Beneficiary, or former Spouse. No Participant, Beneficiary, or former Spouse has any claim, right, title, or interest in or to any specific assets, except as and to the extent expressly provided herein.

5.07.

S PECIAL P ROVISIONS A PPLICABLE TO THE C OMPANY S TOCK P ORTION OF THE P LAN

(a)	Trading Price . Any transfer of an amount into or out of the MeadWestvaco Stock Unit Fund shall be executed using the same closing price of a share of MeadWestvaco Common Stock as would apply for a comparable transfer into or out of the MeadWestvaco Stock Fund under the Qualified Plan.

(b)

Dividend Equivalents Under the MeadWestvaco Stock Unit Fund . Any credits in a Participant’s Account allocated to the MeadWestvaco Stock Unit Fund shall be increased whenever a dividend is paid on MeadWestvaco Common Stock. The number of additional credits credited to a Participant’s Account as a result of such increase shall be determined by (1) dividing the balance of a Participant’s Account allocated to the MeadWestvaco Stock Unit Fund by the closing price of a share of MeadWestvaco Common Stock on the composite tape of New York Stock Exchange issues on the dividend record date (or if there was no reported sale of MeadWestvaco Common Stock on such date, on the next preceding day on which there was such a reported sale), and then (2) by multiplying the amount resulting from the calculation in clause (1) by the amount of the dividend declared per share of MeadWestvaco Common Stock on the dividend record date.

ARTICLE 6. VESTING AND FORFEITURE

6.01.

V ESTING

(a)	Except as provided in Section 6.02, each Participant shall have a fully vested, nonforfeitable interest in all amounts deferred under the Plan and related earnings.

(b)	A Participant’s vested interest shall not affect the Participant’s status as a general creditor of the Company, on equal footing with all other unsecured creditors of the Company, with respect to his Account balance.


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6.02.

F ORFEITURE

Subject to the requirements of section 409A of the Code (including the limitations set forth in Treas. Reg. § 1.409A-3(j)(4)(xiii)), the amount of any payment to or on behalf of any individual shall be subject to any claims the Company may have against such individual. The remedies available to the Company and Affiliates, at law or in equity, for any loss or other injury caused directly or indirectly by a current or former Participant, shall not be limited in any way.

ARTICLE 7. PAYMENTS

7.01.

D ISTRIBUTION E LECTION P ROCESS

(a)	Subject to the provisions of this Article 7, Section 1.03, Appendix B and Appendix C, the Administration Committee shall establish procedures for Participants to elect the time and manner in which their Accounts will be paid.

(b)

Effective January 1, 2005, each Plan Year, during Open Enrollment (or when an Eligible Employee makes a Deferral Election pursuant to Section 4.01(b)(2) or (3)), each Eligible Employee shall file a Distribution Election specifying the time (or times) and manner of payment of the deferrals and matching and other credits attributable (as described in Sections 4.01(a) and 2.01(i)) to the upcoming Plan Year. If an Eligible Employee does not make a Distribution Election for any amount deferred or credited to his Account by the deadline for making the corresponding Deferral Election, such amount (including associated matching credits and earnings) shall be paid at the time and in the form prescribed by Section 7.02(b)(2) (unless such time or form is changed in accordance with the requirements of Section 7.04).

(c)	Any Distribution Election that is not made in accordance with the procedures established by the Administration Committee shall be ineffective and shall be disregarded.

7.02.

T YPES OF D ISTRIBUTIONS

Subject to the provisions of this Article 7, Section 1.03, Appendix B and Appendix C, a Participant may elect to receive a payment of all or part of his Account on a specified date or after his Termination Date, in a form permitted under Section 7.03. For purposes of determining the amount of any payment under this Section 7.02, the balance of any Account shall be determined as of June 30 of the Plan Year in which such payment is made.

(a)	Specified Date Distributions . Subject to the procedures and election deadline prescribed by Section 7.01 and the restrictions set forth in this Section 7.02(a), a Participant may elect a Specified Date Distribution in a form permitted by Section 7.03.

(1)

Each Distribution Election form calling for a Specified Date Distribution shall specify the Plan Year in which such Specified Date Distribution will commence, which shall be no earlier than the second Plan Year after the Plan Year in which the applicable Deferral Election was filed (or deemed to be filed, in the case of a deemed election pursuant to Section 4.01(b)(4)).


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(2)

After the election deadline prescribed by Section 7.01, an election to receive a Specified Date Distribution may be amended only in the manner and to the extent permitted under Section 7.04.

(3)

Any deferrals and other credits with respect to which an Eligible Employee elects to receive a Specified Date Distribution shall be segregated in a separate sub-account of the Participant’s Account, to be separately adjusted to reflect earnings and losses thereon pursuant to Article 5.

(4)

Each Specified Date Distribution shall commence as soon as practicable after June 30 of the Plan Year elected by the Participant pursuant to paragraph (a)(1), above. The Company shall make each payment as soon as practicable after June 30 of the Plan Year in which such payment (whether an installment or a lump sum) is due.

(5)

Each Specified Date Distribution shall be coordinated with the Participant’s Termination Distribution, as follows:

(A)

If the Participant’s Termination Date (for a reason other than death) occurs before the commencement date for the Specified Date Distribution:

(i)

If the Participant’s Termination Date occurs before the Participant’s 55th birthday, the sub-account or sub-accounts associated with such Specified Date Distribution shall be paid in the form that applies for the Participant’s Termination Distribution (or, if the Participant has not elected a form, the form prescribed by Section 7.02(b)(2)), commencing at the time prescribed by Section 7.02(b)(1)(B).

(ii)

If the Participant’s Termination Date occurs on or after the Participant’s 55th birthday, the sub-account or sub-accounts associated with such Specified Date Distribution shall be paid in accordance with the Participant’s Specified Date Distribution election, without regard to the Participant’s termination of employment.

(B)

If the Participant’s Termination Date (for a reason other than death) occurs after the commencement date for the Specified Date Distribution (regardless of the Participant’s age), the sub-account or sub-accounts associated with such Specified Date Distribution shall continue to be paid in accordance with the Participant’s Specified Date Distribution election, without regard to the Participant’s termination of employment (but subject to paragraph (6), below).

(6)

Notwithstanding the form or time of payment elected by the Participant or any other individual, if a Participant dies before he receives all or part of a Specified Date Distribution, the Company shall pay any remaining balance in his Account in accordance with Section 8.02.


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(b)	Distributions Following Termination Date .

(1)

Subject to the procedures and election deadline prescribed by Section 7.01 and the restrictions set forth in this Section 7.02(b), a Participant may elect that a Termination Distribution will commence, in a form permitted by Section 7.03, as soon as practicable after June 30 of any Plan Year after the Plan Year in which his Termination Date occurs, subject to the following restrictions:

(A)

The elected Plan Year of commencement must be no later than the earlier of—

(i)

The tenth Plan Year following the Participant’s Termination Date, or

(ii)

The Plan Year next following the later of (I) the Plan Year in which the Participant attains age 70 or (II) the Plan Year in which the Participant’s Termination Date occurs.

(B)

If the Participant’s Termination Date (for a reason other than death) occurs before his 55th birthday, his election as to the time of payment shall not apply and payment shall commence as soon as practicable after (I) June 30 of the Plan Year next following the Plan Year in which such Participant’s Termination Date occurs or (II) such later commencement date as required by reason of a change in election previously filed under Section 7.04(a).

(C)

Notwithstanding the form or time of payment elected by the Participant or any other individual, if the Participant dies before his entire Account is paid, the Company shall pay his Account in accordance with Section 8.02.

(2)

Subject to Section 7.04, any portion of a Participant’s Account with respect to which the Participant did not file a valid and timely Distribution Election shall be paid in a lump sum as soon as practicable after June 30 of the Plan Year next following the Plan Year in which the Participant’s Termination Date occurs. For purposes of this Section 7.02(b)(2), a deemed election under Section 4.01(b)(4) shall be treated as a valid and timely Distribution Election. If the Participant dies before all or part of his Account is paid pursuant to this Section 7.02(b)(2), his Account shall be paid in accordance with Section 8.02.

7.03.

F ORM OF P AYMENT OF D ISTRIBUTIONS

(a)	Except as otherwise provided in paragraph (b), below, all payments pursuant to this Article 7 shall be in the form of a lump sum.

(b)

At the time that he makes a Distribution Election with respect to any amount (in accordance with Section 7.01(b)), a Participant may elect to receive the portion of his Account that is attributable to such amount in annual installments or a combination of annual installments and a partial lump sum, subject to the following restrictions:

(1)

Effective January 1, 2005, in the case of a Specified Date Distribution, the number of annual installments shall not exceed five.


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(2)

In the case of a Termination Distribution:

(A)

The number of annual installments shall not exceed 20, and

(B)

If the vested balance of a Participant’s Account as of June 30 of the Plan Year in which payments are scheduled to commence is $50,000 or less, such vested balance shall be paid to the Participant in a lump sum; and

(C)

No partial lump sum shall be paid to any Participant whose Termination Date occurs before he attains age 55. If Participant’s age as of his Termination Date is less than 55, any Termination Distribution that is scheduled to be paid in a combination of annual installments and a partial lump sum shall be paid in annual installments over the scheduled number of years, without the partial lump sum.

(3)

To the extent that payments are to be made in annual installments, the amount of each annual installment shall be equal to the balance of the applicable Account as of June 30 of the applicable Plan Year divided by the number of annual installments remaining to be paid.

7.04.

C HANGES TO THE T IME AND F ORM OF D ISTRIBUTION

(a)

Effective January 1, 2005, a Participant may change the time or form in which all or a portion of his Account (not including any Pre-AJCA Account, which shall be subject to the provisions of Appendix B and Appendix C) will be paid only to the extent permitted by the Administration Committee, in accordance with any rules or procedures that the Administration Committee may establish. Such rules or procedures established by the Administration Committee shall be designed to avoid adverse tax consequences and, except as permitted under the special transition rules set forth in paragraph (b), below, shall comply with the following restrictions:

(1)

Any change must be filed with the Plan’s recordkeeper before the Participant’s Termination Date.

(2)

The time or schedule for payment of all or part of a Participant’s Account shall not be accelerated, unless the Administration Committee determines that such acceleration would not result in adverse tax consequences under section 409A of the Code or other applicable tax doctrines. The Administration Committee shall have discretion to accelerate payments to the extent (and only to the extent) permitted by Treas. Reg. § 1.409A-3(j)(i) through (xiv).

(3)

The time or schedule for payment may be delayed and the form of payment may be changed only if: (A) the Participant’s election is filed with the Plan’s recordkeeper at least 12 months before the date of the first payment from the sub-account to which such election applies would be made if not for such election and (B) the Participant’s election results in payment being delayed for at least five years from the date payment otherwise would have been made. For purposes of this rule, the payment date in any Plan Year shall be deemed to be July 1 of such Plan Year.


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Where an amount is scheduled to be paid upon more than one alternative date or event (such as the earliest of a fixed date, the Participant’s Termination Date, or his death), the requirements of this Section 7.04(a)(3) shall be applied separately with respect to each date or event, in accordance with Treas. Reg. § 1.409A-2(b)(6).

(b)	Special Transition Rules

(1)

Papers Participants. Any Participant whose employment was terminated as of May 1, 2005 as a result of MeadWestvaco’s divestiture of its Papers business (a “Papers Participant”) may make a one-time election, to be filed with the Plan’s recordkeeper on or before May 20, 2005, to change the time and/or form in which all or part of his Account is paid; provided that:

(A)

The elected commencement date shall not be before July 2006;

(B)

The elected form shall be either a lump sum or annual installments over a period of 20 or fewer years; and

(C)

If, as of the Papers Participant’s elected commencement date, the vested balance of his Account is less than or equal to $50,000, such vested balance shall be paid in a lump sum.

(2)

AJCA Transition. Prior to January 1, 2009, or such earlier deadline as established by the Administration Committee, any Participant may elect to change the time and/or form in which all or part of his Account (not including any Pre-AJCA Account, which shall be subject to the provisions of Appendix B or Appendix C, as applicable) is paid; provided that:

(A)

Such election shall not become effective unless such election is filed with the Plan’s recordkeeper (i) before the Participant’s Termination Date and (ii) at least 12 months before the date the first payment from the sub-account to which such election applies would be made if not for such election;

(B)

Payments pursuant to such election shall commence no earlier than 12 months after such election is filed with the Plan’s recordkeeper; and

(C)

The elected form of payment shall be a form permitted under Section 7.03.

After December 31, 2008, or such earlier deadline as established by the Administration Committee, any election pursuant to this Section 7.04(b)(2) may be amended only to the extent permitted under Section 7.04(a).


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(c)	Rules of Construction

(1)

For purposes of this Section 7.04, a series of installment payments shall be treated as a single payment. A combination of installments and a lump sum shall be treated as two separate payments: (A) the lump sum and (B) the series of installments.

(2)

Any election to change the time or form of payment of all or part of a Participant’s Account that does not comply with the rules and procedures established by the Administration Committee, or that is otherwise inconsistent with the restrictions set forth in this Section 7.04, shall be null and void.

(d)

Discontinuation of Unscheduled Distributions. Effective January 1, 2005, unscheduled distributions (other than hardship withdrawals in accordance with Section 8.01) shall not be permitted; provided that the provisions for unscheduled distributions in effect as of October 3, 2004, as set forth in Appendix B and Appendix C, shall remain in effect for Pre-AJCA Accounts.

7.05.

P RE -AJCA A CCOUNTS

Effective January 1, 2005, the provisions of this Article 7 shall not apply for any Pre-AJCA Account. Pre-AJCA DIP Accounts shall be paid in accordance with Section B-3, except as provided in Section B-4. Pre-AJCA Ex-CAP Accounts shall be paid in accordance with Sections C-3 through C-5.

ARTICLE 8. HARDSHIP WITHDRAWALS AND PAYMENTS UPON DEATH

8.01.

H ARDSHIP W ITHDRAWAL .

Effective January 1, 2005, subject to approval by the Administration Committee, a Participant who is actively employed by the Company and who satisfies the requirements of this Section 8.01 may receive a lump-sum hardship withdrawal of a portion of his Account (not including any Pre-AJCA Account, which shall be subject to the provisions of Appendix B or Appendix C, as applicable) in case of an “unforeseeable emergency.”

(a)	For purposes of this Section 8.01, an “unforeseeable emergency” is a severe financial hardship of the Participant resulting from:

(1)

An illness or accident of the Participant or his Spouse or dependent (as defined in section 152(a) of the Code),

(2)

Loss of the Participant’s property due to casualty (including the need to rebuild a home following damage to a home not otherwise covered by insurance, for example, as a result of a natural disaster), or

(3)

Such other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant (such as imminent foreclosure or eviction from the Participant’s primary residence, the need to pay


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medical expenses, including non-refundable deductibles and prescription drugs, and the need to pay funeral expenses for the Participant’s Spouse or dependent (as defined in section 152(a) of the Code)), as determined by the Administration Committee.

In no case may the need to send a child to college or the desire to purchase a home constitute an “unforeseeable emergency.”

(b)	If a Participant seeks to receive a payment pursuant to this Section 8.01, the Participant shall present such evidence and certifications as the Administration Committee or the Plan’s recordkeeper considers necessary to determine whether the Participant meets the requirements of this Section 8.01.

(c)

The amount of any payment pursuant to this Section 8.01 shall not exceed the amount reasonably required to satisfy the emergency need, taking into account both cessation of deferrals pursuant to paragraph (d), below, and the extent to which the Participant’s unforeseeable emergency is or may be relieved through—

(1)

Reimbursement or payment by insurance or otherwise;

(2)

A commercial loan or a loan under the Qualified Plan;

(3)

A hardship withdrawal under the Qualified Plan;

(4)

Liquidation of the Participant’s assets, to the extent the liquidation of such assets would not itself cause severe financial hardship; or

(5)

Cessation of deferrals under the Qualified Plan or any other tax-qualified retirement plan maintained by the Company or an Affiliate.

(d)	If a Participant receives a payment pursuant to this Section 8.01—

(1)

His Deferral Elections for the remainder of the Plan Year in which such hardship withdrawal is paid shall be canceled;

(2)

Any deferral election previously filed by the Participant under any other nonqualified deferred compensation arrangement maintained by the Company or an Affiliate shall be canceled; and

(3)

The Participant shall not be permitted to file any further Deferral Elections (or any deferral elections pursuant to any other plan maintained by the Company or an Affiliate) with respect to the Plan Year during which such hardship withdrawal is paid.

8.02.

P AYMENTS U PON D EATH

Upon the death of a Participant (whether or not the Participant is employed by MeadWestvaco or an Affiliate at the time of death), the Company shall pay any remaining balance in the Participant’s Account to the Participant’s Beneficiary or Beneficiaries in a lump sum


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as soon as practicable after the Participant’s death. For purposes of this Section 8.02, the remaining balance in the Participant’s Account shall be determined as of the last day of the calendar month immediately preceding the calendar month in which the lump-sum payment required by this Section 8.02 is made.

8.03.

D ESIGNATION OF B ENEFICIARY

A Participant shall be entitled to make a beneficiary designation in the form and manner authorized by the Administration Committee. In the event that a Participant has not properly designated a Beneficiary, his Beneficiary or Beneficiaries shall be the same beneficiary or beneficiaries as under the Qualified Plan.

8.04.

P RE -AJCA A CCOUNTS

Effective January 1, 2005, the provisions of this Article 8 shall not apply with respect to any Pre-AJCA Account, except as provided in Sections B-4 and C-4 with respect to Beneficiary designations. Hardship withdrawals and post-death payment of any Pre-AJCA DIP Account shall be governed by Section B-3. Hardship withdrawals and post-death payment of any Pre-AJCA Ex-CAP Account shall be governed by Sections C-3 and C-4.

ARTICLE 9. PLAN ADMINISTRATION

9.01.

P LAN A DMINISTRATOR

The individuals or committee(s) appointed by the Chief Executive Officer of MeadWestvaco to administer the Qualified Plan shall also administer this Plan, unless such Chief Executive Officer appoints different individuals (or a different committee) to administer this Plan. The authority to administer the Plan shall not include the power to amend the Plan, to determine funding policy, or to appoint actuaries or independent accountants, which powers are reserved by the Board of Directors (except as provided in Section 10.01(b).

9.02.

D ELEGATION AND E MPLOYMENT OF A GENTS

Instruments designating a named individual or committee may grant to such named individual or committee the power to designate other persons to carry out the responsibilities delegated to such individual or committee. Any individual or committee designated by the Chief Executive Officer of MeadWestvaco, or by an individual or committee designated by the Chief Executive Officer of MeadWestvaco, may employ one or more persons to render advice or to assist with regard to any responsibility such individual or committee has under the Plan.

9.03.

I NTERPRETATIONS

All interpretations pertaining to facts or provisions of the Plan made by the Plan Administrator or the Administration Committee shall be made in the complete and exclusive discretion of the Plan Administrator or Administration Committee, as applicable, and shall be binding and conclusive on all parties. The Plan Administrator or Administration Committee, as appropriate, shall have the complete and exclusive discretion to resolve ambiguities and inconsistencies in the language of the Plan and to supply omissions in the language of the Plan.


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9.04.

E LECTIONS AND D ESIGNATIONS

All elections and designations that Participants are required or permitted to make under the Plan shall be made in writing or electronically in the form prescribed by the Administration Committee or the Plan’s recordkeeper (or their designees).

9.05.

C LAIMS

Claims for participation in or benefits under the Plan shall be filed in accordance with procedures established by the Plan Administrator, in such form as shall be acceptable to the Company. In the absence of a separate written claims procedure, the claims procedure under the Qualified Plan shall apply under the Plan.

9.06.

P OSTPONEMENT OF A CTION

In the event that any dispute shall arise as to any act to be performed by the Plan Administrator, the Plan Administrator may postpone the performance of such act until actual adjudication of such dispute shall have been made in a court of competent jurisdiction or until the Plan Administrator shall be indemnified by the Company against any liability.

ARTICLE 10. AMENDMENT AND TERMINATION OF PLAN

10.01.

A MENDMENT OF THE P LAN

(a)	The Company reserves the right, at any time and from time to time, to amend in whole or in part, either retroactively or prospectively, any or all of the provisions of this Plan without notice to or the consent of any Participant or Beneficiary hereunder; provided, however, that no amendment shall:

(1)

Reduce any Participant’s vested Account balance, except to the extent that a reduction results from (A) an amendment described in Section 1.03(a)(4) or (B) an amendment that the Company determines is necessary or appropriate to conform the Plan to mandatory provisions of applicable federal or state laws, regulations, or rulings or to secure or maintain favorable tax treatment of amounts deferred under the Plan;

(2)

Constitute or result in a “material modification” of the Plan (within the meaning of section 885(d) of the AJCA) with respect to any Pre-AJCA Account, unless, and only to the extent that, the amendment or other action that could constitute a “material modification” expressly states that it is intended to constitute a “material modification” of the Plan with respect to one or more Pre-AJCA Accounts; or

(3)

Be effective to the extent that it would result in a violation of any requirement under section 409A of the Code.


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(b)

Any amendment of this Plan may be adopted by resolution of the Board of Directors. In addition, the Chairman of the Board of Directors, the Chief Executive Officer of MeadWestvaco, the President of MeadWestvaco, and the Senior Vice President of MeadWestvaco with responsibility for Human Resources may make any amendment which: (1) may be necessary or desirable to improve the administration of the Plan, so long as such amendment does not materially affect the substance of the Plan or the level of benefits the Plan provides or (2) may be required to comply with various federal or state laws (including tax laws that might result in adverse tax consequences to any Participant, the Company, or an Affiliate).

10.02.

T ERMINATION OF THE P LAN

(a)

Reservation of Right to Terminate . Although the Company expects to continue the Plan indefinitely, the Company reserves the right to terminate the Plan, partially or in its entirety, without notice to or the consent of any Participant or Beneficiary, by a written resolution of the Board of Directors.

(b)	Date of Termination . If the Board of Directors adopts a resolution to terminate the Plan, the Plan shall be terminated as of a date to be specified in the resolution.

(c)

Rights of Affected Participants . In the event of the termination or partial termination of the Plan, or the discontinuance of deferrals and credits to the Plan, the balance of any Participant’s Account and timing of payments of such balance shall remain unchanged, unless (1) the Participant consents otherwise and (2) MeadWestvaco determines that the change would not result in adverse tax consequences under section 409A of the Code ( e.g. , the change is permitted by Treas. Reg. § 1.409A-3(j)(4)(ix)).

10.03.

D ESIGN D ECISIONS

Decisions regarding the design of the Plan shall be made in a settlor capacity. The act of modifying, altering, amending, or terminating the Plan shall be taken on behalf of the Company as employer sponsor of the Plan, and shall not be construed under any circumstances as an act taken in a fiduciary capacity under or with respect to the Plan.

ARTICLE 11. MISCELLANEOUS PROVISIONS

11.01.

E MPLOYMENT R IGHTS N OT A FFECTED BY P LAN

The adoption and maintenance of the Plan shall not be deemed to constitute a contract between the Company or an Affiliate and any employee or other service provider. Nothing herein contained shall be deemed to give to any individual the right to be retained in the employ of the Company or an Affiliate or to interfere with the right of the Company or an Affiliate to discharge any service provider.


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11.02.

D OUBT AS TO I DENTITY

(a)

If, after reasonable efforts, the Administration Committee is unable to determine the whereabouts of any person entitled to payment hereunder, the Accounts of such person shall be deemed paid in accordance with the required payment schedule, and the Administration Committee shall take (or cause to be taken) all steps that it determines to be reasonably appropriate to avoid a violation of section 409A of the Code ( e.g. , withholding income taxes at the time of each deemed payment, and depositing the amount withheld with the Internal Revenue Service). For purposes of the preceding sentence, notice by registered mail sent to such person’s most recent address (as reflected in the Plan records) shall be deemed to constitute reasonable efforts to locate such person. Subject to the requirements of section 409A of the Code, if such person subsequently makes a proper claim to the Company for such sum, the Company may in its discretion pay to such person the net amount (after withholding) of the deemed payment described in this Section 11.02(a).

(b)

If a payment is made to a Participant, Beneficiary, or former Spouse as provided under the Plan, the payment is not returned as being undeliverable, and the check on which the payment is made is not presented for payment before such time as the check expires, then the amount of the check may be forfeited. However, subject to the requirements of section 409A of the Code, if such Participant, Beneficiary, or former Spouse subsequently makes a proper claim for the amount of the uncashed benefit check, the Company may in its discretion issue a replacement check.

11.03.

P AYMENT M EDIUM

All payments under this Plan shall be made in cash.

11.04.

O BLIGATIONS TO M AKE P AYMENTS

Any obligation of the Company, MeadWestvaco, or any Designated Subsidiary to make a payment under the Plan may be satisfied by MeadWestvaco or the applicable Designated Subsidiary (a) making the payment or (b) causing another party, such as an Affiliate or the trustee of an unsecured trust, to make the payment.

11.05.

L IABILITY L IMITED

11.06.

O VERPAYMENTS

To the extent permitted by section 409A of the Code, if any overpayment of benefits is made under the Plan, the amount of the overpayment may be set off against further amounts payable to or on behalf of the person who received the overpayment until the overpayment has been recovered. The foregoing remedy is not intended to be exclusive.


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D EFERRED I NCOME P LAN		P AGE 24

11.07.

I NCAPACITY AND M INOR S TATUS

If any individual is a minor or unable to care for his affairs because of illness or accident, unless a duly qualified guardian or other legal representative has been appointed, any payment due from the Plan to that individual may be paid, for the benefit of such individual, to his Spouse, parent, brother, sister, or other person deemed by the Administration Committee to have incurred expenses for such person. Such payment, to the extent thereof, shall discharge all liability for such payment under the Plan.

11.08.

A SSIGNMENT AND L IENS

(a)

Nonalienability of Benefits . Subject to paragraph (b), below, the right of any person to any benefit or payment under the Plan shall not be subject to alienation, transfer, assignment, or encumbrance, or otherwise subject to lien, and any such attempt to alienate, transfer, assign, or encumber any benefit or payment under the Plan shall be null and void.

(b)

Exception for Transfers Incident to Divorce . Paragraph (a), above, shall not apply to payments made pursuant to a qualified domestic relations order (as defined in section 414(p)(1)(A) of the Code) applicable to this Plan. Any domestic relations order shall be subject to the terms of the Qualified Plan with respect to any such orders, except that all qualified domestic relations orders shall be construed and executed in a manner consistent with the terms of the Plan and the requirements of section 409A of the Code.

11.09.

W ITHHOLDING T AXES

The Administration Committee may make any appropriate arrangements to deduct from all amounts paid under the Plan, or to collect, any taxes reasonably determined to be required to be withheld under applicable laws. Irrespective of whether withholding is required, the Participant, Beneficiary, or surviving or former Spouse, as the case may be, shall bear all taxes on amounts paid under the Plan, on any imputed income resulting from the operation of the Plan, and on any other payments or compensation from the Company or an Affiliate.

11.10.

T ITLES AND H EADINGS N OT TO C ONTROL

11.11.

N OTICE OF P ROCESS

In any action or proceeding involving the Plan, the Company and the Administration Committee are the only necessary parties, and no Participant, Beneficiary, former Spouse, or other person having or claiming to have an interest under the Plan shall be entitled to any notice of process unless such notice is required by applicable law.


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D EFERRED I NCOME P LAN		P AGE 25

11.12.

P LAN E XPENSES

All reasonable expenses incurred in the administration of the Plan may be charged against Participants’ accounts in such manner as the Administration Committee determines to be reasonable.

11.13.

G OVERNING L AW AND L IMITATION ON A CTIONS

(a)

The Plan shall be construed, administered, and regulated in accordance with the provisions of federal law, and, to the extent not preempted thereby, in accordance with the laws of the Commonwealth of Virginia, excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of the Plan to the substantive law of another jurisdiction.

(b)

No claim for non-payment or underpayment of benefits allegedly owed by the Plan (regardless of whether such benefits are allegedly due under the terms of the Plan or by reason of any law) may be filed in court until the claimant has exhausted the claims review procedures established in accordance with Section 9.05. Claims for underpayment or non-payment of benefits must be filed in a court located with jurisdiction to hear the claim no later than thirty-six (36) months after the date when the payment of the benefit commenced or the date when the first payment was allegedly due, as applicable. The running of the thirty-six (36) month limitations period shall be suspended during the time that any request for review of the claim pursuant to Section 9.05 is pending before the Administration Committee. The foregoing limitations period is expressly intended to replace and to supersede any limitations period that might otherwise be deemed applicable under state or federal law in the absence of this Section 11.13. Claims filed after the expiration of the limitations period prescribed by this Section 11.13 shall be deemed to be time-barred.

11.14.

C LASS A CTION F ORUM S ELECTION C LAUSE

(a)

(b)

This Section 11.14 does not relieve the Plan or any putative litigant or class member of any obligation existing under the Plan or by law to exhaust administrative remedies (including the applicable claims procedures) before initiating litigation or to comply with the limitation of actions provision set forth in Section 11.13(b).


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D EFERRED I NCOME P LAN		P AGE 26

11.15.

S EVERABILITY

11.16.

I NTEGRATION C LAUSE AND C OMPLETE S TATEMENT OF P LAN

This document is a complete statement of the Plan and, as of the effective date hereof, supersedes all prior plan documents. No Participant, Beneficiary, former Spouse, or any other person shall be entitled to or have any vested right in or claim to a benefit under the Plan, except as expressly provided herein. The Company shall from time to time issue to Participants one or more booklets or brochures or make presentations summarizing the Plan. In the event of any conflict between the terms of the Plan document and the terms of any such booklets, brochures, and presentations summarizing the Plan, the terms of the Plan document shall control.

* * *

IN WITNESS WHEREOF the undersigned has executed this restatement of the Plan.

/s/ John A. Luke, Jr.

John A. Luke, Jr.

Chairman and Chief Executive Officer


APPROVALS

LAW DEPARTMENT

By		/s/ John J. Carrara
		John J. Carrara
		Associate General Counsel and Assistant Secretary

FILED: December 30, 2008

By		/s/ Wendell L. Willkie, II
		Wendell L. Willkie, II
		Senior Vice President, General Counsel and Secretary


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APPENDIX A. TRANSFER OF EX-CAP BALANCES

Effective January 1, 2007 (the “Merger Date”), The Mead Corporation Executive Capital Accumulation Plan (the “Ex-CAP”) is merged into the Plan. From and after the Merger Date:

A-1.

Amounts deferred under the Ex-CAP shall be credited to sub-accounts established pursuant to Section 5.04 of the Plan (the “Ex-CAP Accounts”). Any individual with an account balance under the Ex-CAP who is not already a Participant in the Plan shall become a Participant in the Plan on the Merger Date.

A-2.	Except as otherwise provided in this Appendix A, each Participant’s Ex-CAP Account shall be subject to the terms of the Plan, as in effect and amended from time to time.

A-3.	Subject to the Participant’s right to change the time or form of payment pursuant to Section 7.04 of the Plan (or, for Pre-AJCA Ex-CAP Accounts, Appendix C):

(a)

The Company shall pay each Participant’s Ex-CAP Account in accordance with his most recent distribution election that is valid under the Terms of the Plan and the AJCA (as determined by the Administration Committee in its sole discretion) under the Ex-CAP filed prior to the Merger Date.

(b)

If any Participant has not filed a valid distribution election with respect to all or part of his Ex-CAP Account prior to the Merger Date, the Company shall pay any amount to which a valid distribution election does not apply in a lump sum as soon as practicable after June 30 of the Plan Year next following the Plan Year in which his Termination Date occurs.

(c)

If any Participant dies before his entire Ex-CAP Account has been paid, the Company shall pay the remaining vested balance of his Ex-CAP Account to his Beneficiary in accordance with Section 8.02 of the Plan.


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D EFERRED I NCOME P LAN		P AGE A-1

APPENDIX B. DISTRIBUTION OF PRE-AJCA DIP ACCOUNTS

B-1.	A PPLICABILITY

This Appendix B applies only for Pre-AJCA DIP Accounts, as defined in Section 2.01(dd)(1) of the Plan. This Appendix B sets forth the rules relating to form and time of payment for Pre-AJCA DIP Accounts that applied under the Pre-AJCA DIP (as defined below).

B-2.	D EFINITIONS

For purposes of this Appendix B—

(a)

“Gross Misconduct” means conduct, including a Pre-AJCA DIP Participant’s performance, that the Company determines is cause for terminating the Participant’s employment. Gross Misconduct includes engaging in fraud, misappropriation, embezzlement, neglect of duties and responsibilities, insubordination, or any other material violation of the Company’s policies and procedures.

(b)

“Pre-AJCA DIP” means the MeadWestvaco Corporation Deferred Income Plan as in effect on October 3, 2004.

(c)

“Pre-AJCA DIP Participant” means a Participant who (i) terminated employment with the Company and Affiliates before January 1, 2005, and (ii) has a Pre-AJCA DIP Account.

(d)

“Pre-AJCA DIP Termination Date” means the date, before January 1, 2005, on which a Pre-AJCA DIP Participant’s employment with the Company ended, other than by death, including the date on which a Pre-AJCA DIP Participant retired, quit, or was discharged.

(e)

“Pre-AJCA DIP Termination Distribution” means a distribution of all or part of a Participant’s Pre-AJCA DIP Account, scheduled to commence after his Pre-AJCA DIP Termination Date, in accordance with Section B-3(b).

(f)

“Pre-AJCA DIP Unforeseeable Emergency” means a severe financial hardship resulting from—

(i)

a sudden and unexpected illness or accident of the Pre-AJCA DIP Participant or his dependent (as defined in section 152(a) of the Code);

(ii)

loss of the Pre-AJCA DIP Participant’s property due to casualty; or

(iii)

such other similar extraordinary and unforeseeable circumstances, as approved by the Administration Committee in a non-discriminatory manner, arising as a result of events beyond the Pre-AJCA DIP Participant’s control.


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D EFERRED I NCOME P LAN		P AGE B-1

In no case may the need to send a child to college or the desire to purchase a home constitute a Pre-AJCA DIP Unforeseeable Emergency.

B-3.	S CHEDULED D ISTRIBUTION OF P RE -AJCA DIP A CCOUNTS

(a)

Scheduled Distribution Elections

(i)

The Company shall pay Pre-AJCA DIP Accounts in accordance with Pre-AJCA DIP Participant distribution elections made pursuant to such procedures established by the Administration Committee as were in effect on October 3, 2004. Any distribution election not made in accordance with such procedures shall be ineffective and shall be disregarded.

(ii)

If a Pre-AJCA DIP Participant terminates employment with the Company without an Pre-AJCA DIP effective distribution election, the Company shall pay his Pre-AJCA DIP Account in accordance with Section B-3(b)(iii).

(b)

Scheduled Distributions Following Termination of Employment

(i)

To the extent properly elected, a Pre-AJCA DIP Termination Distribution shall commence (in a form permitted under Section B-3(c)) in a Plan Year after the Participant’s Pre-AJCA DIP Termination Date.

(A)

If the Pre-AJCA Termination Date occurs prior to the date on which the Pre-AJCA DIP Participant attains age 55, distribution shall commence as soon as practicable after June 30 of the calendar year following the Pre-AJCA DIP Termination Date.

(B)

If the Pre-AJCA DIP Termination Date occurs on or after the date on which the Pre-AJCA DIP Participant attains age 55, and the reason for termination is not Gross Misconduct, distribution shall commence no later than the earliest administratively practicable date after June 30 in the earlier of the (1) tenth calendar year following his Pre-AJCA DIP Termination Date; or (2) the calendar year in which he attains age 70.

(C)

If a Pre-AJCA DIP Participant’s employment with the Company is terminated for Gross Misconduct, distribution of his Pre-AJCA DIP Account shall commence as soon as practicable after June 30 of the calendar year following the his Pre-AJCA DIP Termination Date. The amount of any distribution to any individual whose employment is terminated for Gross Misconduct shall be subject to any claims the Company may have against such individual arising from such Gross Misconduct.

(ii)

Notwithstanding any election by a Pre-AJCA DIP Participant to receive an in-service distribution pursuant to Section 7.02(a) of the Pre-AJCA DIP, if a Pre-AJCA DIP Participant terminated employment prior to receiving all or part of such distribution, the distribution election shall be canceled (to the extent unpaid) and the sub-account or sub-accounts associated with such distribution shall be distributed in accordance with the terms of his Pre-AJCA DIP Termination Distribution election.


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D EFERRED I NCOME P LAN		P AGE B-2

(iii)

If a Pre-AJCA DIP Participant terminated employment without an effective Pre-AJCA DIP Termination Distribution election, his Pre-AJCA DIP Account (including sub-accounts associated with any unpaid portions of any in-service distribution pursuant to Section 7.02(a) of the Pre-AJCA DIP) shall be distributed in a single lump sum, as soon as practicable after June 30 of the calendar year following the calendar year in which his Pre-AJCA DIP Termination Date occurs.

(iv)

If a Pre-AJCA DIP Participant terminated employment with an effective Pre-AJCA DIP Termination Distribution election that does not apply to the entire balance in his Pre-AJCA DIP Account, (A) distribution of the portion of the Pre-AJCA DIP Account to which a Pre-AJCA DIP Termination Distribution election applies shall commence in accordance with the terms of such election, and (B) the remaining balance of his Pre-AJCA DIP Account shall be paid in a lump sum as soon as practicable after June 30 of the calendar year following the calendar year in which his Pre-AJCA DIP Termination Date occurs.

(c)

Form of Payment Following Termination of Employment

(i)

Except as otherwise provided in Section B-3(c)(ii), all payments under this Section B-2 shall be in the form of lump sum, equal to the full balance of the Pre-AJCA DIP Participant’s nonforfeitable interest in his Pre-AJCA DIP Account as of June 30 in the Plan Year in which the distribution is made.

(ii)

A Pre-AJCA DIP Participant may elect to receive his Pre-AJCA DIP Account in annual installments over a specified period of up to 20 years; provided that:

(A)

If, as of June 30 of the year in which payment is scheduled to commence, the Pre-AJCA DIP Account balance is $50,000 or less, the Company shall pay such balance to the Pre-AJCA DIP Participant in a lump sum; and

(B)

If the Pre-AJCA DIP Participant’s employment with the Company is terminated for Gross Misconduct, the Company shall have sole discretion to determine the form in which his Pre-AJCA DIP Account is paid.

The amount of each annual installment shall be equal to the balance of the Pre-AJCA DIP Account as of June 30 of the applicable year divided by the number of annual installments remaining to be paid. A Pre-AJCA DIP Participant may change his election with respect to form of payment of his Pre-AJCA DIP Account only to the extent permitted by and subject to such rules and procedures established by the Administration Committee as in effect on October 3, 2004.


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D EFERRED I NCOME P LAN		P AGE B-3

(d)

Rehire

(i)

If a Pre-AJCA Participant is rehired by the Company before his Pre-AJCA DIP Distribution commences, his prior termination date shall not be treated as his Pre-AJCA DIP Termination Date for purposes of this Appendix B.

(ii)

If a Pre-AJCA Participant is rehired by the Company after his Pre-AJCA DIP Termination Distribution commences, payments shall continue in accordance with the payment schedule in effect, without regard to his rehire.

B-4.	U NSCHEDULED D ISTRIBUTIONS AND P AYMENTS U PON D EATH

(a)

A Pre-AJCA DIP Participant shall not be eligible to receive an unscheduled distribution except to the extent permitted by subsections (b) and (c) of this Section B-4.

(b)

Hardship Distribution

(i)

A Pre-AJCA DIP Participant who is actively employed by the Company (after having been rehired before commencement of his Pre-AJCA DIP Termination Distribution) and who satisfies the requirements of this Section B-4(b) may receive an unscheduled distribution from his Pre-AJCA DIP Account in the event of a Pre-AJCA DIP Unforeseeable Emergency.

(ii)

If a Pre-AJCA DIP Participant seeks to receive a distribution pursuant to this Section B-4(b), he shall present such evidence and certifications as the Administration Committee or the Plan’s recordkeeper considers necessary to determine whether the Pre-AJCA DIP Participant meets the requirements of this Section B-4(b). The amount of any distribution pursuant to this Section B-4(b) shall not exceed the amount reasonably required to satisfy the emergency need.

(iii)

Notwithstanding the forgoing, a distribution shall not be made pursuant to this Section B-4(b) to the extent that the applicable Pre-AJCA DIP Unforeseeable Emergency is or may be relieved through—

(A)

reimbursement or payment by insurance or otherwise;

(B)

a commercial loan or loan under the Qualified Plan;

(C)

a hardship distribution under the Qualified Plan;


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D EFERRED I NCOME P LAN		P AGE B-4

(D)

liquidation of the Pre-AJCA DIP Participant’s assets, to the extent the liquidation of such assets would not itself cause severe financial hardship; or

(E)

cessation of deferrals under the Plan.

(iv)

If a Pre-AJCA DIP Participant receives a distribution pursuant to this Section B-4(b)—

(A)

any Deferral Elections previously filed by the Pre-AJCA DIP Participant with respect to a period after the distribution shall be canceled; and

(B)

the Pre-AJCA DIP Participant shall not be permitted to file any further Deferral Election forms with respect to any Plan Year before the Plan Year that beings after the Plan Year in which such distribution is made.

(c)

Non-Hardship “Haircut” Distribution . A Pre-AJCA DIP Participant who does not qualify for a Pre-AJCA Hardship Distribution may at any time elect to receive a distribution of all or any portion of his Pre-AJCA DIP Account; provided, however, that if a Pre-AJCA DIP Participant receives an unscheduled distribution pursuant to this Section B-4(c), an amount equal to 10 percent of the amount requested to be distributed shall be permanently forfeited from the vested balance in the Participant’s Pre-AJCA DIP Account and shall not be paid to, or in respect of, the Pre-AJCA DIP Participant at any time.

(d)

Form of Payment of Unscheduled Pre-AJCA DIP Distributions . All payments under subsections (b) and (c), above, shall be made in a lump sum.

(e)

Payments Upon Death . Upon the death of a Pre-AJCA DIP Participant (whether or not he is employed by the Company at the time of death), the Company shall pay the remaining balance in his Pre-AJCA DIP Account in accordance with the following rules:

(i)

Except as provided in Section B-4(e)(iii), if, at the time of the Pre-AJCA DIP Participant’s death, he has not begun receiving payments from the Plan, payments shall be made in accordance with Section B-3(b). If the Participant dies before his Pre-AJCA DIP Termination Date, the date of his death shall be treated as his Pre-AJCA DIP Termination Date.

(ii)

Except as provided in Section B-4(e)(iii), if a Pre-AJCA DIP Participant dies while receiving Pre-AJCA DIP Account distributions, his Beneficiary shall receive any remaining installment payments under this Appendix B as they become due.

(iii)

Subject to any rules, regulations, conditions, and restrictions established by the Administration Committee and in effect on October 3, 2004, any Beneficiary may petition the Administration Committee to change the terms of the Pre-AJCA DIP Participant’s distribution election with respect to his Pre-AJCA DIP Account or to receive his distribution in a single lump sum.


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D EFERRED I NCOME P LAN		P AGE B-5

(f)

Designation of Beneficiary . A Pre-AJCA DIP Participant’s Beneficiary shall be determined in accordance with Section 8.03 of the Plan.


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D EFERRED I NCOME P LAN		P AGE B-6

APPENDIX C. DISTRIBUTION OF PRE-AJCA EX-CAP ACCOUNTS

C-1 .

A PPLICABILITY

This Appendix C applies only for Pre-AJCA Ex-CAP Accounts, as defined in Section 2.01(dd)(2) of the Plan. This Appendix C sets forth the rules relating to form and time of payment for Pre-AJCE Ex-CAP Accounts that applied under the Pre-AJCA Ex-CAP (as defined below).

C-2 .

D EFINITIONS

For purposes of this Appendix C—

(a)

“Ex-CAP Change in Control.”

(i)

Subject to paragraph (ii), below, an “Ex-CAP Change in Control” shall be deemed to have occurred if any one of the following events shall have occurred:

(A)

A Tender Offer (other than a Tender Offer by MeadWestvaco) expires, if the offeror acquires Shares pursuant to such Tender Offer;

(B)

Shareholders of MeadWestvaco approve a definitive agreement—

(1)

for the merger or consolidation of MeadWestvaco or any direct or indirect subsidiary of MeadWestvaco into or with another corporation, other than—

(a)

a merger or consolidation that would result in the voting securities of MeadWestvaco outstanding immediately prior thereto continuing to represent—

(I)

in the case of a merger or consolidation of MeadWestvaco, either by remaining outstanding or by being converted into voting securities of the surviving entity of any parent thereof, or

(II)

in the case of a merger or consolidation of any direct or indirect subsidiary of MeadWestvaco, either by remaining outstanding if MeadWestvaco continues as a parent of the merged or consolidated subsidiary or by being converted into voting securities of the surviving entity or any parent thereof;

at least 51 percent of the combined voting power of the voting securities of MeadWestvaco or such surviving or parent entity outstanding immediately after such merger or consolidation; or


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(b)

a merger or consolidation effected to implement a recapitalization of MeadWestvaco (or similar transaction) in which no Person is or becomes the Beneficial Owner, directly or indirectly, of securities of MeadWestvaco (not including in the securities Beneficially Owned by such Person any securities acquired directly from MeadWestvaco or its CIC Affiliates) representing 25 percent or more of the combined voting power of MeadWestvaco’s then outstanding securities, or

(2)

for the sale or disposition of all or substantially all of the assets of MeadWestvaco, other than a sale or disposition by MeadWestvaco of all or substantially all of MeadWestvaco’s assets to an entity, at least 51 percent of the combined voting power of the voting securities of which are owned (directly or indirectly) by shareholders of MeadWestvaco in substantially the same proportions as their ownership of MeadWestvaco immediately prior to such sale or disposition;

(C)

any Person is or becomes the Beneficial Owner of 25 percent or more of the voting power of the then outstanding securities of MeadWestvaco (not including in the securities Beneficially Owned by such Person any securities acquired directly from MeadWestvaco or its CIC Affiliates), excluding (1) any Person who becomes such a Beneficial owner in connection with a transaction described in subparagraph (B)(1)(a), above, or (2) the date of authorization, by both a majority of the portion of such voting power excluding the voting power of interested Shares, of a “control share acquisition” (as such term is defined in Chapter 1701 of the Ohio Revised Code, or, if applicable, its closest equivalent under Delaware law), or

(D)

a change in the composition of the Board of Directors such that individuals who were members of the Board of Directors on the date two years prior to such change (and any new directors (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of MeadWestvaco) who were elected, or were nominated for election by MeadWestvaco’s shareholders with the affirmative vote of at least two-thirds of the directors then still in office who either were directors at the beginning of such two year period or whose election or nomination for election was previously so approved) no longer constitute a majority of the Board of Directors.


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(ii)

Notwithstanding any provision of paragraph (i), above, an Ex-CAP Change in Control shall not be deemed to have occurred by virtue of the consummation of any transaction or series of integrated transactions immediately following which the record holders of the common stock of MeadWestvaco immediately prior to such transaction or series of transactions continue to have substantially the same proportionate ownership in an entity that owns all or substantially all of the assets of MeadWestvaco immediately following such transaction or series of transactions.

(iii)

Certain Definitions . For purposes of this Section C-2(a)—

(A)

“Beneficial Owner” shall have the meaning set forth in Rule 13d-3 of the Exchange Act.

(B)

“CIC Affiliate” shall mean “affiliate,” as defined in Rule 12b-2 promulgated under section 12 of the Exchange Act.

(C)

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

(D)

“Person” shall have the meaning set forth in section 3(a)(9) of the Exchange Act, as modified and used in sections 13(d) and 14(d) thereof, except that such term shall not include:

(1)

MeadWestvaco or any of its subsidiaries;

(2)

a trustee or other fiduciary holding securities under an employee benefit plan of MeadWestvaco or any of its CIC Affiliates;

(3)

an underwriter temporarily holding securities pursuant to an offering of such securities, or

(4)

a corporation owned, directly or indirectly, by the shareholders of MeadWestvaco in substantially the same proportions as their ownership of stock of MeadWestvaco.

(E)

“Shares” shall mean shares of common stock of MeadWestvaco Corporation.

(F)

“Tender Offer” shall mean a tender offer or a request or invitation for tenders or an exchange offer subject to regulation under Section 14(d) of the Exchange Act and the rules and regulations thereunder, as the same may be amended, modified, or superseded from time to time.

(b)

“ Ex-CAP Distribution Period ” means a period of 5, 10, 15, or 20 calendar years as elected by the Pre-AJCA Ex-CAP Participant for whom the Account is maintained.


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(c)

“Ex-CAP Elective Distribution” means a distribution pursuant to Section C-3(d).

(d)

“Ex-CAP Emergency Distribution” means a distribution pursuant to Section C-3(c).

(e)

“Ex-CAP Payment Date” means July 20 of each year, except that if an election was filed in accordance with Section 3.3 of the Pre-AJCA Ex-CAP with respect to distributions following an Ex-CAP Change in Control, the term includes July 20 of the year selected by a Participant to receive a lump sum distribution.

(f)

“Pre-AJCA Ex-CAP Participant” means a Participant who (i) terminated employment with the Company and Affiliates before January 1, 2005, and (ii) has a Pre-AJCA Ex-CAP Account.

(g)

“Pre-AJCA Ex-CAP” means the Mead Corporation Executive Capital Accumulation Plan as in effect on October 3, 2004.

(h)

“Ex-CAP Unforeseeable Emergency” means severe financial hardship to the Pre-AJCA Ex-CAP Participant resulting from a sudden and unexpected illness or accident of the Pre-AJCA Ex-CAP Participant or of his “dependent” (as defined in section 152(a) of the Code), loss of the Pre-AJCA Ex-CAP Participant’s property due to a casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Pre-AJCA Ex-CAP Participant.

C-3.	D ISTRIBUTION OF P RE -AJCA E X -CAP A CCOUNTS TO P RE -AJCA E X -CAP P ARTICIPANTS

(a)

Annual Distributions

Except as otherwise provided in this Appendix C, if a Pre-AJCA Ex-CAP Participant’s employment with the Company and 80% Affiliates is terminated for any reason other than his death, and on the June 30 preceding his initial Ex-CAP Payment Date, the aggregate balances of his Pre-AJCA Ex-CAP Accounts equal at least $50,000, each of his Pre-AJCA Ex-CAP Accounts shall be distributed to him in annual installments (each in the amount determined as provided below), made on or about each Ex-CAP Payment Date, beginning:

(i)

in the case of a Pre-AJCA Ex-CAP Participant whose employment terminates at any age by reason of “disability” (as determined by the Plan Administrator) or for any reason upon or after reaching age 55 years, on or about the Ex-CAP Payment Date of the calendar year elected by him; and

(ii)

in all other cases, and notwithstanding any previous election, on or about the Ex-CAP Payment Date of the calendar year next following the calendar year during which his termination of employment with the MeadWestvaco and its 80% Affiliates occurs;

and continuing for the number of calendar years constituting the Ex-CAP Distribution Period he has elected with respect to that Pre-AJCA Ex-CAP Account. Notwithstanding a Pre-AJCA Ex-CAP Participant’s elected Ex-CAP


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Distribution Period, if on the June 30 preceding his initial Ex-CAP Payment Date, the aggregate balances of a Pre-AJCA Ex-CAP Participant’s Pre-AJCA Ex-CAP Accounts is an amount that is less than $50,000, those balances shall be distributed to him on or about his initial Ex-CAP Payment Date in a single lump sum. The amount of each annual installment from a Pre-AJCA Ex-CAP Account for a calendar year shall be equal to the balance of such Pre-AJCA Ex-CAP Account as of June 30 of the applicable year, divided by the number of calendar years remaining in the Ex-CAP Distribution Period elected by the Pre-AJCA Ex-CAP Participant with respect to that Pre-AJCA Ex-CAP Account. Notwithstanding any of the foregoing to the contrary, if a Pre-AJCA Ex-CAP Participant with respect to whom a participant account under the Pre-AJCA Ex-CAP was established for calendar year 1995 or 1996 has elected an Ex-CAP Distribution Period that is less than 10 calendar years, then, at any time, but at least one year prior to his initial Ex-CAP Payment Date, he may elect to have his Ex-CAP Distribution Period with respect to such portion of his Pre-AJCA Ex-CAP Account occur over a period of 10 or more years commencing on the previously elected initial Ex-CAP Payment Date.

(b)

Interim Distributions

If a Pre-AJCA Ex-CAP Participant becomes entitled to receive an interim distribution pursuant to section 8.2 of the Pre-AJCA Ex-CAP from a Pre-AJCA Ex-CAP Account on or after the initial Ex-CAP Payment Date applicable to such Account, no such interim distribution shall be made to him and the annual installment payments specified by Section C-3(a) shall continue. Any interim distribution election made by a Pre-AJCA Ex-CAP Participant pursuant to section 8.2 of the Pre-AJCA Ex-CAP shall be automatically canceled on the date of his death. Notwithstanding any of the foregoing to the contrary, if a Pre-AJCA Ex-CAP Participant has elected pursuant to section 8.2 of the Pre-AJCA Ex-CAP to receive an interim distribution with respect to a participant account established for calendar years 1995 and 1996, then, at any time, but at least one year prior to such interim distribution, he may elect to reduce such interim distribution payment.

(c)

Ex-CAP Emergency Distributions

(i)

If, on written application of a Pre-AJCA Ex-CAP Participant, it is determined (as provided below) that such Participant has experienced an Ex-CAP Unforeseeable Emergency, then, as of the first day of any calendar month, he may elect to receive an Ex-CAP Emergency Distribution from one or more of his Pre-AJCA Ex-CAP Accounts, provided that the aggregate amount of any such distribution shall not exceed the amount reasonably needed to satisfy his emergency need. In determining whether an Ex-CAP Emergency Distribution should be made to a Pre-AJCA Ex-CAP Participant consideration may be given to the extent to which his Ex-CAP Unforeseeable Emergency can be relieved:

(A)

through reimbursement or compensation by insurance or otherwise;


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(B)

by liquidation of the Pre-AJCA Ex-CAP Participant’s assets, to the extent the liquidation of such assets would not itself cause severe financial hardship;

(C)

by cessation of deferrals under the Plan; or

(D)

other distributions to be made to the Pre-AJCA Ex-CAP Participant from the Plan.

(ii)

A determination with respect to whether a Pre-AJCA Ex-CAP Participant has experienced an Ex-CAP Unforeseeable Emergency shall be made:

(A)

in the case of a Pre-AJCA Ex-CAP Participant employed or last employed by the Company at a salary grade below salary grade 24 (exclusive of an elected officer of the Company or an 80% Affiliate) and his Beneficiary, the Plan Administrator; and

(B)

in the case of a Pre-AJCA Ex-CAP Participant employed or last employed by the Company at salary grade 24 or above or as an elected officer of the Company or an 80% Affiliate, and their beneficiaries, the Administration Committee.

(iii)

To the extent permitted under ERISA, determinations made pursuant to this Section C-3(c) shall not be subject to the procedures established pursuant to Section 9.05 of the Plan.

(d)

Ex-CAP Elective Distributions . As of the first day of any calendar month a Pre-AJCA Ex-CAP Participant may elect, by writing filed with the Plan Administrator, to receive an Ex-CAP Elective Distribution from one or more of his Pre-AJCA Ex-CAP Accounts; provided, however, that if a Pre-AJCA Ex-CAP Participant receives an Ex-CAP Elective Distribution, he shall forfeit an amount equal to 20 percent of the amount of such Ex-CAP Elective Distribution.

(e)

Ex-CAP Change in Control Distributions . In connection with, but prior to, a, Ex-CAP Change in Control, the Administration Committee, in its sole discretion, may authorize distribution of Pre-AJCA Ex-CAP Accounts in single lump sums.

C-4 .

D ISTRIBUTION OF P RE -AJCA EX-CAP A CCOUNTS TO B ENEFICIARIES

(a)

Distribution to a Beneficiary . If a Pre-AJCA Ex-CAP Participant dies (either prior to or following his Termination of Employment) the undistributed balance of each of his Pre-AJCA Ex-CAP Accounts will be distributed as follows:

(i)

If distribution has commenced prior to his death, annual installments shall continue to be distributed to his Beneficiary with respect to the Pre-AJCA Ex-CAP Account during the remainder of the Ex-CAP Distribution Period applicable to that Pre-AJCA Ex-CAP Account, as if the deceased Pre-AJCA Ex-CAP Participant had lived; and


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(ii)

If distribution has not commenced prior to his death, the applicable Pre-AJCA Ex-CAP Account shall be distributed in annual installments commencing on the Ex-CAP Payment Date and over the Ex-CAP Distribution Period elected by the deceased Pre-AJCA Ex-CAP Participant with respect to that Pre-AJCA Ex-CAP Account.

(b)

Beneficiary . A Pre-AJCA Ex-CAP Participant’s Beneficiary shall be determined in accordance with Section 8.03 of the Plan.

C-5 .

Section 162(m) Limitation on Distributions

Notwithstanding any other provision of this Appendix C to the contrary, distributions of Pre-AJCA Ex-CAP Accounts shall be subject to the “Section 162(m) Limitation” as in effect on October 3, 2004. This Section C-5 sets forth the terms of such Section 162(m) Limitation.

(a)

Definitions . For purposes of this Section C-5—

(i)

“Ex-CAP Accounting Date” means each business day; provided that, with respect to any Ex-CAP Supplement A Individuals, “Ex-CAP Accounting Date” means the last business day of each calendar quarter.

(ii)

“Ex-CAP Supplement A Individual” means (i) any individual who was a participant in the Ex-CAP as of December 31, 1999, and (ii) each beneficiary of a deceased participant in the Ex-CAP who was eligible to receive a distribution from the Ex-CAP as of January 1, 2000.

(b)

Tentative Section 162(m) Determination . Prior to a Pre-AJCA Ex-CAP Participant’s Ex-CAP Payment Date for any calendar year, the Administration Committee may, in its discretion, make a tentative determination as to whether the sum of:

(i)

amounts otherwise distributable to the Pre-AJCA Ex-CAP Participant from his Pre-AJCA Ex-CAP Account under the Plan as of that Ex-CAP Payment Date; and

(ii)

all other compensation expected to be payable to the Pre-AJCA Ex-CAP Participant and deductible by the Company for that calendar year;

will exceed the maximum deductible amount permitted with respect to the Pre-AJCA Ex-CAP Participant for that calendar year by section 162(m) of the Code. Based on the Administration Committee’s tentative decision, the provisions of Section C-5(c) or (d), as the case may be, shall become applicable with respect to the Pre-AJCA Ex-CAP Participant. Notwithstanding the foregoing, the provisions of this Section C-5 shall not be applicable with respect to any distribution payable under this Appendix C during any calendar year following the calendar year in which an Ex-CAP Change in Control occurs.

(c)

Tentative Determination Amount Not in Excess of 162(m) Limit . If the Administration Committee tentatively determines that the sum of the amounts described in Section C-5(b)(i) and (b)(ii) payable to a Pre-AJCA Ex-CAP


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Participant for a calendar year will be fully deductible by the Company for that year, distribution from his Pre-AJCA Ex-CAP Accounts shall be made to the Pre-AJCA Ex-CAP Participant in accordance with the provisions of Section C-3 as of his Ex-CAP Payment Date.

(d)

Tentative Determination Amount in Excess of 162(m) Limit . If the Administration Committee tentatively determines that the sum of the amounts described in Section C-5(b)(i) and (b)(ii) payable to a Pre-AJCA Ex-CAP Participant for a calendar year will not be fully deductible by the Company for that year, the Administration Committee may direct that all or any portion of the balances of his Pre-AJCA Ex-CAP Accounts otherwise distributable as of his Ex-CAP Payment Date for that calendar year be retained under the terms of the Plan, as modified by this Appendix C. However, during the month of December of that calendar year, the Administration Committee shall make a final determination with respect to whether any portion of such retained amount will be fully deductible to the Company for that calendar year if distributed to the Pre-AJCA Ex-CAP Participant and such portion that is fully deductible, if any, shall be distributed to the Pre-AJCA Ex-CAP Participant on or before that last day of that calendar year. Any such distribution shall be charged to the Participant’s Pre-AJCA Ex-CAP Account from which it was distributed as of the Ex-CAP Accounting Date coincident with or next following the date of distribution.


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Exhibit 10.26

MEADWESTVACO CORPORATION RETIREMENT RESTORATION PLAN

Effective January 1, 2009, except as otherwise provided

TABLE OF CONTENTS


A RTICLE 1. I NTRODUCTION		1
1.01.	History of the Plan	1
1.02.	Overview and Purposes of the Plan	2
1.03.	Section 409A of the Internal Revenue Code	2
1.04.	Effective Date	3

A RTICLE 2. D EFINITIONS AND C ONSTRUCTION		4
2.01.	Definitions	4
2.02.	Construction	7
2.03.	Timing of Payments	7

A RTICLE 3. E LIGIBILITY , P ARTICIPATION , AND V ESTING		8
3.01.	Eligibility and Participation	8
3.02.	Vesting	8

A RTICLE 4. A MOUNT AND P AYMENT OF B ENEFITS		9
4.01.	Amount of Benefits	9
4.02.	Form and Time of Benefit Payments	9
4.03.	Death Benefits	11

A RTICLE 5. P LAN A DMINISTRATION		13
5.01.	Plan Administrator	13
5.02.	Interpretations	13
5.03.	Elections and Designations	13
5.04.	Claims	13

A RTICLE 6. A MENDMENT , M ERGER , AND T ERMINATION OF P LAN		14
6.01.	Amendment of the Plan	14
6.02.	Termination of the Plan	14
6.03.	Design Decisions	14

A RTICLE 7. M ISCELLANEOUS P ROVISIONS		1 5
7.01.	Employment Rights Not Affected by Plan	15
7.02.	Integration Clause	15
7.03.	Doubt as to Identity	15
7.04.	Consistency of Payment Forms in Benefit Calculations	15
7.05.	Discretion to Accelerate Payments	16
7.06.	Payment Medium	16
7.07.	Obligations to Make Payments	16
7.08.	Liability Limited	16
7.09.	Overpayments	16
7.10.	Incapacity and Minor Status	16


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		T ABLE OF C ONTENTS


7.11.	Assignment and Liens	17
7.12.	Withholding Taxes	17
7.13.	Titles and Headings Not to Control	17
7.14.	Notice of Process	17
7.15.	Governing Law and Limitation on Actions	17
7.16.	Class Action Forum Selection Clause	18
7.17.	Severability	18
7.18.	Complete Statement of Plan	18


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ARTICLE 1. INTRODUCTION

1.01.

H ISTORY OF THE P LAN

(a)	Immediately before January 1, 2003, The Mead Corporation and Westvaco Corporation sponsored, inter alia , the following four supplemental and excess benefit plans for the benefit of certain of their employees:

(1)

The Mead Corporation Section 415 Excess Benefit Plan, which was a defined benefit plan designed to supplement the amount of any pension payable to or on account of any employee or former employee of the Mead Corporation and certain of its affiliates from the Mead Retirement Plan to the extent that such employee’s or former employee’s pension from the Mead Retirement Plan was limited as a result of section 415 of the Internal Revenue Code.

(2)

The Mead Corporation Excess Earnings Benefit Plan, which was a defined benefit plan designed to supplement the amount of benefits payable to or on account of any employee or former employee of the Mead Corporation and certain of its subsidiaries from the Mead Corporation retirement and pension plans to the extent that such benefits were limited as a result of section 401(a)(17) of the Internal Revenue Code.

(3)

The Westvaco Corporation Retirement Income Restoration Plan, which was a defined benefit plan designed to supplement the amount of benefits payable to or on account of any employee or former employee of Westvaco Corporation and certain of its subsidiaries from the Westvaco Corporation retirement and pension plans to the extent that such benefits were limited as a result of section 401(a)(17) of the Internal Revenue Code.

(4)

The Westvaco Corporation Excess Benefit Plan, which was a combination defined benefit and defined contribution plan designed to supplement the amount of benefits payable to or on account of any employee or former employee of Westvaco Corporation and certain of its subsidiaries from the Westvaco Corporation retirement and pension plans and/or the Westvaco Corporation Savings and Investment Plan for Salaried Employees to the extent that such benefits were limited as a result of section 415 of the Internal Revenue Code.

(b)

Effective January 1, 2003, all or portions of the Mead Corporation Section 415 Excess Benefit Plan, the Mead Corporation Excess Earnings Benefit Plan, the Westvaco Corporation Retirement Income Restoration Plan and the Westvaco Corporation Excess Benefit Plan (the “Predecessor Plans”) were merged into the MeadWestvaco Corporation Retirement Restoration Plan (the “Plan”). With respect to participants whose benefits were transferred to the Plan as a result of the merger, the accrued benefits and liabilities under the Predecessor Plans immediately before the merger became accrued benefits and liabilities under this Plan immediately after the merger. To the extent required by the plan documents for the Predecessor Plans, the accrued benefits under the Predecessor Plans that were transferred to this Plan shall not be reduced as a result of the transfer.


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		P AGE 1

(c)	The Plan is a single plan sponsored by MeadWestvaco Corporation.

1.02.

O VERVIEW AND P URPOSES OF THE P LAN

(a)

The benefits provided under the Plan are linked to the benefits provided under the MeadWestvaco Corporation Retirement Plan for Salaried and Non-Bargained Hourly Employees and certain other defined benefit pension plans that are qualified under section 401(a) of the Code and are sponsored by the Employer. The purpose of the Plan is to restore certain retirement benefits that cannot be provided under such tax-qualified defined benefit plans by reason of the limits required by sections 401(a)(17) and/or 415 of the Internal Revenue Code of 1986, as amended.

(b)

The Plan is unfunded and benefits due under the Plan remain subject to claims of the Company’s general creditors in the event of the Company’s bankruptcy or insolvency. Benefits due under the Plan shall be payable from the general assets of the Employers or, in the sole discretion of the Plan Administrator, from the assets of the Company or from any unsecured (“rabbi”) trust or similar arrangement, the assets of which shall be subject to the claims of the Company’s general creditors in the event of the Company’s bankruptcy or insolvency.

(c)

1.03.

S ECTION 409A OF THE I NTERNAL R EVENUE C ODE

(a)	Effective January 1, 2005:

(1)

All benefits under the Plan shall be subject to section 409A of the Internal Revenue Code of 1986, as amended (the “Code”);

(2)

The Plan shall comply with the requirements of, and shall be operated, administered, and interpreted in accordance with section 409A of the Code, except to the extent permitted by transition relief issued by the Internal Revenue Service; and

(3)

For the period from January 1, 2005 through December 31, 2008, the Company and the Plan Administrator had sole discretion to override the terms set forth in the plan document for the Plan to the extent that either the Company or the Plan Administrator determined to be necessary or appropriate to comply with a good-faith, reasonable interpretation of the requirements of section 409A of the Code.

(4)

If the Company or Plan Administrator determines that any provision of the Plan is or might be inconsistent with the restrictions imposed by section 409A of the Code, such provision shall be deemed to be amended to the extent that the Company or Plan Administrator determines is necessary to bring it into compliance with the requirements of section 409A of the Code. Any such deemed amendment shall be effective as of the earliest date such amendment is necessary under section 409A of the Code.


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(b)

No provision in the Plan shall be interpreted or construed to (1) create any liability for the Company or any Affiliate, or any of their employees, officers, directors, or other service providers, related to a failure to comply with section 409A, or (2) transfer any liability for a failure to comply with section 409A from a Participant or other individual to the Company or any Affiliate, or any of their employees, officers, directors, or other service providers.

1.04.

E FFECTIVE D ATE

Except where a particular provision of the Plan specifies a different effective date for that provision, this restatement of the Plan shall be effective January 1, 2009, and the provisions of this Plan document shall not affect Plan benefits for which payments commenced before January 1, 2009.


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ARTICLE 2. DEFINITIONS AND CONSTRUCTION

2.01.

D EFINITIONS

For purposes of the Plan, unless the context clearly or necessarily indicates the contrary, the following words and phrases shall have the meaning set forth in the definitions below:

(a)	“Actual Commencement Date” means, for any Participant, the date on which payments under the Plan to such Participant commence, in accordance with Section 4.02(b).

(b)

(c)	“ Annuity Component ” means the portion of a Legacy Mead Participant’s Supplemental FAP Benefit that is paid in the form of an annuity, as described in Section 4.01(c)(2).

(d)

“Beneficiary” means, for any Participant who dies, the person(s) designated by the Participant as his beneficiary(ies) (or contingent annuitant or similar survivor entitled to a benefit after the Participant’s death) under the Qualified Plan. If the Participant has not designated a beneficiary under the Qualified Plan, his Beneficiary shall be (1) his surviving Spouse, if any, or (2) if he does not have a Surviving Spouse, his estate.

(e)	“Board of Directors” means the Board of Directors of the Company.

(f)	“Cash Balance Participant” means a Participant who is a “Cash Balance Participant” as defined by the Qualified Plan.

(g)	“Code” means the Internal Revenue Code of 1986, as amended.

(h)	“Company” means MeadWestvaco Corporation, a Delaware corporation.

(i)	“Employer” means the Company and any Affiliate that, with the consent of the Board of Directors, has adopted the Plan.

(j)	“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

(k)

“Gross Pension” means, with respect to any Participant as of any date, the pension benefit that would be payable to the Participant under a specified formula of the Qualified Plan (or, where no formula is specified herein, under all of the Qualified Plan’s formulas, but excluding any supplemental or restructuring benefit), commencing on such date, if not for the Qualified Plan Limits.

(l)

“Legacy Mead Participant” means a Participant who is a Mead Legacy Participant (as defined by the MeadWestvaco Corporation Retirement Plan for Salaried and Non-Bargained Hourly Employees) and is eligible to elect to receive his Frozen December 31, 2002 Accrued Benefit (as defined by such Qualified Plan) in a lump sum, determined based on the provisions of the Qualified Plan in effect on January 1, 2009.


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(m)	“Lump-Sum FAP Component” means the portion of a Legacy Mead Participant’s Supplemental FAP Benefit that is paid in a lump sum, as described in Section 4.01(c)(1).

(n)	“Nominal Commencement Date” means, for any Participant—

(1)

For the Participant’s Supplemental Cash Balance Benefit (if any), the first day of the calendar month coincident with or next following the Participant’s Termination Date; and

(2)

For the Participant’s Supplemental FAP Benefit (if any), the first day of the calendar month coincident with or next following the later of (A) the Participant’s Termination Date or (B) the Participant’s 55th birthday;

provided, that for any Participant who (i) had a Termination Date before July 1, 2008, (ii) attained age 55 before January 1, 2009, and (iii) did not begin receiving his Plan benefit before January 1, 2009, the Nominal Commencement Date means January 1, 2009.

(o)	“Participant” means an individual who satisfies the requirements for participation in the Plan in Section 3.01 and whose accrued benefit under the Plan has not been forfeited or paid in full.

(p)	“Plan” means the MeadWestvaco Retirement Restoration Plan, as in effect and amended from time to time.

(q)	“Plan Administrator” means the plan administrator appointed pursuant to Section 5.01(a).

(r)

“Plan Interest Rate” means the interest rate that is required by the Qualified Plan for purposes of converting a single-life annuity to a lump-sum payment commencing as of the Participant’s Nominal Commencement Date. If the rate required by the Qualified Plan is determined by reference to a yield curve, the Plan Interest Rate shall mean the first segment of such yield curve.

(s)	“Predecessor Plans” means the Westvaco Corporation Retirement Income Restoration Plan, the Mead Corporation Section 415 Excess Benefit Plan, the Mead Corporation Excess Earnings Benefit Plan and the Westvaco Corporation Excess Benefit Plan.

(t)

“Qualified Pension” means, with respect to any Participant as of any date, the actual pension benefit payable to the Participant under a specified formula of the Qualified Plan (or, where no formula is specified herein, under all of the Qualified Plan’s formulas, but excluding any supplemental or restructuring benefit), commencing on such date.

(u)

“Qualified Plan” means, for any Participant, the tax-qualified defined benefit pension plan maintained by the Company or an Affiliate for non-bargained employees, under which the Participant accrued benefits. Such tax-qualified defined benefit pension plan shall be (1) the MeadWestvaco Corporation Retirement Plan for Salaried and Non-Bargained Hourly Employees or (2) the MeadWestvaco Corporation Envelope Division Retirement Plan for Salaried and Non-Bargained Hourly Employees.


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(v)	“Qualified Plan Limits” means the provisions of the Qualified Plan implementing Section 401(a)(17) or Section 415 of the Code.

(w)	“Spouse” means the person, if any, to whom a Participant is legally married under the laws of the state in which the Participant resides, and who qualifies as a “spouse” within the meaning of 1 U.S.C. § 7.

(x)

“Supplemental Cash Balance Benefit” means, for any Participant, the portion (if any) of his Supplemental Pension that is attributable to the Qualified Plan’s cash balance formula— i.e., the excess (if any) of (i) the Participant’s Gross Pension calculated under the Qualified Plan’s cash balance formula, over (ii) the Participant’s Qualified Pension calculated under the Qualified Plan’s cash balance formula.

(1)

For any Cash Balance Participant who does not have a Pre-Cash Balance Accrued Benefit (as defined by the Qualified Plan) under the Qualified Plan, the Participant’s Supplemental Pension shall consist entirely of the Participant’s Supplemental Cash Balance Benefit.

(2)

No Participant who is not a Cash Balance Participant shall accrue a Supplemental Cash Balance Benefit.

(y)

“Supplemental FAP Benefit” means, for any Participant, the portion (if any) of his Supplemental Pension that is not attributable to the Qualified Plan’s cash balance formula— i.e. , the excess (if any) of (i) the Participant’s Gross Pension calculated under the Qualified Plan’s final average pay formula (and any other formula other than the Qualified Plan’s cash balance formula, but excluding any supplemental or restructuring benefit), over (ii) the Participant’s Qualified Pension calculated under the Qualified Plan’s final average pay formula (and any other formula other than the Qualified Plan’s cash balance formula, but excluding any supplemental or restructuring benefit).

(1)

For any Participant who is not a Cash Balance Participant, such Participant’s Supplemental Pension shall consist entirely of the Participant’s Supplemental FAP Benefit.

(2)

For any Cash Balance Participant who has a Pre-Cash Balance Accrued Benefit (as defined by the Qualified Plan), such Participant’s Supplemental FAP Benefit shall be equal to the excess (if any) of (a) such Pre-Cash Balance Accrued Benefit, determined without regard to the Qualified Plan Limits, over (b) such Pre-Cash Balance Accrued Benefit.

(3)

No Cash Balance Participant who does not have a Pre-Cash Balance Accrued Benefit (as defined by the Qualified Plan) under the Qualified Plan shall accrue a Supplemental FAP Benefit.

(z)

“Supplemental Pension” means, for any Participant, the benefit (if any) payable to such Participant under this Plan, which shall equal his Gross Pension minus his Qualified Pension. For the avoidance of doubt, the value of a Participant’s Supplemental Pension shall not exceed the value of the sum of his Supplemental Cash Balance Benefit (if any) and his Supplemental FAP Benefit (if any).


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(aa)	“Termination Date” means the date of an individual’s “separation from service” (within the meaning of Section 409A(a)(2)(A)(i) of the Code) with the Employers and their Affiliates, as determined by the Company in accordance with Treas. Reg. § 1.409A-1(h)(1). For purposes of the Plan:

(1)

(2)

A sale of assets to an unrelated buyer that results in an individual working for the buyer or one of its affiliates shall not, by itself, constitute a “separation from service” for such individual unless the Company, with the buyer’s written consent, so provides in writing 60 or fewer days before the closing of such sale.

2.02.

C ONSTRUCTION

For purposes of the Plan, unless the contrary is clearly indicated by the context:

(a)	The use of the masculine gender shall also include within its meaning the feminine and vice versa;

(b)	The use of the singular shall also include within its meaning the plural and vice versa;

(c)	The word “include” means to include, but not to be limited to; and

(d)	Any reference to a statute or section of a statute shall further be a reference to any successor or amended statute or section, and any regulations or other guidance of general applicability issued thereunder.

2.03.

T IMING OF P AYMENTS

(a)

(b)


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ARTICLE 3. ELIGIBILITY, PARTICIPATION, AND VESTING

3.01.

E LIGIBILITY AND P ARTICIPATION

(a)	Any individual who was a member of one of the Predecessor Plans immediately before January 1, 2003, and whose benefits under such Predecessor Plan were transferred to this Plan as provided in Section 1.01(b), shall be a Participant in the Plan as of January 1, 2003.

(b)	Any individual designated by the Plan Administrator as a senior manager or highly compensated employee whose Qualified Pension is negatively affected by a Qualified Plan Limit shall be eligible to participate in the Plan as of the date established by the Plan Administrator.

3.02.

V ESTING

(a)	A Participant’s Supplemental Pension (if any) shall vest according to the same schedule that applies for Qualified Plan benefits, as follows:

(1)

If the Participant is a Cash Balance Participant, his Supplemental Pension shall become fully vested after he has three Years of Vesting Service under the Qualified Plan.

(2)

If the Participant is not a Cash Balance Participant, his Supplemental Pension shall become fully vested after he has five Years of Vesting Service under the Qualified Plan.

(b)	If a Participant’s Termination Date occurs before his Supplemental Pension has become fully vested, he shall forfeit his Supplemental Pension (if any) and shall not have any right to a benefit or payment under the Plan.


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ARTICLE 4. AMOUNT AND PAYMENT OF BENEFITS

4.01.

A MOUNT OF B ENEFITS

(a)	General Rule . A Participant’s benefit under the Plan (his Supplemental Pension) shall be equal to the excess, if any, of (i) his Gross Pension over (ii) his Qualified Pension, each calculated as of the Participant’s Nominal Commencement Date.

(b)

Special Rule for Cash Balance Participants Who Accrued Benefits Before January 1, 2008 . The Supplemental Pension (if any) for any Cash Balance Participant who is entitled to a Supplemental Pension for service before January 1, 2008 shall consist of (1) a Supplemental FAP Benefit (for service before January 1, 2008) and (2) a Supplemental Cash Balance Benefit (for service on and after January 1, 2008).

(c)	Special Rule for Legacy Mead Participants . The Supplemental FAP Benefit (if any) for any Legacy Mead Participant shall consist of (i) a Lump-Sum FAP Component and (ii) an Annuity Component, as follows:

(1)

The Lump-Sum FAP Component shall be equal to the portion of the Participant’s Supplemental FAP Benefit attributable to his Frozen December 31, 2002 Accrued Benefit (as defined by the Qualified Plan)— i.e. , the excess (if any) of (A) such Frozen December 31, 2002 Accrued Benefit, determined without regard to the Qualified Plan Limits, over (B) the actual amount of such Frozen December 31, 2002 Accrued Benefit; and

(2)

The Annuity Component shall be equal to the excess (if any) of the Participant’s Supplemental FAP Benefit over his Lump-Sum FAP Component.

4.02.

F ORM AND T IME OF B ENEFIT P AYMENTS

(a)	Form of Payment . Any vested Supplemental Pension shall be paid to the Participant in the form prescribed by this Section 4.02 (a).

(1)

Supplemental Cash Balance Benefit . The Participant’s vested Supplemental Cash Balance Benefit (if any) shall be paid in lump sum.

(2)

Supplemental FAP Benefit . The Participant’s vested Supplemental FAP Benefit (if any) shall be paid as follows:

(A)

Unless the Participant is a Legacy Mead Participant, his vested Supplemental FAP Benefit shall be paid in the annuity form elected (or deemed to be elected) by the Participant, in accordance with Section 4.02(d).

(B)

If the Participant is a Legacy Mead Participant, (i) his vested Lump-Sum FAP Component (if any) shall be paid in a lump sum, and (ii) his vested Annuity Component (if any) shall be paid in the form prescribed by subparagraph (A), above.


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(b)	Time of Payment . Payment of a Participant’s vested Supplemental Pension (if any) shall commence on the following Actual Commencement Date:

(1)

The Actual Commencement Date for the Participant’s vested Supplemental Cash Balance Benefit (if any) shall be the first day of the seventh calendar month that begins after the Participant’s Termination Date; and

(2)

The Actual Commencement Date for the Participant’s vested Supplemental FAP Benefit (if any) shall be the later of (A) the first day of the seventh calendar month that begins after the Participant’s Termination Date or (B) the first day of the calendar month coincident with or next following the Participant’s 55th birthday;

If a Participant is not living on his Actual Commencement Date, no Supplemental Pension shall be paid to the Participant, but a death benefit may be payable to his Beneficiary under Section 4.03.

The time of payment of benefits to any Participant who has had a Termination Date shall not be affected in any way by a subsequent rehire. For example, payments that are required by the schedule set forth above shall not be suspended or otherwise delayed by reason of a Participant’s rehire.

(c)	Make-up Payment . If a Participant’s Actual Commencement Date occurs after his Nominal Commencement Date, the first payment to the Participant shall include an amount equal to:

(1)

The sum of all of the payments that would have been made on or before the Actual Commencement Date if payments had commenced on the Participant’s Nominal Commencement Date; plus

(2)

Interest, at the Plan Interest Rate, on each payment described in paragraph (1), above, calculated from the date on which the payment would have been made if payments had commenced on the Nominal Commencement Date to the Actual Commencement Date.

(d)	Election of Annuity Form of Payment .

(1)

Annuity Forms Permitted . Each Participant who has accrued a vested Supplemental FAP Benefit that is payable in the form of an annuity shall have a right to elect that such annuity be paid in one of the following annuity forms:

(A)

50% or 100% Joint and Survivor Annuity; or

(B)

Single-Life Annuity.


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Each annuity form listed above shall be defined by the terms of the Qualified Plan, disregarding any provision of the Qualified Plan that would result in any such annuity form not qualifying as a “life annuity” under Treas. Reg. § 1.409A-2(b)(2)(ii). The monthly amount payable under each annuity form listed above shall be actuarially equivalent to the monthly amount payable in the form of a Single-Life Annuity, determined using the actuarial assumptions prescribed by the Qualified Plan.

(2)

Election Procedures .

(A)

Subject to the requirements of subparagraph (B), below, a Participant shall make any election under this Section 4.02(d) on the form prescribed by the Plan Administrator, during an election period established by the Plan Administrator that ends no later than 20 business days before the Participant’s Nominal Commencement Date. If a Participant fails to file a valid election of an annuity form under this Section 4.02(d) during his election period, his Supplement FAP Benefit (excluding any Lump-Sum FAP Component) shall be paid in the following annuity form:

(i)

If the Participant is married, a Qualified Joint and Survivor Annuity, as defined by the Qualified Plan— i.e. , a joint and 50% surviving spouse annuity; or

(ii)

If the Participant is not married, a Single-Life Annuity.

(B)

A married Participant’s election to receive a benefit in the form of a Single-Life Annuity shall be effective only if the Participant’s Spouse consents to such form of payment in accordance with such procedures as are established by the Plan Administrator.

4.03.

D EATH B ENEFITS

(a)

Death Before Nominal Commencement Date . If a Participant dies before his Nominal Commencement Date, his Beneficiary shall be entitled to receive a death benefit under the Plan if (i) a vested death benefit is payable on the Participant’s behalf under the Qualified Plan, and (ii) the amount of such death benefit under the Qualified Plan is reduced by reason of a Qualified Plan Limit.

(1)

Amount . The amount of the death benefit payable under this Section 4.03 shall be equal to the excess (if any) of (A) the death benefit that would be payable under the Qualified Plan if not for the Qualified Plan Limits, over (B) the actual death benefit payable under the Qualified Plan, each determined as of the commencement date prescribed by paragraph (2), below.

(2)

Form and Time of Payment . The death benefit prescribed by paragraph (1), above, shall be paid to the Participant’s Beneficiary as follows:

(A)

Any portion of the death benefit that is attributable to the Qualified Plan’s cash balance formula shall be paid in a lump sum on the first day of the month next following the Participant’s death (or as soon as practicable thereafter).


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(B)

Any remaining portion of the death benefit shall be paid in the form prescribed by this Section 4.03(a)(2)(B), commencing on the later of (I) the first day of the month next following the Participant’s death (or as soon as practicable thereafter) or (II) the first day of the month coincident with or next following the date on which the Participant would have attained age 55:

(i)

Unless the Participant was a Legacy Mead Participant, the portion of the death benefit not described in subparagraph (A), above, shall be paid in the form of a single-life annuity over the Beneficiary’s life.

(ii)

If the Participant was a Legacy Mead Participant, (I) the portion of the death benefit attributable to the Participant’s Frozen December 31, 2002 Accrued Benefit (if any) shall be paid in a lump sum, and (II) the remainder of the death benefit (if any) shall be paid in the form prescribed by clause (i), above.

(b)

Death After Nominal Commencement Date but Before Actual Commencement Date . If a Participant dies after his Nominal Commencement Date but before his Actual Commencement Date, the Participant’s Beneficiary shall be entitled to receive the death benefits (if any) prescribed by paragraphs (1) and (2), below.

(1)

The amount prescribed by this paragraph (1) is:

(A)

The sum of all of the payments that would have been made to the Participant on or before the date of the Participant’s death if payments had commenced on the Nominal Commencement Date; plus

(B)

Interest, at the Plan Interest Rate, on each payment described in subparagraph (A), above, calculated from the date on which the payment would have been made if payments had commenced on the Nominal Commencement Date to the date on which payment is actually made.

Such amount prescribed by this paragraph (1) shall be paid as soon as practicable after the Participant’s death.

(2)

If the Participant elected an annuity form with a survivor benefit, his Beneficiary with respect to such survivor benefit shall receive such survivor benefit, commencing on the first day of the month next following the Participant’s death (or as soon as practicable thereafter).

(c)

Death After Actual Commencement Date . If a Participant dies after his Actual Commencement Date, no death benefit shall be paid on the Participant’s behalf unless the Participant elected to receive any portion of his benefit in the form of an annuity with a survivor benefit. If the Participant elected an annuity form with a survivor benefit, his Beneficiary with respect to such survivor benefit shall receive such survivor benefit, commencing on the first day of the month next following the Participant’s death (or as soon as practicable thereafter).


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ARTICLE 5. PLAN ADMINISTRATION

5.01.

P LAN A DMINISTRATOR

(a)	The committee appointed by the Company’s chief executive officer to administer the Qualified Plan shall also administer this Plan, unless the Company’s chief executive officer appoints different individuals to administer this Plan.

(b)	The Plan Administrator shall adopt such procedures and rules as it deems necessary or advisable to administer the Plan.

(c)	Any administrator under this Plan may employ one or more persons to render advice with regard to any responsibility such administrator has under the Plan.

(d)	All costs and expenses and fees of the Plan Administrator shall be borne by the Employers, which also shall bear all other costs and expenses incurred in administering the Plan.

5.02.

I NTERPRETATIONS

All interpretations pertaining to facts or provisions of the Plan made by the Plan Administrator shall be made in the complete and exclusive discretion of the Plan Administrator and shall be binding and conclusive on all parties. The Plan Administrator shall have the complete and exclusive discretion to resolve ambiguities and inconsistencies in the language of the Plan and to supply omissions in the language of the Plan.

5.03.

E LECTIONS AND D ESIGNATIONS

5.04.

C LAIMS


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ARTICLE 6. AMENDMENT, MERGER, AND TERMINATION OF PLAN

6.01.

A MENDMENT OF THE P LAN

(a)

(b)

Any amendment of this Plan may be adopted by resolution of the Board of Directors. In addition, the Chairman of the Board of Directors, the Chief Executive Officer of the Company, the President of the Company, and the Senior Vice President of the Company with responsibility for Human Resources may make any amendment in writing which (1) may be necessary or desirable to improve the administration of the Plan, so long as such amendment does not materially affect the substance of the Plan or the level of benefits the Plan provides, or (2) may be required to comply with various federal and state laws (including tax laws that might result in any adverse tax consequences to any Participant, Employer, or any of their Affiliates). All amendments shall be filed with the Secretary of the Company.

6.02.

T ERMINATION OF THE P LAN

(a)

Reservation of Right to Terminate . Although the Company expects to continue the Plan indefinitely, the Company reserves the right to terminate the Plan at any time, partially or in its entirety, without notice to or the consent of any Participant or Beneficiary, by written resolution of the Board of Directors.

(b)	Date of Termination . If the Board of Directors adopts a resolution to terminate the Plan, the Plan shall be terminated as of a date to be specified in the resolution.

(c)

Rights of Affected Participants . In the event of a termination or partial termination of the Plan, benefits under the Plan shall cease to accrue. However, service after the termination date will count for vesting purposes and the form and time of payment of benefits under the Plan shall not change, unless (1) the Participant consents otherwise and (2) the Company determines that the change would not result in adverse tax consequences under section 409A of the Code ( e.g. , the change is permitted by Treas. Reg. § 1.409A-3(j)(4)(ix)).

6.03.

D ESIGN D ECISIONS


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ARTICLE 7. MISCELLANEOUS PROVISIONS

7.01.

E MPLOYMENT R IGHTS N OT A FFECTED BY P LAN

7.02.

I NTEGRATION C LAUSE

7.03.

D OUBT AS TO I DENTITY

(a)

If, after reasonable efforts, the Plan Administrator is unable to determine the whereabouts of any person entitled to payment hereunder, the required payment to such person shall be deemed made at the time prescribed by the applicable payment schedule, and the Plan Administrator shall take (or cause to be taken) all steps that it determines to be reasonably appropriate to avoid a violation of section 409A of the Code ( e.g. , withholding income taxes at the time of each deemed payment, and depositing the amount withheld with the Internal Revenue Service). For purposes of the preceding sentence, notice by registered mail sent to such person’s most recent address (as reflected in the Plan records) shall be deemed to constitute reasonable efforts to locate such person. Subject to the requirements of section 409A of the Code, if such person subsequently makes a proper claim to the Company for such sum, the Company may in its discretion pay to such person the net amount (after withholding) of the deemed payment described in this Section 7.03.

(b)

7.04.

C ONSISTENCY OF P AYMENT F ORMS IN B ENEFIT C ALCULATIONS

For purposes of calculating any benefit payable under the Plan, any amount that would be payable under a Qualified Plan if not for the Qualified Plan Limits and any amount that is actually payable under the Qualified Plan shall be determined based on consistent


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assumptions with respect to time(s) and form(s) of payment. For example, if a Participant’s Qualified Pension is expressed in the form of a single-life annuity starting as of the Participant’s Nominal Commencement Date, his Gross Pension shall also be expressed in the form of a single-life annuity starting on the Participant’s Nominal Commencement Date, without regard to the time(s) or form(s) in which the Participant’s Supplemental Pension and Qualified Pension are actually paid.

7.05.

D ISCRETION TO A CCELERATE P AYMENTS

Notwithstanding any other provision of the Plan, the Plan Administrator shall have discretion to accelerate payments of benefits under the Plan to the extent (and only to the extent) permitted by Treas. Reg. § 1.409A-3(j)(i) through (xiv).

7.06.

P AYMENT M EDIUM

All payments under this Plan shall be made in cash.

7.07.

O BLIGATIONS TO M AKE P AYMENTS

Any obligation to make a payment under the Plan shall be an obligation of the applicable Employer or, in the sole discretion of the Company, of the Company. The Company and any Employer may satisfy any obligation to make a payment hereunder by (a) making the payment, or (b) causing another party, such as an Affiliate or the trustee of an unsecured trust, to make the payment.

7.08.

L IABILITY L IMITED

7.09.

O VERPAYMENTS

7.10.

I NCAPACITY AND M INOR S TATUS


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7.11.

A SSIGNMENT AND L IENS

(a)

Subject to Section 7.11(b), the right of any person to any benefit or payment under the Plan shall not be subject to alienation, transfer, assignment, or encumbrance, or otherwise subject to lien, and any such attempt to alienate, transfer, assign, or encumber any benefit or payment under the Plan shall be null and void.

(b)

Section 7.11(a) shall not apply to payments made pursuant to a qualified domestic relations order (as defined by section 414(p)(1)(A) of the Code) applicable to this Plan. Any domestic relations order shall be subject to the terms of the Qualified Plan with respect to any such order, except that all qualified domestic relations orders shall be construed and executed in a manner consistent with the terms of the Plan and the requirements of section 409A of the Code.

7.12.

W ITHHOLDING T AXES

The Plan Administrator may make any appropriate arrangements to deduct from all amounts paid under the Plan, or to collect, any taxes reasonably determined to be required to be withheld under applicable laws. Irrespective of whether withholding is required, the Participant, Beneficiary, or surviving or former Spouse, as the case may be, shall bear all taxes on amounts paid under the Plan, on any imputed income resulting from the operation of the Plan, and on any other payments or compensation from the Company or an Affiliate.

7.13.

T ITLES AND H EADINGS N OT TO C ONTROL

7.14.

N OTICE OF P ROCESS

In any action or proceeding involving the Plan, the Company and the Plan Administrator are the only necessary parties, and no Participant, Beneficiary, former Spouse, or other person having or claiming to have an interest under the Plan shall be entitled to any notice of process unless such notice is required by applicable law.

7.15.

G OVERNING L AW AND L IMITATION ON A CTIONS

(a)

(b)


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Claims for non-payment of benefits must be filed in a court with jurisdiction to hear the claim no later than 36 months after the date when the first payment was allegedly due. The running of the 36-month limitations period shall be suspended during the time that any request for review of the claim pursuant to Section 5.04 is pending before the Plan Administrator. The foregoing limitations period is expressly intended to replace and to supersede any limitations period that might otherwise be deemed applicable under state or federal law in the absence of this Section 7.15. Claims filed after the expiration of the limitations period prescribed by this Section 7.15 shall be deemed to be time-barred.

7.16.

C LASS A CTION F ORUM S ELECTION C LAUSE

(a)

(b)

This Section 7.16 does not relieve any putative litigant or class member of any obligation existing under the Plan or by law to exhaust administrative remedies (including the applicable claims procedures) before initiating litigation or to comply with the limitation of actions provision set forth in Section 7.15(b).

7.17.

S EVERABILITY

7.18.

C OMPLETE S TATEMENT OF P LAN

This document is a complete statement of the Plan and, as of the effective date hereof, supersedes all prior plan documents.

* * * * *


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IN WITNESS WHEREOF the undersigned has executed this restatement of the Plan.

/s/ John A. Luke, Jr.

John A. Luke, Jr.

Chairman and Chief Executive Officer

APPROVALS

LAW DEPARTMENT


By		/s/ John J. Carrara
		John J. Carrara
		Associate General Counsel and Assistant Secretary


FILED:		December 30, 2008


By		/s/ Wendell L. Willkie, II
		Wendell L. Willkie, II
		Senior Vice President, General Counsel and Secretary


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Exhibit 10.30

MEADWESTVACO CORPORATION

Amendments to the

The Mead Corporation Incentive Compensation Election Plan,

The Mead Corporation Deferred Compensation Plan for Directors,

The Mead Corporation Directors Capital Accumulation Plan

Westvaco Corporation Deferred Compensation Plan,

Westvaco Corporation Savings and Investment Restoration Plan, and

Westvaco Corporation Deferred Compensation Plan for Non-Employee Outside Directors

Westvaco Corporation Retirement Plan for Outside Directors

The Mead Corporation Incentive Compensation Election Plan (the “Mead DCP”), The Mead Corporation Deferred Compensation Plan for Directors (the “Mead Director DCP”), The Mead Corporation Directors Capital Accumulation Plan (the “Mead Director CAP”), Westvaco Corporation Deferred Compensation Plan (the “Westvaco DCP”), Westvaco Corporation Savings and Investment Restoration Plan, (the “SIRP”), Westvaco Corporation Deferred Compensation Plan for Non-Employee Outside Directors (the “Westvaco Director DCP”), and Westvaco Corporation Retirement Plan for Outside Directors (the “Westvaco Director Retirement Plan”) are hereby clarified and amended as set forth below.

A. Mead DCP

1. Section 1 of the Mead DCP is renamed “Purpose and History of Plan,” and amended by adding the following new paragraphs at the end thereof:

In connection with the establishment of MeadWestvaco, deferrals under the Plan were discontinued prior to January 1, 2003, and individuals who otherwise would have been eligible to participate in the Plan became eligible to participate in the MeadWestvaco Corporation Deferred Income Plan (the “DIP”). Prior to January 1, 2005, Participants in the Plan were permitted, but not required, to “roll over” the balances of Accounts under the Plan to the DIP. Account balances that were not rolled over to the DIP remain subject to the terms and conditions of the Plan.

All account balances are attributable to amounts “deferred” (within the meaning of Section 409A of the Code and Section 885 of the American Jobs Creation Act of 2004, including any regulations or other guidance thereunder (collectively the “AJCA”)) prior to January 1, 2005 and therefore are not subject to the AJCA. No change shall be made in the form or administration of the Plan as in effect on October 3, 2004 that would constitute a “material modification” (within the meaning of the AJCA) of the Plan. Unless expressly stated otherwise, any amendment to, or other action under, the Plan shall be null and void to the extent that such amendment or other action would otherwise be deemed to constitute a “material modification” (within the meaning of the AJCA) with respect to amounts “deferred” (within the meaning of the AJCA) prior to January 1, 2005.

2. Effective January 1, 2003, Section 5 of the Mead DCP is amended to provide as follows:

No individual may elect to defer incentive compensation under the Plan after December 31, 2002. Accounts under the Plan shall be distributed in accordance with Section 6.

B. Mead Director DCP

1. The following new Section 1 is added, and the remainder of the Mead Director DCP renumbered, and any cross-references updated accordingly:

History of the Plan

-2-

connection with this event, MeadWestvaco assumed sponsorship of the benefit plans maintained by Westvaco, including the Plan. Accordingly, effective January 29, 2002, references to the “Company” other than those contained in this Section 1 shall be understood to refer to MeadWestvaco; provided that, for purposes of Section 2 hereof, the “Company” shall mean The Mead Corporation as it existed on January 28, 2002.

All Account balances are attributable to amounts “deferred” (within the meaning of Section 409A of the Code and Section 885 of the American Jobs Creation Act of 2004, including any regulations or other guidance thereunder (collectively the “AJCA”)) prior to January 1, 2005 and therefore are not subject to the AJCA. No change shall be made in the form or administration of the Plan as in effect on October 3, 2004 that would constitute a “material modification” (within the meaning of the AJCA) of the Plan. Unless expressly stated otherwise, any amendment to, or other action under, the Plan shall be null and void to the extent that such amendment or other action would otherwise be deemed to constitute a “material modification” (within the meaning of the AJCA) with respect to amounts “deferred” (within the meaning of the AJCA) prior to January 1, 2005.

2. Effective January 1, 2003, Section 4 of the Mead Director DCP is amended to provide as follows:

No individual may elect to defer compensation under the Plan after December 31, 2002. Accounts under the Plan shall be distributed in accordance with the provisions of this Section 4 in effect immediately prior to January 1, 2003.

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C. Mead Director CAP

1. Section 1.1 of the Mead Director CAP is renamed “Purpose and History of Plan,” and amended by adding the following new paragraphs at the end thereof:

Effective January 29, 2002, The Mead Corporation and Westvaco Corporation became wholly owned subsidiaries of MW Holding Corporation, the name of which was subsequently changed to MeadWestvaco Corporation (“MeadWestvaco”). In connection with this event, MeadWestvaco assumed sponsorship of the benefit plans maintained by Westvaco, including the Plan. Accordingly, effective January 29, 2002, references to the “Mead” other than those contained in this Section 1.1 shall be understood to refer to MeadWestvaco; provided that, for purposes of the definition of Eligible Director, “Mead” shall refer to The Mead Corporation as it existed on January 28, 2002.

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2. Effective January 1, 2003, Section 3 of the Mead Director CAP is amended to provide as follows:

No individual may elect to defer compensation under the Plan after December 31, 2002. Accounts under the Plan shall be distributed in accordance with the provisions of Section 8.

D. Westvaco DCP

1. Section 1.1 of the Westvaco DCP is renamed “Purpose and History of Plan,” and amended by adding the following new paragraphs at the end thereof:

All Account balances are attributable to amounts “deferred” (within the meaning of Section 409A of the Code and Section 885 of the American Jobs Creation Act of 2004, including any regulations or other guidance thereunder (collectively the “AJCA”))) prior to January 1, 2005 and therefore are not subject to the AJCA. No change shall be made in the form or administration of the Plan as in effect on October 3, 2004 that would constitute a “material modification” (within the meaning of the AJCA) of the Plan. Unless expressly stated otherwise, any amendment to, or other action under, the Plan shall be null and void to the extent that such amendment or other action would otherwise be deemed to constitute a “material modification” (within the meaning of the AJCA) with respect to amounts “deferred” (within the meaning of the AJCA) prior to January 1, 2005.

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2. Effective January 1, 2003, Article II of the Westvaco DCP is amended to provide as follows:

No individual may elect to defer compensation under the Plan after December 31, 2002. Accounts under the Plan shall be distributed in accordance with Article IV.

3. Effective January 1, 2005, Section 4.5 of the Westvaco DCP is amended to provide as follows:

Section 4.5

Hardship Withdrawals . Upon request of a Participant, the Participant shall receive a special lump-sum distribution (a “Withdrawal”) of all or a portion of his or her Account as set forth in this Section 4.5, subject to the limitations set forth below. If the Administrative Committee determines, in accordance with such procedures as it may establish from time to time, that the Participant has experienced an unforeseeable financial hardship as a result of the illness or accidental injury of the Participant or a dependant of the Participant, a casualty loss of property not fully covered by insurance, or other similar financial hardship caused by unforeseeable circumstances beyond the control of the Participant, then the Administrative Committee (i) shall cancel any deferral elections previously filed by the Participant (under the DIP or any other nonqualified deferred compensation maintained by the Company and its subsidiaries) with respect to compensation to be earned after the Administrative Committee makes its determination, and (ii) may approve a distribution from the Participant’s Account, but only to the extent necessary to alleviate the financial hardship after taking into account the effect of the foregoing cancellation of Deferral Elections.

E. SIRP

1. Paragraph 1 of the SIRP is amended by adding the following new paragraphs at the end thereof:

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the Plan. Accordingly, effective January 29, 2002, references to Westvaco Corporation, Westvaco, or Employer other than those contained in this Paragraph 1 shall be understood to refer to MeadWestvaco; provided that, for purposes of determining eligibility to participate in the Plan, the Affiliated Group shall mean Westvaco and its Subsidiaries as of January 29, 2002. No person became a Member of the Plan on or after January 29, 2002.

2. Effective January 1, 2003, Paragraph 4 of the SIRP is amended to provide as follows:

No individual may elect Salary Reductions under the Plan after December 31, 2002. Accounts under the Plan shall be distributed in accordance with Paragraph 6.

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F. Westvaco Director DCP

1. Section 1.1 of the Westvaco Director DCP is renamed “Purpose and History of Plan,” and amended by adding the following new paragraphs at the end thereof:

Effective January 29, 2002, The Mead Corporation and Westvaco Corporation became wholly owned subsidiaries of MW Holding Corporation, the name of which was subsequently changed to MeadWestvaco Corporation (“MeadWestvaco”). In connection with this event, MeadWestvaco assumed sponsorship of the benefit plans maintained by Westvaco, including the Plan. Accordingly, effective January 29, 2002, references to the “Company” other than those contained in this Section 1.1 shall be understood to refer to MeadWestvaco; provided that, for purposes of the definition of Eligible Director, the “Company” shall refer to Westvaco Corporation as it existed prior to January 29, 2002. No person became a Participant on or after January 29, 2002.

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2. Effective January 1, 2003, Article II of the Westvaco Director DCP is amended to provide as follows:

No individual may elect to defer Eligible Compensation under the Plan after December 31, 2002. Accounts under the Plan shall be distributed in accordance with Article IV.

G. Westvaco Director Retirement Plan

1. By resolution of the Board of Directors of Westvaco Corporation, the Westvaco Director Retirement Plan was terminated effective February 25, 1997. Pursuant to the termination resolution, all benefits accrued under the Westvaco Director Retirement Plan as of February 25, 1997 shall be preserved and paid in accordance with such plan, and all benefits established for directors previously retired shall continue to be paid in accordance with such plan.

2. In accordance with the rules in effect for the Westvaco Director Retirement Plan as of October 3, 2004, the accrued benefit of each Member of the Westvaco Director Retirement Plan who was not in pay status as of October 3, 2004 shall be paid in the form of a single-life annuity, commencing on the first day of the calendar month next following the later of (a) the Member’s separation from service (as determined by MeadWestvaco in accordance with Treas. Reg. § 1.409A-1(h)) or (b) the Member’s 72nd birthday.

* * * * *

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IN WITNESS WHEREOF, the undersigned has executed the above amendment.

/s/ John A. Luke, Jr.

John A. Luke, Jr.

Chairman and Chief Executive Officer

APPROVALS

LAW DEPARTMENT

FILED: December 30, 2008


By		/s/ John J. Carrara
		John J. Carrara
		Associate General Counsel and Assistant Secretary

By		/s/ Wendell L. Willkie, II
		Wendell L. Willkie, II
		Senior Vice President, General Counsel and Secretary

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Exhibit 10.31

Summary of MeadWestvaco Corporation Long-Term Incentive Plan under 2005 Performance Incentive Plan, as amended

Under the MeadWestvaco Corporation Long-Term Incentive Plan (the “Plan”), which is a part of the 2005 Performance Incentive Plan, the Compensation and Organization Development Committee (the “Committee”) of the Board of Directors annually awarded each executive a long-term incentive award that is payable partially in the form of performance-based prior to 2009, restricted stock units and partially in the form of non-qualified stock options. For 2009 an executive’s long-term award is payable partially in the form of time-based restricted stock units and partially in the form of non-qualified stock options. The size of each executive officer’s long-term incentive award is determined by application of his or her long-term incentive target expressed as a percentage of base salary, which the Committee examines annually to confirm that the target is reasonable when viewed against external competitive market data, peer group and general industry trends, over multiple years.

The Committee generally establishes a three year period for performance-based restricted stock units awarded under the Plan. Performance-based restricted stock unit awards are payable only if designated objectives for key financial and/or operational metrics are met, unless they are reduced at the discretion of the Committee. These objectives for executive officers are set by the Committee, and generally include such targets as Return on Invested Capital (ROIC), Innovation, measured by revenue from new products, Profitable Revenue Growth, and Relative Earnings per Share. Performance-based restricted stock units awards (assuming performance criteria are met) are payable in the third year and are subject to a maximum payout of 200% of target performance with a minimum threshold equal to 50% of target, generally. In the event of below target performance, the Committee shall reduce award values to reflect proportional progress made towards target performance levels; provided that no award shall vest in the event of performance below threshold performance levels. During the vesting period, dividends on unvested restricted stock unit awards are credited to an executive’s award, but are only delivered when and to the extent that the award vests.

Time-based restricted stock units awarded under the plan generally are subject to three-year vesting.

Stock options awarded under the plan generally are subject to a three-year pro rata vesting expiring on the third anniversary of the grant date. While there is no performance-based prerequisite to the vesting of stock options, in the event the market value of the common stock does not appreciate over the exercise price, the options will have no value. The exercise price for stock options is not less than the “fair market value” of the common stock underlying the awards on the grant date. “Fair market value” is defined as the closing price of such common stock as reflected on the New York Stock Exchange on the grant date and is a term and condition of all stock option awards approved by the Committee. No dividend rights attach to non-qualified stock options.

Exhibit 10.32

Summary of MeadWestvaco Corporation Annual Incentive Plan under 2005 Performance Incentive Plan, as amended

Under the MeadWestvaco Corporation Annual Incentive Plan (the “Plan”), which is a part of the 2005 Performance Incentive Plan, the Compensation and Organization Development Committee (the “Committee”) of the Board of Directors annually awards each executive an annual incentive award that is payable in cash. The size of each executive officer’s annual award is determined by application of his or her annual incentive target expressed as a percentage of base salary, which the Committee examines annually to confirm that the target is reasonable when viewed against external competitive market data, peer group and general industry trends.

Prior to 2009, annual cash incentives are payable only if designated objectives for key financial and/or operational metrics are met, unless they are reduced at the discretion of the Committee. These objectives for executive officers are set by the Committee, and generally include such targets as earnings before interest and taxes (“EBIT”), free cash flow, and EVA actions which include productivity, and general and administrative savings. Annual incentives are subject to a maximum payout of 200% of target performance with a minimum threshold equal to 50% of target, generally. In the event of below target performance, the Committee shall reduce award values to reflect proportional progress made towards target performance levels, except no awards are payable for performance below the threshold level. The company must generate sufficient cash flow from operations to cover dividends to shareholders and maintenance capital expenditures before annual cash incentives can be paid.

For 2009, the Committee established a performance-based incentive pool for executive officers equal to a designated target percentage of earnings before interest and taxes (“EBIT”). Assuming designated performance levels are achieved, funding of the pool will permit the Committee to pay annual cash incentives based on the attainment of additional key financial and/or operational metrics. These additional metrics for executive officers are also set by the Committee, and generally include targets for free cash flow, EVA actions (such as planned revenue reductions, capacity rationalization, capital expenditures and productivity) and also selling, general, administrative and other overhead savings. Individual annual incentives are subject to a maximum payout of 200% of target performance with a minimum threshold equal to 50% of target, generally. The Committee may adjust award values to reflect progress made towards target performance levels, provided no awards are payable in the event the designated percentage for threshold EBIT (which funds the incentive pool) is not met. The company must also generate sufficient cash flow from operations to cover dividends to shareholders and maintenance capital expenditures before annual cash incentives can be paid.

EXHIBIT 21

SUBSIDIARIES OF THE REGISTRANT

The following were significant subsidiaries of the Registrant as of December 31, 2008:


Name		State or Jurisdiction of Incorporation
MeadWestvaco Coated Board, Inc.		Delaware
MeadWestvaco Consumer Packaging Group, LLC		Illinois
MeadWestvaco Packaging Systems, LLC		Delaware
MeadWestvaco South Carolina, LLC		Delaware
MeadWestvaco Texas, L.P.		Delaware
MeadWestvaco Virginia Corporation		Delaware
Rigesa, Celulose, Papel E. Embalagens Ltda.		Brazil
Tilibra Productos de Papelaria Ltda.		Brazil

EXHIBIT 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (Nos. 333-81638, 333-91660, 333-113183, 333-116860, 333-116862, 333-127861, 333-147175, and 333-147176) and on Form S-3 (No. 333-103918) of MeadWestvaco Corporation of our report dated February 24, 2009 relating to the financial statements and the effectiveness of internal control over financial reporting, which appears in this Form 10-K.

/s/ PricewaterhouseCoopers LLP

PricewaterhouseCoopers LLP

Richmond, Virginia

February 24, 2009

EXHIBIT 31.1

CERTIFICATION

I, John A. Luke, Jr. certify that:

1.	I have reviewed this annual report on Form 10-K of MeadWestvaco Corporation;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 24, 2009


		/s/ John A. Luke, Jr.
Name:		John A. Luke, Jr.
Title:		Chief Executive Officer

EXHIBIT 31.2

CERTIFICATION

I, E. Mark Rajkowski certify that:

1.	I have reviewed this annual report on Form 10-K of MeadWestvaco Corporation;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

(a)

(b)

(c)

(d)

5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 24, 2009


		/s/ E. Mark Rajkowski
Name:		E. Mark Rajkowski
Title:		Chief Financial Officer

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The undersigned hereby certifies, in his capacity as an officer of MeadWestvaco Corporation (the “Company”), for purposes of 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

•

the Annual Report of the Company on Form 10-K for the period ended December 31, 2008 fully complies with the requirements of Section 13(a) or 15 (d) of the Securities Exchange Act of 1934; and

•

the information contained in such report fairly presents, in all material respects, the financial condition and results of operation of the Company.

Date: February 24, 2009


		/s/ John A. Luke, Jr.
Name:		John A. Luke, Jr.
Title:		Chief Executive Officer

EXHIBIT 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

•

the Annual Report of the Company on Form 10-K for the period ended December 31, 2008 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

•

the information contained in such report fairly presents, in all material respects, the financial condition and results of operation of the Company.

Date: February 24, 2009


		/s/ E. Mark Rajkowski
Name:		E. Mark Rajkowski
Title:		Chief Financial Officer