INTERNATIONAL PAPER CO /NEW/ false 0000051434 0000051434 2024-03-13 2024-03-13

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 OR 15(d)

of The Securities Exchange Act of 1934

Date of Report (date of earliest event reported): March 13, 2024

 

 

International Paper Company

(Exact name of registrant as specified in its charter)

 

 

 

Commission file number 1-3157

 

New York   13-0872805

(State or other jurisdiction

of incorporation)

 

(I.R.S. Employer

Identification No.)

 

6400 Poplar Avenue, Memphis, Tennessee   38197
(Address of Principal Executive Offices)   (Zip Code)

Registrant’s telephone number, including area code: (901) 419-9000

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading
Symbol(s)

 

Name of each exchange
on which registered

Common Stock, $1 per share par value   IP   New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 


SECTION 1. REGISTRANT’S BUSINESS AND OPERATIONS

 

Item 1.01.

Entry into a Material Definitive Agreement.

The information set forth in Item 5.02 of this Current Report on Form 8-K is incorporated herein by reference.

SECTION 5. CORPORATE GOVERNANCE AND MANAGEMENT.

 

Item 5.02.

Departure of Directors or Certain Officers; Election of Directors; Appointment of Officers; Compensatory Arrangements of Certain Officers

On March 13, 2024, the Board of Directors of International Paper Company (the “Company”) appointed Andrew K. Silvernail, 53, to the position of chief executive officer, effective May 1, 2024 or such other dates as the parties may mutually agree (the “Effective Date”). He will succeed Mark S. Sutton, who will continue as Chairman of the Board. Mr. Sutton has served as chief executive officer of the Company since 2014 and as Chairman of the Board since 2015. The Board expresses its appreciation to Mr. Sutton for his years of service and contributions to the Company.

Mr. Silvernail joins the Company from KKR & Co., Inc., a global investment firm, where he has served as an executive advisor since 2022. Prior to this role, Mr. Silvernail served as chair and chief executive officer of Madison Industries, a private industrial and scientific products company (2021). He is the former chair and chief executive officer of IDEX Corporation (NYSE:IEX), a market capitalization multi-platform industrial and scientific technology company (2011-2020). Since 2013, Mr. Silvernail has served on the Board of Directors for Stryker Corporation (NYSE: SYK) where he serves as Chair of the Audit Committee.

The Company entered an employment offer letter dated March 14, 2024 (the “Offer Letter”), with Mr. Silvernail. The Offer Letter has no specified term and Mr. Silvernail’s employment with the Company will be on an at-will basis. The material terms of the Offer Letter are summarized below.

Base Salary and Bonus. Mr. Silvernail will receive an annual base salary of $1,000,000 and will be eligible for an annual bonus under the Company’s Annual Incentive Plan (“AIP”) with a target amount of 150% of base salary. For 2024, Mr. Silvernail will receive a pro-rata portion of the AIP, subject to performance metrics on the same terms and conditions as the Company’s Senior Leadership Team. Mr. Silvernail’s AIP payment for 2024 will be based on the greater of actual performance or 75% of target pro-rata opportunity.

One-Time Inducement Equity Grant. Mr. Silvernail will receive a one-time, special “inducement grant” of performance share units (“Inducement PSU Award”) with a grant date fair market value of $8,500,000. The target number of units will be determined by dividing $8,500,000 by the closing price of our common stock on the Effective Date. The Inducement PSU Award will be subject to both a service and performance vesting condition. Except as provided below, no portion of the Inducement PSU Award will vest unless Mr. Silvernail remains employed by the Company through the third anniversary of the Effective Date.

 

 

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The number of shares of the Company’s common stock that shall become vested and paid in respect of the Inducement PSU Award shall be determined in accordance with the following table. For the purpose of the table below, “Ending Average Stock Price” means the average of the closing prices of the Company common stock on each trading day during the ninety (90) day period ending on the third anniversary of the Effective Date.

 

Ending Average Stock Price

 

Percentage of Inducement PSU Award Vested

Less than the Grant Date Closing Price plus $10

  0%

Equal to the Grant Date Closing Price plus $10 (“Performance Hurdle I”)

  100% of target shares

Equal to Grant Date Closing Price plus $20 (“Performance Hurdle II”)

  150% of target shares

Equal to or greater than the Grant Date Closing Price plus $30 (“Performance Hurdle III”)

  200% of target shares

If the actual Ending Average Stock Price is between the threshold amount applicable to any two of the above stated performance hurdles, the number of shares of the Company’s common stock vested and payable shall be determined by linear interpolation between the applicable percentages for such performance hurdles. For the avoidance of doubt, if the Ending Average Stock Price is less than Performance Hurdle I, no portion of the Inducement PSU Award shall vest.

Earned shares fully vest on the three-year anniversary of the Effective Date, subject to continued service, with accelerated satisfaction of the service vesting condition upon an involuntary termination without cause, voluntary termination for good reason, death, or disability. In those circumstances, Mr. Silvernail will be eligible to receive the full inducement grant, subject to performance determination on the date of termination, based on the average closing prices of the Company’s common stock over the ninety (90) day period ending on and including the date of termination.

Long-Term Incentive Plan. To induce Mr. Silvernail to accept the Company’s offer of employment to him, Mr. Silvernail will receive a Long-Term Incentive Plan (“LTIP”) grant of performance share units (“PSUs”) for 2024 that is not prorated to reflect the partial year of service, and which will have a grant date fair value of $12,500,000, subject to performance metrics on the same terms and conditions as the Senior Leadership Team. Future year LTIP grants are expected to be 100% PSUs, subject to annual review and approval by the Company’s Board of Directors. Earned shares fully vest on the three-year anniversary of the grant date, subject to continued service.

Severance Terms. In the event Mr. Silvernail’s employment is terminated by the Company without “cause” or voluntarily by Mr. Silvernail for “good reason,” he will be entitled to certain severance payments and benefits. Mr. Silvernail will be entitled to a lump sum cash severance payment equal to 2.0 times the sum of his base salary and target AIP, a pro-rata annual bonus based on actual performance in the year of termination, six months of Company-subsidized health and welfare benefits continuation, and

 

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outplacement services. In the event of a change in control, Mr. Silvernail’s cash severance will be 2.99 times the sum of his base salary and target AIP, and he will receive three years of Company-subsidized health and welfare benefits continuation and outplacement services.

In the event of a termination of Mr. Silvernail’s employment by the Company due to his death or disability, Mr. Silvernail’s outstanding equity awards, other than the Inducement PSU Award, will be settled as follows: pro-rata vesting of each of his then outstanding and unvested PSU awards subject to achievement of specified performance objectives. For purposes of the Company’s enhanced retirement equity vesting, Mr. Silvernail will be eligible for retirement treatment at age 60 regardless of years of service.

In the event of a non change-in-control termination, Mr. Silvernail’s unvested PSUs will be pro rated based on number of months employed through such termination and will be settled following the end of the performance period based on actual performance following an involuntary termination without cause, voluntary termination for good reason, divestiture, death, disability, or retirement.

In the event of a change-in-control with a qualified involuntary termination within two years of the change in control, Mr. Silvernail’s unvested PSUs will be treated as follows:

 

Less than one year of performance period completed   Full vesting at target performance
More than one year of performance period completed   Full vesting at actual performance at time of change in control

Other Benefits. Mr. Silvernail will be eligible to participate in the benefit programs available to executive officers of the Company, including, without limitation, participation in the Company’s qualified Salaried Savings Plan – 401(k) and nonqualified Deferred Compensation Savings Plan. Mr. Silvernail will be provided with use of Company aircraft for personal travel pursuant to a Time Sharing Agreement. Mr. Silvernail is required to reimburse the Company for the incremental cost to the Company of personal use above $150,000 per year. The value of such use up to $150,000 per year will result in imputed taxable income to Mr. Silvernail and will not be grossed up for taxes.

Mr. Silvernail will also be provided with the Company’s standard relocation benefits, plus an additional one-time cash payment of $200,000 to support relocation expenses not covered under the Company’s current relocation policy. Mr. Silvernail will be required to repay the one-time cash payment if he voluntarily terminates employment before May 1, 2025. Additionally, Mr. Silvernail will be reimbursed for legal fees incurred in the development of his offer of employment up to $50,000.

There are no arrangements or understandings between Mr. Silvernail and any other persons pursuant to which he was selected as chief executive officer. There are also no family relationships between Mr. Silvernail and any director or executive officer of the Company, and he has no direct or indirect material interest in any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K.

SECTION 8. OTHER EVENTS.

 

Item 8.01.

Other Information.

On March 19, 2024, the Company issued a press release announcing the appointment of Mr. Silvernail as the chief executive officer as described above. A copy of this press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

 

 

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SECTION 9. FINANCIAL STATEMENTS AND EXHIBITS.

 

Item 9.01(d).

Exhibits.

The following exhibits are filed as part of this report:

 

Exhibit
No.
  

Description

10.1    Employment Offer Letter dated March 14, 2024, between International Paper Company and Andrew K. Silvernail.
99.1    Press release dated March 19, 2024.
104    Cover Page Interactive Data File (embedded within the Inline XBRL document).

 

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

    INTERNATIONAL PAPER COMPANY
Date: March 19, 2024  

 

  By:  

/s/ Joseph R. Saab

    Name:   Joseph R. Saab
    Title:   Senior Vice President, General Counsel and Corporate Secretary

 

6

Exhibit 10.1

 

LOGO

6400 POPLAR AVENUE

MEMPHIS TN 38197 USA

March 14, 2024

Andrew Silvernail

Terms and Conditions of Offer of Employment as Chief Executive Officer

Dear Andrew,

The purpose of this letter (this “Offer Letter”) is to establish the terms regarding your employment at International Paper Company (the “Company). Your term of employment with the Company will begin on May 1, 2024, or such other date as mutually determined by you and the Company (the “Effective Date”), at our headquarters in Memphis, Tennessee. Your title will be Chief Executive Officer and you will report directly to the Company’s Board of Directors (the “Board”). You shall also be elected as a member of the Board effective at the first regular meeting of the Board following the Effective Date, and you shall be nominated for reelection to the Board so long as you continue to serve as the Company’s Chief Executive Officer. Upon the retirement of the Company’s current Chairman, you shall also be elected to serve as Chairman of the Board, which the Company expects will occur on or about June 30, 2024 or at an earlier or later date as the Board determines is in the best interests of the Company.

As a condition of your employment, you must faithfully and industriously assume and perform with skill, care, diligence, and attention all responsibilities and duties connected with your employment on behalf of the Company. You also agree to follow the policies and procedures established by the Company, which may change from time to time (each of which policies and procedures, as in effect from time to time, shall be provided to you by the Company), work directions from the Board, and the provisions set forth herein. As an executive officer of the Company, you shall be required to enter into the Company’s customary non-disclosure, non-competition and non-solicitation agreements which are applicable to all executive officers of the Company not later than the Effective Date, and you will be subject to the Company’s Clawback Policy requiring the repayment of “Erroneously Awarded Compensation” as described therein.

Your base salary will be $1,000,000 annually, subject to all applicable taxes and withholdings, paid in accordance with the Company’s regular practices.

During your employment, you will be a participant in the Company’s Annual Incentive Plan (“AIP”), which is the annual cash incentive plan for the Company’s key executives. Your annual target AIP award for the 2024 plan year will be 150% of your annual base salary, prorated to reflect your applicable service during the 2024 plan year. The AIP focuses on the achievement of the Company’s most critical short-term financial goals as well as individual performance achievement. Your individual award may range from 0% up to 200% of your AIP target based on the attainment of total Company metrics and your personal performance, as determined by the Management Development and Compensation Committee of the Board (the “MDCC”). The Company-wide performance metrics applicable to your AIP opportunity will be


the same as those established generally for the members of the Company’s Senior Leadership Team. Notwithstanding the foregoing, for the 2024 plan year, subject to your continued employment through the date such award is paid (other than as otherwise noted below), you shall receive a pro-rata payment under the AIP equal to the greater of (x) actual performance or (y) 75% of your target opportunity.

During your employment, you will be eligible to participate in the Company’s annual Long-Term Incentive Plan (“LTIP”) and to receive awards thereunder in the form of performance-based restricted stock units (“PSU” awards). To induce you to accept this offer, your award in respect of 2024 services will not be prorated to reflect your partial year of service. Annual awards for services after 2024 will be made at the same time as annual grants are made to other members of the Senior Leadership Team. For the 2024 annual grant (which will be made on the Effective Date), the target number of shares subject to your PSU awards will be determined by dividing the grant value by: (i) for the absolute adjusted Return on Invested Capital (“ROIC”) performance portion of the award, the 20-trading-day average closing price of the Company’s common stock ending on the trading day immediately preceding the grant date (the “Grant Date Average Value”), and (ii) for the relative Total Shareholder Return (“TSR”) portion of the award, the Grant Date Average Value, adjusted by the market factor utilized for accounting purposes, which is based on the Monte Carlo valuation model. PSU awards have a payout potential ranging from 0% up to 200% of target. LTIP performance metrics, performance targets, and payout ranges are determined by the MDCC. Your annual LTIP target for 2024 will be $12,500,000. Except as described above with respect to the grant date value, your award for the 2024 plan year shall be subject to terms and conditions no less favorable to you than those applicable to 2024 PSU Awards made to other members of the Company’s Senior Leadership Team.

The AIP and LTIP designs, performance metrics and your annual target award in respect of years after 2024 may be changed or amended from time to time at the MDCC’s discretion based on such factors as it shall determine, including corporate and individual performance and market positioning, provided that any Company-wide changes or amendments applicable to you will be no less favorable to you than those applicable to other members of the Company’s Senior Leadership Team. In addition, the form of long-term incentive award may change and could consist of other award types in the future.

On the Effective Date, you will receive a one-time, special PSU “inducement grant” with respect to the greatest whole number of shares of the Company’s common stock (the “Inducement PSU Award”) equal to the quotient of (i) $8,500,000 divided by (ii) the closing price of a share of the Company’s common stock on the Effective Date (the “Grant Date Closing Price”). The Inducement PSU Award shall be subject to both a service and performance vesting condition. Except as provided below, no portion of the Inducement PSU Award will be vested unless you remain employed by the Company through the third anniversary of the Effective Date (the “Stated Service Vesting Date”).

If and to the extent that the service condition applicable to the Inducement PSU Award is satisfied, the number of shares of the Company’s common stock that shall become vested and paid in respect of the Inducement PSU Award shall be determined in accordance with the following table. Except as specifically provided below, for purposes of this table and this Offer Letter, the “Ending Average Stock Price” means the average of the closing prices of the Company common stock on each trading day during the 90-calendar-day period ending on the third anniversary of the Effective Date.

 

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Ending Average Stock Price

   Percentage of Inducement PSU Award
Vested
 

Less than the Grant Date Closing Price plus $10

     0

Equal to the Grant Date Closing Price plus $10 (“Performance Hurdle I”)

     100 % of target shares 

Equal to Grant Date Closing Price plus $20 (“Performance Hurdle II”)

     150 % of target shares 

Equal to or greater than the Grant Date Closing Price plus $30 (“Performance Hurdle III”)

     200 % of target shares 

In the event that the actual Ending Average Stock Price is between the threshold amount applicable to any two of the above stated Performance Hurdles, the number of shares of the Company’s common stock vested and payable shall be determined by linear interpolation between the applicable percentages for such Performance Hurdles. For the avoidance of doubt, if the Ending Average Stock Price is less than Performance Hurdle I, no portion of the Inducement PSU Award shall vest.

In the event that your employment terminates prior to the Stated Service Vesting Date due to (i) your death, (ii) your disability (as determined in accordance with the terms and conditions of the Company’s long-term disability plan applicable to you), (iii) the termination of your employment by the Company without Cause or (iv) your termination of your employment for Good Reason, the service condition applicable to the Inducement PSU Award shall be deemed satisfied upon your termination of employment, subject to your execution and delivery of a release of claims in the form customarily used by the Company under its Salaried Employee Severance Plan and substantially in the form attached hereto as Exhibit A (the “Release”) within 60 days following your termination of employment, (the “Release Condition”; provided that it is understood that for purposes of the Release Condition each time it is referred to in this letter, the Release shall be modified as necessary to provide for the payments and/or benefits subject to the Release Condition). In such case, the number of shares, if any, that will become vested shall be determined in accordance with the above table as of the date of your termination but deeming the “Ending Average Stock Price” to be the average closing prices of the Company’s common stock over the 90-calendar-day period ending on and including the date of termination.

Except as otherwise expressly provided below in the context of a termination upon or following a Change in Control of the Company (as described below), for purposes of this Offer Letter:

Good Reason” shall mean, without your express written consent, the occurrence of any of the following: (i) the assignment to you of any duties with the Company (or with a successor or affiliated company) inconsistent with your role as Chief Executive

 

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Officer of the Company (and Chair of the Board following your appointment to such position), or a substantial adverse alteration in the nature or status of your responsibilities, or a change in your reporting line such that you do not report directly to the Board, or a change in your title to other than Chief Executive Officer of the Company (and Chair of the Board following your appointment to such position); (ii) a reduction in your annual base salary as in effect from time to time (other than a reduction that is concurrent with and no greater (as a proportion of base salary) than a reduction in base salaries applicable to each other member of the SLT); (iii) the Company’s requiring you to be based at a new place of work more than 50 miles from your then-current place of work, except for required travel on the Company’s business; (iv) your not being appointed Chair of the Board upon the retirement of the current Chair; or (v) any other material breach of the Company’s obligations to you under this Offer Letter or any other agreement between you and the Company. Notwithstanding the foregoing, you shall not be deemed to have Good Reason to terminate your employment unless (a) you notify the Board in writing of your intent to terminate your employment for Good Reason within 90 days following your first having knowledge of the occurrence of an event described in the immediately preceding sentence, which notice shall specifically identify the action(s) or event(s) alleged to give rise to your right to terminate your employment for Good Reason, (b) you provide the Company 30 days following delivery of such written notice to cure the event giving rise to your right to terminate your employment for Good Reason and (c) the Company fails to cure such circumstance within such notice period.

Cause” shall mean (i) the willful and continued failure by you substantially to perform your duties with the Company (other than any such failure resulting from your incapacity due to physical or mental illness or any such actual or anticipated failure resulting from termination by you for Good Reason) after a written demand for substantial performance is delivered to you by the Board, which demand specifically identifies the manner in which the Board believes that you have not substantially performed your duties; (ii) your conviction of or plea of nolo contendere with respect to a felony; (iii) your willful engaging in conduct which is demonstrably and materially injurious to the Company, whether monetarily or otherwise; (iv) any breach (other than an immaterial and unintentional breach) of your obligations to the Company with respect to non-disclosure, non-competition or non-solicitation; or (v) your material breach of any material written policy of the Company, including, without limitation, its Code of Conduct, in each case, that has been provided to you. No act or failure to act will be considered “willful” unless it is done, or omitted to be done, by you in bad faith or without reasonable belief that your action or omission was in the best interests of the Company and its affiliates. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board or based upon your good faith reliance on the advice of counsel for the Company and its affiliates will be conclusively presumed to be done, or omitted to be done, by you in good faith and in the best interests of the Company and its affiliates. The cessation of your employment will not be deemed to be for Cause unless and until (x) you are given written notice by the Board specifically identifying the action(s) or event(s) alleged to constitute “Cause” and (if curable) you have not cured such conduct within 30 days after your receipt of such written notice, and (y) there shall have been delivered to you a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters of the entire membership of the Board (excluding you) at a meeting of the Board called and held for such purpose (after reasonable notice is provided to you and you are given an opportunity, together with your counsel, to be heard before the Board), finding that, in the good faith opinion of the Board, you are guilty of conduct described in any of clauses (i) through (v) above, and specifying the particulars thereof in detail.

 

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During your employment, you will be eligible to participate in the Company’s comprehensive benefit package, inclusive of medical, dental, prescription drug, vision, life insurance, accident insurance, and disability, made available to the most senior U.S.-based executives of the Company, subject to the terms and conditions of the respective plans or programs, on the same terms and conditions, including, but not limited to, satisfaction of any stated waiting periods or service requirements and the obligation to make any contributions required to receive the available benefits.

In the event that your employment with the Company is terminated by the Company without Cause or by you voluntarily for Good Reason (as each such term is defined above), and subject to your compliance with the Release Condition, you will be entitled to receive a lump sum severance payment equal to two times the sum of your then current base salary and target AIP opportunity for the then applicable plan year. You shall also receive (i) a pro-rated bonus for your services in the year of termination, based on actual performance, as determined in accordance with the applicable terms and conditions of the AIP for such plan year (other than any continued service obligation), with actual performance determined in a manner no less favorable than that applicable to members of the Company’s Senior Leadership Team generally and with any subjective or individual performance metrics deemed fully satisfied, (ii) health and welfare benefit plan continuation for a period of six months following your termination, on the same terms and conditions (including employer subsidy) as though you continued to be employed and (iii) outplacement services in accordance with the Company practices for senior executives. For clarity, your termination of employment without Cause or by you voluntarily for Good Reason shall be considered a qualifying termination for purposes of Section 4(b) of the Company’s forms of PSU Award agreement for 2024, which are attached hereto as Exhibit B (and any corresponding section of PSU Award agreements used for future grants), and this provision shall supersede any “entire agreement,” “merger” or similar clause that might be contained in any such award agreement. Notwithstanding the foregoing, in the event that your employment is terminated with the Company upon or within two years following the occurrence of a Change in Control by the Company without Cause or by you voluntarily for Good Reason (as each such term is defined in the Company’s form of Change in Control Agreement for its senior officers), and subject to your compliance with the Release Condition, you shall receive a lump sum severance payment equal to 2.99 times the sum of your then current base salary and target AIP opportunity for the applicable plan year, and health and welfare benefit plan continuation for a period of three years following your termination of employment. To the extent that any such health or welfare benefit continuation cannot be provided under applicable law or without a substantial penalty to the Company and/or its affiliates or the other participants in the applicable plan, program or arrangement, the Company shall either provide you with a substantially equivalent benefit or pay you an amount equal to the Company’s cost of providing such coverage, without any associated tax gross-up.

In the event of your termination of employment for any reason, treatment of any outstanding equity awards (including with respect to a termination occurring following a Change in Control of the Company, as defined in the immediately preceding paragraph) will be determined in accordance with the applicable terms and conditions of the applicable award, which will be the same as applies generally to awards to other members of the Company’s Senior Leadership Team, except (i) to the extent specifically provided above with respect to the Inducement PSU Award, and (ii) that you shall be treated as having met the conditions to qualify for enhanced retirement vesting with respect to any such award upon your termination of employment (other than due to your death or by the Company for Cause) on or after your having attained age 60. Upon any termination of your employment as the Chief Executive Officer, you shall resign as a member of the Board, if requested by action of a majority of the other then current members of the Board.

 

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As the Chief Executive Officer, you will also be subject to such share ownership requirements established by the Board or the MDCC, as shall be in effect from time to time. Currently, the share ownership requirement for the Chief Executive Officer is ownership of shares of the Company’s common stock having a market value equal to six times your annual base salary, as in effect from time to time. Details of the current share ownership guidelines are provided in the Officer Stock Ownership and Retention Program Guidelines attached hereto as Exhibit C.

You will also be eligible for relocation benefits in accordance with the Company’s applicable relocation practices. Details of the Company’s current policies are attached hereto as Exhibit D. In addition, within 10 business days of the Effective Date, you will receive a one-time, non-recurring cash payment of $200,000, which is intended to compensate you for any relocation expenses that are not otherwise eligible for reimbursement in accordance with the Company’s applicable relocation practices. This amount will be subject to repayment by you to the Company in the event you should voluntarily terminate your employment without Good Reason prior to the first anniversary of the Effective Date.

You shall also be entitled to reimbursement of your legal fees incurred in connection with the negotiation of the terms set forth in this Offer Letter, up to a maximum amount of $50,000. The reimbursements and payments referenced in this paragraph and the immediately preceding paragraph shall be (i) treated as taxable ordinary income, except to the extent that the Company determines an exemption from gross income applies, (ii) subject to all applicable withholding requirements and (iii) not subject to any tax gross-up.

You will be eligible for personal use of a private aircraft pursuant to a time sharing agreement, but will be required to reimburse the Company for all expenses associated with such personal aircraft use in excess of $150,000 per annum based on the aggregate incremental cost to the Company as described in such timesharing agreement. The value of any such personal aircraft use borne by the Company shall be reported as imputed income to you in accordance with the applicable tax rules resulting in the lowest reported cost, and shall not be subject to any tax gross-up. For clarity, subject to the reimbursement obligation set forth above, your personal use of a private aircraft will be uncapped.

Your employment relationship with the Company is at-will. Either you or the Company shall have the right to terminate your employment with the Company at any time, with or without Cause or Good Reason.

The terms and conditions of this Offer Letter and your employment are contingent upon satisfactory completion of a background check and drug screening prior to the Effective Date. You and the Company agree that this Offer Letter (together with the other agreements referred to herein) constitutes the entire agreement and supersedes all prior agreements or understandings, whether oral or written, between you and the Company with respect to the subject matter of this Offer Letter. Any modifications to this Offer Letter must be in writing and signed by you and an authorized employee or agent of the Company. This Offer Letter may be signed in counterparts with the same effect as if the signatures hereto and thereto were upon the same instrument. This Offer Letter may be transmitted and/or signed by facsimile, digital, or electronic transmission and/or signature. This Offer Letter is governed by and will be construed in accordance with the laws of the State of Tennessee.

 

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Please take the time to review this Offer Letter carefully and address any questions you may have to me. If you wish to accept the foregoing offer, please sign and date two copies of this Offer Letter where indicated below, returning one executed copy to me and retaining the other copy of this Offer Letter for your files.

 

Sincerely,

/s/ Christopher M. Connor

By: Christopher M. Connor
Title: Lead Independent Director, International Paper Company

 

AGREED AND ACCEPTED:

/s/ Andrew Silvernail

ANDREW SILVERNAIL

Dated: March 14, 2024

 

7

Exhibit 99.1

 

LOGO    pg 1 of 2

News Release

Silvernail Elected International Paper

Chief Executive Officer

Sutton to continue as Chairman of the Board

MEMPHIS, Tenn. – March 19, 2024 – International Paper (NYSE: IP) today announced that its board of directors has elected Andrew Silvernail as Chief Executive Officer (CEO), following an extensive evaluation process. Effective May 1, 2024, Silvernail will succeed Mark Sutton, who previously announced the final phase of the CEO succession process. Sutton will continue in his role as Chairman of the International Paper Board of Directors to ensure a smooth and successful transition.

Silvernail has two decades of experience leading global companies in the manufacturing and technology sectors. He joins IP from KKR & Co., Inc., a global investment firm, where he served as an executive advisor. Silvernail served as the Chairman and CEO of Madison Industries, one of the world’s largest privately held companies. Prior to that, Silvernail served as Chairman and CEO of IDEX Corporation from 2011 to 2020. Employee engagement reached best-in-class performance and total shareholder return grew by more than 500% during his tenure at IDEX. Silvernail previously held executive positions at Rexnord Industries, Newell Rubbermaid and Danaher Corporation. He currently serves on the Board of Directors of Stryker Corporation.

International Paper Lead Director Chris Connor said, “Andy is an experienced CEO with an extensive track record for creating value. His strategic agility, core values and drive for results align with and will enhance IP’s outstanding leadership team. We are confident that he is the right person to build on the success achieved under Mark Sutton’s leadership.”

“On behalf of the Board, I want to thank Mark for his outstanding contributions to IP over the past decade. He successfully led the company through the pandemic and a period of significant economic challenges, and the company achieved record-level market capitalization during his tenure. Mark’s legacy is a safer, more focused and financially strong company with an incredible culture and a bright future,” said Connor.

Mark Sutton, current International Paper CEO and Chairman of the Board, said, “The Board’s succession process was comprehensive, and I’m confident that Andy’s experience paired with the industry expertise of our senior leadership team will amplify the company’s success going forward. It’s been a privilege to work with the IP team for the past 40 years and to lead the company for the past decade – I am incredibly proud to be IP.”


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Andy Silvernail, CEO-Elect of International Paper, said, “I’m honored and proud to be a part of International Paper, a strong and resilient company and a force for good in communities around the world. Many things impressed me about IP, from the customers who rely on its essential products to the core values that drive its culture and its extraordinary sustainability platform. Thanks to Mark’s leadership, the company is well-positioned for growth, and I’m excited to be a part of what’s next for IP.

“I want to thank the Board for their confidence in me. I look forward to working closely with the Board, Mark and our more than 39,000 employees worldwide as we continue to fulfill our vision of being among the most successful, sustainable and responsible companies in the world.”

About International Paper

International Paper (NYSE: IP) is a global producer of sustainable packaging, pulp and other fiber-based products, and one of the world’s largest recyclers. Headquartered in Memphis, Tenn., we employ approximately 39,000 colleagues globally who are committed to creating what’s next. We serve customers worldwide, with manufacturing operations in North America, Latin America, North Africa and Europe. Net sales for 2023 were $18.9 billion. Additional information can be found by visiting internationalpaper.com.

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Contacts:

 

   

Media: Amy Simpson, 901-419-4964

 

   

Investors: Mark Nellessen; 901-419-1731; Michele Vargas, 901-419-7287