<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF
THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant: / /
Filed by a party other than the Registrant: / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
INTERNATIONAL PAPER COMPANY
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
[INTERNATIONAL PAPER LOGO]
TWO MANHATTANVILLE ROAD
PURCHASE, NEW YORK 10577
JOHN T. DILLON
CHAIRMAN
March 30, 1998
Dear Fellow Shareholder:
This year is an important year for International Paper as we celebrate our
Centennial anniversary. On January 31, 1898, International Paper Company was
formed by the joining of seventeen paper companies, including the Hudson River
Mill in Corinth, New York. To commemorate that occasion, this year's annual
meeting will be held at the Queensbury Hotel, 88 Ridge Street, Glens Falls, New
York, the area of the state where the Company was founded 100 years ago. The
meeting will start at 9:30 a.m., on Tuesday, May 12, 1998. You are cordially
invited to attend this meeting and we look forward to seeing you there.
The following Proxy Statement outlines the business to be conducted at the
meeting, which includes the election of one class of directors; ratification of
the appointment of Arthur Andersen LLP as the independent auditor for 1998; and
consideration of one shareholder proposal concerning a chlorine-containing
compound phaseout schedule.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, YOUR VOTE IS IMPORTANT. WE
URGE YOU TO VOTE, DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD, OR IF YOU
PREFER, YOU MAY VOTE VIA THE TELEPHONE.
Attendance at the meeting is limited to shareholders of record as of the
close of business on March 20, 1998, or their duly appointed proxy holder (not
to exceed one proxy per shareholder), and to guests of management. If you or
your proxy holder plan to attend the meeting, please complete and return the
enclosed Request for Admittance card.
Thank you for your continued support.
Sincerely,
[/S/ JOHN T. DILLION]
John T. Dillon
<PAGE>
[INTERNATIONAL PAPER LOGO]
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TUESDAY, MAY 12, 1998
9:30 A.M.
THE QUEENSBURY HOTEL
88 RIDGE STREET
GLENS FALLS, NEW YORK
To the Owners of Common Stock of
International Paper Company:
The annual meeting of shareholders of International Paper Company will be held
Tuesday, May 12, 1998, at 9:30 a.m. at the Queensbury Hotel, 88 Ridge Street,
Glens Falls, New York to:
1. Elect one class of directors: Peter I. Bijur, John T. Dillon, and John R.
Kennedy, each for a term of three years;
2. Ratify the appointment of Arthur Andersen LLP as independent auditor for
1998;
3. Consider and vote on a shareholder resolution concerning a schedule for total
phaseout of chlorine-containing compounds for papermaking; and
4. Transact such other business properly before the meeting or any adjournments.
YOUR BOARD OF DIRECTORS URGES SHAREHOLDERS TO VOTE FOR ITEMS 1 AND 2 AND AGAINST
ITEM 3.
Shareholders of record at the close of business on March 20, 1998, will be
entitled to vote at the meeting or any adjournments thereof.
By order of the Board of
Directors
JAMES W. GUEDRY
VICE PRESIDENT AND SECRETARY
March 30, 1998
<PAGE>
PROXY STATEMENT
INTERNATIONAL PAPER COMPANY
TWO MANHATTANVILLE ROAD
PURCHASE, NEW YORK 10577
(914) 397-1500
GENERAL INFORMATION
This statement is furnished to you by the Board of Directors of International
Paper Company in connection with the solicitation of your proxy to be voted at
the annual meeting of shareholders to be held on May 12, 1998. You are entitled
to one vote for each share of common stock held of record at the close of
business on March 20, 1998. As of that date, there were 302,813,198 shares of
common stock outstanding.
The annual report, including the audited financial statements of International
Paper for the fiscal year ended December 31, 1997, has been mailed to you with
this Proxy Statement and should be read carefully in conjunction with this Proxy
Statement before voting on any proposals contained herein, as it contains
details of the Company's operations and other relevant disclosures.
PROXY PROCEDURES
VOTING BY TELEPHONE
This year you have a choice of voting by telephone or by mail. The telephone
voting procedure is simple and fast. Dial the 800 number on your proxy card and
listen for further directions. You must have a touch-tone phone in order to
respond to the questions. This vote will be counted immediately and there is no
need to send in your proxy card.
VOTING BY PROXY CARD
Shares eligible to be voted, and for which a properly-signed proxy is returned,
will be voted in accordance with the instructions specified on the proxy card;
if you do not mark any instructions, your shares will be voted in favor of
proposals 1 and 2 and against proposal 3. If any other matters come before the
meeting, including any proposal submitted by a shareholder which was omitted
from this Proxy Statement, your proxy will be voted in accordance with the best
judgment of the persons voting them. As of the time this Proxy Statement was
printed, management was not aware of any other matters to be voted upon. You may
revoke your proxy at any time before its exercise by submitting a written
revocation or a new proxy, or by attending and voting at the annual meeting.
Solicitation of proxies may be done by directors, officers and employees, as
well as by Georgeson & Company Inc. Payments to that firm as compensation are
estimated to be about $14,500 plus reimbursable expenses. This solicitation may
be carried out by mail, telephone, telecommunication, or personal interview. The
cost of any such solicitations will be borne by International Paper.
WHO COUNTS THE VOTE AND IS IT CONFIDENTIAL?
The Company has a policy of confidentiality in the voting of shareholder proxies
generally. It uses the services of its registrar and transfer
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agent, ChaseMellon Shareholder Services, L.L.C., as independent inspectors of
election to receive and tabulate the proxy vote. These representatives are the
only persons who process and have access to your proxy card.
This Proxy Statement and the form of Proxy were sent to shareholders commencing
March 30, 1998.
ADMITTANCE PROCEDURES AT MEETING
You shareholders of record as of the close of business on March 20, 1998 (or
your duly appointed proxy holder) are entitled to vote and attend the meeting.
Certain procedures have been adopted to insure that no inconvenience or delays
are caused to the Company's shareholders or their proxy holders when entering
the meeting.
If you plan to attend the meeting in person or appoint someone to attend as your
proxy (other than the proxies set out on the proxy card), please complete, sign
and return the enclosed Request for Admittance card promptly so that an
admittance card can be reserved for you or your proxy in advance of the meeting.
If you are appointing your own proxy, please include his or her name on the
Request. These admittance cards will be delivered to you or your proxy holder at
the shareholders' admittance counter at the meeting upon verification of
identification by you or your proxyholder.
If you are a record shareholder and do not have an admittance card reserved for
you at the meeting, you will be admitted upon verification of ownership at the
shareholders' admittance desk. If you have not appointed a proxy in advance or
have changed the appointed proxy on the Request for Admittance card, your duly
appointed proxy who attends the meeting in your place will be required to
present evidence of your signature on the proxy (a copy of your driver's license
or employment identification card or other identification with your signature)
in order to determine that only valid proxies are admitted and voted.
Persons who own stock through brokers, trustees, plans or "street name" and not
directly through ownership of stock certificates are considered "beneficial
owners." Beneficial owners of record on March 20, 1998, or their duly appointed
proxy holder, can obtain admittance cards only at the shareholders' admittance
desk by presenting evidence of common stock ownership in the Company. This
evidence could be a proxy from the institution that is the record holder of the
stock or your most recent bank or brokerage firm account statement, along with
proper identification. If you are a beneficial shareholder who will appoint a
proxy to attend the meeting on your behalf, your duly appointed proxy will be
required to comply with the procedures described above in this paragraph, as
well as the admittance procedures described above for duly appointed proxies not
designated in advance on the Request for Admittance card.
CORPORATE GOVERNANCE
BOARD OF DIRECTORS
The Board has three classes of directors: Class I directors, of which there are
currently two, were elected until the 1998 annual meeting and one new director
who is being assigned to that class; Class II directors, of which there are
currently five, were elected to serve until the 1999 annual meeting; and
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Class III directors, of which there are currently five, were elected until the
2000 annual meeting. Each class is elected for a three-year term, unless they
retire earlier. Three Class II directors are scheduled to retire upon reaching
retirement age prior to the 1999 annual meeting. New directors are assigned to a
class until the first annual meeting after their selection.
Nine regular meetings and three special meetings of the Board of Directors were
held in 1997. In addition, there were 23 Committee meetings. Each director
attended at least 75% of the meetings of the Board and the Committees on which
he or she serves. All of the directors attended an average of 93% of such
meetings of the Board and the Committees on which they serve.
Record and beneficial ownership of current directors in equity securities of the
Company is shown in the table on page 6.
RELATED TRANSACTION
In June 1997, the Company sold 825 acres of land near Killington, Vermont to The
Conservation Fund for later disposition to the State of Vermont for conservation
and recreational use. The sale price was $424,875 which was the market value of
the land. Mr. Noonan, a director of the Company, is chairman and chief executive
officer of The Conservation Fund.
AUDIT COMMITTEE
The Audit Committee of the Board assists the Board in carrying out its
responsibilities for monitoring management's accounting for the Company's
financial results and for the timeliness and adequacy of the reporting of those
results; it discusses and makes inquiry into the audits of the Company's books
made internally and by outside independent auditors, the Company's financial and
accounting policies, its internal controls and its financial reporting; it
reviews and makes a recommendation to the Board each year with respect to the
appointment of independent auditors for the following year; it informs the Board
of any significant accounting matters; and it reviews the performance of the
Committee.
Current members of the Committee, none of whom is an employee of the Company,
are J. C. Pfeiffer (Chairman), P. I. Bijur, W. C. Butcher, J. R. Kennedy, and P.
F. Noonan.
Four meetings of the Committee were held in 1997.
MANAGEMENT DEVELOPMENT AND COMPENSATION COMMITTEE
The Management Development and Compensation Committee reviews Company policies
and programs for the development of management personnel; it makes
recommendations to the Board with respect to any proposals for compensation or
compensation adjustments of officers who are also directors of the Company; it
authorizes compensation or compensation adjustments for other officers of the
Company; it administers the Company's executive bonus and Long-Term Incentive
Compensation Plan; it reviews and endorses changes in Company employee
retirement and benefits plans; it reviews officer candidates and endorses
nominees for election as executive officers; it delegates to the Chief Executive
Officer the authority to act on compensation adjustments at certain levels; it
makes recommendations to the Board with respect to directors' compensation; it
reviews senior management succession planning; and it reviews the performance of
the Committee.
Current members of the Committee, none of whom is an employee of the Company,
are R. J. Eaton (Chairman), P. I. Bijur, W. C. Butcher, T.
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C. Graham, E. T. Pratt, Jr. and C. R. Shoemate. Stanley C. Gault retired from
the Board and as chairman of the Committee on January 6, 1998.
Five meetings of the Committee were held in 1997.
NOMINATING COMMITTEE
The Nominating Committee reviews the size and composition of the Board; it
reviews possible director candidates and director nominations properly presented
by shareholders; it recommends to the Board individuals suitable for election as
directors; it reviews and recommends annually to the full Board the slate of
nominees for election by the Company's shareholders; it reviews institutional
affiliations of directors and director candidates for possible conflicts; and it
reviews and recommends Board Committee assignments.
Current members of the Committee, none of whom is an employee of the Company,
are W. C. Butcher (Chairman), D. F. McHenry, J. C. Pfeiffer, E. T. Pratt, Jr.
and C. R. Shoemate.
Four meetings of the Committee were held in 1997.
ENVIRONMENT, HEALTH AND TECHNOLOGY COMMITTEE
The Environment, Health and Technology Committee reviews environmental, safety,
health and technological policies and programs throughout the Company; it
assures that they are appropriate to the short- and long-term objectives of the
Company in terms of industry leadership, compliance with federal and state laws
and regulations and social responsibility; it advises the Board of the
effectiveness of these policies and programs; and it reviews the performance of
the Committee.
Current members of the Committee are T. C. Graham (Chairman), R. J. Eaton, J. R.
Kennedy, P. F. Noonan and C. W. Smith.
Three meetings of the Committee were held in 1997.
OTHER COMMITTEES
Membership of the other regular Committees of the Board of Directors is shown on
page 51 of the Company's annual report which accompanies this Proxy Statement.
FUTURE SHAREHOLDER PROPOSALS AND NOMINATIONS
In order to be considered for inclusion in next year's Proxy Statement,
shareholder proposals intended to be presented at the 1999 annual meeting must
be made in writing and received by the Secretary of the Company at the Company's
principal executive offices by the close of business on November 30, 1998.
Other shareholder proposals intended to be introduced at the 1999 annual meeting
must be made in accordance with Article I, Section 7 of the Company's By-laws.
Thus, shareholder proposals intended to be presented at the 1999 annual meeting,
but not included in the 1998 Proxy Statement, must be received by the Secretary
of the Company not earlier than February 9, 1999 nor later than March 11, 1999,
if the annual meeting is held on May 11, 1999, and must conform to the
requirements set out in the Company's By-laws.
Nominations by shareholders for directors must be made in accordance with
Article II, Section 9 of the Company's By-laws. Thus, shareholder nominations,
to be considered by the Nominating Committee for the 1999 election of directors
must be received by the Secretary of the Company not earlier than
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February 9, 1999, nor later than March 11, 1999, if the annual meeting is held
on May 11, 1999, and must conform to the requirements set out in the Company's
By-laws.
COMMON STOCK OWNERSHIP OF DIRECTORS AND MANAGEMENT
The following table shows, as of March 20, 1998, the number of shares of Company
common stock beneficially owned or otherwise claimed by each current director,
executive officers included in the Summary Compensation Table on page 20, and by
all directors and executive officers of the Company as a group. The total
beneficial ownership of common stock of all directors and executive officers as
a group represents less than 1% of the outstanding stock. To the best knowledge
of the Company, no person or group beneficially owns more than 5% of the
Company's common stock outstanding, except as set forth below in the table
beside the respective shares owned.
<TABLE>
<CAPTION>
SHARES
NAME OF INDIVIDUAL BENEFICIALLY STOCK UNITS
OR GROUP OWNED (1) OWNED (2)
- -------------------------------------------------- ------------- --------------
<S> <C> <C>
P.I. Bijur........................................ 1,083 510
W.C. Butcher...................................... 7,134 24,819
J.T. Dillon....................................... 300,429 26,515
R.J. Eaton........................................ 5,500 5,841
J.A. Georges...................................... 36,185 0
T.C. Graham....................................... 15,135 28,762
J.R. Kennedy...................................... 103,929 2,736
D.F. McHenry...................................... 8,002 10,123
P.F. Noonan....................................... 4,150 4,384
J.C. Pfeiffer..................................... 7,734 5,428
E.T. Pratt, Jr. .................................. 7,143 44,458
C.R. Shoemate..................................... 4,200 4,712
C.W. Smith........................................ 152,738 15,660
J.P. Melican...................................... 137,838 17,377
D.W. Oskin........................................ 160,404 0
M.J. Turk......................................... 126,593 4,530
All directors and executive officers as a group... 1,555,691 (.51%)
Bank trustee under Company and subsidiary employee
benefit plans (3)............................... 25,003,206 (8.3%)
Merrill Lynch, Pierce, Fenner & Smith Incorporated
(4)............................................. 20,601,662 (6.8%)
The Capital Group Companies, Inc. (5)............. 18,150,000 (6.0%)
</TABLE>
(1) Ownership shown includes securities over which the individual has or shares,
directly or indirectly, voting or investment powers, including certain
relatives and ownership by trusts for the benefit of such relatives, as
required to be reported by the Securities and Exchange Commission; certain
individuals may disclaim beneficial ownership of some of these shares,
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but they are included for the purpose of computing the holdings and the
percentages of common stock owned. The above table does not include shares
represented by stock options granted executive officers under the Long-Term
Incentive Compensation Plan, including options for 323,037 shares for Mr.
Dillon, 149,700 shares for Mr. C. W. Smith, 164,200 shares for Mr. Melican,
135,700 shares for Mr. Oskin, and 107,000 shares for Mr. Turk.
(2) Ownership shown represents the non-voting stock-equivalent units owned by
the named individuals and group under the Nonfunded Deferred Compensation
Plan for Non-Employee Directors or the Unfunded Savings Plan.
(3) As of December 31, 1997, State Street Bank & Trust Co., N.A. holds such
shares as the independent trustee in trust funds for employee savings,
thrift, and similar employee benefit plans of the Company and its
subsidiaries ("Company Trust Funds"). In addition, State Street Bank & Trust
Co., N.A. is trustee for various third party trusts and employee benefit
plans and is an Investment Advisor. As a result of its holdings in all
capacities, State Street Bank & Trust Co., N.A. is the record holder of
25,003,206 shares of common stock of the Company. The trustee disclaims
beneficial ownership of all such shares except 3,904,894 shares of which it
has sole power to dispose or to direct the disposition. The common stock
held by the Company Trust Funds is allocated to participants' accounts and
such stock or the cash equivalent will be distributed to participants upon
termination of employment or pursuant to withdrawal rights. The trustee
votes the shares of common stock held in the Company Trust Funds in
accordance with the instructions of the participants; shares for which no
instructions are received are voted in the trustee's discretion.
(4) As of January 31, 1998, Merrill Lynch, Pierce, Fenner & Smith Incorporated
is a broker-dealer registered under Section 15 of the Securities Exchange
Act of 1934 (the "Act"). They, or subsidiaries, hold these shares primarily
as sponsor to various registered investment companies, but disclaim
beneficial ownership thereof other than certain of which are held in
proprietary accounts.
(5) As of December 31, 1997, the Capital Group Companies, Inc. holds such shares
as the parent holding company of a group of investment management companies
(including Capital Research and Management Company). The Capital Group
Companies, Inc. does not have investment power or voting power over any of
the securities reported here; however, The Capital Group Companies, Inc. may
be deemed to "beneficially own" such securities by virtue of Rule 13d-3
under the Act. Capital Research and Management Company, an investment
advisor registered under Section 203 of the Investment Advisors Act of 1940,
is the beneficial owner of these shares as a result of acting as investment
advisor to various investment companies registered under Section 8 of the
Investment Company Act of 1940.
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MATTERS TO BE CONSIDERED AT THE MEETING
1. ELECTION OF THREE DIRECTORS
At this meeting, two (2) directors are to be re-elected and one director elected
as Class I directors for three-year terms expiring in 2001. Each nominee is
currently a director of the Company. Election requires the affirmative vote by
the holders of a plurality of outstanding common stock voting at the annual
meeting of shareholders. A plurality means that the three (3) nominees receiving
the largest number of votes cast will be elected. Votes which are withheld from
any nominee, as well as broker non-votes, will not be counted in such nominee's
favor. Shareholders voting at the meeting may not vote for more than the number
of nominees listed in the Proxy Statement. Proxies given to management to vote
will be voted according to instructions given, but only for nominees listed in
the Proxy Statement. The term of the present Class I directors expires at the
adjournment of the 1998 annual meeting.
CLASS I DIRECTORS--TERM EXPIRING IN 2001
The three nominees for election at this meeting as Class I directors are Peter
I. Bijur, John T. Dillon and John R. Kennedy, and are identified below:
[PHOTO] PETER I. BIJUR, 55, Chairman and Chief Executive
Officer of Texaco Inc. He joined Texaco in 1966 and progressed
through a series of positions and was elected senior vice
president in May of 1992. He became vice chairman of the Board
in January 1996, and was elected to his current position in July 1996. He is
also a director of the American Petroleum Institute and a member of The Business
Council, The Business Roundtable, The Conference Board, and the National
Petroleum Council.
Director since July 8, 1997
[PHOTO] JOHN T. DILLON, 59, Chief Executive Officer since
1996. Prior to that he was executive vice president-packaging
from 1987 to 1995 when he assumed the position of president
and chief operating officer. He is also a director and
chairman of the board of IP Forest Resources (the managing general partner of IP
Timberlands, Ltd.) and a director of Caterpillar Inc. He is chairman of the
board of The National Council on Economic Education.
Director since March 1, 1991
[PHOTO] JOHN R. KENNEDY, 67, retired President and Chief
Executive Officer of Federal Paper Board Company, Inc. from
1975 to 1996. He is a director of DeVlieg Bullard, Inc., Chase
Brass Industries, Inc., Holnam, Inc., and Spartech
Corporation. He is director and chairman of the board of Georgetown University,
on the board of governors of the United Nations Association of the United States
of America, and one of the directors for the Foreign Policy Association.
Director since March 12, 1996
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CLASS II DIRECTORS--TERM EXPIRING IN 1999
None of these directors are to be elected at the 1998 annual meeting, but were
elected until the 1999 annual meeting.
[PHOTO] WILLARD C. BUTCHER, 71, retired Chairman and Chief
Executive of The Chase Manhattan Bank, N.A. He is a director
of ASARCO, Incorporated, and Texaco, Inc. He is a member of
The Business Council, the International Advisory Board for
Banca Nazionale del Lavaro, the International Advisory Council of The Chase
Manhattan Bank and vice chairman of the Lincoln Center for the Performing Arts,
Inc. He is a trustee emeritus of the American Enterprise Institute for Public
Policy Research and a fellow emeritus of Brown University.
Director since August 1, 1989
[PHOTO] THOMAS C. GRAHAM, 71, Consultant. Retired Chairman of
the Board of AK Steel Corporation. Previously, he was chairman
and chief executive officer, elected to those posts concurrent
with the formation of AK Steel Holding Corporation, a publicly held corporation
which emerged from the privately-held Armco Steel Company, L.P. in April of
1994. He had been named president and chief executive officer of Armco Steel in
June 1992. He was formerly chairman and chief executive officer of Washington
Steel Corporation until 1992. He is a director of IP Forest Resources Company
(the managing general partner of IP Timberlands, Ltd.).
Director since October 14, 1986
[PHOTO] JANE C. PFEIFFER, 64, Management Consultant. She is a
director of Ashland, Inc., IP Forest Resources Company (the
managing general partner of IP Timberlands, Ltd.), J.C. Penney
Company, Inc., and The Mutual Life Insurance Company of New
York. She is a trustee of the Conference Board, the University of Notre Dame and
the Overseas Development Council and a member of The Council on Foreign
Relations.
Director since June 14, 1977
[PHOTO] EDMUND T. PRATT, Jr., 71, retired Chairman of the
Board (from 1972 to 1992) and Chief Executive Officer from
(1972-1991) of Pfizer Inc. He is a director and member of the
Executive Committee of AEA Investors, Inc., and a member of
the Board of Trustees of Logistics Management Institute.
Director since September 9, 1975
[PHOTO] C. WESLEY SMITH, 57, Executive Vice
President--printing papers since 1992. Prior thereto, he was
president--International Paper--Europe from 1989.
Director since December 12, 1995
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CLASS III DIRECTORS-TERM EXPIRING IN 2000
None of these directors are to be elected at the 1998 annual meeting, but were
elected until the 2000 annual meeting.
[PHOTO] ROBERT J. EATON, 58, Chairman and Chief Executive
Officer of the Chrysler Corporation. He joined Chrysler in
1992, as vice chairman and chief operating officer and a
member of the Board. Prior to joining Chrysler, his 29-year
career with General Motors included various management positions, the most
recent being president of General Motors Europe (1988 to 1992). He is a fellow
of both the Society of Automotive Engineers and the Engineering Society of
Detroit and a member of the National Academy of Engineering. He is a member of
The Business Council and The Business Roundtable. He also is a member of the
President's Advisory Committee on Trade Policy and Negotiations and serves as a
director of The Economic Strategy Institute and the U.S./Japan Business Council.
Director since January 10, 1995
[PHOTO] JOHN A. GEORGES, 67, retired Chairman and Chief
Executive Office of International Paper. He was elected chief
executive officer in 1984 and became chairman and chief
executive officer in 1985. He was a director, chairman of the
board and chief executive officer of IP Forest Resources Company (the managing
general partner of IP Timberlands, Ltd.) from 1985 to 1996. Since retirement
from International Paper, he has joined Windward Capital Partners, L.P. as
senior managing director. He is a director of AK Steel Holding Corporation,
Ryder Systems, Inc., Warner-Lambert Company and IP Forest Resources (the
managing general partner of IP Timberlands Ltd.) He is a member of The Business
Council, The Trilateral Commission, and Bankers Trust European Advisory Board.
He is a trustee of the Public Policy Institute of the Business Council of New
York State and board member of the University of Illinois Foundation.
Director since February 1, 1980
[PHOTO] DONALD F. MCHENRY, 61, University Research Professor
of Diplomacy and International Affairs at Georgetown
University since 1981. He is president of the IRC Group LLC
and a director of AT&T, The Coca-Cola Company, Bank of Boston
Corporation, the First National Bank of Boston, SmithKline Beecham plc, and the
Institute for International Economics. He is a trustee of The Brookings
Institution, The Mayo Foundation, and Columbia University; and chairman of the
board of Africare.
Director since April 14, 1981
[PHOTO] PATRICK F. NOONAN, 55, Chairman of the Board of The
Conservation Fund (a nonprofit organization dedicated to
conserving America's land and water resources) and previously,
also its chief executive officer since 1985. Prior to that he
was president of The Nature Conservancy. He is a trustee of The National
Geographic Society. He is also a director of Ashland, Inc., the Fund for
Government Investors, Saul Centers REIT, the American Gas Association Index Fund
and IP Forest Resources (the managing general partner of IP Timberlands Ltd.) He
is a member of the Board of Visitors of Duke University School of the
Environment.
Director since December 14, 1993
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[PHOTO] CHARLES R. SHOEMATE, 58, Chairman, President and
Chief Executive Officer of Bestfoods. He was elected president
and a member of its board of directors in 1988, chief
executive officer in August 1990 and chairman in September
1990. He joined Bestfoods, formerly CPC International, in 1962 and progressed
through a variety of positions in manufacturing, finance and business management
within the consumer foods and corn refining businesses. In 1981, he was named
president of Canada Starch Company, CPC's Canadian subsidiary. He was elected
vice president of the corporation in 1983, and in 1986 became president of the
Corn Refining Division. He is a director of CIGNA Corporation and chairman of
the Grocery Manufacturers of America, Inc. He is a member of the Business
Roundtable; and a trustee of The Conference Board.
Director since November 1, 1994
2. RATIFICATION OF ARTHUR ANDERSEN LLP AS INDEPENDENT AUDITOR
Arthur Andersen LLP has been our independent public accountant for many years.
The Audit Committee and the Board considered the qualifications of Arthur
Andersen LLP and have appointed it as independent auditor of the consolidated
financial statements of the Company for 1998. The Committee reviewed its
performance in prior years, as well as its reputation for integrity and
competence in the fields of accounting and auditing. The Committee has expressed
its satisfaction with Arthur Andersen LLP in all of these respects. The
Committee's review also included inquiry concerning litigation involving Arthur
Andersen LLP and the existence of any investigations by the Securities and
Exchange Commission into the financial reporting practices of the companies
audited by it. In this respect, the Committee concluded that the ability of
Arthur Andersen LLP to perform services for the Company is in no way adversely
affected by any such investigation or litigation. A representative of Arthur
Andersen LLP will be present at the annual meeting to respond to appropriate
questions and to make a statement if he or she desires.
We are asking shareholders to ratify the Board's appointment of Arthur Andersen
LLP as independent auditors for 1998. We need the affirmative vote of a majority
of the shares voting on this proposal in order to ratify the appointment.
Abstentions and broker non-votes will not be counted as having voted on this
proposal.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF ARTHUR ANDERSEN
LLP AS INDEPENDENT AUDITOR FOR 1998.
11
<PAGE>
3. SHAREHOLDER PROPOSAL CONCERNING A CHLORINE-COMPOUND PHASEOUT SCHEDULE
PROPOSAL
The Sisters of Mercy of the Americas, Regional Community of Detroit, 29000
Eleven Mile Road, Farmington Hills, Michigan 48336, represented that, as of
November 18, 1997, it owned 1,050 shares of common stock of the Company and has
informed us that it intends to present the following proposal at the annual
meeting. Two groups and one individual, whose names, addresses and shareholdings
will be supplied upon oral or written request to the Secretary of the Company,
have co-sponsored the proposal. The text of the proposal is as follows:
"WHEREAS: our company claims to be environmentally responsible, yet uses
chlorine-based bleach chemicals that produce dioxin and many other persistent
pollutants known to harm human and environmental health in even minute
quantities;
"Dioxins, furans, and other organochlorines are created whenever chlorine-
based chemicals are used. These chemicals pass up the food chain, accumulating
in living organisms. In humans, minuscule amounts contribute to reproductive
failure, birth defects, immune suppression, cancer. In children, they cause
developmental impairment, hormonal disruption, and behavioral disorders;
"Distinguished world bodies, including the:
- World Bank
- American Public Health Association
- International Joint Commission on the Great Lakes
- Intergovernmental Forum on Chemical Safety
publicly recognize the grave risks posed by chlorine-based pulp and paper
bleaching. These significant scientific and economic viewpoints demonstrate
worldwide support for phasing out the industrial use of chlorine-containing
compounds;
"New regulations set minimum bleach standards as 100% chlorine dioxide
(ClO2). But ClO2 perpetuates organochlorine contamination, and represents a
costly and imprudent investment when commercially available technologies that
eliminate chlorinated compounds are in successful use by our global competitors;
"US EPA recognizes "technology options more advanced than the technology
option [of ClO2, such as] . . . ozone-based bleaching sequences, [and] totally
chlorine-free bleaching";
"According to EPA: "total chlorine free bleaching . . . provides significant
benefits such as elimination of chlorinated pollutants to the environment and
allows bleach plant effluents to be recycled . . . [this] moves the mill further
toward the closed mill concept";
"Closed-loop mills are possible because totally chlorine-free (TCF)
technologies eliminate highly corrosive ClO2. ClO2's corrosiveness wears out
mill equipment more rapidly, resulting in accelerated capital replacement and
higher costs. Closed-loop mills would allow tremendous savings through the
reduction and reuse of chemicals, energy and water;
"Dangerously unstable, ClO2 also threatens worker health and safety, driving
up costs and reducing productivity. The paper industry's record of adopting
innovative technology is one of the country's lowest when compared to other US
industrial sectors;
12
<PAGE>
"TCF technology would enable IP to compete in global TCF markets. The
world's largest paper market (Europe) has moved from less than 5% to over 25%
TCF just since 1991. IP cannot compete in these growing world markets by
remaining committed to chlorinated chemicals;
"Chlorine-based bleaching inevitably releases persistent organochlorine
toxins, and results in higher health and safety costs. Our company should phase
out chlorine-based compounds in its production;
"RESOLVED: that our company report by the 1998 annual meeting on a schedule
to phase out the use of chlorine-based compounds from its pulp and paper
production."
The supporting statement of shareholders on this resolution is as follows:
"IP should not be committed to chlorine-based chemicals, but rather to
comprehensive solutions. ClO2 has significant problems that cannot be overcome:
high corrosiveness, explosiveness, and toxicity. The use of ClO2 reduces global
opportunities and has higher long-term operating costs. Scientific research
indicates that NO safe or "acceptable" level of exposure to many organochlorine
chemicals exists. Reliance on ClO2 bleaching postpones the adoption of proven
TCF technologies. To be an environmental and technological innovator, IP must
use technology that eliminates organochlorines from pulp and paper production."
POSITION OF YOUR COMPANY'S BOARD OF DIRECTORS
We recommend that you vote AGAINST the proposal.
The Company has eliminated dioxins and furans in its mill effluents, utilizing
the EPA's very low (10 parts per quadrillion) detection levels. We formerly used
sodium-hypochlorite and elemental chlorine as bleaching agents in the pulp and
paper making process but began phasing them out in 1988. The Company set and met
a schedule for conversion of all of its eleven mills to 100% elemental chlorine
free ("ECF") bleaching by December 31, 1996. Two additional mills acquired in
1996 as part of the merger with Federal Paper Board will be converted by the end
of 1998. Having voluntarily expended $160 million, the Company has eliminated
any detectable dioxins or furans, by-products of using elemental chlorine as a
bleaching agent.
We disagree with the proponent's opinions regarding chlorine dioxide. We believe
that:
- There is no scientific evidence that an ECF mill produces any dioxin;
- There is no scientific evidence that there is any bioaccumulation of
dioxin associated with an ECF mill;
- There is no national or international body that has publicly recognized
any dangers, much less significant dangers, from ECF bleaching. In fact,
the opposite is true: all agencies that have evaluated ECF bleaching, such
as the U.S. EPA, have regarded ECF bleaching as protective of health and
the environment;
- TCF pulp is qualitatively inferior to ECF pulp and requires more wood per
unit of pulp;
- To convert International Paper's existing mills to TCF would require that
we retrofit thirteen mills at an estimated cost of $500 million over and
above what is being spent on the Cluster Rules, including ECF conversion
with no environmental, health or other benefits, but with significant
reductions in product quality and substantial increases in energy and wood
fiber usage for the same unit of production.
13
<PAGE>
We believe that no valid health, safety or financial objective would be obtained
from the very substantial expenditure of capital required to implement a total
phase-out of chlorine dioxide in our mill system. Since none of our major U.S.
competitors are utilizing totally chlorine-free processes, to require
International Paper to do so would put us at a significant cost disadvantage
from a competitive standpoint.
Approval of this proposal requires the affirmative vote of a majority of the
shares voting on it. Abstentions and broker non-votes will not be counted as
having voted on this proposal.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THE COMPANY DEVISING A SCHEDULE
FOR THE PHASEOUT OF CHLORINE COMPOUNDS IN ITS PAPER-MAKING PROCESSES.
REPORT OF THE MANAGEMENT DEVELOPMENT
AND COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS
As of December 31, 1997, the Management Development and Compensation Committee
(the "Committee") consisted of seven outside directors: Peter I. Bijur, Willard
C. Butcher, Robert J. Eaton, Thomas C. Graham, Stanley C. Gault, Edmund T.
Pratt, Jr. and Charles R. Shoemate. Mr. Stanley C. Gault served as chairman of
the Committee during 1997, and retired effective January 6, 1998. Mr. Eaton was
named chairman effective January 6, 1998. The Committee met five times in 1997
with a 97% attendance record. The chairman and chief executive officer of the
Company was not present during any discussion of his compensation.
GENERAL
Total compensation received by the named executive officers consists of salary,
cash bonus, stock options and restricted stock. The total compensation has been
designed to attract the most qualified talent, motivate them to reach their
highest level of achievement, reward sustained superior performance and retain
those senior managers whose competencies are prerequisite to shareholder value
appreciating over the long term. The cash bonus and long-term incentives
introduce considerable risk in the total executive compensation package, since
the value of these components may vary significantly from year to year based on
Company performance, individual performance and Company stock price.
The Committee periodically reviews each component of the Company's executive
compensation program to ensure that pay levels and incentive opportunities are
competitive and that incentive opportunities are linked to Company performance.
The Committee relates total compensation levels for the Company's executives to
the compensation paid at a select group of comparator companies. The Committee
reviews and approves
14
<PAGE>
the selection of companies used for compensation comparisons. International
Paper also uses independent compensation consulting firms to advise the
Committee. In 1997, the comprehensive pay study of incentive-eligible positions
originally conducted in 1996, was updated and expanded, and included a cross
section of 31 manufacturing companies. The 31 manufacturing companies included
in the pay study are in industries that are close in size ($19.5 billion average
revenue) and manufacturing complexity to International Paper and compete
directly with International Paper for executive talent. The Company's
compensation levels for each component of pay were compared to the median of the
comparator group's competitive pay.
The Company's Management Incentive Plan (MIP) was amended in 1997 and directly
links payment of an annual cash bonus to the achievement of (1) the Company's
return on investment versus budget; (2) the Company's return on investment
compared to Peer Paper Group's (eight companies which comprise the Peer Line of
the Performance Graphs on pages 18 and 19); and (3) predetermined targets of
qualitative nonfinancial performance factors, such as quality, safety and
environment and people development. The Plan was amended to emphasize return on
investment rather than net after tax earnings; create three separate performance
measures which independently fund the MIP pool; and calculate individual awards
on differing allocations of emphasis on performance measures. Performance in
1997 against financial targets was above threshold but did not achieve 100% of
goal in one case and achieved 100% of goal in the other; performance compared to
nonfinancial targets met or exceeded the goals for 1997. Accordingly, the bonus
awards as set out on page 20 were earned in 1997. There was no fund generated in
1996.
The Company's Long-Term Incentive Compensation Plan and amendments, which were
approved by the shareholders in 1989 and 1994, respectively, provide for awards
of stock options and restricted stock in the form of performance shares which
are made in amounts which the Committee determines to be competitive based on
the study described above. Stock options are granted at fair market value at the
time of the award and are restricted for four years. Contingent awards of
performance shares are made in December of the year preceding a five-year Award
Period. At the end of the five-year Award Period, the number of shares earned is
determined by financial performance which the Committee measures by comparing
the Company's and Peer Paper Group's (eight companies which comprise the Peer
Group Line of the Performance Graphs on pages 18 and 19) and weighing equally,
the five-year average return on equity and earnings per share. If the threshold
level of performance is not attained, no shares are earned. Above the threshold,
the contingent award is reduced if the target goal is not met or supplemented if
the target goal is exceeded. Adjustments in the number of shares earned can be
made by the Committee with any such adjustments offset by reductions in other
awards made under the Company's Long-Term Incentive Compensation Plan or other
Company bonus awards. Payouts of earned performance shares are made in Company
stock at the end of the five-year Award Period. One half of the shares earned is
mandatorily deferred for an additional three years, and payout is subject to the
executive's continued employment throughout that period.
From time to time executive continuity awards are made with long-term vesting
requirements which are designed to encourage retention of a small number of
15
<PAGE>
senior executives designated by the Committee. The size of an award, and any
adjustments, is determined by the Committee to reflect an executive's level of
responsibility and individual performance. As provided by the Company's
Long-Term Incentive Compensation Plan, a continuity award may consist of
restricted stock or a tandem grant of restricted stock together with a related
non-qualified stock option which is granted at fair market value and restricted
until a specified age. If the stock option is exercised, then the related
restricted shares are canceled; if any portion of the stock option is not
exercised by the date the continuity award terminates, then the less valuable
component of the tandem award is canceled.
The Committee has considered the provisions of the Omnibus Budget Reconciliation
Act of 1993 which limit deductibility of compensation paid to named executive
officers which exceeds $1 million. The Committee endorsed amendments to the
Company's Long-Term Incentive Compensation Plan in 1994 to make certain sections
of the Plan compatible with those provisions, while maintaining the Committee's
flexibility in the Company's Management Incentive Plan to exercise business
judgment in determining awards to take account of business conditions or the
performance of individual executives. In 1997, the Committee recognized that a
portion of Mr. Dillon's total current compensation was above $1 million.
THE 1997 EXECUTIVE OFFICERS' COMPENSATION
The Committee approved merit salary increases for all named executive officers
based on competitiveness of the executives' pay and personal performance. In
April 1997, Mr. Dillon's salary was increased to $900,000, which is below the
median base salary level for CEO's in the group of surveyed companies referred
to above. Salaries paid to the named officers in 1997, were competitively
positioned from below to slightly above the median of the survey companies.
MIP awards for the named executive officers in 1997 were determined by the
Committee after review of Company and personal performance compared to
predetermined 1997 financial and nonfinancial goals. All named executive
officers' MIP awards increased compared to 1996 since no bonus fund was
generated for that year.
The performance share guidelines described above were used by the Committee to
determine contingent performance share awards in December 1997 to the named
executive officers for the 1998-2002 Award Period and the payouts in 1997 of
earned shares for the 1992-1996 Award Period. The pretax value of Mr. Dillon's
performance share award in 1997 was $1,421,000 in contingent restricted stock
for the 1998-2002 Award Period. The actual payout of this award will not be
determined until 2003. Awards for the 1992-1996 Award Period were slightly below
target; accordingly, the pretax values of Mr. Dillon's award, paid in 1997,
including accrued dividends, were $291,747 in deferred restricted stock; and
$291,747 in earned shares. The shares earned for the 1992-1996 Award Period
reflect Company performance which compared with the somewhat better performance
of the Peer Paper Group.
The Committee granted stock options in 1997 based on earlier described
competitive surveys of senior managers' total compensation packages, without
consideration of the amount of stock options already held by named executive
officers. Mr. Dillon's 1997 stock option award was 104,000 shares reflecting his
promotion to chief executive officer; his 1996 stock option award was 26,000
16
<PAGE>
shares; and his 1995 stock option awards were 19,737 shares which reflected his
promotion to president.
In 1997, no named executive officers were granted continuity awards.
THE MANAGEMENT DEVELOPMENT AND COMPENSATION
COMMITTEE OF THE BOARD OF DIRECTORS
Peter I. Bijur
Willard C. Butcher
Robert J. Eaton, chairman
Thomas C. Graham
Edmund T. Pratt, Jr.
Charles R. Shoemate
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No executive officer or other employee of the Company served as a member of the
Committee or as a member of the compensation committee on the board of any
company where an executive officer of such company is a member of the Committee.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers and directors among others, to file reports of ownership and
changes in ownership of such securities with the Securities Exchange Commission
and the New York Stock Exchange. Copies of these reports must also be furnished
to the Company. Based solely upon a review of the copies of the forms filed
under Section 16(a) and furnished to the Company, or written representations
from reporting persons, the Company believes that all filing requirements
applicable to its executive officers and directors were complied with during
1997, except that C. Wesley Smith, a director and executive officer,
inadvertently failed to file a report reflecting his sale of stock in December
1997, but made a late filing of such report immediately upon discovery of the
oversight.
17
<PAGE>
PERFORMANCE GRAPHS
The following charts compare a $100 investment in International Paper stock with
a similar investment in a peer group of eight key competitor companies and the
S&P 500. The charts portray total nominal return, 1992-1997 and 1987-1997
assuming reinvestment of dividends. The Company has presented information
pertaining to total shareholder return over two different time periods since all
holders of the common stock did not acquire their investment in International
Paper on the same date. The Company believes a presentation in this format more
accurately reflects the financial return provided to the holders of its common
stock which may not be evident if only one time period was highlighted.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
FIVE YEARS ENDED DECEMBER 31, 1997*
DOLLARS
International Paper S&P 500 Index Peer Group**
<S> <C> <C> <C>
1992 100 100 100
1993 104 110 114
1994 119 111 117
1995 122 153 128
1996 134 189 138
1997 146 251 149
</TABLE>
Assumes $100 invested on December 31, 1992.
*Total return assumes reinvestment of dividends.
**Includes Boise Cascade, Champion, Georgia Pacific, Mead,
Stone Container, Union Camp, Westvaco, and Weyerhaeuser.
18
<PAGE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
COMPARISON OF TEN-YEAR CUMULATIVE TOTAL RETURN*
DOLLARS
International Paper S&P 500 Index Peer Group**
<S> <C> <C> <C>
1987 100 100 100
1988 113 117 106
1989 141 154 116
1990 138 149 94
1991 188 194 128
1992 181 209 143
1993 189 230 162
1994 215 233 168
19 222 320 182
1996 243 394 197
1997 265 525 213
</TABLE>
Assumes $100 invested on December 31, 1987.
* Total return assumes reinvestment of dividends.
** Includes Boise Cascade, Champion, Georgia Pacific, Mead,
Stone Container, Union Camp, Westvaco, and Weyerhaeuser.
19
<PAGE>
ADDITIONAL INFORMATION
REGARDING EXECUTIVE COMPENSATION
The compensation of the Company's executive officers is approved by the
Committee except for the compensation of the officer-directors, which is
recommended by the Committee and approved by the Board of Directors.
The following tables set forth information with respect to the five most highly
compensated executive officers of the Company for the years 1995-1997.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION
---------------------
ANNUAL COMPENSATION CONTINGENT AWARDS
---------------------------------- ---------------------
(a) (b) (c) (d) (e) (f) (g) (h)
OTHER RESTRICTED
ANNUAL STOCK ALL OTHER
SALARY BONUS COMPENSATION AWARD OPTIONS COMPENSATION
NAME AND POSITION YEAR ($) (1) ($) (2) ($) (3) ($) (4) (#) (5) ($) (6)
<S> <C> <C> <C> <C> <C> <C> <C>
John T. Dillon as 1997 $ 862,500 $ 850,000 $ 0 $1,421,001 160,300 $ 153,497
Chief Executive Officer 1996 $ 712,500 $ 0 $ 0 $3,400,911 26,000 $ 172,397
1995 $ 490,417 $ 600,000 $ 0 $1,771,108 35,737 $ 129,717
C. Wesley Smith as 1997 $ 465,000 $ 310,000 $ 0 $ 345,539 72,900 $ 97,052
Executive Vice President 1996 $ 429,667 $ 0 $ 0 $ 340,423 25,000 $ 114,086
1995 $ 380,750 $ 410,000 $ 0 $ 367,619 36,600 $ 93,299
James P. Melican as 1997 $ 493,333 $ 275,000 $ 0 $ 316,204 96,600 $ 93,834
Executive Vice President 1996 $ 471,667 $ 0 $ 0 $ 311,518 15,400 $ 111,882
1995 $ 446,667 $ 410,000 $ 0 $ 248,987 27,700 $ 106,803
David W. Oskin as 1997 $ 422,917 $ 275,000 $ 490,491 $ 316,204 57,500 $ 51,328
Executive Vice President 1996 $ 397,917 $ 0 $ 0 $ 745,974 50,800 $ 143,199
1995 $ 461,315 $ 129,410 $ 149,719 $ 400,131 12,000 $ 256,608
Milan J. Turk as 1997 $ 355,000 $ 250,000 $ 0 $ 289,301 74,200 $ 58,088
Executive Vice President 1996 $ 332,083 $ 0 $ 0 $1,137,962 12,000 $ 68,842
1995 $ 293,750 $ 260,000 $ 0 $ 191,405 27,200 $ 60,554
</TABLE>
(1) Salary paid in 1997 including amounts deferred pursuant to Section 401(K) of
the Internal Revenue Code or pursuant to unfunded deferral arrangements.
Includes, for 1995, Mr. Oskin's salary paid by Carter Holt Harvey, Ltd.
during the six months after which it became a Company subsidiary.
(2) Management Incentive Plan awards paid in 1998 and 1996 attributable to 1997
and 1995 respectively, including amounts deferred pursuant to Section 401(K)
of the Internal Revenue Code or pursuant to deferral arrangements reported
in the year earned. No awards were paid for 1996.
20
<PAGE>
(3) Includes payment in 1995 of household maintenance expenses and home leave of
$81,477 and $47,018, respectively, and reimbursement, plus tax gross-up for
interest paid by Mr. Oskin on a third party loan undertaken in connection
with an expatriate assignment from 1993 to 1995 with an affiliate, later a
subsidiary.
(4) Represents (a) 100% of the value of gross target restricted performance
shares contingently awarded in 1997 for the 1998-2002 Award Period, in 1996
for the 1997-2001 Award Period, and in 1995 for the 1996-2000 Award Period
which are earned if the target goal is met for an Award Period. The awards
are reduced if the goal is not met, or entirely forfeited if a predetermined
threshold goal is not met. 150% of the value of the target restricted
performance shares are earned if the target goal is exceeded by a
predetermined percentage; (b) 100% of the value of incremental target awards
for prior periods made upon promotion, subject to the same contingencies;
and (c) the value of continuity awards of $840,000 in 1996 and $858,750 in
1995 for Mr. Dillon; $336,000 in 1996 for Mr. Oskin; and $648,000 in 1996
for Mr. Turk. The number and dollar value of restricted stock holdings at
December 31, 1997 are as follows: 220,515/$9,509,728 for Mr. Dillon;
96,452/$4,159,497 for Mr. Smith; 94,655/$4,082,017 for Mr. Melican;
92,179/$3,975,226 for Mr. Oskin; and 90,985/$3,923,707 for Mr. Turk. These
numbers include the restricted stock portion of the tandem awards of
restricted stock/options made to the respective individuals under continuity
awards. Dividends are paid on restricted shares.
(5) Includes replacement options if applicable. These figures do not include the
tandem option awards made as a part of the continuity awards, insofar as the
awards are characterized as restricted stock awards. Such tandem options
were for 100,000 shares for Mr. Dillon in 1996 and 1995; 40,000 shares for
Mr. Oskin in 1996; and 80,000 shares for Mr. Turk in 1996.
(6) 1997 totals represent Company contributions to the Salaried Savings Plan and
Unfunded Savings Plan, cost of group life, premium payments grossed up for
taxes for the Executive Supplemental Insurance Plan (ESIP), accruals for
ESIP lump-sum dividend payments as follows: $41,400, $15,075, $76,176 and
$20,846 for Mr. Dillon; $22,320, $12,049, $45,462 and $17,221 for Mr. Smith;
$23,689, $12,811, $37,010 and $20,323 for Mr. Melican; $7,800, $5,949,
$28,208 and $9,372 for Mr. Oskin; and $17,050, $9,092, $31,946 and $0 for
Mr. Turk.
21
<PAGE>
The table below sets out information on the option grants made in 1997 to the
named executive officers:
<TABLE>
<CAPTION>
OPTION GRANTS IN 1997
INDIVIDUAL GRANTS
(a) (b) (c) (d) (e) (f)
% OF TOTAL
OPTIONS OPTIONS GRANTED EXERCISE OR GRANT DATE
GRANTED TO EMPLOYEES BASE PRICE EXPIRATION VALUE
NAME AND POSITION (#) (1) IN 1997 ($/SH) DATE ($) (2)
<S> <C> <C> <C> <C> <C>
John T. Dillon as 12,300(4) 0.22% $ 57.688 01/10/99 $ 113,731
Chief Executive Officer 14,000(4) 0.26% $ 57.688 01/09/00 $ 161,546
14,000(4) 0.26% $ 57.688 01/08/01 $ 161,546
16,000(4) 0.29% $ 57.688 01/14/02 $ 184,624
85,000(3) 1.55% $ 42.875 01/14/07 $ 996,863
19,000(3) 0.35% $ 41.000 01/29/07 $ 213,083
C. Wesley Smith as 8,600(4) 0.16% $ 54.938 01/09/00 $ 94,505
Executive Vice President 8,600(4) 0.16% $ 54.938 01/08/01 $ 94,505
8,600(4) 0.16% $ 54.938 01/14/02 $ 94,505
13,600(4) 0.25% $ 54.938 01/12/03 $ 149,450
25,000(3) 0.46% $ 42.875 01/14/07 $ 293,195
8,500(3) 0.16% $ 41.000 01/29/07 $ 95,327
James P. Melican as 9,600(4) 0.18% $ 56.125 01/10/99 $ 88,221
Executive Vice President 12,300(4) 0.22% $ 56.125 01/09/00 $ 138,086
13,600(4) 0.25% $ 56.125 01/08/01 $ 152,680
15,400(4) 0.28% $ 56.125 01/14/02 $ 172,888
15,400(4) 0.28% $ 56.125 01/12/03 $ 172,888
22,000(3) 0.40% $ 42.875 01/14/07 $ 258,012
7,700(3) 0.14% $ 41.000 01/29/07 $ 86,355
David W. Oskin as 8,600(4) 0.16% $ 49.000 01/10/99 $ 71,126
Executive Vice President 9,600(4) 0.18% $ 43.000 01/14/02 $ 82,571
9,600(4) 0.18% $ 43.000 01/12/03 $ 82,571
22,000(3) 0.40% $ 42.875 01/14/07 $ 258,012
7,700(3) 0.14% $ 41.000 01/29/07 $ 86,355
Milan J. Turk as 9,600(4) 0.18% $ 57.688 01/12/03 $ 110,774
Executive Vice President 9,600(4) 0.18% $ 57.688 01/11/04 $ 110,774
12,000(4) 0.22% $ 57.688 01/10/05 $ 138,468
12,000(4) 0.22% $ 57.688 01/09/06 $ 145,302
17,000(3) 0.31% $ 42.875 01/14/07 $ 199,373
7,000(4) 0.13% $ 57.688 01/29/07 $ 101,361
7,000(3) 0.13% $ 41.000 01/29/07 $ 78,504
</TABLE>
(1) Each option granted may be replaced upon exercise. This means that a new
option is granted for the same number of shares as is exercised, with the
then current market value becoming the new exercise price. The replacement
option does not extend the term of the original option. Options may not be
replaced more than three times. Original options are indicated by "(3)" and
replacement options by "(4)". These numbers do not include any options
granted as part of the tandem awards of restricted stock/options made as
continuity awards in 1997. The restricted stock is reported as part of the
total holdings of the respective individuals under footnote 3 to the Summary
Compensation Table.
(2) Grant date value is based on the Black-Scholes option pricing model adapted
for use in valuing stock options. The real value of the options in this
table depends upon the actual
22
<PAGE>
performance of the Company's stock during the applicable period and upon
when they are exercised. The Company believes that no model accurately
predicts the future price of International Paper's stock or places an
accurate present value on stock options. The grant date values were
determined based upon the following assumptions:
<TABLE>
<CAPTION>
ORIGINAL (3) REPLACEMENT (4)
------------- -----------------
<S> <C> <C>
Expected volatility.............................................. 29.50% 29.50%
Risk-free rate of return......................................... 6.32% 6.31%
Dividend yield................................................... 2.50% 2.31%
Expected term (years)............................................ 4.37 2.22
</TABLE>
The table below sets out the information on options exercised and options
outstanding:
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN 1997
AND DECEMBER 31, 1997 OPTION VALUES
(a) (b) (c) (d) (e) (f) (g)
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY
OPTIONS AT
SHARES VALUE REALIZED($) OPTIONS AT 12/31/97(#)(5) 12/31/97($)(5)
ACQUIRED ON ---------------------- ------------------------- -------------------------
EXERCISE AGGREGATE ANNUALIZED RESTRICTED UNRESTRICTED RESTRICTED
NAME AND POSITION (#)(1) (1) (2) UNRESTRICTED (3) (4) (3)(4)
<S> <C> <C> <C> <C> <C> <C> <C>
John T. Dillon as 79,300 $1,573,700 $334,136 84,600 165,737 $ 26,138 $342,638
Chief Executive Officer
C. Wesley Smith as 43,400 $ 871,550 $299,470 47,400 81,300 $ 0 $257,100
Executive Vice President
James P. Melican as 84,800 $1,398,255 $413,656 75,900 75,900 $ 0 $248,050
Executive Vice President
David W. Oskin as 42,600 $ 355,893 $190,725 54,600 66,700 $ 72,000 $196,988
Executive Vice President
Milan J. Turk as 50,200 $1,018,613 $576,794 32,400 57,600 $117,800 $ 4,250
Executive Vice President
</TABLE>
(1) The number of incremental shares retained on exercises by Mr. Dillon and
Mr. Turk was 14,728 and 9,721 shares respectively.
(2) Represents the aggregate incremental value realized divided by the number
of years the option was held prior to exercise.
(3) All options are exercisable under the plan upon grant; however, columns
(e) and (g) indicate the number and value of options, the underlying
shares of which, while exercisable, cannot be sold or are otherwise
restricted.
(4) Total value of options (market value minus exercise price) based on fair
market value of Company stock of $43.125, as of December 31, 1997.
(5) Options granted as part of the tandem awards of restricted stock/options
made as continuity awards are not included.
23
<PAGE>
RETIREMENT BENEFITS
The following table shows the total estimated annual pension benefits payable
under the Company's qualified and supplementary retirement plans upon retirement
at age 65, calculated on a straight life annuity basis and reduced by a Social
Security offset:
<TABLE>
<CAPTION>
COMBINED RETIREMENT PLAN
TABLE OF ESTIMATED BENEFITS
CREDITABLE YEARS OF SERVICE
PENSIONABLE ----------------------------------------------------------------
REMUNERATION 5 10 15 20 25 30
<S> <C> <C> <C> <C> <C> <C>
$ 400,000 $ 100,000 $ 124,829 $ 187,243 $ 192,044 $ 192,044 $ 192,444
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
$ 600,000 $ 150,000 $ 189,829 $ 284,743 $ 292,044 $ 292,044 $ 292,644
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
$ 800,000 $ 200,000 $ 254,829 $ 382,243 $ 392,044 $ 392,044 $ 392,844
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
$1,000,000 $ 250,000 $ 319,829 $ 479,743 $ 492,044 $ 492,044 $ 493,044
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
$1,500,000 $ 375,000 $ 482,329 $ 723,493 $ 742,044 $ 742,044 $ 743,544
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
$2,000,000 $ 500,000 $ 644,829 $ 967,243 $ 992,044 $ 992,044 $ 994,044
</TABLE>
"Pensionable Remuneration" for purposes of the table above means salary, bonus
and compensation deferred under the Unfunded Savings Plan or awards deferred
under the MIP.
Retirement benefits are payable under one or more of the following plans: a
qualified plan covering all salaried employees which provides pension benefits
based on final average earnings; a supplementary plan which provides a make-up
of qualified plan benefits limited by the imposition of statutory Code
limitations; and a supplementary plan covering designated senior managers which
provides supplemental benefits to the qualified plan. At December 31, 1997, the
number of creditable years of service and the currently applicable average
pensionable remuneration (NOT the pension) under the retirement plans for the
following are:
<TABLE>
<CAPTION>
NAME YEARS AMOUNT
- ------------------------------ --------- -------------
<S> <C> <C>
Mr. Dillon.................... 30.92 $ 1,712,500
Mr. Smith..................... 17.33 $ 790,750
Mr. Melican................... 13.92 $ 856,667
Mr. Oskin..................... 22.25 $ 697,917
Mr. Turk...................... 7.67 $ 605,000
</TABLE>
COMPENSATION OF DIRECTORS
COMPENSATION AND BENEFITS
The compensation of each non-employee director of the Company is a retainer fee
of $36,000 per year plus fees of $1,500 for each Board and Committee or other
meeting attended. Directors may elect to defer receipt of all or part of their
remuneration until a later date under a Deferred Compensation Plan, at which
time the director will be paid in
24
<PAGE>
cash equal to (1) the cash amount deferred plus interest at the higher of 6% per
annum or the yield of U.S. Treasury bills or (2) the value at the time of
payment of units equivalent to the value of Company common stock credited to the
director's account at the time of each deferral, plus dividend equivalents. In
addition, there is a compulsory portion to the Deferred Compensation Plan. Under
this, each non-employee director, 54 years or older, is credited with 300 common
stock equivalent units each year which remain in the Plan until death,
disability or retirement. The common stock units held in each non-employee
director's account are credited with dividend equivalents. Upon retirement, the
amounts will be paid in cash. Employees of the Company who are also directors
receive no compensation for services as a director or for attendance at Board or
Committee meetings.
In addition, under the Non-Employee Directors Restricted Stock Plan, awards of
2,100 shares of common stock are made upon the election or re-election of a
director to a full three-year term, or a pro-rata amount for the appointment of
a non-employee director to fill an unexpired term. Awards made in 1997 were
2,100 shares each for Class III directors and a pro-rata award to one newly
elected director. Directors receive dividend payments represented by the shares
awarded under the Restricted Stock Plan at $0.25 per share per quarter.
As part of its overall program to promote charitable giving to education and
assist corporate recruiting and research efforts, the Company has established a
directors' planned gift program funded by life insurance policies on all
directors. Upon the death of an individual director, the Company will donate $1
million over a ten-year period to one or more qualifying universities or
colleges recommended by the individual director and the Company will be
reimbursed by life insurance proceeds. Individual directors derive no financial
benefit from this program since charitable deductions accrue solely to the
Company. The program does not result in any material cost to the Company.
IP FOREST RESOURCES COMPANY
Further, four of the non-employee directors of the Company serve as directors of
IP Forest Resources Company ("IPFR"), a wholly-owned subsidiary which acts as
the managing general partner of IP Timberlands, Ltd., a New York Stock
Exchange-listed limited partnership. As such, each of the four non-employee
directors receives a retainer fee of $7,000 per year plus a fee of $1,500 for
each IPFR Board and Committee meeting attended. These fees are paid by IPFR.
There were six meetings of the Board and four Committee meetings in 1997.
INDEMNIFICATION INSURANCE AND CONTRACTS
The Company provides liability insurance for the Company's directors and all
elected officers, as well as contractual arrangements with directors and certain
officers of the Company, agreeing to compensate them for costs and liabilities
incurred in actions brought against them while acting as directors or officers.
On June 15, 1997, the Company amended its policies with Federal Insurance
Company and National Union Insurance Company and purchased a policy with Zurich
Insurance Company at a current annual period cost aggregating $600,000, such
policies expiring on June 15, 1998. No monies have been paid under such policies
by the carrier or by the Company under the contractual arrangements.
25
<PAGE>
TERMINATION AGREEMENTS
The Company has agreements with members of the executive officer group,
providing for payments and other benefits if there is a change of control of the
Company and the officer's employment is terminated (i) by the Company or its
successor, other than for cause, disability or retirement, or (ii) by the
officer if the chief executive officer of the Company ceases to hold that
position for reasons other than cause, retirement or disability, or if the
officer determines that by reason of adverse changes in, among other things, the
officer's authority, compensation, duties, office location or responsibilities,
the officer is unable to perform the duties and responsibilities of the position
the officer held immediately prior to the change in control. These agreements
provide that if the officer's employment terminates under the circumstances
described above, the officer will receive: (a) continuation of medical and
dental insurance coverage until age 65 or eligibility to join a comparable plan
sponsored by another employer; (b) retiree medical coverage comparable to the
Company's pre-change of control retiree medical plan; (c) a lump-sum payment
equal to (i) his annual salary at termination together with his most recent
short-term annual incentive compensation payment during the year preceding
termination, multiplied by the smaller of the number "three" or the number of
years between the termination date and the date he reaches age 65 and (ii) an
amount necessary to offset any special federal excise tax on all payments
received under the termination agreement.
In addition to the foregoing provisions, Mr. Dillon's agreement can be triggered
by a voluntary termination at any time within 18 months of the change in
control. The agreement provides him with the above benefits as well as (a)
payment of vested benefits under the pension plan which entitlement shall
include payments made under the agreement which constitute "compensation" under
the pension plan; (b) a lump-sum payment equal to the difference between (i) the
actuarial value on termination date of accrued vested pension benefits and (ii)
the actuarial value on termination date of what accrued pension benefits would
have been if the period and payments set out in (c)(i) and (c)(ii) below were
recognized under the pension plan; (c) a lump-sum payment equal to (i) his
annual salary at termination, (ii) the average of his short-term incentive
compensation award for three years preceding termination and (iii) the value of
his average earned award under the Performance Share Award Plan (PSA) for three
years preceding termination, multiplied by the number "four"; (d) a lump-sum
payment equal to the value of any deferred incentive compensation or PSA awards
and unvested Company matching contributions under the Salaried Savings Plan; (e)
stock options equal to the average number of options awarded during the three
years preceding termination, multiplied by the number "four", plus the extension
of each option held until the end of the normal term of such option if he had
not left the Company.
The Board requires unanimous approval at a meeting of the Management Development
and Compensation Committee, composed solely of non-employee directors, and
majority approval by the Board before any termination agreement such as those
described above is amended or entered into. The potential cost of satisfying the
payments called for under the above-described termination agreements, prior to
tax "gross-up", if there had been a change in control and all of the members of
the executive officer group described in the Summary Compensation Table had
26
<PAGE>
been terminated on December 31, 1997, would have been approximately $25 million.
In addition to the foregoing, the Long-Term Incentive Compensation Plan contains
provisions that release restrictions from stock awards and stock options for all
members of the group if there is a change of control of the Company. Also, the
Supplemental Retirement Plan for Senior Managers provides that if a change of
control of the Company occurs, pension benefits will vest immediately and the
minimum benefit will be increased from 25% to 50% of pensionable remuneration.
The Company has authorized a grantor trust under Sections 671 through 677 of the
Code in connection with the Company's benefit plans and termination agreements.
Under the grantor trust, the trustee will pay the beneficiaries of the trust the
amounts to which they are entitled under such plans and agreements subject to
claims of the Company's creditors.
27
<PAGE>
[INTERNATIONAL PAPER LOGO]
TWO MANHATTANVILLE ROAD
PURCHASE, NEW YORK 10577
Printed on Hammermill Papers, Accent Opaque 50 lbs.
Hammermill Papers is a division of International Paper.
<PAGE>
[LOGO]
TWO MANHATTANVILLE ROAD, PURCHASE, N.Y. 10577
- -------------------------------------------------------------------------------
This proxy is solicited on behalf of the Board of Directors and will be
voted FOR Item 1, the election of Class I Directors, FOR Item 2, and AGAINST
Item 3, if no instructions to the contrary are indicated.
The undersigned hereby appoints John T. Dillon and C. Wesley Smith, jointly
or individually, proxies with power of substitution to vote all shares the
undersigned is entitled to vote at the Annual Meeting of Shareholders on May 12,
1998 or adjournment thereof. The proxies are instructed as indicated on the
reverse side. This proxy revokes all prior proxies given by the undersigned.
Please sign on the reverse side exactly as name or names appear there. If
stock is held in name of joint holders, each should sign. If you are signing as
trustee, executor, etc., please so indicate.
<PAGE>
The Board of Directors Recommends a vote "FOR"
proposals 1 and 2 and "AGAINST" 3.
Please mark
your vote as
indicated in X
this example
CLASS I (3-YEAR TERM)
The Board Recommends a vote "FOR"
Item 1 -- Election of the following
nominees as Directors:
FOR / /
WITHHOLD / /
FOR ALL EXCEPT / /
01 Peter I. Bijur
02 John T. Dillon
03 John R. Kennedy
________________________________
Except Nominee(s) written above
The Board Recommends a vote "FOR"
Item 2 -- Appointment of Independent
Auditors
FOR / /
AGAINST / /
ABSTAIN / /
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE "AGAINST" ITEM 3 -- PROPOSAL
RELATING TO A CHLORINE PHASEOUT
FOR / /
AGAINST / /
ABSTAIN / /
- --------------------------------------------------------------------------------
**PLEASE RETURN YOUR PROXY OR IF YOU WISH TO VOTE BY TELEPHONE,
PLEASE READ THE INSTRUCTIONS BELOW**
- --------------------------------------------------------------------------------
In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
Signature(s)___________________________________________________ DATE____________
NOTE: Please sign as name appears hereon. Joint owners should each sign.
When signing as attorney, executor, administrator, trustee or guardian, please
give full title as such.
<PAGE>
[LOGO]
To Participants in the Salaried Savings Plan and Retirement Savings Plan of
International Paper Company:
As a participant in the Plan(s), with full shares of the Company's common
stock allocated to your account as of December 31, 1997, you may instruct the
Trustee how to vote such shares at the Annual Meeting of Shareholders to be held
May 12, 1998. The 1997 Annual Report and the Board of Directors proxy statement
are enclosed.
Your instructions to the Trustee will be held in strict confidence and will
be made available only to the inspectors of election, none of whom is an
employee of the Company. Under the terms of the Plan(s), you have the right to
give voting instructions for all shares allocated to your account, whether or
not you have a vested interest in those shares. Please use the voting
instruction card on the reverse to give your instructions.
Any shares held by the Trustee for which it has not received voting
instructions by May 6, 1998 will be voted by the Trustee in its discretion
consistent with its fiduciary duties. Any shares held by the Trustee for which
it has been instructed to sign the Board of Directors proxy, with no additional
instructions to the contrary indicated, will be voted as follows: FOR Item 1,
the election of Class I Directors, FOR Item 2, and AGAINST Item 3.
STATE STREET BANK & TRUST CO., N.A.,
TRUSTEE
<PAGE>
To State Street Bank & Trust Co., N.A., Trustee of the Salaried Savings Plan
and Retirement Savings Plan of International Paper: I understand that the Board
of Directors proxy referred to on the reverse authorizes the proxy holders to
vote "FOR" or "WITHHOLD AUTHORITY" on the election of Class I Directors, to vote
"FOR", "AGAINST", or "ABSTAIN" on Items 2 and 3, and in their discretion, on any
other business that may properly come before the meeting.
Please mark
your vote as
indicated in X
this example
CLASS I (3-YEAR TERM)
The Board Recommends a vote "FOR"
Item 1--Election of the following
nominees as Directors:
FOR / /
WITHHOLD / /
FOR ALL EXCEPT / /
01 Peter I. Bijur
02 John T. Dillon
03 John R. Kennedy
_____________________________________
Except Nominee(s) written above
The Board Recommends a vote "FOR"
Item 2--Appointment of Independent
Auditors
FOR / /
AGAINST / /
ABSTAIN / /
The Board of Directors Recommends
a vote "AGAINST" Item 3--Proposal
relating to a chlorine phaseout
FOR / /
AGAINST / /
ABSTAIN / /
- --------------------------------------------------------------------------------
**PLEASE RETURN YOUR PROXY OR IF YOU WISH TO VOTE BY TELEPHONE,
PLEASE READ THE INSTRUCTIONS BELOW**
- --------------------------------------------------------------------------------
TRUSTEE AUTHORIZATION
I hereby authorize State Street Bank & Trust Co., N.A. as Trustee under
the Salaried Savings Plan and the Retirement Savings Plan to vote the
shares of Common Stock held for my account under said Plan(s) at the
Annual Meeting in accordance with the instructions given above.
State Street Bank & Trust Co., N.A., Trustee, has appointed Chase Mellon
Shareholder Services L.L.C. as Agent to tally the votes.
Signature(s)___________________________________________________ DATE____________
NOTE: Please sign as name appears hereon. Joint owners should each sign.
When signing as attorney, executor, administrator, trustee or guardian, please
give full title as such.
<PAGE>
[LOGO]
TWO MANHATTANVILLE ROAD
PURCHASE, NEW YORK 10577
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS AND WILL BE VOTED
FOR THE ELECTION OF CLASS I DIRECTORS, FOR ITEM 2 AND AGAINST ITEM 3 IF NO
INSTRUCTIONS TO THE CONTRARY ARE INDICATED.
The undersigned hereby appoints JOHN T. DILLON and C. WESLEY SMITH, jointly or
individually, proxies with the power of substitution to vote all shares the
undersigned is entitled to vote at the Annual Meeting of Shareholders on May 12,
1998 or adjournments thereof:
<TABLE>
<S> <C> <C>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEM 1.--Election of the following nominees
as Directors:
CLASS I (3-YEAR TERM) For all Withheld for
Peter I. Bijur Nominees Nominees
John T. Dillon / / / /
John R. Kennedy
Withheld for the following only:
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEM 2.--Appointment of Independent Auditors.
FOR AGAINST ABSTAIN
/ / / / / /
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST ITEM 3--Proposal relating to a chlorine phaseout.
FOR AGAINST ABSTAIN
/ / / / / /
</TABLE>
PLEASE SIGN YOUR NAME(S) ON THE REVERSE SIDE.
<PAGE>
In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
Please sign exactly as name appears on this card. If stock is held in name
of joint holders, each should sign. If you are signing as a trustee, executor,
etc., please so indicate.
<TABLE>
<S> <C>
DATED: ------------------------------------------------, 1998 -------------------------------------------------------------
Please mark, sign, date and mail the card promptly in the postage Signature
prepaid return envelope provided. -------------------------------------------------------------
Signature if held jointly
</TABLE>
