AMENDED AND RESTATED AS OF FEBRUARY 7, 2005
 
                           INTERNATIONAL PAPER COMPANY
                      LONG-TERM INCENTIVE COMPENSATION PLAN
 
 
1. Purpose and Effective Date
 
       This plan shall be known as the International Paper Company Long-Term
Incentive Compensation Plan (the "Plan"). The purpose of this Plan is to provide
incentive for senior management officers and employees of the Company and its
subsidiaries (the "Company") to improve the performance of the Company on a
long-term basis, and to attract and retain in the employ of the Company persons
of outstanding competence. The terms "subsidiary" and "subsidiaries" as used
herein shall mean corporations which are owned or controlled by International
Paper Company, directly or indirectly.
 
       The effective date of the Plan is January 1, 1989. The Plan was amended
in 1994, 1999, 2000, 2003 and 2004 by a vote of shareholders and in February
2005 by the Committee, as defined below.
 
2. Administration of the Plan
 
     (a)  The Plan shall be administered by a committee (the "Committee") which
          shall be composed of members of the Board of Directors of the Company
          and which shall be constituted so as to permit the Plan to comply with
          the provisions of Rule 16b-3 under the Securities Exchange Act of
          1934, as amended ("1934 Act") (or any successor rule) and Section
          162(m) of the Internal Revenue Code of 1986, as amended (the "Code").
          The Committee is authorized to administer and interpret the Plan, to
          authorize, change, and waive the restrictions and conditions imposed
          on awards and stock options under the Plan, to delegate the granting
          of awards hereunder, and to adopt such rules and regulations for
          carrying out the Plan as it may deem appropriate. Decisions of the
          Committee or its delegates on all matters relating to the Plan shall
          be in the Committee's sole discretion and shall be conclusive and
          binding on all parties, including the Company, the shareholders and
          the participants.
 
     (b)  No member of the Committee or any employee acting on its behalf shall
          incur any liability for any action or failure to act in connection
          with this Plan. The Company shall indemnify each member of the
          Committee and any employee acting on its behalf against any and all
          claims, losses, damages, expenses and liabilities arising from any
          action or failure to act.
 
3. Participants
 
     (a)  Participation in this Plan shall be limited to senior managers and
          other key employees of the Company as determined by the Committee or
          its delegates. Awards of stock and stock appreciation rights and
          grants of stock options may be made to such employees and for such
          respective numbers of Shares, as the Committee or its delegates, in
          their absolute discretion shall determine (all such individuals to
          whom awards and options shall be granted being herein called
          "participants").
 
     (b)  Members of the Board of Directors who are also employees of the
          Company shall be eligible to participate in the Plan. However, members
          of the Board of Directors who are not also employees of the Company
          shall be ineligible for awards under this Plan. Notwithstanding the
          foregoing, any members of the Board of Directors who are also retired
          employees of the Company shall be entitled to the portions of their
          awards which are earned or vested pursuant to the provisions of the
          Plan.
 
 
 
     (c)  A person who is compensated on the basis of a fee or retainer, as
          distinguished from salary, shall not be eligible for participation in
          the Plan.
 
     (d)  Participation in this Plan, or receipt of an award or option under
          this Plan, shall not give a participant any right to a subsequent
          award or option, nor any right to continued employment by the Company
          for any period, nor shall the granting of an award or option give the
          Company any right to continued services of the participant for any
          period. Likewise, participation in the Plan will not in any way affect
          the Company's right to terminate the employment of the participant at
          any time with or without cause.
 
4. Definitions
 
     (a)  "Stock" or "Share" shall mean a share of the common stock of $1.00 par
          value of International Paper Company.
 
     (b)  "Performance Shares" shall mean Shares contingently awarded with
          respect to an Award Period and issued with the restriction that the
          holder may not sell, transfer, pledge, or assign such Shares, and with
          such other restrictions as the Committee in its sole discretion may
          determine (including, without limitation, restrictions with respect to
          forfeiture of the Shares and with respect to reinvestment of dividends
          in additional restricted Shares), which restrictions may lapse
          separately or in combination at such time or times (in installments or
          otherwise) as the Committee may determine.
 
     (c)  "Stock Appreciation Right" or "SAR" shall mean a right included in an
          award under this Plan to receive upon exercise of the SAR a payment
          equal to the amount of the appreciation in the fair market value of a
          Share over the exercise price which is set forth in the SAR provided
          that the exercise price is not less than the fair market value of a
          Share on the date the SAR is granted. Payment upon exercise of an SAR
          may be in the form of cash, or restricted stock, or unrestricted
          stock, or a combination, as determined by the Committee in its sole
          discretion. SARs may be awarded separately or in combination with
          other awards and stock options under this Plan pursuant to terms and
          conditions contained in an award agreement as determined by the
          Committee.
 
     (d)  "Change of Control of the Company" shall mean a change in control of a
          nature that would be required to be reported in response to Item 5(f)
          of Schedule 14A of Regulation 14A promulgated under the 1934 Act;
          provided that, without limitation, such a change in control shall be
          deemed to have occurred if (i) any "person" as such term is used in
          Sections 13(d) and 14(d)(2) of the 1934 Act (other than employee
          benefit plans sponsored by the Company) is or becomes the beneficial
          owner, directly or indirectly, of securities of the Company
          representing 20% or more of the combined voting power of the Company's
          then outstanding securities, or (ii) during any period of two
          consecutive years, individuals who at the beginning of such period
          constitute the Board of Directors of the Company, cease for any reason
          to constitute at least a majority thereof unless the election, or the
          nomination for election, by the Company's shareholders of each new
          director was approved by a vote of at least two-thirds of the
          directors still in office who were directors at the beginning of the
          period.
 
5. Stock Available for the Plan
 
       Subject to the adjustments permitted by Section 6 of the Plan, an
aggregate of 14 million (14,000,000) Shares shall be available under the Plan as
amended by the shareholders at the 2004 Annual Meeting for delivery pursuant to
the future awards, and options granted pursuant to the Plan, together with any
Shares previously authorized by shareholders under the Plan, as previously
amended, which are not yet issued to, or are reacquired from, participants in
the Plan as previously amended. Such Shares shall be either previously unissued
Shares or reacquired Shares. Shares covered by awards which are not earned, or
which are settled in cash, or which are forfeited or terminated for any reason,
and options which expire unexercised or which are exchanged for other awards,
shall again be available for other awards and stock options under the Plan. Shares received by the Company on or prior to May 11, 2014 in connection with the exercise of stock options by
delivery of other Shares, and received in connection with payment of withholding
taxes, shall again be available for awards and options under the Plan. Shares
reacquired by the Company on the open market on or prior to May 11, 2014 using
the cash proceeds received by the Company from the exercise of stock options
granted under the Plan as previously amended shall be available for awards and
options up to the number of Shares issued upon option exercises which generated
such proceeds, provided any such exercise occurred on or after January 1, 1989.
Notwithstanding the foregoing, the maximum number of Shares available for
delivery pursuant to future awards, options and SARs to executive officers of
the Company who, at the time of grant, are subject to the provisions of Section
16 of the 1934 Act shall not exceed 14,600,000 Shares, subject to the
adjustments permitted by Section 6 of the Plan. Notwithstanding any other
provision of this Plan, subject, however, to the adjustments permitted by
Section 6 of the Plan, the aggregate number of Shares that can be covered by
future stock options or SARs granted to any individual in any period of three
consecutive fiscal years shall be 1,800,000, and subject to the adjustments
permitted by this Section 5, the aggregate number of restricted Shares issued
under this Plan after the 1999 annual meeting of shareholders may not exceed
17,100,000 Shares.
 
6. Changes in Stock and Exercise Price of Stock Options and SARs
 
       In the event of any stock dividend, split-up, reclassification or other
analogous change in capitalization or any distribution (other than regular cash
dividends) to holders of the Company's common stock, the Committee shall make
such adjustments, if any, as it deems to be equitable in the exercise price of
outstanding options and SARs, and in the number of Performance Shares awarded
and earned, and in the number of Shares covered by any outstanding stock options
and SARs, granted under this Plan, and in the aggregate number of Shares covered
by this Plan.
 
7. Time of Granting Awards and Stock Options
 
       Nothing contained in this Plan, or in any resolution adopted or to be
adopted by the Board of Directors or the shareholders of the Company, shall
constitute the granting of an award or stock option under this Plan. The
granting of an award or stock option pursuant to the Plan shall take place only
when authorized by the Committee or its delegates.
 
8. Death or Disability of a Participant
 
       In the event of the death of a participant, a stock option or an SAR may
be exercised within one year of the participant's death by the participant's
designated beneficiary or beneficiaries (or if no beneficiary has been
designated or survives the participant, by the person or persons who have
acquired the rights of the participant by will or under the laws of descent and
distribution). If a participant becomes disabled, the participant may exercise a
stock option or an SAR within one year after the date of the disability.
 
       For purposes of this Plan, the term "disabled" shall refer to the
condition of total disability defined in the Company's long-term disability
plan.
 
       A participant may file with the Committee a designation of a beneficiary
or beneficiaries on a form approved by the Committee, which designation may be
changed or revoked by the participant's sole action, provided that the change or
revocation is filed with the Committee on a form approved by it. In case of the
death of the participant, before termination of employment or after retirement
or disability, any portions of the participant's award to which the
participant's designated beneficiary or estate is entitled under the Plan and
the award agreement, shall be paid to the beneficiary or beneficiaries so
designated or, if no beneficiary has been designated or survives such
participant, shall be delivered as directed by the executor or administrator of
the participant's estate.
 
 
9. Retirement of Holder of Stock Option or SAR
 
       If a participant retires under a Company pension plan, the participant
may exercise a stock option or an SAR within its remaining term unless otherwise
provided in the award agreement. Retirement under any of the Company's pension
plans shall cause incentive stock options to be treated for federal income tax
purposes as non-qualified stock options on a date which is three months after
the date of retirement. For purposes of this section, retirement shall be given
the meaning used under the Company's pension plan for salaried employees.
 
10. Non-Transferability of Awards
 
       No award, stock option or SAR under this Plan, and no rights or interests
therein, shall be assignable or transferable by a participant (or legal
representative), except at death by will or by the laws of descent and
distribution unless otherwise permitted by the Committee and by law and, in the
case of incentive stock options, to the extent consistent with Section 422 of
the Code.
 
11. Modification of the Plan
 
       The Board of Directors, without further approval of the shareholders, may
at any time amend the Plan to take into account and comply with any changes in
applicable securities or federal income tax laws and regulations, or other
applicable laws and regulations, including without limitation, any modifications
to Rule 16b-3 under the 1934 Act or Section 162(m) of the Code (or any successor
rule, provision or regulation), terminate or modify or suspend (and if
suspended, may reinstate) any or all of the provisions of this Plan, except that
no modification of this Plan shall without the approval of the Company's
shareholders increase the total number of Shares for which awards, stock options
and SARs may be granted under the Plan (except pursuant to Section 6).
 
12. Impact of Restatement of Financial Statements upon Previous Awards
 
       If any of the Company's financial statements are required to be restated,
resulting from errors, omissions, or fraud, the Committee may (in its sole
discretion, but acting in good faith) direct that the Company recover all or a
portion of any such award made to any, all or any class of participants with
respect to any fiscal year of the Company the financial results of which are
negatively affected by such restatement. The amount to be recovered from any
participant shall be the amount by which the affected award exceeded the amount
that would have been payable to such participant had the financial statements
been initially filed as restated, or any greater or lesser amount (including,
but not limited to, the entire award) that the Committee shall determine. The
Committee may determine to recover different amounts from different participants
or different classes of participants on such bases as it shall deem appropriate.
In no event shall the amount to be recovered by the Company be less than the
amount required to be repaid or recovered as a matter of law. The Committee
shall determine whether the Company shall effect any such recovery (i) by
seeking repayment from the participant, (ii) by reducing (subject to applicable
law and the terms and conditions of the applicable plan, program or arrangement)
the amount that would otherwise be payable to the participant under any
compensatory plan, program or arrangement maintained by the Company or any of
its affiliates, (iii) by withholding payment of future increases in compensation
(including the payment of any discretionary bonus amount) or grants of
compensatory awards that would otherwise have been made in accordance with the
Company's otherwise applicable compensation practices, or (iv) by any
combination of the forgoing.
 
RESTRICTED PERFORMANCE SHARE AWARDS
 
13. Terms and Conditions of Awards of Performance Shares
 
     (a)  Each award of Performance Shares under this Plan shall be contingently
          awarded with respect to a period of consecutive calendar years as
          determined by the Committee (herein called an "Award Period") and
          shall be made from newly issued or reacquired Shares. The first
          complete Award Period under this Plan began with the year 1989. A new
          Award Period shall commence at the beginning of each calendar year.
 
     (b)  The Performance Shares awarded under this Plan will be earned by a
          participant on the basis of the Company's financial performance over
          the Award Period for which it was awarded, on the basis of
          pre-established performance goals determined by the Committee in its
          sole discretion. The Performance measurement criteria used for
          Performance Shares shall be limited to one or more of: earnings per
          share, return on stockholders equity, return on investment, return on
          assets, growth in earnings, growth in sales revenue, and shareholder
          returns. Such criteria may be measured based on the Company's results
          or on the Company's performance as measured against a group of peer
          companies selected by the Committee. In applying such criteria,
          earnings may be calculated based on the exclusion of discontinued
          operations and extraordinary items. Subject to the adjustments
          permitted by Section 6 of the Plan, the maximum number of Performance
          Shares that can be earned for any one individual for any future Award
          Period is 660,000. Subject to such maximum number of Shares, the
          amount, if any, that may be earned by a participant receiving
          Performance Shares may vary in accordance with the level of
          achievement of the performance goal or goals established by the
          Committee.
 
     (c)  A participant's rights with respect to all unearned Performance Shares
          shall terminate at the end of each Award Period.
 
     (d)  The number of Shares determined by the Committee to have been earned
          with respect to any Award Period shall be final, conclusive and
          binding upon all parties, including the Company, the shareholders and
          the participants.
 
     (e)  All dividend equivalents credited on Performance Shares during an
          Award Period shall be reinvested in additional Performance Shares
          (which shall be allocated to the same Award Period, and shall be
          subject to being earned by the participant on the same basis as the
          original award).
 
     (f)  All dividends paid on earned restricted Shares under this part of the
          Plan shall be paid in cash.
 
     (g)  As a condition of any award of Performance Shares under this Plan,
          each award shall be subject to documentation of terms and conditions
          authorized by the Committee. The Committee may in its sole discretion,
          include additional conditions and restrictions to the awards under
          this Plan. Settlements in Shares may be subject to forfeiture and
          other contingencies as the Committee may determine.
 
     (h)  At the discretion of the Committee, SARs may be awarded separately or
          in combination with other awards or grants under this portion of the
          Plan.
 
     (i)  In the event a Change of Control of the Company occurs, then
 
          (A)  all restrictions shall be immediately removed with respect to all
               earned Performance Shares and
 
          (B)  a pro rata portion of each outstanding Award that would have been
               earned were Company performance to reach the goals established by
               the Committee for each uncompleted Award Period shall be deemed
               earned (based on the number of months of the total Award Period
               which have been completed prior to the Change of Control), and
               all restrictions shall be immediately removed with respect to
               that number of shares; the remaining portion of each Award shall
               be cancelled.
 
 
 
STOCK OPTION AWARDS
 
14. Terms and Conditions of Stock Options
 
     (a)  The Committee and its delegates shall have the sole authority to grant
          stock options under this Plan. Such grants may consist of
          non-qualified stock options, or Incentive Stock Options, or any
          combination thereof, as the Committee shall decide from time to time.
          The aggregate fair market value (determined at the time the option is
          granted) of the Stock with respect to which Incentive Stock Options
          are exercisable for the first time by an individual during a calendar
          year shall not exceed $100,000 as determined under Section 422 of the
          Internal Revenue Code or comparable legislation. The maximum number of
          Shares for which stock options can be awarded to any one individual
          over any consecutive three-year period commencing on the effective
          date of the amendment to the Plan is 1,800,000 Shares, subject to the
          adjustments permitted by Section 6 of the Plan.
 
     (b)  The term of each option granted under the Plan shall be set by the
          Committee, but in no event shall an Incentive Stock Option be
          exercised after ten years following the date of its grant under this
          Plan.
 
     (c)  The exercise price of each option granted under the Plan shall be no
          less than the fair market value of the underlying Stock at the time
          the option is granted as determined by the Committee.
 
     (d)  Prior to the exercise of the option and delivery of the Stock
          represented thereby, the participant shall have no rights to any
          dividends nor be entitled to any voting rights on any Stock
          represented by outstanding options.
 
     (e)  As a condition of any grant of a stock option under this Plan, each
          participant shall enter into an award agreement authorized by the
          Committee. The Committee may, in its sole discretion, include
          additional conditions and restrictions in the award agreement entered
          into under this Plan.
 
     (f)  At the discretion of the Committee, SARs may be awarded separately or
          in combination with other awards or grants under this part of the
          Plan.
 
15. Exercise of Stock Options
 
     (a)  Each stock option granted under this Plan shall be exercisable as
          provided in accordance with the document evidencing the option by full
          payment of the option price in cash or at the discretion of the
          Committee in Stock owned by the participant (including Performance
          Shares and other restricted Shares awarded under this Plan). Unless
          otherwise provided herein, a participant may exercise a stock option
          only if he or she is an employee of the Company and has continuously
          been an employee of the Company since the date the option was granted.
 
     (b)  If a stock option under this Plan is exercised by a participant, then,
          at the discretion of the Committee, the participant may receive a
          replacement option under this part of the Plan to purchase a number of
          Shares equal to the number of Shares which the participant purchased
          on the exercise of the option, with an exercise price equal to the
          current fair market value, and with a term extending to the expiration
          date of the original stock option. If a stock option is exercised by
          delivery of restricted Shares, then the participant shall receive an
          equal number of identically restricted Shares; the remaining option
          exercise Shares shall contain any applicable restrictions which are
          set forth in the participant's award agreement and shall otherwise be
          unrestricted.
 
     (c)  In the event a Change of Control of the Company occurs, all stock
          options granted under this part of the Plan shall be immediately
          exercisable, and all restrictions on Shares issued under this plan
          pursuant to the exercise of stock option shall be immediately removed.
 
 
CONTINUITY AWARDS
 
16. Terms and Conditions of Executive Continuity Awards
 
     (a)  Executive Continuity Awards may be made from time to time under this
          Plan at the discretion of the Committee, in such amounts and upon such
          terms and conditions as are established by the Committee under this
          portion of the Plan, except that in no event shall any such award made
          after May 13, 2003, extend beyond a term of ten years following the
          date of its grant under this Plan.
 
     (b)  An Executive Continuity Award shall consist of a tandem grant of
          restricted Shares together with a related non-qualified stock option
          (options to be granted in accordance with the provisions of sections
          13-14 of this Plan) to purchase a specified number of Shares, in such
          amounts as may be determined by the Committee. All dividends paid on
          the restricted Shares shall be reinvested in additional shares of
          restricted Shares (subject to the same restrictions, terms and
          conditions). Upon attainment of age 65, (or death or the executive's
          becoming disabled) or such other age as is determined in the sole
          discretion of the Committee, or upon a Change of Control of the
          Company (as limited under subsection (h) below), the restrictions on
          the award will be removed, and the award will vest in the following
          manner, except as otherwise determined by the Committee:
 
          (i)  If the current realizable gain on a tandem stock option is
               greater than the current market value of the related restricted
               Shares (including re-invested dividends), then all such shares of
               restricted Shares shall be canceled and the term of the stock
               option shall continue for the term set forth in the award
               agreement.
 
          (ii) If the current market value of the restricted Shares (including
               re-invested dividends) is greater than the current realizable
               gain on any related tandem stock option, then the option shall be
               canceled and the restrictions shall be removed from all of the
               related restricted Shares.
 
     (c)  If a stock option granted under this portion of the Plan is exercised
          prior to the executive's attainment of an age determined by the
          Committee, the related shares of restricted Shares shall be canceled,
          and the additional Shares issued upon the exercise of the stock option
          shall be restricted and subject to either forfeiture or repurchase by
          the Company at the option exercise price for a period ranging up to 12
          years from the date of the grant of the option, or longer, as
          determined by the Committee and set forth in the award agreement.
 
     (d)  A stock option granted under this portion of the Plan shall be
          exercisable as provided in accordance with the document evidencing the
          option by full payment of the option price in cash or, at the
          discretion of the Committee, in Stock owned by the participant
          (including Performance Shares awarded under this Plan). At the
          discretion of the Committee, the participant may receive a replacement
          stock option to purchase a number of shares equal to the number of
          shares purchased by the participant in exercising the option, with an
          exercise price equal to the current market value, and with a term
          extending to the expiration date of the original stock option. If an
          option is exercised by delivery of restricted Shares, then the
          participant shall receive an equal number of identically restricted
          Shares; the remaining option exercise Shares shall be subject to the
          Company's right to impose restrictions on such Shares as described in
          subsection (c) above.
 
     (e)  As a condition of any executive Continuity Award under this Plan, each
          participant shall enter into an award agreement authorized by the
          Committee. The Committee may, in its sole discretion, include
          additional conditions and restrictions in the award agreement.
 
     (f)  At the discretion of the Committee, SARs may be awarded separately or
          in combination with other awards or grants under this portion of the
          Plan.
 
 
 
     (g)  In the event a Change of Control of the Company occurs, all
          restrictions shall be immediately removed with respect to the exercise
          of stock options under this part of the Plan and with respect to
          Shares issued upon the exercise of any stock option. A Change of
          Control, for these purposes, shall not include a transaction initiated
          by management such as a management led buyout or recapitalization
          except where such transaction (i) is in response to the acquisition of
          10% or more of the Company's stock or the announcement of a tender
          offer for 20% or more of the Company's stock (other than by employee
          benefit plans sponsored by the Company); or (ii) is approved by the
          Board in accordance with the standards set forth in Section 717 of the
          New York Business Corporation Law or any successor provision.
 
17. Terms and Conditions of Other Continuity Awards
 
     (a)  Awards of restricted stock hereinafter called "continuity awards" may
          be made from time to time under the Plan at the discretion of the
          Committee or its delegates, in such amounts and upon such terms and
          conditions as are established by the Committee or its delegates under
          this portion of the Plan except that in connection with any such
          awards made after May 11, 2004, in no event shall such award extend
          beyond a term of ten years following the date of its grant under this
          Plan. All dividends paid on the restricted Shares shall be reinvested
          in additional shares of restricted Shares (subject to the same
          restrictions, terms and conditions.)
 
     (b)  As a condition of any such continuity award under this Plan, each
          participant shall enter into an award agreement authorized by the
          Committee or its delegates. The Committee or its delegates, in their
          sole discretion, may include additional conditions or restrictions in
          the award agreement.
 
     (c)  In the event a Change of Control of the Company occurs, all
          restrictions shall be immediately removed with respect to Shares
          issued as a continuity award. A Change of Control, for these purposes,
          shall not include a transaction initiated by management, such as a
          management led buyout or recapitalization except where such
          transaction (i) is in response to the acquisition of 10% or more of
          the Company's stock or the announcement of a tender offer for 20% or
          more of the Company's stock (other than by employee benefit plans
          sponsored by the Company); or (ii) is approved by the Board in
          accordance with the standards set forth in Section 717 of the New York
          Business Corporation Law or any successor provision.
 
MISCELLANEOUS
 
18. Prior Awards
 
       Awards of stock options and Performance Shares made under the Plan prior
to the amendments approved by shareholders at the 1994 annual meeting continued
to be subject to the terms of the Plan and the instruments evidencing such
awards prior to such amendments becoming effective.
 
19. Tax Withholding
 
       The Company shall have the right to deduct from any settlement of an
award made under the Plan, including the delivery or vesting of Shares, a
sufficient amount to cover withholding of any federal, state, local or foreign
jurisdiction taxes required by law, or to take such other action as may be
necessary to satisfy any such withholding obligations. The Committee may permit
or require Shares to be used to satisfy required tax withholding and such Shares
shall be valued at the fair market value as of the settlement date of the
applicable award.
 
 
 
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