xpedx, Unisource Merger Moves Forward

The transaction will be accomplished through a Reverse Morris Trust structure. International Paper will indirectly contribute the assets of xpedx to a newly formed wholly owned subsidiary, xpedx Holding, in exchange for the stock of the subsidiary, a cash payment of approximately $400 million expected to be financed with new debt in the new company's capital structure, as well as the potential for an additional cash payment pursuant to an "earn-out" provision described below. International Paper will distribute shares of the new company to International Paper shareholders on a pro rata basis in a manner intended to be tax-free to International Paper and its shareholders.