Exhibit 10.1

August 27, 2002

Mr. Jerome F. Tatar

Chairman of the Board

                    MeadWestvaco Corporation

                    Courthouse Plaza NE

                    Dayton, OH 45463

 

                    Dear Jerry:

As agreed between you and the Board of Directors of MeadWestvaco Corporation
(the "Company"), you will retire from your position as Chairman of the Company
on December 30, 2002 or such earlier date as may be mutually agreed (the
"Retirement Date"). This retirement will be a "Qualifying Termination" under the
Employment Agreement (your "Employment Agreement") dated as of January 29, 2002
between you, the Company and The Mead Corporation ("Mead"). Therefore, upon your
retirement on the Retirement Date, you will be entitled to the severance
payments and benefits provided for in your Employment Agreement in the event of
a Qualifying Termination.

This letter sets forth the understanding reached between you and the Company
about the calculation of certain of the payments and benefits due to you upon a
Qualifying Termination.

You and the Company have agreed that the lump sum severance payment provided for
in Section 8(b)(i) of your Employment Agreement will equal $9,269,764. The
calculation of this amount is shown in Exhibit I. In addition, you and the
Company have agreed that your compensation under the arrangements described in
Section 8(a) of the Employment Agreement will include $82,202 for accrued but
unpaid vacation (which amount is not included in the $9,269,764 severance
payment referred to above).

You and the Company have also agreed that your enhanced pension benefit under
Section 8(b)(ii) of your Employment Agreement will be $5,166,501, payable in a
lump sum. The calculation of this amount is shown in Exhibit II. This enhanced
pension benefit is in addition to all benefits under tax-qualified and
non-qualified retirement plans of the Company and its affiliates to which you
may are entitled.

In addition, you will be entitled to your 2002 annual bonus, to the extent
earned in accordance with the Company's bonus plan, as is contemplated by
Section 6(b) of your Employment Agreement.

You and the Company have also agreed that you will pay the same cost as is
charged to active employees of the Company for the medical and dental benefits
to be provided to you and your family under Section 8(b)(iv) of your Employment
Agreement, for the period provided therein.

Finally, as is contemplated by Section 6(b) of your Employment Agreement, if the
integration of Westvaco Corporation and Mead has been successfully accomplished
as of the Retirement Date, the Board, in its discretion, may recognize your
contributions with a completion bonus.

Except as provided herein, your Employment Agreement remains in effect without
amendment.

If you agree that this letter correctly sets forth the agreement between you and
the Company on these matters, please sign the enclosed copy in the space
provided below and return it to us.

Sincerely yours,

/s/John G. Breen

John G. Breen

Chairman of the Compensation Committee of the Board of Directors of MeadWestvaco
Corporation

/s/John A. Luke, Jr

John A. Luke, Jr.

Chief Executive Officer of MeadWestvaco Corporation

Agreed to and Accepted:

/s/ Jerome F. Tatar

Jerome F. Tatar

Date: August 27, 2002

 

EXHIBIT I

LUMP SUM SEVERANCE PAYMENT

Base Salary                                 $ 854,904

Annual and Long-term Incentive* 1,793,600

Total                                         $2,648,504

                                                        x 3.5

Lump Sum Severance Payment $ 9,269,764

 

 

* Annual and Long-Term Incentive is the higher of (x) or (y) where:

(x) = highest of actual annual and long-term incentive awards for 1999, 2000 or
2001

AND

(y) = highest of target annual and long-term incentive awards for 1999, 2000 or
2001

The relevant amounts are as follows:

(x) Actual Incentives:

Year

Annual

Long-Term

1999

550,000

1,243,600

2000

530,000

767,900

2001

400,000

0

(y) Target Incentives:

Year

Annual

Long-Term

1999

823,600

823,600

2000

834,700

834,700

2001

845,100

834,700

Thus, the actual awards for 1999 produce the highest amount:

$550,000 + $1,243,600 = $ 1,793,600

MeadWestvaco Corporation

Exhibit II--Enhanced Pension Benefit for J. F. Tatar

Retirement Age (years-months)

56-1

Retirement Date

01/01/03

Severance Payment (excluding long term incentive)

Base Pay

$854,904.00

x 3.5 =

$2,992,164.00

Incentive

$854,400.00

x 3.5 =

$2,990,400.00

$5,982,564.00

Use one third of severance payment

$5,982,564.00

/ 3 =

$1,994,188.00

$

Earnings

Year3

1,994,188.00

*

Year2

1,994,188.00

*

Year1

1,994,188.00

*

Final Average Earnings (3 years)

1,994,188.00

x Accrual Rate

0.55

1,096,803.40

x Early Retirement Factor

0.9125

*

1,000,833.10

Benefit Offsets

Before Age 62

Age 62+

Qualified Plan Benefit

46,667.48

46,667.48

Excess Plan Benefit

280,248.72

280,248.72

.5 x Social Security at age 62

0.00

8,442.00

Other Non-Mead Plans

0.00

**

0.00

**

Annual Benefit after Offsets

673,916.90

665,474.90

Flat Annual Benefit for Lump Sum

669,160.90

Lump Sum Factor

13.7383

***

Lump Sum before SERP Offset

9,193,133.23

Offset SERP Lump Sum

4,026,631.89

***

Enhanced Pension Benefit

5,166,501.34

* Calculated assuming an additional 3 years of age.

** The SERP benefit will be reduced by any employer-funded qualified plan
benefits earned

under a previous employer's defined benefit plan.

*** Based on the 1994 Group Annuity Mortality Table blended 50% male / 50%
female

using a 5.39% interest rate.