EXHIBIT 10.8(iii)

 

GEORGIA-PACIFIC CORPORATION

DEFERRED COMPENSATION PLAN

Effective as of February 1, 2002

 

Section 1. Purpose

 

The purpose of this Georgia-Pacific Corporation Deferred Compensation Plan
(“Plan”) is to provide Participants with the opportunity to voluntarily defer a
portion of their compensation.

 

Section 2. Definitions

 

2.1 “Account” means the bookkeeping account maintained by the Company on its
books and records to show for each Participant as of any date all Deferrals made
by such Participant under this Plan, any adjustments made in accordance with
Section 5, and any distributions to such Participant under Section 6, which
Account may consist of Annual Subaccounts for each Plan Year in which the
Participant makes a Deferral and which may include a Fort James Subaccount.

 

2.2 “Annual Subaccount” means a subaccount which is maintained as part of each
applicable Participant’s Account which shows all Deferrals made by the
Participant for a Plan Year and any adjustments to such subaccount under Section
5 and any distributions from such subaccount under Section 6.

 

2.3 “Base Salary” means an employee’s base annual salary.

 

2.4 “Beneficiary” means the person designated by the Participant on an Election
Form or, if no such person is so designated or if no such person survives the
Participant, the Participant’s estate.

 

2.5 “Bonus” means the annual incentive award payable by the Company to a
Participant during a Plan Year.

 

2.6 “Change in Control” means a change in control of the Company as defined in
the Georgia-Pacific Corporation/Georgia-Pacific Group Long-Term Incentive Plan.

 

2.7 “Committee” means the Compensation Committee of the Board of Directors of
the Company.

 

2.8 “Company” means Georgia-Pacific Corporation, a Georgia corporation, and any
successor thereto.

 

2.9 “Deferral” means the amount deferred under this Plan in accordance with
Section 4.

 

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2.10 “Disability” means “disability” as defined under the Georgia-Pacific
Corporation LifeChoices Plus Benefits Program, Long-Term Disability Plan
(whether or not the Participant is eligible to participate in such plan).

 

2.11 “Election Form” means the form (a written form or any electronically
recorded form or any telephonic or voice response system) provided by the
Company for making the elections and designations called for under this Plan .

 

2.12 “Eligible Employee” means for any Plan Year an employee of the Company or
its U.S. subsidiaries who is paid on a U.S. payroll and who:

 

  (a)   is an employee classified as Grade 31 or above (or broad band Grades
EB11 or EH05 or above) on October 1 of the year preceding such Plan Year; or

 

  (b)   who was a participant in the Fort James Management Incentive Plan
Deferral Opportunity Plan and whose account balance under such plan was
transferred to this Plan.

 

2.13 “Fort James Subaccount” means a subaccount which is maintained as part of
each applicable Participant’s Account which shows the account balance
transferred to this Plan from the Fort James Management Incentive Plan Deferral
Opportunity Plan (as amended to reflect the merger of the Fort James
Supplemental Deferral Plan into such plan) and any adjustments to such
subaccount under Section 5 and any distributions from such subaccount under
Section 6.

 

2.14 “Inactive Participant” means, with respect to any Plan Year, a Participant
who does not satisfy the eligibility criteria under Section 2.12(a) for that
Plan Year.

 

2.15 “Measurement Fund” means an investment fund selected by the Company for the
purpose of tracking the hypothetical investment of a Participant’s Account in
accordance with Section 5.

 

2.16 “Participant” means an employee of the Company who participates in the Plan
in accordance with Section 3.

 

2.17 “Payment Commencement Date” means, with respect to each Annual Subaccount
and the Fort James Subaccount, the date determined in accordance with Section
6.1.

 

2.18 “Plan Year” means, with respect to the initial Plan Year, the period
commencing on February 1, 2002 and ending on December 31, 2002 and, with respect
to each subsequent Plan Year, the period commencing on each January 1 and ending
on each December 31.

 

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2.19 “Retirement” means termination of a Participant’s employment with the
Company on or after the date the Participant attains age sixty-two (62), other
than due to the Participant’s death or Disability.

 

Section 3. Participation

 

An Eligible Employee shall become a Participant in this Plan as of the first day
of the first Plan Year coincident with or next following the date he or she
satisfies the requirements to be an Eligible Employee. An Eligible Employee who
has become a Participant shall remain a Participant until his or her entire
Account balance has been distributed in accordance with the terms of this Plan;
provided, however, that a Participant shall not have the right to make Deferrals
under this Plan for any Plan Year in which such Participant is an Inactive
Participant.

 

Section 4. Deferrals

 

4.1 Amount of Deferrals. With respect to each Plan Year, a Participant (other
than an Inactive Participant) may elect to defer to his or her Annual Subaccount
a percentage (in 1% increments) up to fifty percent (50%) of his or her Base
Salary, and a percentage (in 1% increments) up to one hundred percent (100%) of
his or her Bonus payable during that Plan Year, but not less than five thousand
dollars ($5,000). Deferrals may be reduced by the Company by an appropriate
amount to cover other required or elected deductions, including, but not limited
to, tax withholdings, garnishments, and benefit premiums.

 

4.2 Time of Deferral Election. A Participant (other than an Inactive
Participant) with respect to a Plan Year shall have the right before the
beginning of such Plan Year to elect on an Election Form to defer his or her
Base Salary and Bonus otherwise payable during such Plan Year in accordance with
Section 4.1. Any election which is made and which is not revoked before the
beginning of such Plan Year shall become irrevocable on the first day of such
Plan Year and shall remain irrevocable through the end of such Plan Year.

 

4.3 Account Credits. The Base Salary and Bonus which a Participant elects to
defer under this Section 4 shall be credited to his or her Account as of the
date that the Company determines that such amounts otherwise would have been
payable directly to the Participant if no election had been made under this
Section 4.

 

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Section 5. Adjustments to Accounts

 

5.1 Measurement Funds. The Company from time to time shall select one, or more
than one, Measurement Fund that a Participant may elect that the Company use to
make adjustments to his or her Account as if the amount in such Account had been
invested in such Measurement Fund. The Company may change the Measurement Funds
available under this Plan at any time with or without advance notice to a
Participant.

 

5.2 Initial Election of Measurement Funds. The Participant shall elect with
respect to each Annual Subaccount one or more Measurement Funds for the purpose
of adjusting such subaccount in accordance with this Section 5. Any such
election shall be made on an Election Form and shall specify the percentage (in
1% increments) of such subaccount to be allocated to the Measurement Fund(s) the
Participant selects.

 

5.3 Special Rule for Fort James Subaccounts. Notwithstanding anything in this
Section 5 to the contrary, the entire balance in a Participant’s Fort James
Subaccount shall be adjusted as if invested in the Measurement Fund designated
by the Company until the Participant changes the Measurement Fund, and the
percentage (in 1% increments) of his or her Fort James Subaccount allocated to
such Measurement Fund, in accordance with Section 5.5.

 

5.4 Adjustments. The Company shall adjust each Annual Subaccount and each Fort
James Subaccount for any earnings and losses as if such subaccount actually had
been invested in the Measurement Funds in accordance with the Participant’s
election under this Section 5 (or, until a Participant changes his election with
respect to a Fort James Subaccount, the Measurement Fund designated by the
Company under Section 5.3). The performance of each Measurement Fund (either
positive or negative) will be determined by the Company, in its sole reasonable
discretion. Such adjustments shall be made on a daily basis to the extent that
Measurement Fund values are available.

 

5.5 Changes to Measurement Fund Elections. Participants may elect to change the
Measurement Fund(s), the percentages of the Annual Subaccount or Fort James
Subaccount allocated to each Measurement Fund, and may elect whether new
Deferrals, from the effective date of the election, will be allocated to
different Measurement Funds than those allocated for the Participant’s Annual
Subaccount balance prior to such election. Any such election shall be made on an
Election Form and shall become effective at the close of business on the day the
Company receives such form.

 

5.6 No Actual Investment. Notwithstanding any other provision in this Plan to
the contrary, the Measurement Funds are to be used for measurement purposes
only, and a Participant’s election of any such Measurement Fund, the allocation
of his or her Account balance thereto, and the calculation of the adjustment
made to his or her Account shall not be considered or construed in any manner as
an actual investment of his or her Account in any such Measurement Fund.

 

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Section 6. Payment of Accounts

 

6.1 Payment Commencement Date. A Participant’s Payment Commencement Date with
respect to each Annual Subaccount and Fort James Subaccount shall be the earlier
of:

 

(a) the date the Participant terminates employment with the Company,

 

(b) the date the Participant dies,

 

(c) the date the Participant becomes Disabled,

 

(d) if so elected by a Participant in accordance with Section 6.6, the date of a
Change in Control, or

 

(e) the January 1 elected by a Participant for payment of such Annual Subaccount
or Fort James Subaccount to begin, which is:

 

  (i)   at least three (3) years following the end of the Plan Year in which the
compensation is earned (or with respect to the Fort James Subaccount, the Plan
Year in which such amounts are transferred to this Plan) and no later than the
date the Participant reaches age seventy (70) years of age, or

 

  (ii)   immediately following his or her Retirement.

 

6.2 Payment of Deferred Amounts. A Participant shall elect on an Election Form
whether payment of such Participant’s Annual Subaccount(s) and Fort James
Subaccount shall be made in a single lump sum payment or by means of annual
installments. Except as set forth in Section 6.5 and 6.6, the Company shall pay,
or shall commence payment of, each Annual Subaccount(s) and Fort James
Subaccount in accordance with the Participant’s election as of the date set
forth in 6.2(a) or (b), as applicable.

 

  (a)   Lump-Sum Payment. A lump sum payment shall be made in cash within thirty
(30) calendar days after the Payment Commencement Date, or as soon thereafter as
administratively practicable.

 

  (b)   Installment Payments. Participants may elect payment in annual
installments over a period of between two (2) and ten (10) years. The initial
payment shall be made in cash as of the January 1 coincident with or next
following the Payment Commencement Date, or as soon thereafter as
administratively practicable. The remaining installment payments shall be made
in cash as of each successive anniversary of the initial payment, until the
Participant’s entire Annual Subaccount or Fort James Subaccount balance, as
applicable, has been paid. The amount of each installment payment shall be equal
to the Participant’s subaccount balance immediately prior to each such payment,
multiplied by a fraction, the

 

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      numerator of which is one (1), and the denominator of which is the number
of installment payments then remaining.

 

Notwithstanding the foregoing, in the event that the total balance in all of a
Participant’s subaccounts with a common Payment Commencement Date is less than
ten thousand dollars ($10,000) at any Payment Commencement Date, such
subaccount(s) automatically shall be paid in a lump sum. Further, in the absence
of a payment election, a lump sum payment will be made within thirty (30) days
of the Payment Commencement Date, or as soon as administratively practicable
thereafter.

 

6.3 Special Rule for Fort James Subaccounts. Notwithstanding anything in this
Section 6 to the contrary, a Participant shall be deemed to have elected to have
the entire balance in his or her Fort James Subaccount paid in a single lump sum
upon his or her Retirement unless and until the Participant changes the form of
payment and/or the Payment Commencement Date with respect to his or her Fort
James Subaccount in accordance with Section 6.9.

 

6.4 Employment Termination Other Than Retirement, Death, or Disability.
Notwithstanding anything in this Plan to the contrary, a Participant’s entire
Account balance shall be paid in a single lump sum in the event that the
Participant’s employment with the Company and its subsidiaries is terminated for
any reason other than Retirement, death, or Disability. Such payment shall be
made in cash within thirty (30) calendar days after the date the Participant
terminates employment, or as soon thereafter as administratively practicable.

 

6.5 Death. If a Participant dies before the complete payment of his or her
Account, the remaining balance in any Annual Subaccount or Fort James Subaccount
shall be distributed to the Participant’s Beneficiary in the payment form
selected by the Participant with respect to each such subaccount if such
Beneficiary is an individual. If such Beneficiary is not an individual, then
payment of the entire Account balance shall be made in a lump sum within thirty
(30) calendar days after the Participant’s death, or as soon as administratively
practicable thereafter.

 

6.6 Change in Control. Notwithstanding anything in this Plan to the contrary, a
Participant may elect to have his entire Account balance paid in a single lump
sum in the event of a Change in Control. Such payment shall be made in cash
within thirty (30) calendar days after the date of the Change in Control.

 

6.7 Financial Hardship. If a Participant incurs a severe financial hardship, the
Participant may make a request to the Company for an emergency distribution from
his or her Account. In the event that the Participant establishes to the
satisfaction of the Company that he or she has incurred a severe financial
hardship, the Company may, in its sole discretion, authorize the cessation of
Deferrals by such Participant under the Plan for that Plan Year. If the Company
determines that the cessation of Deferrals alone is not sufficient to satisfy
the hardship, the Company may provide that all, or a portion of, the
Participant’s Account immediately be paid in a lump sum cash payment.

 

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For purposes of this Section 6.7, “severe financial hardship” shall mean any
financial hardship resulting from extraordinary and unforeseeable circumstances
arising as a result of one or more recent events beyond the control of the
Participant. In any event, payment may not be made to the extent such emergency
is or may be relieved: (i) through reimbursement or compensation by insurance or
otherwise; (ii) by liquidation of the Participant’s assets, to the extent the
liquidation of such assets would not itself cause severe financial hardship;
(iii) through exhaustion of any loans or withdrawals available under a 401(k)
plan; and (iv) by cessation of Deferrals under the Plan. Distribution of amounts
because of a severe financial hardship may only be permitted to the extent
reasonably necessary to satisfy the hardship.

 

The Company’s determination of whether a severe financial hardship has occurred,
and whether the Participant’s future Deferral opportunities shall be ceased
and/or an emergency distribution is made shall be final, conclusive, and not
subject to appeal.

 

6.8 Early Withdrawal. A Participant may elect to withdraw amounts from his or
her Account prior to his or her Payment Commencement Date subject to the
following restrictions:

 

  (a)   The election to receive an early distribution shall be made in writing
and delivered to the Company;

 

  (b)   The amount of the early distribution shall in all cases be reduced by an
early withdrawal penalty equal to ten percent (10%) of the amount of the elected
early withdrawal, which penalty amount shall be permanently deducted from the
Participant’s Account and forfeited by the Participant; and

 

  (c)   The amount of the early withdrawal (less the 10% penalty) shall be paid
in a single lump sum payment as soon as practicable after the early distribution
election is made.

 

6.9 Change in Payment. Participants may change, with respect to each Annual
Subaccount and Fort James Subaccount, the Payment Commencement Date, the form of
payment, and the Change in Control payment election, provided written notice of
such change is received by the Company not less than twelve (12) months prior to
the Payment Commencement Date then in effect, or, in the case of Change in
Control payment election, not less than twelve (12) months prior to the Change
in Control.

 

6.10 Charge Against Account. The Company shall debit each Participant’s Account
for any payment made to the Participant or to his or her Beneficiary under this
Plan.

 

Section 7. Miscellaneous

 

7.1 Administration. The Company shall administer this Plan and shall have the
power to make any and all decisions as the Company deems necessary or
appropriate to administer and interpret and otherwise effect the terms and
conditions of this Plan. All

 

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determinations and decisions made by the Company with respect to the
interpretation or administration of this Plan shall be final, conclusive, and
binding on all persons.

 

7.2 Company Action. For purposes of this Plan, the Company shall act through its
Chairman, Chief Executive Officer and President or its Executive Vice President
– Human Resources, or their delegates.

 

7.3 No Liability. No Participant or Beneficiary shall have the right to look to,
or shall have any claim whatsoever against, any officer, director, employee or
agent of the Company or its subsidiaries with respect to the establishment of an
Account, any credits or debits made under this Plan to such an Account or the
distribution of such an Account to a Participant or, in the event of his or her
death, to his or her Beneficiary.

 

7.4 No Assignment. No Participant or Beneficiary shall have the right to
alienate, assign, commute or otherwise encumber an Account for any purpose
whatsoever, and any attempt to do so shall be disregarded completely by the
Company as null and void.

 

7.5 Source of Benefits. Any payment made under this Plan to, or on behalf of, a
Participant shall be made from the Company’s general assets or, at the Company’s
discretion, from a rabbi trust, and any claim by a Participant or a Beneficiary
against the Company for any payment under this Plan shall be the same as a claim
by any general and unsecured creditor of the Company.

 

7.6 No Contract of Employment. An Eligible Employee’s participation in this Plan
shall not constitute a contract of employment for any particular term or for any
particular rate of compensation, and participation in this Plan shall have no
bearing whatsoever on the terms and conditions of an Eligible Employee’s
employment or the Company’s right to terminate his or her employment at any time
with or without good reason.

 

7.7 Construction. This Plan shall be construed in accordance with the laws of
the State of Georgia except to the extent that such state laws are preempted by
ERISA. Headings and subheadings in this Plan have been added only for
convenience of reference and shall have no substantive effect whatsoever in
interpreting this Plan. Finally, all references to the singular shall include
the plural and all references to the plural shall include the singular.

 

7.8 Tax Withholding on Payments. The Company shall have the right to require
Participants to remit to the Company an amount sufficient to satisfy any
withholding tax requirements or to deduct from all payments made pursuant to the
Plan amounts sufficient to satisfy withholding tax requirements.

 

7.9 Claims for Benefits. If a Participant or Beneficiary makes a claim for the
payment of an Account and the Company denies such claim, the Company shall
effect such denial in accordance with the claims procedure regulations set forth
under the Employee Retirement Income Security Act of 1974, as amended, for
claims under a deferred compensation

 

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plan and shall provide the Participant or Beneficiary the opportunity to appeal
any such denial in accordance with such regulations.

 

7.10 Severability. In the event any provision of the Plan shall be held illegal
or invalid for any reason, the illegality or invalidity shall not affect the
remaining parts of the Plan, and the Plan shall be construed and enforced as if
the illegal or invalid provision had not been included.

 

7.11 Successors. All obligations of the Company under the Plan shall be binding
on any successor to the Company, whether the existence of such successor is the
result of a direct or indirect purchase, merger, consolidation, or otherwise, of
all or substantially all of the business and/or assets of the Company.

 

7.12 Amendment or Termination. The Committee shall have the right from time to
time and at any time to amend this Plan with or without notice to Participants
or to terminate this Plan at any time; provided, however, the Committee (1)
shall have no right to amend this Plan to retroactively reduce the credits made
to a Participant’s Account and (2) shall have no right to terminate this Plan
without paying the balance credited to each such Account as of the date of such
termination to each Participant (or Beneficiary) in a lump sum as soon as
practicable after such termination. Finally, the Committee immediately shall
terminate this Plan if this Plan fails to satisfy the requirements under ERISA §
401(a)(1) for a plan which is unfunded and which is maintained primarily for the
purpose of providing deferred compensation for a select group of management or
highly compensated employees.

 

IN WITNESS WHEREOF, Georgia-Pacific Corporation has adopted and executed this
Plan this 14th day of December, 2001.

 

GEORGIA-PACIFIC CORPORATION

 

BY:

 

/s/ Patricia A. Barnard        

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Patricia A. Barnard

Executive Vice President—Human Resources

 

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