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                                                                    EXHIBIT 10.7
                                                                                
                                        

                       CHAMPION INTERNATIONAL CORPORATION
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                       MANAGEMENT INCENTIVE DEFERRAL PLAN
                       ----------------------------------

                       (Effective as of January 1, 1998)


                                  INTRODUCTION
                                  ------------

     Champion International Corporation hereby adopts the Champion International
                                                          ----------------------
Corporation Management Incentive Deferral Plan, effective as of January 1, 1998.
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Prior to the establishment of this Plan, certain employees of Champion
International Corporation were permitted to defer receipt of awards granted
under the Champion International Corporation Management Incentive Program
          ---------------------------------------------------------------
pursuant to the provisions of the Champion International Corporation
                                  ----------------------------------
Nonqualified Supplemental Savings Plan.  Effective as of January 1, 1998, such
--------------------------------------                                        
awards are deferrable under the provisions of this Plan.  This Plan is an
unfunded deferred compensation arrangement maintained by Champion International
Corporation for the purpose of providing supplemental retirement savings
primarily for a select group of management or highly compensated employees.

                                        
                            ARTICLE I - DEFINITIONS
                            -----------------------
                                        
1.1  "Beneficiary" means the person or persons entitled to receive the
      -----------                                                     
     distributions, if any, payable under the Plan upon or after a Participant's
     death.  Each Participant may designate a Beneficiary by filing the proper
     form with the Committee.  A Participant may designate one or more
     contingent Beneficiaries to receive any distributions after the death of a
     prior Beneficiary.  A designation shall be effective upon said filing,
     provided that it is so filed during such Participant's lifetime, and may be
     changed from time to time by the Participant.

1.2  "Code" means the Internal Revenue Code of 1986, as amended from time to
      ----                                                                  
     time, and regulations relating thereto.

1.3  "Committee" means the Champion International Corporation Pension and
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     Employee Benefits Committee (or its delegate(s)) which is responsible for
     the administration of this Plan in accordance with the provisions of the
     Plan as set forth in this document.

1.4  "Company" means Champion International Corporation, a New York corporation,
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     or any successor thereto, including any successor to substantially all of
     its assets which adopts and assumes the Plan at the time of transfer.

1.5  "Deferral Election" means the form described in Section 2.2 of the Plan.
      -----------------                                                      

1.6  "Deferred Compensation Account" means the account to be established by the
      -----------------------------                                            
     Company as a book reserve to reflect the amounts deferred by a Participant,
     as adjusted by earnings (or losses) under Article III.

1.7  "Effective Date" means January 1, 1998.
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1.8  "Employer" means the Company and any affiliate of the Company which, with
      --------                                                           
     the authorization of the Company, has adopted the Plan, and any successor
     or assignee of any of them.

1.9  "Executive" means any employee of an Employer who is: (a) classified as
      ---------                                                             
     Grade 20 or higher and designated by the Committee as a member of the
     select group of management or highly compensated employees eligible for
     participation in the Plan; (b) a Vice President; (c) a Listed Executive;
     and (d) any other employee designated by the Committee as a member of the
     select group of management or highly compensated employees eligible for
     participation in the Plan.

1.10 "Listed Executive" means any employee of an Employer whose name appears
      ----------------                                                       
     on the list attached hereto as Schedule A.

1.11 "Management Incentive Award" means any bonus awarded under the Champion
      --------------------------                                    --------
     International Corporation Management Incentive Program or under any other
     ------------------------------------------------------                   
     management incentive program maintained by an Employer that may be
     designated by the Committee as deferrable under Section 2.2 of the Plan.

1.12 "Participant" means any Executive who elects to participate in the Plan
      -----------                                                           
     in accordance with Article II or a person who was such at the time of his
     death or termination of service and who retains, or whose Beneficiary
     retains, a benefit under the Plan which has not been distributed.

1.13 "Plan" means the Champion International Corporation Management Incentive
      ----            -------------------------------------------------------
     Deferral Plan as set forth in this instrument, and as it may be amended
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     thereafter.

1.14 "Plan Year" means the calendar year.
      ---------                          

1.15 "Savings Plan" means the Champion International Corporation Savings Plan
      ------------            -----------------------------------------------
     #077 as in effect on the Effective Date and as subsequently amended, and
     ----                                                                    
     any successor or replacement plan for such plan.


                        ARTICLE II - DEFERRAL ELECTIONS
                        -------------------------------

2.1  General.  Each Executive may elect in accordance with this Article II to
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     defer a part (or all) of any Management Incentive Award earned for a Plan
     Year and thereby become a Participant under the Plan.

2.2  Deferral Election.  A Participant desiring to exercise an election under
     -----------------                                                       
     Section 2.1 shall file with the Employer a Deferral Election in such form
     as the Committee may prescribe.  Such election shall be irrevocable,
     provided however, in the event a Participant is faced with an unforeseeable
     emergency (as defined in Section 4.3) during the Plan Year, such
     Participant, with the approval of the Committee, may revoke his election
     for the remainder of such Plan Year.  A Deferral Election of a Participant
     shall be authorization to the Employer to defer all or any part of any
     Management Incentive Award and provide that the Management Incentive Award
     be reduced by the amount of such deferral.  A Participant who elects to
     defer any part of a Management Incentive Award shall be required, with
     respect to the Plan Year in which the Management Incentive Award would
     otherwise be paid, to make before-tax contributions to the Savings Plan in
     an amount equal to the maximum before-tax contribution permitted under the
     Savings Plan.  A violation of the Savings Plan contribution requirement of
     the preceding sentence shall not be deemed to have occurred if the
     Participant elects to make such required contribution under the 

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     Savings Plan, but the amount the Participant may contribute to the Savings
     Plan is reduced (or there is a refund from the Savings Plan) by reason of
     the actual deferral percentage test of section 401(k) (3) of the Code, by
     reason of section 415 of the Code, or by reason of any other provision of
     law that limits the amount that a Participant is permitted to contribute to
     the Savings Plan.

2.3  Time of Election.  A Participant's Deferral Election must be delivered to
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     the Employer by such date as the Committee shall specify, which date shall
     be prior to the beginning of the Plan Year in which the Management
     Incentive Award  subject to such election is earned.  With respect to an
     employee of an Employer who becomes an Executive during a Plan Year and who
     wishes to make a deferral election under this Article II for such Plan
     Year, he must deliver his Deferral Election to the Employer within the 30-
     day period following the day he becomes an Executive but only with respect
     to any Management Incentive Award earned after the date such Deferral
     Election is delivered to the Employer.

2.4  Commencement of Deferrals.  A Deferral Election shall be effective for the
     -------------------------                                                 
     entire Plan Year to which it relates but only with respect to any
     Management Incentive Award earned for services rendered after the election
     is made in accordance with Sections 2.2 and 2.3.  The deferral of a
     Management Incentive Award shall occur when the Management Incentive Award
     would otherwise be paid to the Participant.

2.5  Crediting of Accounts.  A Management Incentive Award otherwise payable to
     ---------------------                                                    
     the Participant during the applicable Plan Year but deferred in accordance
     with Section 2.2 shall be credited to the Participant's Deferred
     Compensation Account as soon as administratively feasible after such
     Management Incentive Award is so reduced.

                                        
                      ARTICLE III - CREDITING OF EARNINGS
                      -----------------------------------

3.1  General.  Subject to Section 3.3, there shall be credited to Participants'
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     Deferred Compensation Accounts earnings (or losses) as if such Deferred
     Compensation Accounts were actually invested in the investment funds
     (including the Company Stock Fund) available under the Savings Plan as
     determined under this Article III.

3.2  Investment of Participant Deferrals.  With respect to his Deferred
     -----------------------------------                               
     Compensation Account, each Participant shall elect to have earnings (or
     losses) credited to his Deferred Compensation Account from among the
     investment funds made available under the Savings Plan with respect to
     participant before-tax elective deferrals under said plan.  Such an
     election shall be made in writing, on a form provided by the Committee, and
     delivered to the Employer prior to the beginning of each Plan Year by such
     date as the Committee shall determine.  An investment election shall be
     effective for the entire Plan Year to which it relates unless modified by
     the Participant during the Plan Year.  Such modifications may be made
     periodically on the same basis as participant investment elections under
     the Savings Plan may be modified. If a Participant fails to make and
     deliver an election for the following Plan Year by the date as determined
     by the Committee, then his Deferred Compensation Account shall be credited
     with the earnings (losses) under the investment election most recently in
     effect. Notwithstanding the foregoing, the Committee, through Plan
     administrative procedures, may require that Participants not modify the
     investment of their Deferred Compensation Accounts to the extent such
     Accounts are attributable to Participants investment of all or any part of
     Management Incentive Awards which Participants initially elect to invest in
     the Company Stock Fund in connection with any program offered by the
     Company to encourage Participants to invest such awards in the 

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     Company Stock Fund.

3.3  Crediting of Earnings.  The rates of return throughout each Plan Year for
     ---------------------                                                    
     the investment funds and Company Stock Fund referenced under Sections 3.2
     shall be the same as the actual rates of return for said funds as under the
     Savings Plan.  For each Plan Year, each Participant's Deferred Compensation
     Account shall be increased or decreased as if it had earned such rates of
     return.  Such increase or decrease shall be based on the varying balances
     of the Deferred Compensation Accounts throughout the Plan Year and shall be
     credited to said accounts on the same periodic basis as investment earnings
     (losses) are credited to participants' accounts under the Savings Plan.
                                        
                           ARTICLE IV - PLAN BENEFITS
                           --------------------------
                                        
4.1  Vesting.  Subject to Section 8.1, a Participant's rights to his Deferred
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     Compensation Account shall be nonforfeitable at all times.

4.2  Distributions.  Subject to Section 4.3, the amount represented by a
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     Participant's Deferred Compensation Account shall become distributable upon
     the Participant's separation from service with all Employers due to his
     retirement, death, disability (in accordance with the definition of
     "Disability" under the Savings Plan), or other termination of employment.
     At the time a Participant makes his yearly Deferral Election under Article
     II of the Plan, he also shall elect whether the amount represented by his
     Deferred Compensation Account shall commence to be paid to him as soon as
     administratively feasible upon his separation from service with all
     Employers or as of a later date specified by the Participant.  Such an
     election also shall specify whether such amount shall be paid in a single
     sum cash distribution, or in up to ten (10) annual cash installments (as
     well as the amounts of such installments) payable to the Participant while
     living with any remaining amount in his Deferred Compensation Account
     payable after his death to his Beneficiary in a single sum in accordance
     with Article V.

4.3  Withdrawal for Unforeseeable Emergency. Notwithstanding the provisions of
     --------------------------------------                                   
     Section 4.2 to the contrary, in the event that a Participant is faced with
     an unforeseeable emergency (as defined below), the Participant may request
     a withdrawal from his Deferred Compensation Account in an amount sufficient
     to meet such emergency.  Any such withdrawal shall be paid in a single sum
     distribution.  For purposes of this Section 4.3, an unforeseeable emergency
     is a severe financial hardship to the Participant resulting from a sudden
     and unexpected illness or accident of the Participant or of a dependent (as
     defined in section 152(a) of the Code) of the Participant, loss of the
     Participant's property due to casualty, or other similar extraordinary and
     unforeseeable circumstances arising as a result of events beyond the
     control of the Participant.  The Committee shall determine whether the
     circumstances presented by the Participant constitute an unforeseeable
     emergency.  Such circumstances and the Committee's determination will
     depend upon the facts of each case, but, in any case, payment may not be
     made to the extent that such hardship is or may be relieved:  (a) through
     reimbursement or compensation by insurance or otherwise, (b) by liquidation
     of the Participant's assets, to the extent the liquidation of such assets
     would not itself cause severe financial hardship, or (c) by cessation of
     his elective deferrals under this Plan.

4.4  Commencement of Payment.  At the time for payment designated by the
     -----------------------                                            
     Participant in accordance with Section 4.2, the amount represented by the
     Participant's Deferred Compensation Account, increased by any amounts due
     to be credited but not yet credited under Section 2.5, and 

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     decreased by any withdrawals under Section 4.3, shall commence to be paid
     in a single sum distribution or in installments as elected by the
     Participant in accordance with Section 4.2. If installment payments are
     elected, the first annual installment shall be payable as of the
     commencement date elected by the Participant under Section 4.2 and the
     remaining installments shall be payable on the annual anniversary of that
     commencement date. The installment payments shall be in such amounts as
     elected by the Participant on his most recent yearly election form
     completed prior to his separation from service or other termination of
     employment. If a Participant's Deferred Compensation Account is paid in
     installments, such account shall continue to be credited with earnings (or
     losses) under Article III until payment of the final installment.

                           ARTICLE V - DEATH BENEFIT
                           -------------------------
                                        
5.1  Terms.  Upon the death of a Participant, any unpaid amount represented by
     -----                                                                    
     the Participant's Deferred Compensation Account, increased by any amounts
     due to be credited but not yet credited under Section 2.5, shall be payable
     to the Participant's Beneficiary in a single sum distribution as soon as
     administratively feasible after the Participant's death.


                      ARTICLE VI - ADMINISTRATION OF PLAN
                      -----------------------------------
                                        
6.1  General Administration.  The Committee shall be responsible for the general
     ----------------------                                                     
     administration of the Plan and for carrying out its provisions.  The
     Committee shall have full power and authority to interpret, construe and
     administer the Plan.

6.2  General Powers.  All provisions set forth in the Savings Plan with respect
     --------------                                                            
     to the administrative powers and duties of the Committee and the procedures
     for filing claims shall also be applicable with respect to the Plan.  The
     Committee shall be entitled to rely conclusively upon all calculations,
     certificates, opinions and reports furnished by any actuary, accountant,
     controller, counsel or other person employed or engaged by the Committee
     with respect to the Plan.

                     ARTICLE VII - AMENDMENT OR TERMINATION
                     --------------------------------------

7.1  Amendment or Termination.  The Plan may be amended in whole or in part from
     ------------------------                                                   
     time to time, or terminated, by action of the Committee.  Such termination
     and any such amendment shall be binding on each Employer, Executive and
     Beneficiary.  Notice of such termination or amendment shall be given in
     writing to each Employer, Participant and Beneficiary of a deceased
     Participant.

7.2  Effect of Amendment or Termination.  No amendment or termination of the
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     Plan shall directly or indirectly deprive any current or former Participant
     or Beneficiary of all or any portion of any benefit under this Plan,
     payment of which has not been made prior to the effective date of such
     amendment or termination.



                       ARTICLE VIII - GENERAL PROVISIONS
                       ---------------------------------
                                        
8.1  No Funding or Interest in Assets.  The Plan shall at all times be entirely
     --------------------------------                                          
     unfunded and no provision shall at any time be made with respect to
     segregating any assets of an Employer for payment of any benefits
     hereunder.  No Participant or his designated Beneficiary shall acquire any
     property interest in his Deferred Compensation Account or any other assets
     of the Employer, their rights being limited to receiving from the Employer
     deferred payments as set forth in this Plan and these rights are
     conditioned upon continued compliance with the terms and conditions 

                                       5
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     of this Plan. To the extent that any Participant or Beneficiary acquires a
     right to receive benefits under this Plan, such right shall be no greater
     than the right of any unsecured general creditor of the Employer.

8.2  Assignment or Alienation.  Except as required by law, no right of a
     ------------------------                                           
     Participant or designated Beneficiary to receive payments under this Plan
     shall be subject to transfer, anticipation, commutation, alienation, sale,
     assignment, encumbrance, charge, pledge, or hypothecation or to execution,
     attachment, levy or similar process or assignment by operation of law and
     any attempt, voluntary or involuntary, to effect any such action shall be
     null and void and of no effect.

8.3  General Conditions.  Any retirement benefit or any other benefit payable
     ------------------                                                      
     under the Savings Plan shall be paid solely in accordance with the terms
     and conditions of the Savings Plan and nothing in this Plan shall operate
     or be construed in any way to modify, amend or affect the terms and
     provisions of the Savings Plan.

8.4  No Guaranty of Benefits.  Nothing contained in the Plan shall constitute a
     -----------------------                                                   
     guaranty by any person that the assets of an Employer will be sufficient to
     pay any benefit hereunder.

8.5  No Enlargement of Rights.  No Participant or Beneficiary shall have any
     ------------------------                                               
     right to a benefit under the Plan except in accordance with the terms of
     the Plan.  Establishment of the Plan shall not be construed to give any
     Participant the right to be retained in the service of an Employer.

8.6  Construction.  This Plan shall be construed under the laws of the State of
     ------------                                                              
     Connecticut.  Article headings are for convenience only and shall not be
     considered as part of the terms and provisions of the Plan.  Words in the
     masculine gender shall include the feminine, and the singular shall include
     the plural, and vice versa, unless qualified by the context.

8.7  Withholding of Taxes.  The Company shall withhold from any amounts payable
     --------------------                                                      
     under the Plan, all federal, state, and local taxes that the Company
     determines is legally required.

8.8  Binding on Successors, Purchasers, Transferees and Assignees.  The Plan
     ------------------------------------------------------------           
     shall be binding upon any successor or successors of the Company and of any
     other Employer whether by merger, consolidation, or otherwise.  In the
     event of the sale or transfer of substantially all of the assets of the
     Company or of any other Employer to any successor, purchaser, transferee or
     assignee, the Company and such other Employer each agrees that as a
     condition of such sale or transfer, the successor, purchaser, transferee or
     assignee shall adopt and assume the Plan at the time of the sale, transfer
     or assignment including, without limitation, all obligations which have
     accrued or may accrue in the future, and shall be bound by all the terms
     and provisions of the Plan, and the Company and such other Employer shall
     remain fully liable under the Plan.  If the Company or any other Employer
     assigns or otherwise transfers or attempts to delegate its duties or
     responsibilities pursuant to the Plan to any party, the Company and such
     other Employer each agrees that it shall remain obligated hereunder in
     addition to the obligation hereunder of such party.  If a merger,
     consolidation, sale, or transfer is made as provided in this Section, the
     provisions of this Section shall continue in full force and effect, and
     thereafter for all purposes of this Section and the application thereof,
     the immediate successor, purchaser, transferee or assignee and all
     subsequent successors, purchasers, transferees and assignees shall be
     deemed to be and shall be considered as the Company or as any other
     Employer hereunder, as the case may be.  No other such merger,
     consolidation, sale, or transfer shall be made except in compliance with
     the provisions of this Section.

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     IN WITNESS WHEREOF, the undersigned, as duly authorized by the Pension and
Employee Benefits Committee of Champion International Corporation, on behalf of
said Committee, has executed this Plan as evidence of its adoption effective as
of January 1, 1998.


                                             /s/ William C. Foster    
                                             --------------------------
                                             William C. Foster        
                                             Senior Associate Counsel -
                                             Human Resources           

 

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                                  SCHEDULE A
                                  ----------

                      CHAMPION INTERNATIONAL CORPORATION
                      MANAGEMENT INCENTIVE DEFERRAL PLAN
                       (EFFECTIVE AS OF JANUARY 1, 1998)
                       ---------------------------------


                               Listed Executives
                               -----------------
                                        
Name                                         SSN    
----                                         ---    
                                                    
Carraway, James W.                       ###-##-####
Danielsson, Lars G.                      ###-##-####
Green, Charles E.                        ###-##-####
Green, Mary E.                           ###-##-####
MacBrayne III, John M.                   ###-##-####
O Brien, Edward D.                       ###-##-####
Steltenkamp, Michael S.                  ###-##-####
Suh, Samuel                              ###-##-####
Van Horn, James L.                       ###-##-#### 
 

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