**EXHIBIT 10.25**

 

**SMURFIT-STONE CONTAINER CORPORATIONEXECUTIVE DEFERRED COMPENSATION PLAN**

 

Smurfit-StoneContainer Corporation (the “Company”) has established this Smurfit-StoneContainer Corporation Executive Deferred Compensation Plan effective May 1,2004, for the benefit of its executive and management employees.  The Plan’s purpose is  to permit eligible employees to defer theirreceipt of restricted stock compensation and to enhance the overalleffectiveness of the Company’s executive compensation program.

 

The Plan isintended to be an unfunded plan maintained solely for the purpose of providingdeferred compensation for a select group of management or highly compensatedemployees for purposes of Title I of ERISA. The Plan shall be administered and interpreted to the extent possible ina manner consistent with that intent.

 

**ARTICLE IDEFINITIONS**

 

Wherever usedherein the following terms shall have the meanings hereinafter set forth:

 

## 1.1.                              Administrator.  The Company, or any committee or third-partyadministrator to which the Company delegates its responsibilities under thePlan, shall be the plan administrator.

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## 1.2.                              Board.  The Board of Directors of the Company.

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## 1.3.                              Code.  The Internal Revenue Code of 1986, asamended, or as it may be amended from time to time, and all formal regulationsand rulings issued thereunder.

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## 1.4.                              Company.  Smurfit-Stone Container Corporation or, tothe extent provided in Section 8.7 below, any successor corporation orother entity resulting from a merger or consolidation into or with the Companyor a transfer or sale of substantially all of the assets of the Company.

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## 1.5.                              CompensationDeferral Account.  The accountmaintained under the Plan by the Company in the name of the Participant towhich the Participant’s Salary and/or Bonus Deferrals are credited inaccordance with the Plan.

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## 1.6.                              Disability.  Total and permanent disability as a result ofsickness or injury, to the extent that the Participant is prevented fromengaging in any substantial gainful activity, and is eligible for and receivesdisability under a long-term disability insurance plan maintained by theCompany or Title II of the Federal Social Security Act.

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## 1.7.                              EmploymentTermination.  The date of anExecutive Employee’s termination of employment with the Company for any reason,unless expressly indicated otherwise.

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## 1.8.                              ExecutiveEmployee.  Each employee who is (i)considered by the Company to be an executive officer under the rues of Section 16of the Securities Exchange Act of 1934, or (ii) designated by the Company’sChief Executive Officer as an eligible Executive Employee.  An

 

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existing employee whobecomes an Executive Employee during a Plan Year will be eligible toparticipate in the Plan at the beginning of the next Plan Year.  Executive Employees who are hired after May1, 2004 will be eligible to participate in the Plan immediately upon beinghired.  Notwithstanding the foregoing, ifthe Administrator determines that the inclusion of an Executive Employee willjeopardize the status of the plan as an unfunded plan maintained solely for thepurposes of providing deferred compensation for a select group of management orhighly compensated employees for purposes of Title I of ERISA such ExecutiveEmployee shall cease to be eligible to participate in the Plan.

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## 1.9.                              Participant.  An Executive Employee of the Company who iseligible for participation pursuant to Section 1.8 and who has completedthe election form provided by the Administrator.

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## 1.10.                        Plan.  The Smurfit-Stone Container CorporationExecutive Deferred Compensation Plan, as set forth herein and as hereinafteramended from time to time.

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## 1.11.                        PlanYear.  The Plan Year shall be theCompany’s fiscal year.

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## 1.12.                        RSU.  Restricted Stock Units credited to aParticipant’s RSU Deferral Account.  AnRSU represents the right to receive a Share.

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## 1.13.                        RSUDeferrals.  The amount or number ofRSUs a Participant has elected to defer under this Plan beyond their originallyscheduled distribution date.

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## 1.14.                        RSUDeferral Account.  The accountmaintained under the Plan by the Company in the name of the Participant towhich the Participant’s RSUs are credited in accordance with the Plan.

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## 1.15.                        Salaryand/or Bonus Deferrals.  The amountof a Participant’s Salary and/or Bonus that the Participant elects to deferunder Section 3.1 of the Plan.

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## 1.16.                        Share.  A Share of the Company’s common stock.

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## 1.17.                        Construction.  Words in the masculine gender shall includethe feminine and the singular shall include the plural, and vice versa, unlessqualified by the context.  Any headingsused herein are included for ease of reference only and are not to be construedso as to alter the terms hereof.

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**ARTICLE IIRSU DEFERRALS**

 

## 2.1.                              RSUDeferral Elections.  The Company mayaward RSUs to an Executive Employee or Participant from time to time.  No later than twelve (12) months before thedate that an RSU awarded to an Executive Employee or Participant is to bedistributed in Shares, the Executive Employee or Participant may elect to deferall or any portion of that RSU award by completing the election form providedby the Administrator.  The deferralelection is irrevocable.

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## 2.2.                              Investmentof Participants’ RSU Deferral Accounts. Participants’ RSU Deferrals shall be held by the Company until suchamounts are distributed to the Participant in accordance

 

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with the provisions of Article Vof the Plan.  Participants’ RSU DeferralAccounts will be deemed to be held and invested in Shares.  The Company shall provide each Participant witha written statement of his or her RSU Deferral Account at least annually.

 

**ARTICLE III**

**SALARY AND BONUS DEFERRALS**

 

## 3.1.                              Salaryand Bonus Deferrals.  A Participantwho is an Executive Employee may elect to defer a whole percentage of up to (i)50% of his or her annual base salary, and/or (ii) 100% of the his or her annualbonus by completing the election form provided by the Administrator.  The deferral election is irrevocable.

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## 3.2.                              Investmentof Participants’ Compensation Deferral Accounts.  Participants’ Salary and/or Bonus Deferralsshall be held by the Company until such amounts are distributed to theParticipant in accordance with the provisions of Article V of thePlan.  Participants’ CompensationDeferral Accounts will be deemed to be held and invested in Shares.  The Company shall provide each Participantwith a written statement of his Compensation Deferral Account at leastannually.

 

**ARTICLE IVVESTING OF PARTICIPANTS’ ACCOUNTS**

 

AParticipant shall be fully vested in the amount of RSUs he or she has deferredinto an RSU Deferral Account under this Plan. A Participant shall be fully vested in the amount in his or herCompensation Deferral Account under the Plan at all times.

 

# **ARTICLE VDISTRIBUTION OF PARTICIPANTS’ ACCOUNTS**

 

## 5.1.                              Distributionof Participants’ Accounts.  AParticipant’s RSU Deferral Account and Compensation Deferral Account will bedistributed to him or her in Shares only, in accordance with this Article V.

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## 5.2.                              Timingof Distribution.  For each DeferralContribution elected under Section 2.1 or 3.1 above, a Participant shalldesignate a date upon which such contribution shall be distributed.  The distribution date for a Participant’s RSUDeferral Account shall be at least two years but not more than twenty yearsafter the original date the RSUs were to be distributed.  The distribution date for a Participant’sCompensation Deferral Account shall be at least two years but not more thantwenty years after the Participant’s election to defer.  Notwithstanding a Participant’s electionsunder this Section 5.2 or Section 5.3, a Participant’s RSU DeferralAccount and Compensation Deferral Account will be distributed as soon aspracticable upon the Participant’s Employment Termination.

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## 5.3.                              Changein Distribution Election.  TheAdministrator may permit a Participant to change his or her election as to thecommencement of distribution of his or her RSU Deferral Account and/orCompensation Deferral Contribution Account; provided that any change in

 

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election must specify acommencement date that is at least 12 months from the date of the change.  A Participant may request such change bywritten notice filed with the Administrator.

 

## 5.4.                              DistributionDue to Death.  A Participant maydesignate a beneficiary or beneficiaries to whom the Participant’s RSU andCompensation Deferral Accounts shall be distributed in the event suchParticipant dies before complete distribution of his or her RSU andCompensation Deferral Accounts.  Alldistributions upon a Participant’s death will be made as soon as practicablefollowing the Participant’s death.  Anysuch designation shall be made in writing on a form providing by theAdministrator.  A Participant may make orchange the beneficiary designation under this Section at any time prior todeath.  If a Participant has notdesignated a beneficiary under the Plan, or if no designated beneficiary isliving on the date of distribution hereunder, amounts distributable pursuant tothis Section shall be distributed to the Participant’s spouse, if any, orto the Participant’s estate.

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If theAdministrator has any doubt as to the proper beneficiary to receive paymentsunder the Plan, the Administrator shall have the right, exercisable in itsdiscretion, to cause the Company to withhold such distributions until thematter is resolved to the Administrator’s satisfaction.

 

## 5.5.                              HardshipDistribution.  A Participant mayrequest, by writing filed with the Administrator, that a distribution be madeto him or her of all or part of the amount then credited to his or her RSU andCompensation Deferral Account on account of a severe financial hardship.  The Administrator will approve such adistribution to the Participant only in the event of an unforeseeableemergency.  An “unforeseeable emergency”is an unanticipated emergency that is caused by an event beyond the control ofthe Participant and that would result in severe financial hardship to suchParticipant if early withdrawal were not permitted (determined with referenceto Treas. Reg. §1.457-2(h)(4)).  Anunforeseeable emergency that results in severe financial hardship is anunexpected illness or accident of the Participant or a dependent, loss of aParticipant’s property due to casualty, or other similar, extraordinary,unforeseeable circumstances beyond the control of the Participant.  The severe financial hardship may not berelieved by an early distribution under this Plan to the extent it mightotherwise be relieved through reimbursement or compensation by insurance orotherwise, or by liquidation of a Participant’s assets.  Any hardship distribution under this Section willbe limited to the amount necessary to meet the emergency, after being grossedup for applicable federal, state and local taxes.

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## 5.6.                              Limitationon Distribution.  Notwithstanding theforegoing provisions of the Plan relating to distribution of Participant’s RSUand Compensation Deferral Accounts, if distribution of a Participant’s RSU andCompensation Deferral Accounts in any calendar year would not be deductible bythe Company because of the limitations of Code Section 162(m), suchdistribution shall be postponed in whole or in part, in the sole discretion ofthe Administrator, until the first calendar year in which such distributionwould not be limited as to deductibility by Code Section 162(m).  For purposes of determining whether suchdistribution would be deductible, it shall be assumed that the Participant hasreceived all other distributions to which he or she would be entitled duringthe year.

 

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**ARTICLE VIADMINISTRATION OF THE PLAN**

 

## 6.1.                              Administrationby the Administrator.  TheAdministrator shall be responsible for the general operation and administrationof the Plan and for carrying out the provisions thereof.

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## 6.2.                              Powersand Duties of Administrator.  TheAdministrator shall administer the Plan in accordance with its terms and shallhave all powers necessary to carry out the provisions of the Plan.  The Administrator shall interpret the Planand shall have the discretion to determine all questions arising in theadministration, interpretation, and application of the Plan, whether of law orof fact including but not limited to, questions of eligibility and the statusand rights of employees, Participants and other persons.  Any such determination by the Administratorshall be conclusive and binding on all persons. The regularly kept records of the Company shall be conclusive andbinding upon all persons with respect to a Participant’s date and length ofemployment, time and amount of Compensation and the manner of payment thereof,type and length of any absence from work and all other matters containedtherein relating to Participants.

 

# **ARTICLE VIIAMENDMENT OR TERMINATION**

 

## 7.1.                              Amendmentor Termination.  The Company intendsthe Plan to be permanent but reserves the right to amend or terminate thePlan.  Any such amendment or terminationshall be made pursuant to a written resolution of the Board.

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## 7.2.                              Effectof Amendment or Termination.  Noamendment or termination of the Plan shall divest any Participant orbeneficiary of the amount in the Participant’s RSU or Compensation DeferralAccount.  Upon termination of the Plan,distribution of Participants’ RSU Deferral Accounts shall be made toParticipants or their beneficiaries as soon as practicable.

 

# **ARTICLE VIIIGENERAL PROVISIONS**

 

## 8.1.                              Participants’Rights Unsecured.  Except asotherwise expressly provided herein, the Plan at all times shall be entirelyunfunded and no provision shall at any time be made with respect to segregatingany assets of the Company for payment of any benefits hereunder.  The right of a Participant or the Participant’sbeneficiary to receive a distribution of the Participant’s RSU and CompensationDeferral Accounts hereunder shall be an unsecured claim against the generalassets of the Company, and neither the Participant nor a beneficiary shall haveany rights in or against any specific assets of any Company.

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## 8.2.                              NoGuaranty of Benefits.  Nothingcontained in the Plan shall constitute a guaranty by the Company or any otherperson or entity that the assets of the Company will be sufficient to pay anybenefit hereunder.  No Participant orother person shall have any right to receive a benefit or a distribution of RSUor Compensation Deferral Accounts under the Plan except in accordance with theterms of the Plan.

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## 8.3.                              NoEnlargement of Employee Rights. Establishment of the Plan shall not be construed to give any Participantthe right to be retained in the service of the Company.

 

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## 8.4.                              SpendthriftProvision.  No interest of any personor entity in, or right to receive a distribution under, the Plan shall besubject in any manner to sale, transfer, assignment, pledge, attachment, garnishment,or other alienation or encumbrance of any kind; nor may such interest or rightto receive a distribution be taken, either voluntarily or involuntarily for thesatisfaction of the debts of, or other obligations or claims against, suchperson or entity, including claims for alimony, support, separate maintenance,whether pursuant to an order that purports to be a qualified domestic relationsorder under Code Section 414(p) or otherwise and claims in bankruptcyproceedings.

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## 8.5.                              ApplicableLaw.  The Plan shall be construed andadministered under the laws of the State of Delaware (without regard to itsconflicts of law principles) except (i) to the extent preempted by federal law,(ii) to the extent provided in Section 8.6 and (iii) the determinationwhether an individual is a Participant’s spouse shall be made pursuant to thelaws of the Participant’s domicile.

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## 8.6.                              Incompetenceor Incapacity of Recipient.  Subjectto applicable state law, if any person entitled to a payment under the Plan isdeemed by the Administrator to be incompetent or incapable of personallyreceiving and giving a valid receipt for such payment, then, unless and untilclaim therefor shall have been made by a duly appointed guardian or other legalrepresentative of such person, the Administrator may provide for such paymentor any part thereof to be made to any other person or institution thencontributing toward or providing for the care and maintenance of suchperson.  Any such payment shall be apayment for the account of such person and a complete discharge of anyliability of the Administrator and the Plan therefor.  The Administrator may require proof ofincompetence, incapacity, guardianship or legal representation as it may deemappropriate prior to the distribution of any benefit.

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## 8.7.                              CorporateSuccessors.  The provisions of thisPlan shall be binding upon the Company and its successors and assigns.  The Plan shall not be automaticallyterminated by a transfer or sale of assets of the Company, or by the merger orconsolidation of the Company into or with any other corporation or otherentity, but the Plan shall be continued after such sale, merger orconsolidation only if and to the extent that the transferee, purchaser orsuccessor entity agrees to continue the Plan. In the event that the Plan is not continued by the transferee, purchaseror successor entity, the Plan shall terminate subject to the provisions of Section 7.2.

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## 8.8.                              UnclaimedBenefit.  Each Participant orbeneficiary shall keep the Company informed of his or her current address.  The Administrator shall not be obligated tosearch for the whereabouts of any person. If the location of a Participant is not made known to the Administratorwithin three years after the date on which payment of the Participant’sbenefits under the Plan may first be made, payment may be made as though theParticipant had died at the end of the three-year period.  If, within one additional year after suchthree-year period has elapsed, or, within three years after the actual death ofa Participant, the Administrator is unable to locate any beneficiary of theParticipant, then the Administrator shall have no further obligation to pay anybenefit hereunder to such Participant or beneficiary or any other person andsuch benefit shall be irrevocably forfeited.

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## 8.9.                              Limitationson Liability.  Notwithstanding any ofthe preceding provisions of the Plan, none of the Company, nor anyone servingas the Administrator nor any officer, director or individual acting as anemployee or agent of the Company, shall be liable to any Participant,

 

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former Participant or anybeneficiary or other person for any claim, loss, liability or expense incurredin connection with the Plan, other than the payment of benefits hereunder.

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## 8.10.                        ClaimsProcedure.  In the event that aParticipant’s claim for benefits under the Plan is denied in whole or in partby the Administrator, the Administrator will notify the Participant (orbeneficiary) of the denial.  Such notificationwill be made in writing, within 90 days of the date the claim is received bythe Administrator.  The notification willinclude: (i) the specific reasons for the denial, (ii) specific reference tothe Plan provisions upon which the denial is based, (iii) a description of anyadditional information necessary for the claimant to perfect the claim and anexplanation of why such material or information is necessary, and (iv) anexplanation of the applicable review procedures.

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The Participant(or beneficiary) has 60 days from the date he receives notice of a claim denialto file a written request for review of the denial with the Administrator.  The Administrator will review the claimdenial and inform the Participant (or beneficiary) in writing of its decisionwithin 60 days of the date the claim review request is received by theAdministrator.  This decision will befinal.

 

A Participant’s orbeneficiary’s compliance with the foregoing provisions of this Section 8.10is a mandatory prerequisite to commence any legal action with respect to aclaim for benefits under the Plan.

 

## 8.11.                        SpecialDistribution Provision. Notwithstanding anything to the contrary contained herein, in the eventthat (i) the Internal Revenue Service (“IRS”) prevails in a claim that all orany portion of a Participant’s RSU or Compensation Deferral Account constitutestaxable income to the Participant for any taxable year of such Participantprior to the taxable year in which such amount is distributed to him, (ii)legal counsel satisfactory to the Company renders an opinion that the IRS wouldlikely prevail in such a claim, or (iii) a statutory change occurs that wouldrequire immediate taxation of, or otherwise materially adversely affect, all orany portion of Participants’ RSU or Compensation Deferral Accounts, theaffected portion of the Participant’s Deferral Accounts shall be immediatelydistributed to the Participant (or his or her beneficiary).  The Administrator, in its sole discretion,also may order distributions to all similarly situated Participants andbeneficiaries.

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## 8.12.                        Notice.  Any notice or filing required or permitted tobe given to the Administrator under this Plan shall be sufficient if in writingand hand-delivered, or sent by registered or certified mail, to the addressbelow:

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Smurfit-StoneContainer Corporation

8182Maryland Avenue

St.Louis, MO 63105

Attention:  General Counsel

 

Such notice shallbe deemed given as of the date of delivery or, if delivery is made by mail, asof the date shown on the postmark on the receipt for registration orcertification.

 

Any notice orfiling required or permitted to be given to a Participant under this Plan shallbe sufficient if in writing and hand-delivered, or sent by mail, to the lastknown address of the Participant.

 

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8.13.                        Taxes.  The Company shall withhold all applicabletaxes in a manner determined by the Company.

 

INWITNESS WHEREOF, the Company has caused this Plan to be executed by theundersigned duly authorized officer.

 
| **SMURFIT-STONE  CONTAINER CORPORATION** |                          |
|------------------------------------------|-------------------------------|
|                                     |                          |
|                                     |                          |
| By:                                      | /s/ Craig A. Hunt             |   |   |
|                                     |                          |
| Its:                                     | VICE  PRESIDENT AND SECRETARY |   |   |
|                                          |                               |  |  |  |  |

 

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