Exhibit  10.32


PACKAGING CORPORATION OF AMERICA


DEFERRED
COMPENSATION PLAN


PLAN
DOCUMENT


JANUARY
1, 2005



   
 








PACKAGING
CORPORATION OF AMERICA


DEFERRED
COMPENSATION PLAN


1.             Introduction and Purpose


The Packaging
Corporation of America Deferred Compensation Plan (the “Plan”) was originally
established April 12, 1999 by Packaging Corporation of America (the “Company”).  The purpose of the Plan is to provide a
select group of management or highly compensated employees of the Company and
its affiliates an opportunity to defer compensation in accordance with the
terms and conditions set forth herein.


The Company hereby
amends and restates the Plan, effective as of January 1, 2005 (the “Effective
Date”), to comply with Section 409A.  The
terms of the Plan as provided herein shall apply to all Deferred Amounts
attributable to any period beginning on or after January 1, 2005.  Any amounts deferred and vested under the
Plan on or prior to December 31, 2004, and any earnings attributable thereto,
shall be grandfathered for purposes of Section 409A and shall be subject to the
terms of the Plan as in effect on October 3, 2004 (“Grandfathered Deferrals”).  Neither this restatement nor any subsequent
amendment hereto shall be deemed to apply to Grandfathered Deferrals, unless such
amendment explicitly states otherwise.


2.             Definitions


As used in this
Plan, the following words shall have the following meanings:


“Administrator” means the person, persons
or entity designated as the administrator of the Plan in Section 9.


“Affiliate” means any parent, subsidiary,
or other entity that is directly or indirectly controlled by, or controls, the
Company, and any entity that is directly or indirectly controlled by the
Company’s parent.


“Board” means the Company’s Board of
Directors.


“Bonus” means an EICP Bonus and/or a
Sign-On Bonus.


“Code” means the Internal Revenue Code of
1986, as amended.  Any reference to any
Code Section shall also mean any successor provision thereto.


“Company” means Packaging
Corporation of America, a Delaware corporation, any successor thereto as
provided in Section 20, and where applicable, shall include any Affiliate that
adopts the Plan or has employees or former employees who are Participants in
the Plan.


“Deferral Credit”  means a Bonus deferral made pursuant to
Section 4.


“Deferred Amount” means the amount
otherwise payable to the Participant that is deferred pursuant to Section 4.



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“Deferred Compensation Account” means a
memorandum account established at the time an amount is deferred pursuant to
Section 4, and maintained by the Company on its books for the Participant to or
against which amounts are credited or charged under the Plan.


“EICP Bonus” means a bonus paid under the
PCA Executive Incentive Compensation Plan.


“Employment Termination Date” means, with respect
to any Participant, the date on which such Participant’s employment with the
Company or an Affiliate is terminated for any reason and which constitutes a “separation
from service,” as defined in Section 409A.


“ERISA” means the Employee Retirement Income
Security Act of 1974, as amended.


“Executive” means a member of a select
group of management or highly compensated employees of the Company.


“Participant” means an Executive who meets
the eligibility requirements for the Plan set forth in Section 3 and who has
deferred a portion of his or her Bonus. 
A Participant shall retain such status for purposes of the Plan until
his or her Deferred Compensation Account has been distributed in full.


“Participation Election” means the form
signed and submitted by an Executive to the Administrator prior to the required
election date under Section 4.


“Performance Based Compensation” means
compensation that is contingent upon the satisfaction of pre-established
organizational or individual performance criteria relating to a performance
period of at least 12 consecutive months in which the Participant is employed
or such other compensation that satisfies the definition of “performance based
compensation” under Section 409A.


“Plan” means the Packaging Corporation of
America Company Deferred Compensation Plan as set forth herein and as
hereinafter amended from time to time.


“Plan Year” means the calendar year.


“Section 409A” means Section 409A of the
Code and any regulations or other interpretive authority issued thereunder.


“Sign-On Bonus” means a bonus payable as an
incentive to accept employment with the Company.


“Specified Employee” means any person
defined in Section 416(i) of the Code, without regard to paragraph (5) thereof,
as determined on each September 30 and applied for the 12-month period
beginning on the following January 1.


“Surviving Spouse”
means an individual of the opposite sex who is legally married to a Participant
at the time of the Participant’s death.



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“Unforeseeable Emergency” means a severe
financial hardship of a Participant resulting from an illness or accident of
the Participant, the Participant’s spouse, or 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.


3.             Eligibility


U.S. paid
participants in the Company’s Executive Incentive Compensation Plan and those
individuals designated by the Vice President of Human Resources and the
Director of Benefits of the Company shall be eligible to participate in the
Plan.  Only those Executives who are in a
select group of management or are highly compensated (within the meaning of
Title I of ERISA) may be designated as eligible to participate under this
provision.


4.             Elections to Defer


(a)           Deferrals of EICP Bonus.  A Participant may elect in a written
Participation Election to defer receipt of all or a specified portion of his or
her EICP Bonus to be received on account of a calendar year.  The Participation Election must be submitted
to the Administrator pursuant to such procedures as may be established by the
Administrator from time to time, and specify (i) such portions of his or her
EICP Bonus to be credited to his Deferred Compensation Account under the Plan
as a Deferral Credit (instead of receiving current payments), and (ii) the time
or events upon which such Deferred Amounts shall be distributed pursuant to
Section 7(a) below.


(b)           Timing of Election to Defer EICP
Bonus.  The Administrator may
determine that a separate Participation Election to defer an EICP Bonus must be
made with respect to each Plan Year or that a Participant’s election for one
Plan Year will be deemed to apply to the following Plan Year, unless revoked or
modified by such Participant.  Any such
Participation Election (or revocation thereof) must be made and shall be
irrevocable at such times as set forth below:


(i)  at any time prior to the thirty-first (31st)
day of December prior to the beginning of the Plan Year during which the EICP
Bonus to be deferred is otherwise earned;


(ii)  in the case of an EICP Bonus that is
Performance Based Compensation, at any time prior to six (6) months before the
end of the performance period for which it is earned, provided that such
compensation has not yet become both substantially certain and readily
ascertainable;


(iii)  in the case of the first year in which a
Participant becomes eligible to participate in the Plan (as aggregated with
other plans of its type as defined in Section 1.409A-1(c) of the Code), at any
time within 30 days after the Participant first becomes eligible to
participate; provided, however, that such election may apply only to
compensation attributable to services to be performed after the Participation
Election, and in the case of compensation based upon a performance period
(other than Performance Based Compensation), may apply only to a prorated
portion of such compensation based upon the number of days remaining in such performance
period; and



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(iv)  at any other time as may be permitted under
Section 409A.


(c)           Deferrals of Sign-On Bonuses.


(i)            In the case of a Sign-On Bonus that
is immediately vested or may become vested within 13 months of its award, the
Company may require through a non-elective deferral that all or any portion of
the Participant’s Sign-On Bonus shall be deferred as a Deferral Credit and
distributed in such form, and at such time, as provided in Section 7.  The Company’s non-elective deferral of such
Sign-On Bonus shall be made at such times as are permitted under Section 409A
(for example, prior to the Participant having a legally binding right to such
Sign-On Bonus).


(ii)
          In the case of a Sign-On Bonus
that cannot become vested within 13 months of its award due to vesting
conditions, a Participant may elect in a written Participation Election to
defer receipt of all or a specified portion of his or her Sign-On Bonus.  The Participation Election shall specify (i) such
portions of his or her Sign-On Bonus to be credited to his Deferred
Compensation Account under the Plan as a Deferral Credit, and (ii) the time or
events upon which such Deferred Amounts shall be distributed pursuant to
Section 7(a) below.  A Participant must
make a Participation Election with respect to a Sign-On Bonus no later than 30
days after the Participant receives a legally binding right to such Sign-On
Bonus, subject to the applicable vesting conditions, or at such other time as
permitted under Section 409A.


5.             Crediting of Deferred Payments to
the of Deferred Compensation Account


The Company shall
establish a Deferred Compensation Account for each Participant. The Company may
establish subaccounts, as necessary, to track Deferred Amounts attributable to
any particular Plan Year.  Each
Participant’s Deferred Compensation Account (or subaccount) shall be credited
with such Participant’s Deferred Amount for such Plan Year as of the day on
which the Participant would otherwise have been entitled to receive the bonus
or incentive compensation to which the Deferred Amount is attributable.  Adjustments as provided in Section 6 below,
shall be made to the Participant’s Deferred Compensation Account.


6.             Adjustments to Deferred
Compensation Account


The Administrator
shall credit the balance of the Participant’s Deferred Compensation Account
with an earnings factor. The earnings factor will equal the amount the
Participant’s Deferred Compensation Account would have earned if it had been
invested in the deemed investment options listed below. The Participant is
permitted to select the deemed investment option used to determine the earnings
factor and may change the selection at any time. The Participant may choose
more than one deemed investment option in increments of at least one (1)
percent. The Administrator reserves the right to change or amend any of the
deemed investment options at any time.



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The deemed
investment options used to determine the earnings factor are:


(a)
The prime rate of interest as reported by The Chase Manhattan Bank at the first
day of each calendar month.


(b)
The return for the following mutual funds currently offered in the Company
Retirement Savings Plan for Salaried Employees:


(i) Fidelity Growth
Company Fund


(ii) PIMCO Total Return
Fund


(iii)
Barclays Daily Equity Index Fund


The Company is
under no obligation to acquire or provide any of the investments designated by
a Participant, and any investments actually made by the Company will be made
solely in the name of the Company and will remain the property of the Company.


The crediting of
an earnings factor shall occur so long as there is a balance in the Participant’s
Deferred Compensation Account regardless of whether the Participant has
terminated employment with the Company.


7.             Payment of Deferred Amounts


(a)  Timing of Distribution.  Except as otherwise provided in this Section
7, a Participant’s Deferred Amount shall be paid, or commence to be paid, to
the Participant, or the Participant’s beneficiary, as soon as practicable after
[the earliest of]:


(i)  the Participant’s death;


(ii)  the Participant’s Employment Termination
Date; or


(iii) a date
specified at the time of the deferral.


(b)           Form
of Distribution.  Distributions shall
be made in the form of a lump sum or in a number of annual installments not to
exceed five (5).  The form of
distribution shall be elected by each Participant in his Participation
Election, or designated by the Company pursuant to Section 4(c).  If no election is properly made, distribution
will be in the form of a lump sum payment.


(c)           Tax Withholding.  The Company shall withhold any taxes or other
amounts with respect to a Participant’s Deferred Amounts required to be
withheld under federal, state or local law. 
Such taxes shall be withheld from the Participant’s non-deferred
compensation to the maximum extent possible with any excess being withheld from
the Participant’s elected Deferred Amount. 
Each Participant shall bear the ultimate responsibility for payment of
all taxes owed under this Plan.



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(d)           Distribution Upon Death. In the
event of the Participant’s death, payment of the balance in the Participant’s
Deferred Compensation Account shall be made to the Participant’s designated
beneficiary, or if none, to the Surviving Spouse, or if none, to the
Participant’s estate.


(e)           Distributions to Specified
Employees.  Notwithstanding anything
contained herein to the contrary, in the case of any Specified Employee,
distributions pursuant to 7(a)(ii) above may not commence until (i) six (6)
months after the date of the Specified Employee’s Employment Termination Date
or (ii) the date of the Participant’s death, whichever is earlier.


(f)            Hardship Distribution. In the
event a Participant incurs an Unforeseeable Emergency, the Administrator, in
its sole discretion and upon written application of such Participant, may
direct immediate payment of all or a portion of the then current value of such
Participant’s Deferred Compensation Account; provided that such payment shall
in no event exceed the amount necessary to satisfy the Unforeseeable Emergency,
plus amounts necessary to pay taxes reasonably anticipated as a result of the
distribution.


(g)           Distribution
Restrictions.  No distribution may be
made pursuant to the Plan if the Company reasonably determines that such
distribution would (i) violate Federal securities laws or other applicable law;
(ii) be nondeductible pursuant to Section 162(m) of the Code; or (iii) violate
a loan covenant or similar contractual requirement of the Company causing
material harm to the Company.  In any
such case, distribution shall be made at the earliest date at which Company
determines such distribution would not trigger clauses (i), (ii) or (iii)
above.


(h)           Section 409A Violations.  Notwithstanding any provision of the Plan, in
the event the Plan or a Deferred Amount fails to satisfy the requirements of
Section 409A, a portion of the Participant’s Deferred Compensation Account
shall be distributed equal to the amount required to be included in income as a
result of the failure to comply with Section 409A.


8.             Participant Reports


The Administrator
shall provide a statement to the Participant at least annually concerning the
status of his or her Deferred Compensation Account.


9.             Plan Administration and Expenses


The Administrator
of this Plan shall be the Benefits Administration Committee, as appointed by
the Company’s Board; provided that, as permitted by law, the Administrator may
delegate some or all of its authority under the Plan.  The Administrator shall administer the Plan
in accordance with its terms and purposes and shall have the authority, which
may be exercised in its discretion, to interpret the Plan, to make any
necessary rules and regulations, and to determine benefits under the Plan.  The Administrator shall also be responsible
for complying with statutory reporting and disclosure requirements.  Any determination made by the Administrator
in good faith shall be binding upon the Participant, his Surviving Spouse, and
the Company.


The Administrator
shall not be subject to liability with respect to the administration of the
Plan.  The Company shall indemnify and
hold harmless the Administrator and each member of the Administrator, or any
employee of the Company, or any individual acting as an employee or agent of
either of them (to the extent not indemnified or saved harmless under any liability



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insurance or any
other indemnification arrangement) from any and all claims, losses,
liabilities, costs and expenses (including attorneys’ fees) arising out of any
actual or alleged act or failure to act made in good faith pursuant to the
provisions of the Plan, including expenses reasonably incurred in the defense
of any claim relating thereto with respect to the administration of the Plan,
except that no indemnification or defense shall be provided to any person with
respect to any conduct that has been judicially determined, or agreed by the
parties, to have constituted willful misconduct on the part of such person, or
to have resulted in his or her receipt of personal profit or advantage to which
he or she is not entitled.  The rights of
indemnification provided hereunder shall be in addition to any right to which
any person concerned may otherwise be entitled by contract or as a matter of
law, and shall inure to the benefit of the heirs, executors, and administrators
of any such person.


The Company shall
pay all expenses of Plan.


10.          Claims
Procedures and Decisions of Administrator


In general,
distributions under this Plan are automatic and no claim for benefits need be
filed.  However, a Participant (or the
Participant’s Surviving Spouse) may submit a claim for benefits under this Plan
in writing to the Administrator.  The
following procedure shall apply in such case:


(a)           If
such claim for benefits is wholly or partially denied, the Administrator shall
notify the claimant of the denial of the claim within a reasonable period of
time, but no later than 90 days after receipt of the written claim, unless
special circumstances require an extension of time for processing the
claim.  In such event, written notice of
the extension shall be furnished to the claimant prior to the end of the 90-day
period and shall indicate the special circumstances requiring the extension and
the date by which a final decision is expected. 
In no event shall the extension period exceed 90 days from the end of
the initial 90 day period.  The notice of
denial: (i) shall be in writing; (ii) shall be written in a manner calculated
to be understood by the claimant; and (iii) shall contain (A) the specific
reason or reasons for denial of the claim; (B) a specific reference to the
pertinent Plan provisions upon which the denial is based; (C) a description of
any additional material or information necessary for the claimant to perfect
the claim; and (D) an explanation of the Plan’s claims review procedure.


(b)           Within 60 days of the receipt by the
claimant of the written notice of denial of the claim, or if the claim has not
been granted within the applicable time period, the claimant may file a written
request with the Administrator that it conduct a full and fair review of the
denial of the claimant’s claim for benefits. 
In connection with the claimant’s appeal of the denial of his or her
benefit, the claimant may review pertinent documents and may submit issues and
comments in writing.


(c)           The Administrator shall deliver to the
claimant a written decision on the claim promptly, but not later than 60 days
after the receipt of the claimant’s request for review, except that if there
are special circumstances which require an extension of time for processing,
the 60-day period shall be extended to a maximum of 120 days, in which case
written notice of the extension shall be furnished to the claimant prior to the
end of the 60-day period.  The
Administrator’s decision shall: (i) be written in a manner calculated to be
understood by the 



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claimant; (ii)
include specific reasons for the decision; and (iii) contain specific
references to the pertinent Plan provisions upon which the decision is
based.  If a written decision on review
is not furnished to the claimant within the applicable time period, the claim
shall be deemed denied on review.


11.          Amendment,
Suspension and Termination


The Company may at
any time and from time to time, alter, amend, suspend, or modify the Plan in
whole or in part.  Notwithstanding the
foregoing, no modification of the Plan will, without the prior written consent
of the Participant, alter or impair any rights or obligations of the
Participant, except to the extent the Administrator determines such
modification is necessary to maintain compliance with Section 409A.  In addition, the Company may in its
discretion terminate the Plan subject to the following:


(a)           the Plan may be terminated within the
30 days preceding, or 12 months following, a change in control (as defined in
Section 409A) provided that all Deferred Compensation Accounts shall be
distributed in full within 12 months after termination;


(b)           the Plan may be terminated in the
Company’s discretion at any time provided that (i) all deferred compensation
arrangements of similar type maintained by the Company are terminated, (ii) all
Deferred Compensation Accounts shall be distributed in full at least 12 months
and no more than 24 months after the termination, and (C) the Company does not
adopt a new deferred compensation arrangement of similar type for a period of
five years following the termination of the Plan; and


(c)           the Plan may be terminated within 12
months of a corporate dissolution taxed under Section 331 of the Code or with
the approval of a bankruptcy court pursuant to 11 U.S.C. 503(b)(1)(A) provided
that all Deferred Compensation Accounts are distributed in full by the latest
of the (i) the end of the calendar year of the termination, (ii)) the calendar
year in which such Deferred Amounts are fully vested, or (iii) the first calendar
year in which such payment is administratively practicable.


12.          Source of Benefits Transferability of
Interests


During the period
of deferral, all Deferred Amounts shall be general assets of the Company for
use as it deems necessary and shall be subject to the claims of the Company
creditors.


The rights and
interests of a Participant during the period of deferral shall be those of a
general creditor except that such Participant’s rights and interests may not be
reached by the creditors of the Participant or the beneficiary, or anticipated,
assigned, pledged, transferred or other-wise encumbered except in the event of
the death of the Participant, and then only by will or the laws of descent and
distribution.



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13.          No Right to Employment or Other Benefits


Nothing contained
herein shall be construed as conferring upon any Participant the right to
continue in the employ of the Company. Any compensation deferred and any
payments made under this Plan shall not be included in creditable compensation
in computing benefits under any employee benefit plan of the Company except to
the extent expressly provided for therein.


14.          Governing
Law


The provisions of
this Plan shall be construed according to the laws of the State of Illinois to
the extent such laws are not preempted by ERISA.  In any question of interpretation or other
matter of doubt, the Company and the Administrator may rely upon the opinion of
legal counsel.


15.
         Reliance on Documents,
Instruments, etc.


The Administrator
may rely on any certificate, statement or other representation made on behalf
of the Company, a Participant or a Surviving Spouse, which it in good faith
believes to be genuine, and on any certificate, statement, report or other
representation made to it by any agent or any attorney, accountant or other
expert retained by it or the Company in connection with the operation and
administration of the Plan.


16.          Information Requests


Each Participant,
Surviving Spouse and Company shall furnish to the Administrator such documents,
evidence, data, and other information, as the Administrator considers necessary
or desirable for administering the Plan. 
Retirement Benefits under the Plan are conditioned on an Participant’s
promptly furnishing full, true and complete documents, evidence, data, and
other information requested by the Administrator or Company in connection with
the Plan’s administration.


17.          Mistake of Fact


Any mistake of
fact or misstatement of fact shall be corrected when it becomes known and
proper adjustment made by reason thereof. 
Without limiting the prior sentence, the Administrator is expressly
authorized to take reasonable steps to recover mistaken overpayments from the
Plan.


18.          Severability


If any provision
of the Plan is held invalid or unenforceable, its invalidity or unenforceability
will not affect any other provisions of the Plan and will be construed and
enforced as if such provision had not been included herein.



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19.          Successors


All obligations of
the Company under the Plan will be binding on any successor to the Company,
whether the existence of the successor results from a direct or indirect
purchase of all or substantially all of the business of the Company, or a
merger, consolidation, or otherwise.


20.          Gender and Number


Words in the masculine general shall include the feminine gender and the
singular shall include the plural, and vice versa, unless qualified by the
context.  Any headings used herein are
included for reference only, and are not to be construed so as to alter the
terms hereof.


21.          Interpretation under Section 409A


The Plan at all
times shall be operated in accordance with the requirements of Section 409A
and, in the event of any inconsistency between any provision of the Plan and
Section 409A, the provisions of Section 409A shall control and the provision of
the Plan shall be void and without effect. 
In addition, any provision that is required to appear in the Plan that
is not expressly set forth herein shall be deemed set forth herein, and the
Plan shall be administered in all respects as if such provision were expressly
set forth herein.


22.
         No Guarantee of Tax Consequences


Neither the Administrator nor the Company makes any commitment or
guarantee that any amounts deferred or credited hereunder will be excludable
from the Participant’s gross income for federal or state income tax purposes,
or that any other federal or state income tax treatment will or will not apply
to or be available to any Participant.


IN WITNESS WHEREOF, and as conclusive evidence of the adoption of the
foregoing, Packaging Corporation of America has caused these presents to be
duly authorized in its name and behalf by its proper officers thereunto as of December
15, 2006.


	
  

  	
  By:

  	
   

  /s/ STEPHEN T. CALHOUN

  
	
   

  	
   

  	
  Stephen T.
  Calhoun

  
	
   

  	
   

  	
   

  
	
   

  	
  Its:

  	
  Vice President - Human Resources

  
	
   

  	
   

  	
   

  



 



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