<PAGE>   1
                                                                    EXHIBIT 10.3

                     THE MERRILL LYNCH NONQUALIFIED DEFERRED
                       COMPENSATION PLAN TRUST AGREEMENT*

                 (Areas highlighted in grey will be completed by
                              Merrill Lynch Trust.)

TRUST UNDER:

IVEX PACKAGING CORPORATION

DEFERRED COMPENSATION PLAN

                  This Agreement made this day of February 19, 1998 by and
between Ivex Packaging Corporation (Company) and Merrill Lynch Trust of
_________________ a ___________________________ corporation (Trustee);

                  WHEREAS, Company has adopted the Nonqualified Deferred
Compensation Plan identified above and such other Plan(s) as are listed in
Appendix A;

                  WHEREAS, Company has incurred or expects to incur liability
under the terms of such Plan(s) with respect to the individuals participating in
such Plan(s);

                  WHEREAS, Company wishes to establish a trust (the "Trust") and
to contribute to the Trust assets that shall be held therein, subject to the
claims of Company's creditors in the event of the Company's insolvency, as
herein defined, until paid to Plan participants and their beneficiaries in such
manner and at such times as specified in the Plan(s);


-----------------------------
*    This trust is intended to comply with the model grantor trust requirement 
     of Revenue Procedure 92-64. While Merrill Lynch believes that this Trust
     Agreement complies with the Revenue Procedure, it provides no assurance
     that modifications to the additional terms contained herein would not be
     required by the Internal Revenue Service during the review process in the
     event the Company were to apply for a ruling as to the tax consequences of
     its plan and this trust. If the Company desires to obtain such a ruling
     from the Internal Revenue Service, a copy of this Trust Agreement with all
     substituted or additional language underlined as required by the Revenue
     Procedure is available through your Merrill Lynch Financial Consultant.



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                  WHEREAS, it is the intention of the parties that this Trust
shall constitute an unfunded arrangement and shall not affect the status of the
Plan(s) as an unfunded plan maintained for the purpose of providing deferred
compensation for a select group of management or highly compensated employees
for purpose of Title I of the Employee Retirement Income Security Act of 1974;
and

                  WHEREAS, it is the intention of Company to make contributions
to the Trust to provide itself with a source of funds to assist it in the
meeting of its liabilities under the Plan(s);

                  NOW, THEREFORE, the parties do hereby establish the Trust and
agree that the Trust shall be comprised, held and disposed of as follows:

                  Section 1.     Establishment of Trust.

                  (1) Company hereby deposits with Trustee in trust such cash
and/or marketable securities, if any, listed in Appendix B, which shall become
the principal of the Trust to be held, administered and disposed of by Trustee
as provided in this Trust Agreement.

                  (2) The Trust hereby established shall be irrevocable.

                  (3) The Trust is intended to be a grantor trust, of which
Company is the grantor, within the meaning of subpart E, part 1, subchapter J,
chapter 1, subtitle A of the Internal Revenue Code of 1986, as amended, and
shall be construed accordingly.

                  (4) The principal of the Trust, and any earnings thereon, 
shall be held separate and apart from other funds of Company and shall be used
exclusively for the uses and purposes of Plan participants and general creditors
as herein set forth. Plan participants and their beneficiaries shall have no
preferred claim on, or any beneficial ownership interest in, any assets of the
Trust. Any rights created under the Plan(s) and this Trust Agreement shall be
mere unsecured contractual rights of Plan participants and their beneficiaries
against Company. Any assets held by the Trust will be subject to the claims of
Company's general creditors under federal and state law in the event of
insolvency, as defined in Section 3(a) herein.

                  (5) Company, in its sole discretion, may at any time, or from
time to time, make additional deposits of cash or other property in trust with
Trustee to




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augment the principal to be held, administered and disposed of by Trustee as
provided in this Trust Agreement. Neither Trustee nor any Plan participant or
beneficiary shall have any right to compel such additional deposits.

                  (6) Trustee shall not be obligated to receive such cash and/or
property unless prior thereto Trustee has agreed that such cash and/or property
is acceptable to Trustee and Trustee has received such reconciliation,
allocation, investment or other information concerning, or representation with
respect to, the cash and/or property as Trustee may require. Trustee shall have
no duty or authority to (1) require any deposits to be made under the Plan or to
Trustee; (2) compute any amount to be deposited under the Plan to Trustee; or
(3) determine whether amounts received by Trustee comply with the Plan. Assets
of the Trust may, in Trustee's direction, be held in an account with an
affiliate of Trustee.

                  Section 2.     Payments to Plan Participants and Their 
Beneficiaries.

                  (1) With respect to each Plan participant, Company shall
deliver to Trustee a schedule (the "Payment Schedule") that indicates the
amounts payable in respect of the participant (and his or her beneficiaries),
that provides a formula or other instructions acceptable to Trustee for
determining the amounts so payable, the form in which such amount is to be paid
(as provided for or available under the Plan(s)), and the time of commencement
for payment of such amounts. The Payment Schedule shall be delivered to Trustee
not more than 30 business days nor fewer than 15 business days prior to the
first date on which a payment is to be made to the Plan participant. Any change
to a Payment Schedule shall be delivered to Trustee not more than 30 days nor
fewer than 15 days prior to the date on which the first payment is to be made in
accordance with the changed Payment Schedule. Except as otherwise provided
herein, Trustee shall make payments to Plan participants and their beneficiaries
in accordance with such Payment Schedule. The Trustee shall make provisions for
the reporting and withholding of any federal, state or local taxes that may be
required to be withheld with respect to the payment of benefits pursuant to the
terms of the Plan(s) and shall pay amounts withheld to the appropriate taxing
authorities or determine that such amounts have been reported, withheld and paid
by Company, it being understood among the parties hereto that (1) Company shall
on a timely basis provide Trustee specific information as to the amount of taxes
to be withheld and (2) Company shall be obligated to receive such withheld taxes
from Trustee and properly pay and report such amounts to the appropriate taxing
authorities.




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                  (2) The entitlement of a Plan participant or his or her
beneficiaries to benefits under the Plan(s) shall be determined by Company or
such party as it shall designate under the Plan(s), and any claim for such
benefits shall be considered and reviewed under the procedures set out in the
Plan(s).

                  (3) Company may make payment of benefits directly to Plan
participants or their beneficiaries as they become due under the terms of the
Plan(s). Company shall notify Trustee of its decision to make payment of
benefits directly prior to the time amounts are payable to participants or their
beneficiaries. In addition, if the principal of the Trust, and any earnings
thereon, are not sufficient to make payments of benefits in accordance with the
terms of the Plan(s), Company shall make the balance of each payment as it falls
due. Trustee shall notify Company where principal and earnings are not
sufficient.

                  (4) Trustee shall have no responsibility to determine whether
the Trust is sufficient to meet the liabilities under the Plan(s), and shall not
be liable for payments or Plan(s) liabilities in excess of the value of the
Trust's assets.

                  Section 3.     Trustee Responsibility Regarding Payments to 
Trust Beneficiary when Company is Insolvent.

                  (1) Trustee shall cease payment of benefits to Plan
participants and their beneficiaries if the Company is insolvent. Company shall
be considered "insolvent" for purposes of this Trust Agreement if (i) Company is
unable to pay its debts as they become due, or (ii) Company is subject to a
pending proceeding as a debtor under the United States Bankruptcy Code.

                  (2) At all times during the continuance of this Trust, as
provided in Section 1(d) hereof, the principal and income of the Trust shall be
subject to claims of general creditors of Company under federal and state law as
set forth below.

                  (1) The Board of Directors and the Chief Executive Officer of
            Company (or, if there is no Chief Executive Officer, the highest
            ranking officer) shall have the duty to inform Trustee in writing of
            Company's insolvency. If a person claiming to be a creditor of
            Company alleges in writing to Trustee that Company has become
            insolvent, Trustee shall determine whether Company is insolvent and,
            pending such determination,




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            Trustee shall discontinue payment of benefits to Plan participants 
            or their beneficiaries.

                  (2) Unless Trustee has actual knowledge of Company's
            insolvency, or has received notice from Company or a person claiming
            to be a creditor alleging that Company is insolvent, Trustee shall
            have no duty to inquire whether Company is insolvent. Trustee may in
            all events rely on such evidence concerning Company's solvency as
            may be furnished to Trustee and that provides Trustee with a
            reasonable basis for making a determination concerning Company's
            solvency.

                  (3) It at any time Trustee has determined that Company is
            insolvent, Trustee shall discontinue payments to Plan participants
            or their beneficiaries and shall hold the assets of the Trust for
            the benefit of Company's general creditors. Nothing in this Trust
            Agreement shall in any way diminish any rights of Plan participants
            or their beneficiaries to pursue their rights as general creditors
            of Company with respect to benefits due under the Plan(s) or
            otherwise.

                  (4) Trustee shall resume the payment of benefits to Plan
            participants or their beneficiaries in accordance with Section 2 of
            this Trust Agreement only after Trustee has determined that Company
            is not insolvent (or is no longer insolvent).

                  (3) Provided that there are sufficient assets, if Trustee
discontinues the payment of benefits from the Trust pursuant to Section 3(b)
hereof and subsequently resumes such payments, the first payment following such
discontinuance shall include the aggregate amount of all payments due to Plan
participants or their beneficiaries under the terms of the Plan(s) for the
period of such discontinuance, less the aggregate amount of any payments made to
Plan participants provided for hereunder during any such period of
discontinuance; provided that Company has given Trustee the information with
respect to such payments made during the period of discontinuance prior to
resumption of payments by Trustee.

                  Section 4.     Payments to Company.

                  Except as provided in Section 3 hereof, since the Trust is
irrevocable in accordance with Section 1(b) hereof. Company shall have no right
or power to direct Trustee to return to Company or to divert to others any of
the Trust assets 




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before all payment of benefits have been made to Plan participants and their
beneficiaries pursuant to tile terms of the Plan(s).

                  Section 5.     Investment Authority.

                  (1) Trustee may invest in securities (including stock or 
rights to acquire stock) or obligations issued by Company. All rights associated
with assets of the Trust shall be exercised by Trustee or the person designated
by Trustee, and shall in no event be exercised by or rest with Plan
participants, except that voting rights with respect to Trust assets will be
exercised by Company unless an investment adviser has been appointed pursuant to
Section 5(c) and voting authority has been delegated to such investment adviser.

                  (2) Company shall have the right at any time, and from time to
time in its sole discretion, to substitute assets of equal fair market value for
any asset held by the Trust. This right is exercised by Company in a
nonfiduciary capacity without the approval or consent of any person in a
fiduciary capacity.

                  (3) Trustee may appoint one or more investment advisers who 
are registered as investment advisers under the Investment Advisers Act of 1940,
who may be affiliates of Trustee, to provide investment advice on a
discretionary or nondiscretionary basis with respect to all or a specified
portion of the assets of the Trust.

                  (4) Trustee, or Trustee's designee, is authorized and
empowered:

                  (1) To invest and reinvest Trust assets, together with the
            income therefrom, in common stock, preferred stock, convertible
            preferred stock, bonds, debentures, convertible debentures and
            bonds, mortgages, notes, commercial paper and other evidences of
            indebtedness (including those issued by Trustee), shares of mutual
            funds (which funds may be sponsored, managed or offered by an
            affiliate of Trustee), guaranteed investment contracts, bank
            investment contracts, other securities, policies of life insurance,
            annuity contracts, options, options to buy or sell securities or
            other assets, and all other property of any type (personal, real or
            mixed, and tangible or intangible);

                  (2) To deposit or invest all or any part of the assets of the
            Trust in savings accounts or certificates of deposit or other
            deposits in a bank or


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            savings and loan association or other depository institution,
            including Trustee or any of its affiliates, provided with respect to
            such deposits with Trustee or an affiliate the deposits bear a
            reasonable interest rate;

                  (3) To hold, manage, improve, repair and control all property,
            real or personal, forming part of the Trust; to sell, convey,
            transfer, exchange, partition, lease for any term, even extending
            beyond the duration of this Trust, and otherwise dispose of the same
            from time to time;

                  (4) To hold in cash, without liability for interest, such
            portion of the Trust as is pending investments, or payment of
            expenses, or the distribution of benefits;

                  (5) To take such actions as may be necessary or desirable to
            protect the Trust from loss due to the default on mortgages held in
            the Trust including the appointment of agents or trustees in such
            other jurisdictions as may seem desirable, to transfer property to
            such agents or trustees, to grant to such agents such powers as are
            necessary or desirable to protect the Trust, to direct such agent or
            trustee, or to delegate such power to direct, and to remove such
            agent or trustee;

                  (6) To settle, compromise or abandon all claims and demands in
            favor of or against the Trust;

                  (7) To exercise all of the further rights, powers, options and
            privileges granted, provided for, or vested in trustees generally
            under the laws of the state in which Trustee is incorporated as set
            forth above, so that the powers conferred upon Trustee herein shall
            not be in limitation of any authority conferred by law, but shall be
            in addition thereto;

                  (8) To borrow money from any source and to execute promissory
            notes, mortgages or other obligations and to pledge or mortgage any
            trust assets as security; and

                  (9) To maintain accounts at, execute transactions through, and
            lend on an adequately secured basis stocks, bonds or other
            securities to, any brokerage or other firm, including any firm that
            is an affiliate of Trustee.

                  Section 6.     Additional Powers of Trustee.




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                  To the extent necessary or which it deems appropriate to
implement its powers under Section 5 or otherwise to fulfill any of its duties
and responsibilities as Trustee of the Trust, Trustee shall have the following
additional powers and authority:

                  (1) To register securities, or any other property, in its name
or in the name of any nominee, including the name of any affiliate or the
nominee name designated by any affiliate, with or without indication of the
capacity in which property shall be held, or to hold securities in bearer form
and to deposit any securities or other property in a depository or clearing
corporation;

                  (2) To designate and engage the services of, and to delegate
powers and responsibilities to, such agents. representatives, advisers, counsel
and accountants as Trustee considers necessary or appropriate. any of whom may
be an affiliate of Trustee or a person who renders services to such an
affiliate, and, as a part of its expenses under this Trust Agreement, to pay
their reasonable expenses and compensation;

                  (3) To make, execute and deliver, as Trustee, any and all
deeds, leases, mortgages, conveyances, waivers, releases or other instruments in
writing necessary or appropriate for the accomplishment of any of the powers
listed in this Trust Agreement; and

                  (4) Generally to do all other acts that Trustee deems 
necessary or appropriate for the protection of the Trust.

                  Section 7.     Disposition of Income.

                  (1) During the term of this Trust, all income received by the
Trust, net of expenses and taxes, shall be accumulated and reinvested.

                  Section 8.     Accounting by Trustee.

                  (1) Trustee shall keep accurate and detailed records of all
investments, receipts, disbursements, and all other transactions required to be
made, including such specific records as shall be agreed upon in writing between
Company and Trustee. Within 90 days following the close of each calendar year
and within 90 days after removal or resignation of Trustee, Trustee shall
deliver to Company a



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written account of its administration of the Trust during such year or during
the period from the close of the last preceding year to the date of such removal
or resignation, setting forth all investments, receipts, disbursements and other
transactions effected by it, including a description of all securities and
investments purchased and sold with the cost or net proceeds of such purchases
or sales (accrued interest paid or receivable being shown separately), and
showing all cash, securities and other property held in the Trust at the end of
such year or as of the date of such removal or resignation, as the case may be.
Trustee may satisfy its obligation under this Section 8 by rendering to Company
monthly statements setting forth the information required by this Section
separately for the month covered by the statement.

                  Section 9.     Responsibility and Indemnity of Trustee.

                  (1) Trustee shall act with the care, skill, prudence and
diligence under the circumstances then prevailing that a prudent person acting
in like capacity and familiar with such matters would use in the conduct of an
enterprise of a like character and with like aims, provided, however, that
Trustee shall incur no liability to any person for any action taken pursuant to
a direction, request or approval given by Company which is contemplated by, and
in conformity with, the terms of the Plan(s) and this Trust and is given in
writing by Company. Trustee shall also incur no liability to any person for any
failure to act in the absence of direction, request or approval from Company
that is contemplated by, and in conformity with, the terms of this Trust. In the
event of a dispute between Company and a party, Trustee may apply to a court of
competent jurisdiction to resolve the dispute.

                  (2) Company hereby indemnifies Trustee and each of its
affiliates (collectively, the "Indemnified Parties") against, and shall hold
them harmless from, any and all loss, claims, liability, and expense, including
reasonable attorneys' fees, imposed upon or incurred by any Indemnified Party as
a result of any acts taken, or any failure to act, in accordance with the
directions from Company or any designee of Company, or by reason of the
Indemnified Party's good faith execution of its duties with respect to the
Trust, including, but not limited to, its holding of assets of the Trust.
Company's obligations in the foregoing regard to be satisfied promptly by
Company, provided that in the event the loss, claim, liability or expense
involved is determined by a no longer appealable final judgment entered in a
lawsuit or proceeding to have resulted from the gross negligence or willful
misconduct of Trustee, Trustee shall promptly on request thereafter return to
Company any amount previously received by Trustee under this Section with
respect to such loss, claim, liability or expense. If Company does not pay such
costs, expenses and liabilities in a



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reasonably timely manner, Trustee may obtain payment from the Trust without
direction from Company.

                  (3) Trustee may consult with legal counsel (who may also be
counsel for Company generally) with respect to any of its duties or obligations
hereunder.

                  (4) Trustee may hire agents, accountants. actuaries,
investment advisers, financial consultants or other professionals to assist it
in performing any of its duties or obligations hereunder.

                  (5) Trustee shall have, without exclusion, all powers
conferred on Trustee by applicable law, unless expressly provided otherwise
herein, provided, however, that if an insurance policy is held as an asset of
the Trust, Trustee shall have no power to name a beneficiary of the policy other
than the Trust, to assign the policy (as distinct from conversion of the policy
to a different form) other than to a successor Trustee, or to loan to any person
the proceeds of any borrowing against such policy.

                  (6) However, notwithstanding the provisions of Section 9(e)
above, Trustee may loan to Company the proceeds of any borrowing against an
insurance policy held as an asset of the Trust.

                  (7) Notwithstanding any powers to Trustee pursuant to this
Trust Agreement or to applicable law. Trustee shall not have any power that
could give this Trust the objective of carrying on a business and dividing the
gains therefrom, within the meaning of section 301.7701-2 of the Procedure and
Administrative Regulations promulgated pursuant to the Internal Revenue Code.

                  Section 10.    Compensation and Expenses of Trustee.

                  Trustee is authorized, unless otherwise agreed by Trustee, to
withdraw from the Trust without direction from Company the amount of its fees in
accordance with the fee schedule agreed to by Company and Trustee. Company shall
pay all administrative expenses, but if not so paid, the expenses shall be paid
from the Trust.

                  Section 11.    Resignation and Removal.




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                  (1) Trustee may resign at any time by written notice to
Company, which shall be effective 30 days after receipt of such notice unless
Company and Trustee agree otherwise.

                  (2) Trustee may be removed by Company on 30 days notice or
upon shorter notice accepted by Trustee.

                  (3) Upon resignation or removal of Trustee and appointment of
a successor Trustee, all assets shall subsequently be transferred to the
successor Trustee. The transfer shall be completed within 60 days after receipt
of notice of resignation, removal or transfer, unless Company extends the time
limit, provided that Trustee is provided assurance by Company satisfactory to
Trustee that all fees and expenses reasonably anticipated will be paid.

                  (4) If Trustee resigns or is removed, a successor shall be
appointed, in accordance with Section 12 hereof, by the effective date of
resignation or removal under paragraph (a) or (b) of this section. If no such
appointment has been made, Trustee may apply to a court of competent
jurisdiction for appointment of a successor or for instructions. All expenses of
Trustee in connection with the Proceeding shall be allowed as administrative
expenses of the Trust.

                  (5) Upon settlement of the account and transfer of the Trust
assets to the successor Trustee, all rights and privileges under this Trust
Agreement shall vest in the successor Trustee and all responsibility and
liability of Trustee with respect to the Trust and assets thereof shall
terminate subject only to the requirement that Trustee execute all necessary
documents to transfer the Trust assets to the successor Trustee.

                  Section 12.    Appointment of Successor.

                  (1) If Trustee resigns or is removed in accordance with
Section 11(a) or (b) hereof, Company may appoint any third party, such as a bank
trust department or other party that may be granted corporate trustee powers
under state law, as a successor to replace Trustee upon resignation or removal.
The appointment shall be effective when accepted in writing by the new Trustee,
who shall have all of the rights and powers of the former Trustee, including
ownership rights in the Trust assets. The former Trustee shall execute any
instrument necessary or reasonably required by Company or the successor Trustee
to evidence the transfer.



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                  (2) The successor Trustee need not examine the records and
acts of any prior Trustee and may retain or dispose of existing Trust assets,
subject to Sections 7 and 8 hereof. The successor Trustee shall not be
responsible for and Company shall indemnify and defend the successor Trustee
from any claim or liability resulting from any action or inaction of any prior
Trustee or from any other past event, or any condition existing at the time it
becomes successor Trustee.

                  Section 13.    Amendment or Termination.

                  (1) This Trust Agreement may be amended by a written
instrument executed by Trustee and Company. Notwithstanding the foregoing, no
such amendment shall conflict with the terms of the Plan(s), or shall make the
Trust revocable since the Trust is irrevocable in accordance with Section 1(b)
hereof.

                  (2) The Trust shall not terminate until the date on which Plan
participants and their beneficiaries are no longer entitled to benefits pursuant
to the terms of the Plan(s). Upon termination of the Trust any assets remaining
in the Trust shall be returned to Company.

                  (3) Upon written approval of participants or beneficiaries
entitled to payment of benefits pursuant to the terms of the Plan(s). Company
may terminate this Trust prior to the time all benefit payments under the
Plan(s) have been made. All assets in the Trust at termination shall be returned
to Company.

                  Section 14.    Miscellaneous.

                  (1) Any provision of this Trust Agreement prohibited by law
shall be ineffective to the extent of any such prohibition, without invalidating
the remaining provisions hereof.

                  (2) Benefits payable to Plan participants and their
beneficiaries under this Trust Agreement may not be anticipated, assigned
(either at law or in equity), alienated, pledged, encumbered or subjected to
attachment, garnishment, levy, execution or other legal or equitable process.

                  (3) This Trust Agreement shall be governed by and construed in
accordance with the laws of the state in which Trustee is incorporated as set
forth above.




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                  (4) The provisions of Sections 2(d), 3(b)(3), 9(b) and 15 of
this Agreement shall survive termination of this Agreement.

                  (5) The rights, duties, responsibilities, obligations and
liabilities of Trustee are as set forth in this Trust Agreement, and no
provision of the Plan(s) or any other documents shall affect such rights,
responsibilities, obligations and liabilities. If there is a conflict between
provisions of the Plan(s) and this Trust Agreement with respect to any subject
involving Trustee, including but not limited to the responsibility, authority or
powers of Trustee, the provisions or this Trust Agreement shall be controlling.

                  (6) For purposes of this Trust, Change of Control shall mean:
The purchase or other acquisition by any person, entity or group of persons,
within the meaning of section 13(d) or 14(d) of the Securities Exchange Act of
1934 ("Act"), or any comparable successor provisions, of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Act) of 30 percent or
more of either the outstanding shares of common stock or the combined voting
power of Company's then outstanding voting securities entitled to vote
generally, or the approval by the stockholders of Company of a reorganization,
merger, or consolidation, in each case, with respect to which persons who were
stockholders of Company immediately prior to such reorganization, merger or
consolidation do not, immediately thereafter, own more than 50 percent of the
combined voting power entitled to vote generally in the election of directors of
the reorganized, merged or consolidated Company's then outstanding securities,
or a liquidation or dissolution of Company or of the sale of all or
substantially all of Company's assets.

                  Section 15.    Arbitration.

-    Arbitration is final and binding on the parties.

-    The parties waive their right to seek remedies in court, including the 
     right to jury trial.

-    Pre-arbitration discovery is generally more limited than and different from
     court proceedings.
 
-    The arbitrators' award is not required to include factual findings or level
     reasoning and any party's right to appeal or seek modification of rulings 
     by the arbitrators is strictly limited.




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-    The panel of arbitrators will typically include a minority of arbitrators 
     who were or are affiliated with the securities industry.

     Company agrees that all controversies that may arise between Company and 
either or both the Trustee and its affiliate Merrill Lynch, Pierce, Fenner &
Smith Incorporated ("MLPF&S") in connection with the Trust, including, but not
limited to, those involving any transactions, or the construction, performance,
or breach of this or any other agreement between Company and either or both the
Trustee And MLPF&S, whether entered into prior, on or subsequent to the date
hereof, shall be determined by arbitration. Any arbitration under this agreement
shall be conducted only before the New York Stock Exchange, Inc., the American
Stock Exchange, Inc., or arbitration facility provided by any other exchange of
which MLPF&S is a member, the National Association of Securities Dealers, Inc.,
or the Municipal Securities Rulemaking Board, and in accordance with its
arbitration rules then in force. Company may elect in the first instance whether
arbitration shall be conducted before the New York Stock Exchange, Inc., the
American Stock Exchange, Inc., other exchange of which MLPF&S is a member, the
National Association Of Securities Dealers, Inc., or the Municipal Securities
Rulemaking Board, but if Company fails to make such election, by registered
letter or telegram addressed to Merrill Lynch Trust, Employee Benefit Trust
Operations, P.O. Box 30532, New Brunswick, New Jersey 08989-0532, before the
expiration of five days after receipt of a written request from MLPF&S and/or
the trustee to make such election, then MLPF&S and/or the Trustee may make such
election. Judgment upon the award of arbitrators may be entered in any court,
state or federal, having jurisdiction. No person shall bring a putative or
certified class action to arbitration, nor seek to enforce any pre-dispute
arbitration agreement against any person who has initiated in court a putative
class action; who is a member of putative class who has not opted out of the
class with respect to any claims encompassed by the putative class action until:

(i)   the class certification is denied;

(II)  the class is decertified; or

(iii) the customer is excluded from the class by the court. Such forbearance to
enforce an agreement to arbitrate shall not constitute a waiver of any rights
under this agreement except to the extent stated herein.

                  Section 16.    Effective Date.




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<PAGE>   15


          The effective date of this Trust Agreement shall be _______, 1998.






















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<PAGE>   16


                  IN WITNESS WHEREOF, Company and the Trustee have executed this
Trust Agreement each by action of a duly authorized person.

                  By signing this Agreement, the undersigned Company
acknowledges (1) that, in accordance with Section 15 of this Agreement, Company
is agreeing in advance to arbitrate any controversies that may arise with either
or both the Trustee or MLPF&S and (2) receipt of a copy of this Agreement.


                                   Ivex Packaging Corporation
                                   (Company)

                                   By:  /s/ Frank V. Tannura  
                                       ----------------------------------------
                                            (Signature)
                                   Name/Title:  Frank V. Tannura    
                                               --------------------------------
                                   Vice President and Chief Financial Officer   
                                   --------------------------------------------

                                   By:  /s/ G. Douglas Patterson    
                                       ----------------------------------------
                                            (Signature)
                                   Name/Title:  G. Douglas Patterson    
                                               --------------------------------
                                   Vice President and General Counsel   
                                   --------------------------------------------



                                   --------------------------------------------
                                   (Trustee) 

                                   By:               
                                      -----------------------------------------
                                                    (Signature)

                                   Name/Title:                
                                              ---------------------------------

                                   --------------------------------------------






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                                                                      APPENDIX A

NAME OF NONQUALIFIED DEFERRED COMPENSATION PLAN(S):

        Ivex Packaging Corp.          Plan
-------------------------------------

                                      Plan
-------------------------------------



















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                                                                      APPENDIX B


           Deposit of cash and/or marketable securities to the Trust:


Cash:  $1,300,000        
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Marketable Securities:   0     
                         -------------------------------------------------------


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