<PAGE>   1
                                                                EXHIBIT 10.3







________________________________________________________________________________







                                TRUST AGREEMENT




                                    Between

                                   IPC, Inc.
                  (Formerly Named Ivex Packaging Corporation)

                                      and

                                David E. Wartner








                              __________________

                                October 17, 1996
                              __________________




________________________________________________________________________________

<PAGE>   2













                               TABLE OF CONTENTS
                         (Not a part of the Agreement)



<TABLE>
<CAPTION>
                                                                       Page  
                                                                       ----  
                                                                             
         <S>    <C>                                                     <C>  
         I.     TRUST FUND . . . . . . . . . . . . . . . . . . . . . .    2  
                                                                             
         II.    PAYMENTS TO TRUST BENEFICIARIES  . . . . . . . . . . .    4  
                                                                             
         III.   THE TRUSTEE'S RESPONSIBILITY REGARDING PAYMENTS TO           
                A TRUST BENEFICIARY WHEN THE COMPANY IS INSOLVENT  . .    6  
                                                                             
         IV.    PAYMENTS TO COMPANY  . . . . . . . . . . . . . . . . .    8  
                                                                             
         V.     INVESTMENT OF TRUST FUND . . . . . . . . . . . . . . .    9  
                                                                             
         VI.    INCOME OF THE TRUST  . . . . . . . . . . . . . . . . .   12  
                                                                             
         VII.   ACCOUNTING BY TRUSTEE  . . . . . . . . . . . . . . . .   13  
                                                                             
         VIII.  RESPONSIBILITY AND INDEMNIFICATION OF TRUSTEE  . . . .   16  
                                                                             
         IX.    AMENDMENTS, ETC., TO PLANS AND EXHIBITS  . . . . . . .   21  
                                                                             
         X.     REPLACEMENT OF TRUSTEE . . . . . . . . . . . . . . . .   23  
                                                                             
         XI.    AMENDMENT OR TERMINATION OF AGREEMENT  . . . . . . . .   25  
                                                                             
         XII.   SPECIAL DISTRIBUTIONS  . . . . . . . . . . . . . . . .   26  
                                                                             
         XIII.  GENERAL PROVISIONS . . . . . . . . . . . . . . . . . .   29  
                                                                             
         XIV.   NOTICES  . . . . . . . . . . . . . . . . . . . . . . .   31  
</TABLE>






                                     -i-



<PAGE>   3


                              TABLE OF DEFINITIONS
                         (Not a part of the Agreement)


                                       

<TABLE>
<CAPTION>

                                              Section
                                              -------
                     <S>                      <C>
                     "Agreement"              Introduction
                     "Board"                  3.1
                     "CEO"                    3.1
                     "Code"                   1.6
                     "Company"                Introduction
                     "ERISA"                  1.6
                     "Executive"              7.3
                     "Insolvent"              Recitals
                     "Participants"           Recitals
                     "Plans"                  Recitals
                     "Successor"              9.1
                     "Supplemental Benefits"  Recitals
                     "Trust Beneficiaries"    Recitals
                     "Trust"                  Recitals
                     "Trustee"                Introduction
</TABLE>



                                    -ii-



<PAGE>   4


                                TRUST AGREEMENT

     This trust agreement ("Agreement") made this 17th day of October, 1996 by
and between IPC, Inc. (formerly named Ivex Packaging Corporation), a Delaware
corporation (the "Company"), and David E. Wartner (the "Trustee").

                                  WITNESSETH:
     WHEREAS, the current employees of the Company listed on Exhibit A hereto
(the "Participants") and their beneficiaries are, or may become, entitled to
benefits under the provisions of one or more of the plans and/or individual
agreements listed on Exhibit B hereto, as the same have been or may hereafter
be amended or restated, or any successor thereto (collectively referred to
herein as the "Plans"), copies of which are appended hereto;

     WHEREAS, the Plans provide for certain income deferral, retirement income
and/or other benefits, and the Company wishes specifically to assure the
payment to the Participants and their beneficiaries (the Participants and their
respective beneficiaries being collectively referred to herein as the "Trust
Beneficiaries") of amounts due thereunder (the amounts so payable being
collectively referred to herein as the "Supplemental Benefits");

     WHEREAS, the Company wishes to establish a trust (the "Trust") and to
transfer to the Trust assets which shall be held therein subject to the claims
of the creditors of the Company to the extent set forth in Article III hereof
until (i) paid in full 

<PAGE>   5


to all Trust Beneficiaries as Supplemental Benefits in
such manner and at such times as specified herein unless the Company is
Insolvent (as that term is defined herein) at the time that such Supplemental
Benefits become payable or (ii) otherwise disposed of pursuant to the terms of
this Agreement; and 

     WHEREAS, the Company shall be considered "Insolvent" for
purposes of this Agreement at such time as the Company (i) is subject to a
pending proceeding as a debtor under the United States Bankruptcy Code, as
heretofore or hereafter amended, or (ii) is unable to pay its debts as they
become due;

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

                                 I.  TRUST FUND

     I.1 Subject to the claims of creditors to the extent set
forth in Article III hereof, the Company hereby deposits with the Trustee in
trust Fifty Thousand Dollars ($50,000), which shall become the principal of
this Trust, to be held, administered and disposed of by the Trustee as herein
provided.
     I.2 The Trust hereby established shall be irrevocable.

     I.3 The principal of the Trust and any earnings thereon shall be held in
trust separate and apart from other funds of the Company and shall be used
exclusively for the uses and purposes herein set forth.  No Trust Beneficiary
shall have any preferred claim on, or any beneficial ownership interest in, any
assets of 

                                     -2-
<PAGE>   6


the Trust prior to the time that such assets are paid to a Trust
Beneficiary as Supplemental Benefits as provided herein.  Any rights created
under the Plans and this Agreement shall be mere unsecured contractual rights
of Trust Beneficiaries with respect to the Company.  The obligation of the
Trustee to pay Supplemental Benefits pursuant to this Agreement constitutes
merely an unfunded and unsecured promise to pay such Supplemental Benefits.


        I.4 Within 10 days after the end of each calendar quarter ending after
the date of this Agreement, the Company shall make a contribution to the Trust
that is sufficient, taking into account the assets of the Trust as of the end
of such calendar quarter prior to such contribution, to provide for the payment
of all Supplemental Benefits and any other amounts that may become payable or
reimbursable pursuant to the terms of this Agreement as determined as of the
end of such calendar quarter. 

        I.5 Within 10 days after each of the date of this Agreement and the end
of each calendar quarter ending thereafter, the Company shall (a) specify as of
the end of such calendar quarter or the date of this Agreement, as the case may
be, the nature, amounts and timing of the Supplemental Benefits, if any,
including the vested percentage thereof under the applicable Plans as if the
Participant had then terminated employment, to which each Trust Beneficiary may
become entitled, subject to Article IX hereof, in an exhibit ("Exhibit C")
which shall become a part of this Agreement and be incorporated herein by this
reference, (b) provide any corresponding revisions to Exhibits A 

                                     -3-

<PAGE>   7


and B that may  be required and (c) provide the Trustee with copies of the
Plans and any amendments thereto. 

       I.6 The Trust is intended to be a grantor trust within the
meaning of section 671 of the Internal Revenue Code of 1986, as amended (the
"Code"), or any successor provision thereto, and shall be construed
accordingly.  The purpose of the Trust is to assure that the Company's
obligations to the Participants pursuant to the Plans are fulfilled.  The Trust
is neither intended nor designed to qualify under section 401(a) of the Code or
to be subject to the provisions of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA").  The Trust established under this Agreement does
not fund and is not intended to fund the Plans or any other employee benefit
plan or program of the Company.  Such Trust is and is intended to be a
depository arrangement with the Trustee for the setting aside of cash and other
assets of the Company for the meeting of part or all of its future obligations
with respect to Supplemental Benefits to some or all of the Trust Beneficiaries
under the Plans.

                      II.  PAYMENTS TO TRUST BENEFICIARIES

      II.1 Provided that the Company is not Insolvent, the Trustee shall make
payments of Supplemental Benefits to each Trust Beneficiary from the assets of
the Trust in compliance and conformity with the terms of the Plans and in
accordance with Exhibit C hereto, and subject to Article IX hereof.  If all or
any portion of a Participant's account balance under the Plans is 

                                     -4-


<PAGE>   8


forfeited in accordance with the terms of the Plans, the Company, subject to    
Article IX thereof, shall provide notice to the Trustee of such forfeiture no
later than 10 days after the end of the calendar quarter in which such
forfeiture occurs and shall specify the portion of the Participant's account so
forfeited. 

II.2 No payment from the Trust assets to a Trust Beneficiary shall
exceed the balance of the separate subaccount(s) maintained pursuant to Section
7.2 hereof with respect to the corresponding Plan and the applicable
Participant. If, after application of the preceding sentence, the balance of a
Participant's separate subaccount(s) maintained pursuant to Section 7.2 hereof
with respect to a Plan is not sufficient to provide for full payment of the
Supplemental Benefits to which such Participant's Trust Beneficiaries are
entitled as provided under the Plan, the Trustee shall so notify the Company
and the Company shall make the balance of each such payment directly to the
Trust Beneficiary as it falls due as provided in the applicable provision of
the respective Plan. 

II.3 The Company may make payments of Supplemental
Benefits to each Trust Beneficiary.  The Company shall notify the Trustee of
its decision to pay Supplemental Benefits directly prior to the time amounts
are due to be paid to a Trust Beneficiary.

                                     -5-

<PAGE>   9


     II.4 Nothing in this Agreement shall in any way diminish any rights of any
Trust Beneficiary to pursue such Trust Beneficiary's rights as a general
creditor of the Company with respect to Supplemental Benefits or otherwise, and
the rights of each Trust Beneficiary under the respective Plan shall in no way
be affected or diminished by any provision of this Agreement or action taken
pursuant to this Agreement, except that any payment actually received by any
Trust Beneficiary hereunder shall reduce dollar-per-dollar amounts otherwise
due to such Trust Beneficiary pursuant to such Plan.

     III. THE TRUSTEE'S RESPONSIBILITY REGARDING PAYMENTS TO
     A TRUST BENEFICIARY WHEN THE COMPANY IS INSOLVENT

     III.1 At all times during the continuance of this Trust, the principal and
income of the Trust shall be subject to claims of creditors of the Company as
set forth in this Section 3.1.  The Board of Directors of the Company (the
"Board") and the Chief Executive Officer of the Company (the "CEO") shall have
the duty to inform the Trustee in writing if either the Board or the CEO
believes that the Company is Insolvent.  If the Trustee receives a notice in
writing from the Board or the CEO stating that the Company is Insolvent or if a
person claiming to be a creditor of
the Company with claims in excess of $5 million alleges in writing to the
Trustee that the Company has become Insolvent, the Trustee shall independently
determine within 30 days after receipt of such notice whether the Company is
Insolvent.  Pending such determination, or if the Trustee has actual knowledge
or has 

                                     -6-

<PAGE>   10


determined that the Company is Insolvent, the Trustee shall discontinue
or refrain from making payments to any Trust Beneficiary and hold the Trust
assets for the benefit of the general creditors of the Company.  The Trustee
shall pay any undistributed principal and income in the Trust to the extent
necessary to satisfy the claims of the creditors of the Company as a court of
competent jurisdiction may direct.  Such payments of principal and income shall
be borne by the Participants in proportion to the balances on the date of such
court order of their respective subaccounts maintained pursuant to Section 7.2
hereof; provided, however, that all accounts and subaccounts shall first be
allocated and reallocated as of such date in accordance with Section 7.2
hereof.  If the Trustee has discontinued or refrained from making payments to
any Trust Beneficiary pursuant to this Section 3.1, the Trustee shall pay or
resume payments to such Trust Beneficiary in accordance with this Agreement if
the Trustee has determined that the Company is
not Insolvent, or is no longer Insolvent (if the Trustee initially determined
the Company to be Insolvent), or pursuant to the order of a court of competent
jurisdiction.  The Trustee shall have no duty to inquire as to whether the
Company is Insolvent and may rely on information concerning the Insolvency of
the Company that has been furnished to the Trustee by any creditor of the
Company or by any person (other than an employee or director of the Company)
acting with apparent or actual authority with respect to the Company.

                                     -7-



<PAGE>   11



        III.2. Subject to the provisions of Section 2.2 hereof, if the Trustee
is precluded from paying Supplemental Benefits from the Trust assets pursuant
to Section 3.1 hereof and such prohibition is subsequently removed, the Trustee
shall pay the aggregate amount of all Supplemental Benefits that would have
been paid to the Trust Beneficiaries in accordance with this Agreement during
the period of such prohibition, less the aggregate amount of Supplemental
Benefits paid to any Trust Beneficiary directly by the Company during any such
period, together with interest on the net amount delayed determined at a rate
equal to the rate actually earned (including, without limitation, accrued but
unpaid income, market appreciation or depreciation, both realized and
unrealized, and accrued expenses of the Trust payable from Trust assets under
the terms of the Agreement) during such period with respect to the assets of
the Trust corresponding to such net amount delayed.

                            IV. PAYMENTS TO COMPANY
     IV.1  Except to the extent expressly contemplated by this Article IV or
Section 11.3, the Company shall have no right or power to direct the Trustee to
return any of the Trust assets to the Company before all payments of
Supplemental Benefits have been made to all Trust Beneficiaries as herein
provided.
     IV.2 Not later than 90 days after the end of each calendar quarter ending
after the date of this Agreement, the Trustee shall pay to the Company the
portion of the balance of the separate subaccount(s) maintained pursuant to
Section 7.2 hereto 

                                     -8-

<PAGE>   12


on behalf of any Participant that is in excess of the   Supplemental Benefits
to which the Participant's Trust Beneficiaries are entitled under the Plan,
which excess has been forfeited by the Participant under the terms of the Plan
during such calendar year, as determined by the Trustee consistent with Section
2.1 and subject to Section IX hereof.

                          V.  INVESTMENT OF TRUST FUND

     V.1  In absence of the exercise of the power of direction provided for in
Section 5.2, the Trustee is authorized and empowered in its sole discretion to
invest and reinvest the assets of Trust consistent with the provisions of this
Section 5.1 and 5.3.  The investment objective of the Trustee shall be to
preserve the principal of the Trust while obtaining a reasonable total rate of
return, measurement of which shall include, without limitation, market
appreciation or depreciation plus receipt of interest and dividends.  The
Trustee shall be mindful, in the course of its management of the Trust, of the
liquidity demands on the Trust.

     V.2 The Company with the agreement of the Executive, as hereinafter
defined, may direct the Trustee to segregate all or a portion of the Trust
assets in a separate investment account or accounts and may appoint an
investment advisor or manager (hereinafter referred to as an "investment
manager") to direct the investment and reinvestment of such investment account
or accounts in respect of which an investment manager has been appointed,
including to have the power to manage, acquire and 

                                     -9-

<PAGE>   13


dispose of any assets of the Trust on a discretionary basis in a manner
consistent with investment objectives provided to the investment manager by the 
Company and the Executive. In such  event, the Company and the Executive shall
notify the Trustee in writing of the appointment of such investment manager. 
The Trustee shall, without question, comply with any directions given to it by
the investment manager appointed pursuant to the preceding sentences of this
Section 5.2.  Directions for the investment or reinvestment of Trust assets
from an investment manager shall, in a manner and in accordance with procedures
acceptable to or established by the Trustee or its designee, be communicated to
and implemented by, as the case be, the Trustee, the Trustee's designee or
broker/dealer designated for the purpose by the investment manager. 
Communication of any such directions to such a designee or broker/dealer shall
conclusively be deemed an authorization to the designee or broker/dealer to
implement the direction even though coming from a person other than the
Trustee.  The Trustee shall not be accountable for any losses sustained by
reason of any action taken or omitted pursuant to the provisions of the
preceding sentences of this Section 5.2 and no person dealing with the Trustee
need inquire whether or not these provisions have been complied with.  The
Trustee shall be under no duty to question any such direction of the investment
manager, to review any securities or other property held in any investment      
account or accounts in respect of which an investment manager has been
appointed or to make any recommendations to the investment manager with respect
to such 

                                    -10-


<PAGE>   14


securities or other property. The Trustee shall not be liable or responsible
for any loss resulting to the Trust by reason of any sale or investment made
pursuant to the direction of an investment manager nor by reason of the failure
to take any action with such direction in the absence of further directions of
such investment manager. Notwithstanding anything in the Agreement to the
contrary, the Trustee shall be indemnified and saved harmless by the Company
from and against any and all personal liability to which the Trustee may be
subjected by carrying out any directions of an investment manager issued
pursuant hereto or for failure to act in the absence of directions of the
investment manager including all expenses reasonably incurred in its defense in
the event the Company fails to provide such defense; provided, however, the
Trustee shall not be so indemnified if it participates knowingly in, or
knowingly undertakes to conceal, an act or omission of an investment manager,
having actual knowledge that such act or omission was a breach of fiduciary
duty; provided further, however, that the Trustee shall not be deemed to have
knowingly participated in or knowingly undertaken to conceal    an act or
omission of an  investment manager with knowledge that such act or omission was
a breach of fiduciary duty by merely complying with directions of an investment
manager or for failure to act in the absence of directions of an investment
manager or by reason of maintaining accounting records.  The Trustee shall not
be charged with knowledge of the termination of the appointment of any
investment manager until it receives written notice thereof from the Company

                                    -11-


<PAGE>   15


and the Executive. 

V.3 The Trustee shall have the sole power to invest the assets of the Trust,
subject to and in accordance with the provisions of Section 5.1 and 5.2 hereof
(including, without limitation, in securities of the Company).  The Trustee
shall not be liable for any failure to maximize income on such portion of the
Trust assets as may be from time to time invested or reinvested as set forth
above, nor for any loss of principal or income due to the liquidation of any
investment that the Trustee, in its sole discretion, believes necessary to make
payments or to reimburse expenses under the terms of this Agreement.
Notwithstanding the provisions of Section 5.1 and 5.2, the Trustee shall have
the right to invest assets of the Trust for short-term investment periods,
pending distribution or long-term investment of such assets, as the Trustee may
deem proper and suitable in non-interest bearing deposit accounts (including
any such accounts offered or maintained by the Trustee or any successor or
affiliated corporation).  Nothing in this Agreement shall preclude the
commingling of Trust assets for investment.

                            VI.  INCOME OF THE TRUST
     VI.1 Except as provided in Article III hereof, during the continuance of
this Trust all net income (or loss) of the Trust shall be retained in the Trust
and allocated quarterly in accordance with Section 7.2 hereof.  For this
purpose, the income (or loss) of the Trust shall be determined for a calendar
quarter by taking into account all income, gains or losses on Trust 

                                    -12-


<PAGE>   16


assets, including (a) accrued but unpaid income, (b) any increase or decrease,
both realized and unrealized, in the value of the Trust assets attributable to
market appreciation or depreciation and (c) any accrued expenses of the Trust
payable form Trust assets under the terms of the Agreement.


                                    -13-

<PAGE>   17



                         VII.  ACCOUNTING BY TRUSTEE

     VII.1 The Trustee shall maintain or cause to be maintained such books,
records and accounts as may be necessary for the proper administration of the
Trust assets, including such specific records as shall be agreed upon in writing
by the Company and the Trustee.  Within 60 days following the close of each
calendar year that includes or commences after the date of this Agreement until
the termination of this Trust or the removal or resignation of the Trustee (and
within 60 days after the date of such termination, removal or resignation), the
Trustee shall render or cause to be rendered to the Company and the Executive an
accounting with respect to the Trust assets as of the end of the then most
recent calendar year (and as of the date of such termination, removal or
resignation, as the case may be).  The Trustee shall furnish or cause to be
furnished to the Company on a monthly basis (or as the Company shall direct from
time to time) and in a timely manner such information regarding the Trust as the
Company shall require for purposes of preparing its statements of financial
condition.  The Trustee shall at all times maintain or cause to be maintained
separate bookkeeping subaccounts for each Participant as prescribed by Section
7.2 hereof, and shall provide or cause to be provided    quarterly  statements
of the subaccounts to each Participant.  Upon the written request of the Company
or the Executive, the Trustee shall deliver or cause to be delivered to the
Executive or the Company, as the case may be, a written report setting forth the
amount held in the Trust, the amount credited to each subaccount 

                                    -14-


<PAGE>   18


and a record of the deposits made with respect thereto by the Company. 
Absent compelling circumstances, the Trustee shall not be required to respond
to more than one such request made within any calendar quarter.  Unless the
Company or the Executive shall have filed with the Trustee written exception or
objection to the statement and account furnished by the Trustee within 90 days
after receipt thereof, the Company and the Trust Beneficiaries shall be deemed
to have approved such statement and account, and in such case the Trustee shall
be forever released and discharged with respect to all matters and things
reported in such statement and account as though it had been settled by a
decree of a court of competent jurisdiction in an action or proceeding to which
the Company and the Trust Beneficiaries were parties. 

     VII.2 (a) Consistent with Exhibit C hereto and subject to Article IX
hereof, the Trustee shall maintain or cause to be maintained separate
subaccount(s) for each Participant as are necessary or appropriate for each
Plan.  The Trustee shall credit or debit or cause to be credited a debited each
subaccount as appropriate to reflect the respective allocable portion of the
Trust assets, as such Trust assets may be adjusted from time to time pursuant to
the terms of this Agreement.  All deposits of principal pursuant to Sections
1.1, 1.4 and 9.3 shall be allocated, but not reallocated, by the Company. 

     (b) As further described in this Section 7.2 (b), as of the last day of 
each calendar quarter ending after the date of this Agreement and as of
such other date(s) provided for under this Agreement, the Trustee shall
allocate or cause to be 

                                    -15-


<PAGE>   19


allocated the net income (or loss) of the Trust for such calendar
quarter in accordance with Exhibit C hereto and subject to Article IX hereof.
The net income (or loss) of the Trust for a calendar quarter shall be allocated
to Participants' subaccounts in proportion to their subaccount balances as
determined under this Section 7.2 as of the last day of the immediately
preceding calendar quarter (or the date as of which the allocation of the
initial deposit to the Trust is made in the case of the calendar quarter
including such date) as adjusted to reflect distributions made since that date.

        VII.3 For purposes of this Agreement, the term "Executive" shall refer
to the Participant listed on Exhibit A who, in the sole judgment of the
Trustee, has the greatest aggregate amount in his or her respective subaccounts
maintained under Section 7.2 hereof and who has accepted such designation in
writing; provided, however, if any Participant shall be deceased or adjudged
incompetent, such Participant's Successor (as defined in Section 9.1 hereof)
(or if no Successor, the Trust Beneficiaries of such Participant) shall
participate in such Participant's stead, and (b) no Successor or Trust
Beneficiary shall participate if all payments of Supplemental Benefits have
been made with respect to such Participant (including the Trust Beneficiaries
of such Participant).  The determination of which Participant should be the
Executive shall be made within 30 days after (and as of) the first day of
January of each year; provided, however, that an acceptance is not required
from a Participant who is already serving as the Executive.  The Trustee 

                                    -16-


<PAGE>   20


shall notify each Participant who, as a result of such determination, is no
longer an Executive.  A Participant may resign as the Executive after
providing not less than 30 days' notice in writing to the Trustee; provided,
however, that no such resignation shall become effective until the successor
Executive has accepted such designation in writing.  In the event of the
resignation, death or incapacity of the Executive, the Trustee
shall designate a successor Executive, which shall be the Participant (other
than an Executive or a Participant who has declined to accept a designation as
an Executive) who has the greatest aggregate amount in such Participant's
respective subaccounts maintained under Section 7.2 hereof and who accepts such
designation in writing.  Except as otherwise expressly provided herein, the
Executive shall be considered to have "agreed" or "consented" to, or "approved"
or "requested", a proposed action or decision under the terms of this Agreement
when the Executive so indicates in writing to the Trustee.

              VIII.  RESPONSIBILITY AND INDEMNIFICATION OF TRUSTEE
     VIII.1 The duties and responsibilities of the Trustee shall be limited to
those expressly set forth in this Agreement, and no implied covenants or
obligations shall be read into this Agreement against the Trustee.

     VIII.2 In addition to and without limiting any other provision of this
Agreement, the Trustee shall, in its sole discretion, based upon the
information furnished to it by the Company and/or the Participants and any
additional information 

                                    -17-


<PAGE>   21


that it may reasonably request, (a) make all decisions
regarding whether a Trust Beneficiary is eligible for the payment of
Supplemental Benefits, the nature, amount and timing of such Benefits, and any
other decisions pertinent to the exercise of the Trustee's duties and
responsibilities under this Agreement, and (b) exercise any power or discretion
granted pursuant to the Plans to the Board, any committee of the Board, or to
any other committee, entity or person.  In connection with the exercise of such
duties, responsibilities, power and discretion, the Trustee (i) shall be
entitled to rely upon any information furnished to it in accordance with the
provisions of this Agreement, (ii) shall not be required to make any
independent verification of such information, and (iii) may, in its sole
discretion, waive any requirement to furnish information to it.  The Company
hereby agrees that it will not contest, dispute or otherwise challenge any
decision made by the Trustee pursuant to the terms of this Agreement.

     VIII.3 If all or any part of the Trust assets are at any time attached,
garnished, or levied upon by any court order, or in case the payment,
assignment, transfer, conveyance or delivery of any such property shall be
stayed or enjoined by any court order, or in case any order, judgment or decree
shall be made or entered by a court affecting such property or any part
thereof, then and in any of such events the Trustee shall be authorized,
in its sole discretion, to rely upon and comply with any such order, judgment
or decree, and it shall not be liable to the Company or any Trust Beneficiary
by reason of such compliance 

                                    -18-


<PAGE>   22

even though such order, judgment or decree subsequently may be reversed,
modified, annulled, set aside or vacated.

     VIII.4 The Trustee shall act with the care, skill, prudence and diligence
under the circumstances then prevailing that a prudent man acting in a 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 the
Trustee shall incur no liability to anyone for any action taken pursuant to a
direction, request, or approval given by the Company or the Executive or Trust
Beneficiary or any investment manager contemplated by and complying with the
terms of this Agreement.  The Trustee shall discharge its responsibility for the
investment, management and control of the Trust assets solely in the interest of
the Trust Beneficiaries and for the exclusive purpose of assuring that, to the
extent of available Trust assets, and in accordance with the terms of this
Agreement, all payments of Supplemental Benefits are made when due to the Trust
Beneficiaries.
  
     VIII.5 The Trustee may consult with legal counsel (who may be counsel for
the Company) to be selected by it, and the Trustee shall not be liable for any
action taken or suffered by it in accordance with the advice of such counsel.

     VIII.6 The Trustee shall be reimbursed by the Company for its reasonable
expenses incurred in connection with the performance of its duties hereunder
(including, but not limited to, the fees and expenses of counsel, accountants,
investment advisors and others incurred pursuant to Section 8.5, 8.10 or 


                                      -19-
<PAGE>   23


12.2 hereof) and shall be paid reasonable fees for the performance of such
duties in the manner provided by Section 8.7 hereof.  Notwithstanding the
foregoing, brokerage commissions and other transaction fees and investment fees
attributable to commingled investments shall be paid at the direction of the
Company from Trust assets.  The fees and expenses of any investment manager
appointed pursuant to Section 5.2 shall be paid by the Company. 

     VIII.7 The Company agrees to indemnify and hold harmless the Trustee from
and against any and all damages, losses, claims or expenses as incurred
(including expenses of investigation and fees and disbursements of counsel to
the Trustee and any taxes imposed on the Trust assets or income of the Trust)
arising out of or in connection with the performance by the Trustee of its
duties hereunder, other than such damages, losses, claims or expenses arising
out of the Trustee's gross negligence or willful misconduct.  The Trustee shall
not be required to undertake or to defend any litigation arising in connection
with this Agreement unless it be first indemnified by the Company against its
prospective costs, expenses and liabilities (including, without limitation,
attorneys' fees and expenses) relating thereto, and the Company hereby agrees to
indemnify the Trustee and be primarily liable for such costs, expenses, and
liabilities.  Any amount payable to the Trustee under Section 8.6 hereof (other
than an amount which the Company, pursuant to Section 8.6, has directed paid
from Trust assets) or this Section 8.7 shall be paid by the Company promptly
upon demand therefor by the Trustee.

                                    -20-


<PAGE>   24

     VIII.8 Subject to Section 5.2 if an investment manager has been appointed,
the Trustee may vote any stock or other securities and exercise any right
appurtenant to any stock, other securities or other property held hereunder,
either in person or by general or limited proxy, power of attorney or other
instrument.

     VIII.9 The Trustee may hold securities in bearer form and may register
securities and other property held in the Trust fund in its own name or in the
name of a nominee, combine certificates representing securities with
certificates of the same issue held by the Trustee in other fiduciary
capacities, and deposit, or arrange for deposit of, property with any
depository; provided that the books and records of the Trustee shall at all
times show that all such securities are part of the assets of the Trust.


     VIII.10 The Trustee may hire agents, accountants, actuaries, investment
advisors, financial consultants or other professionals, who may be agents,
accountants, actuaries, investment advisors, financial consultants, or otherwise
act in a professional capacity, as the case may be, for the Company or with
respect to any Plan, to assist the Trustee in performing any of its duties
hereunder. 

     VIII.11 The Trustee shall have, without exclusion, all powers conferred on
trustees by applicable law unless expressly provided otherwise herein.

     VIII.12 Notwithstanding any other provision of this Agreement, in the event
of the termination of the Trust, or the resignation or discharge of the Trustee,
the Trustee shall have 

                                      -21-

<PAGE>   25


the right to a settlement of its accounts in accordance with the procedures
set forth in Section 7.1 hereof, which may be made, at the option of the
Trustee, either (a) by a judicial settlement in a court of competent
jurisdiction, or (b) by agreement of settlement, release and indemnity from 
the Company to the Trustee.

                  IX.  AMENDMENTS, ETC., TO PLANS AND EXHIBITS

     IX.1  Not later than 10 days after the end of each calendar quarter ending
after the date of this Agreement and at such other times as may in the judgment
of the Company be appropriate in view of a change in circumstances, the Company
and each Participant (or the personal representative of such Participant
(including the guardian, executor or administrator of such Participant)
(hereafter, the "Successor" of such Participant)) shall agree upon and furnish
any amendment to Exhibit C hereto (but only with respect to such Participant's
Supplemental Benefits) as shall be required to reflect:

               (a) any required change in the amounts allocated to or vested
          percentage of the Participant's accounts under the Plans as the result
          of the allocation of contributions or income (or loss) (or otherwise)
          during the prior calendar quarter, or

               (b) any amendment, restatement or other change in or to the
          Plans,


which agreements to amendments to such Exhibit C shall be furnished to the
Trustee by the Company or the Participants (or 


                                    -22-


<PAGE>   26

their   Successors) and thereafter be deemed to be a part of, and to amend to
the extent thereof, this Agreement; provided, however, that in the event of the
failure of the Company and any Participant (or Successor) to reach such
agreement, the provisions of Section 9.2. hereof shall control. 

     IX.2  The Company shall, and any Trust Beneficiary may, promptly furnish
the Trustee true and correct copies of any amendment, restatement or successor
to any of the Plans.  The Company shall, and any Trust Beneficiary may, also
furnish the Trustee, upon the Trustee's request, such evidence of the
compensation of the Participants and other information as the Trustee shall deem
necessary for its determinations under this Section 9.2.  Upon written
notification to the Trustee by the Company or any Participant (or Successor) of
the failure of the Company and such Participant (or Successor) to agree as all
provided in Section 9.1, the Trustee shall, to the extent necessary in the sole
judgment of the Trustee, (a) recompute the account balances under the Plans, the
vested percentage thereof and amounts payable hereunder as set forth in Exhibit
C hereto to any Trust Beneficiary, and (b) notify the Company and the
Participant (or Successor) in writing of its computations. Thereafter, this
Agreement and all Exhibits hereto shall be amended to the extent of such Trustee
determinations without further action; provided, however, that the failure of
the Company to furnish any such amendment, restatement, successor,  compensation
or other information shall in no way diminish the rights of any Trust
Beneficiary hereunder or thereunder. 

                                      -23-

<PAGE>   27


     IX.3  Any amendment to Exhibit A (and any directly corresponding amendment
to Exhibit B) that modifies one or more lists of Participants must be (a) agreed
to by the Executive, and (b) in the case of an amendment that adds a new
Participant as a Trust Beneficiary, accompanied by the deposit into the Trust by
the Company, on or before the effective date on which the new Participant would
become a Trust Beneficiary, an amount sufficient to pay such new Participant's
Supplemental Benefits hereunder.

     IX.4 Notwithstanding the foregoing provisions of this Article IX, any
amendment, restatement, successor or other change in a Plan or the addition of a
new Plan that would materially increase the responsibilities or liabilities of
the Trustee or materially change its duties shall also require the consent of
the Trustee, which consent shall not be unreasonably withheld.

                           X.  REPLACEMENT OF TRUSTEE

     X.1 The Trustee may resign and be discharged from its duties hereunder
after providing not less than 90 days' notice in writing to the Company and to
the Executive.  The Trustee may be removed at any time upon notice in writing by
the Company with the agreement of the Executive.  A replacement or successor
trustee shall be appointed by the Company with the agreement of the Executive.
No such removal or resignation shall become effective until the effectiveness of
the acceptance of the trust by a successor trustee designated in accordance with
this Article X.  If the Trustee should resign, and within 45 days of the 

                                    -24-


<PAGE>   28

notice of such resignation the Company and the Executive shall not have notified
the Trustee of an agreement as to a replacement trustee, the Trustee shall
appoint a successor trustee, which shall be such bank or trust company (a) that
the Trustee in its sole discretion considers an appropriate trustee for the
Trust, having due regard for the objectives, magnitude and expected duration of
the Trust; (b) (i) whose trust assets under investment would place it among the
100 largest trust companies in the United States, or (ii) which is a national
banking association or established under the laws of one of the states of the
United States, and which has equity in excess of $100 million; and (c) that is
independent and not subject to the control of either the Company or the Trust
Beneficiaries.  The preceding determinations shall be made as of the time of
appointment of the successor trustee.  If after making reasonable efforts to
appoint a successor trustee as provided above, the Trustee has been unable to do
so, the Trustee shall petition a court of competent jurisdiction to appoint a
successor trustee.  Upon the acceptance of the trust by a successor trustee, the
Trustee shall release all of the moneys and other property in the Trust to its
successor, who shall thereafter for all purposes of this Agreement be considered
to be the "Trustee."  In the event of its removal or resignation, the Trustee
shall duly file or cause to be filed with the Company and the Executive, a
written statement or statements of accounts and proceedings as provided in
Section 7.1 hereof for the period since the last previous annual accounting of
the Trust, and if written objection to such 

                                    -25-


<PAGE>   29

account is not filed as provided in Section 7.1 hereof, the Trustee shall
to the maximum extent permitted by applicable law be forever released and
discharged from all liability and accountability with respect to the propriety
of its acts and transactions shown in such account.


                   XI.  AMENDMENT OR TERMINATION OF AGREEMENT

     XI.1 This Agreement may be amended at any time and to any extent by a
written instrument executed by the Trustee and the Company and approved by the
Executive; provided, however, that no amendment shall have the effect of (a)
making the Trust revocable or (b) altering Section 11.2 hereof. Notwithstanding
the previous sentence, (i) amendments contemplated by Article IX hereof shall be
made as therein provided, and (ii) the approval by the Executive shall not be
required for any amendment necessary in order to obtain a favorable private
letter ruling (if such ruling is sought) from the Internal Revenue Service
regarding the effect of the Trust on the taxation of the Company or the Trust
Beneficiaries.

     XI.2 The Trust shall terminate upon the earliest to occur of (i) a
determination by the Trustee in its sole judgment that no Trust Beneficiary is
or will be entitled to any further payment of Supplemental Benefits; (ii) such
time as the Trust no longer contains any assets, or contains assets that, in the
sole judgment of the Trustee, are insubstantial in relation to the actual and
potential liabilities of the Trustee to pay Supplemental Benefits under the
terms of this Agreement and any 

                                    -26-


<PAGE>   30

other amounts to be paid from the assets of the Trust, including, without
limitation, the fees and expenses of the Trustee and counsel; or (iii) such
time as the Trustee shall have received consents from the Executive to the
termination of this Agreement.  Notwithstanding the previous sentence (other
than clause (ii) thereof), if payments under a Plan with respect to a Trust
Beneficiary are the subject of litigation and if the balance of the respective
subaccount maintained pursuant to Section 7.2 is greater than zero, the Trust
shall not terminate and the funds held in the Trust with respect to such Trust
Beneficiary shall continue to be held by the Trustee until the final resolution
of such litigation.  The Trustee may assume that no Plan is the subject of such
litigation unless the Trustee receives written notice from a Trust Beneficiary
or the Company with respect to such litigation.  The Trustee may rely upon
written notice from a Trust Beneficiary as to the final resolution of such
litigation. 

     XI.3 Upon a termination of the Trust as provided in Section 11.2 hereof,
any assets remaining in the Trust, less all payments, expenses, taxes and other
charges under this Agreement as of such date of termination, shall be returned
to the Company.

                                    -27-

<PAGE>   31

                          XII.  SPECIAL DISTRIBUTIONS

     XII.1 It is intended that (a) the creation of, transfer of assets to, and
irrevocability of, the Trust will not cause any of the Plans to be other than
"unfunded" for purposes of title I of ERISA; (b) transfers of assets to the
Trust will not be transfers of property for purposes of section 83 of the Code,
or any successor provision thereto, nor will such transfers cause a currently
taxable benefit to be realized by a Trust Beneficiary pursuant to the "economic
benefit" doctrine; and (c) pursuant to section 451 of the Code, or any successor
provision thereto, amounts will be includible as compensation in the gross
income of a Trust Beneficiary in the taxable year or years in which such amounts
are actually distributed or made available to such Trust Beneficiary by the
Trustee.

     XII.2  Notwithstanding anything to the contrary contained in any Plan, if
the Trustee obtains an opinion of tax counsel selected by the Trustee to the
effect that based upon any of the following occurring after the date of this
Agreement:

          (a) change in the federal tax or revenue laws, (b) a decision in a
     controlling case, (c) a published ruling or similar announcement issued by
     the Internal Revenue Service, (d) a regulation issued by the Secretary of
     the Treasury, (e) a decision by a court of competent jurisdiction involving
     a Trust Beneficiary, or (f) a closing agreement made under section 7121 of
     the Code, or any successor provision thereto, that is approved by the
     Internal Revenue Service and involves a Trust Beneficiary, it is more
     likely than not that an 

                                    -28-



<PAGE>   32

    amount is includible in the gross income of a Trust Beneficiary
    in a taxable year that is prior to the taxable year or years in which such
    amount would, but for this Section 12.2, otherwise actually be distributed
    or made available to such Trust Beneficiary by the Trustee, then promptly
    after the next quarterly allocation pursuant to Section 7.2 hereof, the
    Trustee shall distribute to each affected Trust Beneficiary an amount equal
    to the lesser of (i) the amount determined to be includible in gross income
    in such prior taxable year, or (ii) the subaccount balance(s) corresponding
    to such amount.  The Trustee shall seek such an opinion of tax counsel if
    and only if requested to do so by the Executive.


     XII.3  Notwithstanding anything to the contrary contained in any Plan, if a
Trust Beneficiary provides evidence satisfactory to the Trustee demonstrating
that, as a result of an assertion by the Internal Revenue Service, a final
nonappealable binding determination has been made with respect to a taxable year
of such Trust Beneficiary that an amount is includible in the gross income of
such Trust Beneficiary in a taxable year that is prior to the taxable year in
which such amount would, but for this Section 12.3, otherwise actually be
distributed or made available to such Trust Beneficiary by the Trustee, then
promptly after the next quarterly allocation pursuant to Section 7.2 hereof, the
Trustee shall distribute to such Trust Beneficiary an amount equal to the lesser
of (a) such amount determined by the Internal Revenue Service to be includible
in gross income in such prior 

                                    -29-

<PAGE>   33


taxable year, or (b) the subaccount balance(s) corresponding to such
amount. 

     XII.4 Notwithstanding anything to the contrary contained in any Plan, if
the Trustee determines that based upon the aggregate of the subaccount balances
with respect to a Participant the maximum amount potentially or actually due to
such Participant is less than $5,000, the Trustee shall pay such aggregate
amount to the Trust Beneficiaries of such Participant in full satisfaction of
all obligations of the Trustee hereunder to the Trust Beneficiaries of such
Participant.


                           XIII.  GENERAL PROVISIONS

     XIII.1 The Company shall, at any time and from time to time, upon the
reasonable request of the Trustee, provide information, execute and deliver such
further instruments and do such further acts as may be necessary or proper to
effectuate the purposes of this Trust.

     XIII.2 Each Exhibit referred to in this Agreement shall become a part
hereof and is expressly incorporated herein by reference.

     XIII.3 This Agreement sets forth the entire understanding of the parties
with respect to the subject matter hereof and supersedes any and all prior
agreements, arrangements and understandings relating thereto.  This Agreement
shall be binding upon and inure to the benefit of the parties and their
respective successors and legal representatives.

                                     -30-


<PAGE>   34


     XIII.4 This Agreement shall be governed by and construed in accordance with
the laws of the State of Illinois, other than and without reference to any
provisions of such laws regarding choice of laws or conflict of laws.

     XIII.5 In the event that any provision of this Agreement or the application
thereof to any person or circumstances shall be determined by a court of
competent jurisdiction to be invalid or unenforceable to any extent, the
remainder of this Agreement, or the application of such provision to persons or
circumstances other than those as to which it is held invalid or unenforceable,
shall not be affected thereby, and each provision of this Agreement shall be
valid and enforced to the maximum extent permitted by law.

     XIII.6 (a)  The preamble to this Agreement, including the definitions
provided therein, shall be considered a part of the agreement of the parties as
if set forth in a section of this Agreement.

     (b)  The headings contained in this Agreement are solely for the purpose of
reference, are not part of the agreement of the parties and shall not in any way
affect the meaning or interpretation of this Agreement.

     XIII.7 The right of any Trust Beneficiary to any benefit or to any payment
hereunder may not be anticipated, assigned (either at law or in equity),
alienated or subject to attachment, garnishment, levy, execution or other legal
or equitable process except as required by law.  Any attempt by any Trust
Beneficiary to anticipate, alienate, assign, sell, transfer, pledge, encumber

                                    -31-

<PAGE>   35


or charge the same shall be void.  The Trust assets shall not in any manner be
subject to the debts, contracts, liabilities, engagement or torts of any Trust
Beneficiary and payments hereunder shall not be considered an asset of the Trust
Beneficiary in the event of the insolvency or bankruptcy of such Trust
Beneficiary.

     XIII.8 Each Participant (and, where applicable, each Successor) is an
intended beneficiary under this Trust, and as an intended beneficiary shall be
entitled to enforce all terms and provisions hereof with the same force and
effect as if such person had been a party hereto.

     XIII.9 The Trustee shall be permitted to withhold from any payment due to a
Participant hereunder the amount required by law to be so withheld under
federal, state and local withholding requirements or otherwise, and shall pay
over to the appropriate government authority the amounts so withheld.  The
Trustee may rely on reasonable instructions from the Company as to any required
withholding and shall be fully protected under Section 8.7 hereof in relying on
such instructions.

     XIII.10 Notwithstanding any other provision hereof, the parties' respective
rights and obligations under Section 13.8 shall survive any termination or
expiration of this Agreement.

                                    -32-


<PAGE>   36

                                XIV.  NOTICES

     XIV.1  For all purposes of this Agreement, any communication,
including without limitation, any notice, consent, report, demand or waiver
required or permitted to be given hereunder shall be in writing and, unless
otherwise provided in this Agreement, shall be deemed to have been duly given
when hand delivered or dispatched by telegram or electronic facsimile transfer
(confirmed in writing by mail simultaneously dispatched), or two business days
after having been mailed by United States registered or certified mail, return
receipt requested, postage prepaid, or one business day after having been
dispatched by a nationally recognized overnight courier service to the
appropriate party at the addressed specified below:

<TABLE>
<S>                       <C>
If to the Company, to:    IPC, Inc.
------------------------  100 Tri-State Drive                  
                          Suite 200                            
                          Lincolnshire, IL  60069              
                          Attention:  G. Douglas Patterson, Jr.
                          Telephone:  (847) 945-9100           
                          Telecopy:   (847) 945-9184           
                                                               

If to the Trustee, to:    David E. Wartner
------------------------  c/o Ivex Packaging Corporation
                          100 Tri-State Drive           
                          Suite 200                     
                          Lincolnshire, IL 60069        
                          Telephone:  (847) 945-9100    
                          Telecopy:   (847) 945-9184    
                                                        

If to a Participant, to:  the address of such Participant 
------------------------  as listed next to such Participant's
                          name on Exhibit A hereto,


</TABLE>

provided, however, that if any party or such party's successors shall have
designated a different address by notice to the other parties, then to the last
address so designated.

                                    -33-


<PAGE>   37


     XIV.2  The Company shall provide the Trustee with the names of the
beneficiary or beneficiaries designated by a deceased Participant under the
Plans.

                                    -34-


<PAGE>   38


     IN WITNESS WHEREOF, the Company and the Trustee caused this Agreement to
be executed on its behalf as of the date first above written.

Attested                                IPC, Inc.


By:                                     By:
   ---------------------------             -----------------------------

    Its:                                    Its:
        ----------------------                  ------------------------


                                        David E. Wartner, as Trustee
                                        --------------------------------

                                    -35-


<PAGE>   39



                                   Exhibit A


<TABLE>
<CAPTION>

             Employee         Address                Soc. Sec. No.
             ---------------  ---------------------  -------------
             <S>              <C>                    <C>  

             George V. Bayly  544 Fletcher Circle    ###-##-####
                              Lake Forest, IL 60045
</TABLE>





                                    -36-


<PAGE>   40


                                   Exhibit B



I.   Amended and Restated Employment Agreement, dated as of May 30, 1996,
     between IPC, Inc. and George V. Bayly

                        Participant:  George V. Bayly
            
                                    -37-


<PAGE>   41


                                  Exhibit C

                                      


<TABLE>
<CAPTION>
   Participant      Vested Percentage           Subaccount Balance/Date
------------------  -----------------         ---------------------------
<S>                 <C>                       <C>


1. George V. Bayly       100%                  $50,000 as of  
                                               October 17, 1996

</TABLE>



Payment shall be made in accordance with the Amended and Restated Employment
Agreement, dated as of May 30, 1996, between IPC, Inc. and George V. Bayly.

                                    -38-