<PAGE>

                                                                    EXHIBIT 10.5

                                PLUM CREEK TIMBER
                                  COMPANY, INC.

                           EXECUTIVE AND KEY EMPLOYEE
                 SALARY AND INCENTIVE COMPENSATION DEFERRAL PLAN

       (AN AMENDMENT AND RESTATEMENT OF THE PLUM CREEK MANAGEMENT COMPANY
         KEY EMPLOYEE SALARY AND INCENTIVE COMPENSATION DEFERRAL PLAN).

                    AS AMENDED AND RESTATED DECEMBER 6, 2002

<PAGE>

                         PLUM CREEK TIMBER COMPANY, INC.

                           EXECUTIVE AND KEY EMPLOYEE
                 SALARY AND INCENTIVE COMPENSATION DEFERRAL PLAN

              SECTION 1 - RESTATEMENT, PURPOSE, AND EFFECTIVE DATE

                  1.1      Restatement. Plum Creek Timber Company, Inc., a
Delaware corporation (the "Company"), hereby amends and restates the Plum Creek
Management Company, L.P. Executive And Key Employee Salary And Incentive
Compensation Deferral Plan, and renames it the "Plum Creek Timber Company, Inc.
Salary and Incentive Compensation Deferral Plan" (the "Plan"). The Plan is for
the benefit of a select group of management or highly compensated employees (as
described in Section 201(a) of the Employee Retirement Income Security Act of
1974, as amended) of the Company and its Subsidiaries.

                  1.2      Purpose. The purpose of the Plan is to help attract
and retain the services of executive and key employees of the Company and its
Subsidiaries by providing them with the opportunity to defer receipt of all or
some part of their Salary and/or Incentive Compensation.

                  1.3      Effective Date. This restatement and amendment shall
be effective December 6, 2002.

                            SECTION 2 - DEFINITIONS

                  2.1      Definitions. When used in the Plan, the following
terms shall have the meanings specified below.

                           (a)      "Beneficiary" means the person or persons to
whom payments are to be made pursuant to the terms of the Plan in the event of
the Participant's death. The designation shall be on a form provided by the Plan
Committee, executed by the Participant, and delivered to the Plan Committee. A
Participant may change his or her Beneficiary designation at any time. If no
Beneficiary is designated, the designation is ineffective, or in the event the
Beneficiary dies before the balance of the Memorandum Account is paid, the
balance shall be paid to the Participant's estate, and to the extent required by
community property law, to his or her surviving spouse.

                           (b)      "Board" means the Board of Directors of the
Company.

                           (c)      "Code" means the Internal Revenue Code of
1986 (or any successor to such Code), as amended and in effect at the time of
reference.

1

<PAGE>

                           (d)      "Committee" means a committee of two or more
Board members appointed by the Board, none of whom is eligible to participate in
the Plan.

                           (e)      "Common Stock" means the common stock, par
value $0.01 per share, of the Company.

                           (f)      "Company" means Plum Creek Timber Company,
Inc., a Delaware corporation (or any successor).

                           (g)      "Eligible Employees" means an Executive
Employee or Key Employee (Grade 38 or higher) of the Company and/or a
Subsidiary.

                           (h)      "Employees" means employees regularly
employed on a salaried basis by the Company and/or a Subsidiary.

                           (i)      "Executive Employee" means an employee with
the title of Vice President or higher.

                           (j)      "Participant" means an Eligible Employee who
has elected to participate in the Plan.

                           (k)      "Permanent Disability" means a condition
that results in the Participant's being totally disabled, whether due to
physical or mental causes, to the extent that he or she is prevented from
engaging in further employment with the Company or a Subsidiary and the
condition is likely to be permanent and continuous during the remainder of the
Participant's life, as determined by the Plan Committee, upon the basis of
medical evidence.

                           (l)      "Plan" means the Plum Creek Timber Company,
Inc., Executive and Key Employee Salary and Incentive Compensation Deferral Plan
as restated and amended and set forth herein and, where appropriate, any
predecessor plan thereto.

                           (m)      "Plan Committee" means a committee of two or
more officers of the Company appointed by the Committee.

                           (n)      "Plan Year" means the calendar year.

                           (o)      "Salary and/or Incentive Compensation" means
the base salary being paid to a Participant for the Plan Year or partial year,
and/or incentive compensation to be paid to the Participant during the same Plan
Year under the terms of any incentive or bonus arrangement provided by the
Company or any of its Subsidiaries, including amounts payable to Participants in
shares of Common Stock.

2

<PAGE>

                           (p)      "Subsidiary" (A) any corporation (other than
the Company) in an unbroken chain of corporations beginning with the Company, if
each of the corporations (other than the last corporation) in the unbroken chain
owns stock possessing 50% or more of the total combined voting power of all
classes of stock in one of the other corporations in the chain or (B) any
partnership in which the Company and/or any Subsidiary owns more than 50% of the
capital or profits interests.

                           (q)      "Trust" means any trust established in
connection with the Plan.

                           (r)      "Trustee" means the trustee of the Trust.

                           SECTION 3 - ADMINISTRATION

                  3.1      Administration. The Plan Committee shall be
responsible for the administration of the Plan. The Plan Committee, by majority
action thereof, is authorized to interpret the Plan, to prescribe, amend, and
rescind rules and regulations relating to the Plan, to provide for conditions
and assurances deemed necessary or advisable to protect the interests of the
Company and any Subsidiary, and to make all other determinations necessary or
advisable for the administration of the Plan, but only to the extent not
contrary to the express provisions of the Plan. Determinations, interpretations,
or other actions made or taken by the Plan Committee under the Plan, that have
been approved by the Committee, shall be final and binding for all purposes and
upon all persons whomsoever.

                  3.2      Indemnification of Plan Committee. The Company shall
indemnify each member of the Plan Committee (which, for purposes of this Section
3.2, includes anyone to whom duties have been delegated) against any and all
claims, losses, damages, expenses, including counsel fees, incurred by the Plan
Committee, and any liability, including any amounts paid in settlement with the
Company's approval, arising from the member's or the Plan Committee's action or
failure to act, except when the same is judicially determined to be attributable
to the gross negligence or willful misconduct of such member. The right of
indemnity described in the preceding sentence shall be conditioned upon (a) the
timely receipt of notice by the Company of any claim asserted against the Plan
Committee member, which notice, in the event of a lawsuit shall be given within
10 days after receipt by the Plan Committee member, and (b) the timely receipt
by the Company of an offer from the Plan Committee member of an opportunity to
participate in the settlement or defense of such claim.

3

<PAGE>

                    SECTION 4 - ELIGIBILITY AND PARTICIPATION

                  4.1      Eligibility and Participation. Eligible Employees may
elect to begin participation in the Plan on the first of the month following the
month in which they become Eligible Employees or on the first day of any
calendar year.

                             SECTION 5 - DEFERRALS

                  5.1      Deferred Payment. Before January 1 of any calendar
year (or, with respect to individuals who first become Participants during a
year, on or before the date on which they become Participants) or such other
date as the Plan Committee may determine in its discretion, each Participant may
elect to have the payment of all or a portion of his or her Salary for the year
beginning January 1 (or, if later, so much of the year as commences on the day
following the date on which the individual becomes a Participant) and/or
Incentive Compensation, payable during that calendar year, deferred until his or
her retirement, death, Permanent Disability, resignation or any other
termination of employment with the Company. The election shall be made on a form
prescribed by the Plan Committee. The election shall apply only to that calendar
year or partial year. The Participant may designate how payments will be made,
in accordance with the provisions in Section 5.4. If a Participant has not made
an election, the Salary and/or Incentive Compensation paid to him or her shall
be paid in accordance with the Company's or the applicable Subsidiary's
customary payroll practices. Notwithstanding the foregoing, in no case shall a
Participant be permitted to defer compensation (whether cash, stock-based or
both) with respect to a Plan Year with a value (determined by the Plan
Committee) in excess of the sum of the Participant's (a) then current base
salary and (b) maximum annual cash bonus potential under the terms of any
incentive or bonus arrangement provided by the Company or any of its
Subsidiaries (whether or not paid). The value of deferred Common Stock shall be
determined as of the date the Common Stock would otherwise have paid to the
Participant but for the deferral. If any deferral (whether cash, stock-based or
both) exceeds the limitation described herein, then the Plan Committee shall
reduce such deferral in a manner that it deems appropriate.

                  5.2      Memorandum Account. The Company shall establish a
ledger account (the "Memorandum Account") for each Participant who has elected
to defer the receipt of some or all of his or her Salary and/or Incentive
Compensation for the purpose of reflecting the Company's obligation to pay the
deferred Salary and/or Incentive Compensation as provided in Sections 5.4 and
5.5. The Memorandum Account shall be comprised of a Cash Account and a Stock
Account. A Participant's Cash Account shall be credited with a notional amount
equal to the amount otherwise payable (but for the deferral) to the Participant
in cash and a Participant's Stock account shall be credited with a number of
notional shares equal to the number of shares of Common Stock otherwise (but for
the deferral) payable to the

4

<PAGE>

Participant. Investment rate(s) of return shall accrue on a Participant's Cash
Account to the date of distribution, and shall be credited to the Cash Account
at the end of each calendar quarter or such other periods as may be determined
by the Plan Committee. The Plan Committee shall determine the investment rate(s)
of return periodically and in so doing may take into account the earnings,
losses, appreciation or depreciation attributable to any discretionary
investments made pursuant to section 5.3. The Plan Committee shall credit a
number of notional shares to a Participant's Stock Account effective as of the
date shares of Common Stock would otherwise have been paid to the Participant
but for the deferral. If dividends are paid on the Common Stock from and after
the date notional shares are credited to a Participant's Stock Account, the Plan
Committee shall credit the Participant's Cash Account to reflect the dividends
that would have been paid to the Participant if the Participant actually held a
number of shares of Common Stock equal to the number of notional shares then
credited to his or her Stock Account. The Plan Committee shall make appropriate
adjustments to Stock Accounts if the Common Stock shall be changed (or converted
into other consideration) as a result of stock splits, combinations or exchanges
of shares, or through reorganization, merger, consolidation or similar events.

                  5.3      Discretionary Investment by Company. The deferred
Salary and/or Incentive Compensation to be paid to Participants is an unfunded
obligation of the Company. The Plan Committee may annually direct that an amount
equal to the deferred Salary and/or Incentive Compensation for that year held in
Cash Accounts shall be invested as the Plan Committee shall determine and may
approve certain fixed and variable rates of return which are to be credited to
the Participant Memorandum Accounts under the Plan. The Plan Committee may set
investment rate(s) of return equal to those earned by various mutual funds. The
Plan Committee in its sole discretion may determine that all or some portion of
an amount equal to the deferred Salary and/or Incentive Compensation shall be
paid into one or more grantor Trusts to be established by the Company or a
Subsidiary of which it shall be the beneficiary, and to the assets of which it
shall become entitled as and to the extent that Participants receive benefits
under this Plan. The Plan Committee may designate an investment advisor to
direct investments and reinvestment of the funds, including investments paid
into any grantor trusts hereunder.

                  5.4      Payment of Cash Accounts. Upon the retirement,
Permanent Disability, resignation, or termination of employment of a Participant
who has a Cash Account, the Company shall pay to such Participant an amount
equal to the balance of the Participant's Cash Account, as (a) a lump sum cash
payment or (b) in annual installments over a period of years to be determined by
the Plan Committee. Upon the death of a Participant with a Cash Account, the
Company shall pay to his or her Beneficiary an amount equal to the balance of
the Participant's Cash Account as a lump sum cash payment. Lump sum payments
shall commence as soon as

5

<PAGE>

practicable after the Participant's retirement, Permanent Disability,
resignation or other termination of employment or death. Annual installment
payments are valued December 31 (or the last trade date of the year) and paid in
January of the following year.

                  5.5      Payment of Stock Accounts. Upon the retirement,
Permanent Disability, resignation, or termination of employment of a Participant
who has a Stock Account, the Company shall deliver to such Participant a number
of shares of Common Stock equal to the balance of the Participant's Stock
Account, as (a) a lump sum payment or (b) in annual installments of shares of
Common Stock over a period of years to be determined by the Plan Committee. Upon
the death of a Participant who has a Stock Account, the Company shall pay to his
or her Beneficiary an amount of shares of Common Stock equal to the balance of
notional shares in the Participant's Stock Account as a lump sum payment. Lump
sum payments shall commence as soon as practicable after the Participant's
retirement, Permanent Disability, resignation or other termination of employment
or death. Each Common Stock installment payment shall be paid in the month of
January. Shares of Common Stock delivered in respect of a deferral under this
Plan shall be paid pursuant to an equity plan of the Company that provides for
the payment of shares of Common Stock and such shares shall count against the
Common Stock share reserve of such plan. Any fractional shares shall be settled
in cash.

                  5.6      Selection of Payment Option. Before January 1 of any
calendar year, the Plan Committee may allow each Participant to change the
payment provisions for past and current amounts deferred, provided, however,
that the Participant must remain employed by the Company or a Subsidiary for one
(1) year prior to the changes taking effect.

                  5.7      Hardship. In the event the Committee, upon written
request of a Participant, determines in its sole discretion that the Participant
has suffered an unforeseeable financial emergency, the Committee may pay to a
Participant as soon as practicable following such determination, an amount from
the Participant's Memorandum Account that shall not exceed the minimum amount
necessary to satisfy the emergency. For purposes of this Plan, an unforeseeable
financial emergency is an unanticipated emergency that is caused by an event
beyond the control of the Participant as may result from illness, casualty loss
or sudden financial reversal and that would result in severe financial hardship
to the Participant if the emergency distribution were not permitted. Financial
needs arising from foreseeable events, such as the purchase of a residence or
education expenses for children, shall not be considered a financial emergency.
A Participant who receives a hardship distribution pursuant to this Section 5.7
shall be ineligible to make any additional deferrals under the Plan for the
balance of the Plan Year in which the hardship distribution occurs and for the
immediately following Plan Year.

6

<PAGE>

                  5.8      Incapacity of Participant or Beneficiary. If the Plan
Committee finds that any Participant or Beneficiary to whom a payment is payable
under the Plan is unable to care for his or her affairs because of illness or
accident or is under a legal disability, any payment due (unless a prior claim
therefore shall have been made by a duly appointed legal representative), may at
the discretion of the Plan Committee, be paid to the spouse, child, parent or
brother or sister of such Participant or Beneficiary. Any such payment shall be
a complete discharge of the obligations of the Company under the provisions of
the Plan.

                  5.9      Nonassignment. The right of a Participant or
Beneficiary to the payment of any amounts under the Plan may not be assigned,
transferred, pledged or encumbered nor shall such right or other interests be
subject to attachment, garnishment, execution or other legal process.

                        SECTION 6 - UNFUNDED OBLIGATION

                  6.1      Unfunded Obligation. The deferred amounts to be paid
to Participants pursuant to this Plan are unfunded obligations of the Company.
The Company is not required to segregate any monies from its general funds, to
issue any shares of Common Stock, to create any trusts, or to make any special
deposits with respect to this obligation. Title to and beneficial ownership of
any investments including trust investments which the Company or Related
Companies may make to fulfill this obligation shall at all times remain in the
Company or its Subsidiaries, as the case may be. Any investments and the
creation or maintenance of any trust or memorandum accounts shall not create or
constitute a trust or a fiduciary relationship between the Committee, or the
Company and/or any Subsidiary, and a Participant, or otherwise create any vested
or beneficial interest in any Participant, or his or her Beneficiary, or his or
her creditors, in any assets of the Company or any Subsidiary whatsoever.
Participants shall have no claim against the Company or any Subsidiary for any
changes in the value of any assets which may be invested or reinvested by the
Company with respect to this Plan or with respect to any changes in value of
shares of Common Stock.

                        SECTION 7 - RIGHTS OF EMPLOYMENT

                  7.1      Employment. Nothing in this Plan shall interfere with
or limit in any way the right of the Company or any Subsidiary to terminate any
Participant's employment at any time, nor confer upon any Participant any right
to continue in the employ of the Company or any Subsidiary.

7

<PAGE>

                          SECTION 8 - CLAIMS PROCEDURE

                  8.1      Claims Appeal Procedure. After first discussing any
claims that a Participant may have under the Plan with the Company's Vice
President of Human Resources, the Participant may then make a claim under this
Plan in writing to the Plan Committee. The Plan Committee shall make all
determinations concerning such claim. Any decision by the Plan Committee denying
such claim shall be in writing and shall be delivered to the Participant, or if
applicable, anyone who makes a claim in respect of the Participant. Such
decision shall set forth the reasons for denial in plain language. Pertinent
provisions of the Plan shall be cited and, where appropriate, an explanation as
to how the claimant can perfect the claim will be provided. This notice of
denial of the claim will be provided within 90 days of the Plan Committee's
receipt of the claimant's claim. If the Plan Committee fails to notify the
claimant of its decision regarding the claim, the claim shall be considered
denied, and the claimant shall then be permitted to proceed with the appeal as
provided in Section 8.2.

                  8.2      Appeal of Claim. A claimant who has been completely
or partially denied a claim shall be entitled to appeal a denial of his/her
claim by filing a written statement of his/her position with the Committee no
later than sixty (60) days after receipt of the written notification of such
claim denial. The Committee shall schedule an opportunity for a full and fair
review of the issue within thirty (30) days of receipt of the appeal. The
decision on review shall set forth specific reasons for the decision, and shall
cite specific references to the pertinent Plan provisions on which the decision
is based. Following the review of any additional information submitted by the
claimant, either through the hearing process or otherwise, the Committee shall
render a decision on the review of the denied claim. The Committee shall make
its decision regarding the merits of the denied claim within 60 days following
receipt of the request for review (or within 120 days after such receipt, in a
case where there are special circumstances requiring extension of time for
reviewing the appealed claim). The Committee shall deliver the decision to the
claimant in writing. If an extension of time for reviewing the appealed claim is
required because of special circumstances, written notice of the extension shall
be furnished to the claimant prior to the commencement of the extension. If the
decision on review is not furnished within the prescribed time, the claim shall
be deemed denied on review. The decision on review shall set forth specific
reasons for the decision, and shall cite specific references to the pertinent
Plan provisions on which the decision is based.

                     SECTION 9 - TERMINATION AND AMENDMENT

                  9.1      Termination and Amendment. The Committee may from
time to time amend, suspend or terminate the Plan, in whole or in part, and if
the Plan is

8

<PAGE>

suspended or terminated, the Committee may reinstate any or all of its
provisions. No such amendment, suspension, or termination: (a) may impair the
right of a Participant or designated Beneficiary to receive the deferred Salary
and/or Incentive Compensation benefit accrued prior to the effective date of
such amendment, suspension or termination; or (b) shall be effective for a Plan
Year with respect to which a deferral election has been made under Section 5.

                         SECTION 10 - WITHHOLDING TAXES

                  10.1     Withholding Taxes. Appropriate payroll taxes shall be
withheld from all amounts required to be paid or credited pursuant to this Plan.

               SECTION 11 - REQUIREMENTS OF LAW AND GOVERNING LAW

                  11.1     Requirements of Law. The operation and administration
of the Plan shall be subject to all applicable laws, rules, and regulations, and
to such approvals by any governmental agencies or national securities exchanges
as may be required.

                  11.2     Governing Law. The Plan and all agreements under the
Plan shall be constructed in accordance with and governed by the laws of the
State of Washington.

9