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                                                                   Exhibit 10.17



                             PAYLESS CASHWAYS, INC.

                    DEFERRED COMPENSATION PLAN FOR DIRECTORS


Section 1.  Introduction

         1.1  Establishment.  Payless  Cashways,  Inc., an Iowa corporation (the
"Company"),  hereby establishes the Payless Cashways, Inc. Deferred Compensation
Plan for  Directors  (the  "Plan")  for those  directors  of the Company who are
neither officers nor employees of the Company. The Plan provides the opportunity
for Directors to defer receipt of all or a part of their cash  compensation on a
pretax basis and, subject to approval of the Plan by shareholders,  invest those
deferrals in the Company's Stock.

         1.2  Purposes.  The purposes of the Plan are to align the  interests of
Directors more closely with the interests of other  shareholders of the Company,
to  encourage  the  highest  level of  Director  performance  by  providing  the
Directors  with a direct  interest in the Company's  attainment of its financial
goals, and to help attract and retain qualified Directors.

         1.3 Effective  Date.  This Plan shall be effective upon approval of the
Plan by the Board;  provided  that any fees  deferred by a Director and interest
thereon shall not be invested  until the later of (i) the date on which the Plan
is approved by the  shareholders  of the Company or (ii) the date  specified  in
Section 5.3. To the extent an  investment or  distribution  of Stock may be made
under this Plan,  the Plan is intended to qualify for the  exemption  from short
swing profits under  Section  16(b) of the  Securities  Exchange Act of 1934, as
amended, provided by Rule 16b-3 of the Securities and Exchange Commission as now
in effect or hereafter amended.  In the event the shareholders of the Company do
not approve this Plan at the Company's  1996 annual meeting of  shareholders,  a
participating  Director may,  within thirty days after the date of such meeting,
elect  to  terminate  participation  in this  Plan  and to  receive  a  one-time
immediate cash distribution of the entire balance in the Deferred Account.


Section 2.  Definitions

         2.1 Definitions.  The following terms shall have the meanings set forth
below:

         (a)      "Administrative  Committee" means the committee  designated in
                  Section 3 to administer the Plan.

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



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         (c)      "Change in Control" means any of the events set forth below:

                           (i) any person,  as defined in  Sections  3(a)(9) and
                  13(d)(3) of the Securities Exchange Act of 1934 (the "Exchange
                  Act"),  becomes  the  "beneficial  owner" (as  defined in Rule
                  13d-3 promulgated  pursuant to the Exchange Act),  directly or
                  indirectly, of securities of the Company having 25% or more of
                  the voting  power in the election of directors of the Company,
                  excluding,  however,  any person or an "affiliate" (as defined
                  in the  Exchange  Act) of such  person  who is the  beneficial
                  owner of any shares of any class  (preferred or common) of the
                  Company's capital stock on January 31, 1993; or

                           (ii) the occurrence  within any  twelve-month  period
                  during  the term of the Plan of a change in the Board with the
                  result that the  Incumbent  Members (as defined  below) do not
                  constitute  a  majority  of  the  Company's  Board.  The  term
                  "Incumbent Members" shall mean the members of the Board on the
                  date   immediately   preceding   the   commencement   of  such
                  twelve-month  period,  provided  that any  person  becoming  a
                  Director  during such  twelve-month  period whose  election or
                  nomination  for  election  was  approved  by a majority of the
                  Directors  who, on the date of such election or nomination for
                  election,  comprised the Incumbent Members shall be considered
                  one of the Incumbent  Members in respect of such  twelve-month
                  period.

         (d)      "Common Stock Equivalent" means a hypothetical  share of Stock
                  which  shall have a value on any date equal to the Fair Market
                  Value of one share of Stock on that date.

         (e)      "Deferred Account" means the bookkeeping  account  established
                  by the Company in respect to each Director pursuant to Section
                  5.3 hereof and to which shall be credited the fees deferred by
                  the Director and interest thereon, if any, as provided in this
                  Plan and the Common Stock Equivalents into which such deferred
                  fees and interest are invested pursuant to the Plan.

         (f)      "Director"  means a member  of the  Board  who is  neither  an
                  officer nor an employee of the  Company.  For  purposes of the
                  Plan, an employee is an individual  whose wages are subject to
                  the  withholding  of federal  income tax under section 3401 of
                  the Internal  Revenue  Code,  and an officer is an  individual
                  elected  or  appointed  by the Board or  chosen in such  other
                  manner as may be  prescribed  in the Bylaws of the  Company to
                  serve as such.



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         (g)      "Exchange Act" means the  Securities  Exchange Act of 1934, as
                  amended from time to time.

         (h)      "Fair  Market  Value"  means  as of any  applicable  date  the
                  closing sale price of a share of the Company's Common Stock in
                  question   on  the   Composite   Tape  for  New   York   Stock
                  Exchange-Listed  Stock, or, if such stock is not quoted on the
                  Composite  Tape, on the New York Stock  Exchange,  or, if such
                  stock is not listed on such Exchange,  on the principal United
                  States  securities  exchange  registered  under the Securities
                  Exchange  Act of 1934 on which such  stock is  listed,  or, if
                  such  stock  is not  listed  on any  such  exchange,  the last
                  closing bid  quotation  with  respect to a share of such stock
                  immediately  preceding  the time in question  on the  National
                  Association of Securities Dealers,  Inc. Automated  Quotations
                  System  or any  system  then in use (or any  other  system  of
                  reporting or ascertaining  quotations then  available),  or if
                  such stock is not so quoted, the fair market value at the time
                  in  question  of a share of such  stock as  determined  by the
                  Company's Board in good faith.

         (i)      "Internal  Revenue  Code" means the  Internal  Revenue Code of
                  1986, as amended from time to time.

         (j)      "Stock" means the $.01 par value common stock of the Company.

         (k)      "Payment  Date" means each of the dates each year on which the
                  Company pays fees to Directors.

         2.2 Gender and Number.  Except when otherwise indicated by the context,
the masculine gender shall also include the feminine gender, and the definitions
of any term herein in the singular shall also include the plural.


Section 3.  Plan Administration

         The  Plan  shall  be  administered  by  the  Administrative  Committee,
comprised of the Senior Vice  President of Human  Resources  and the Senior Vice
President of Finance of the Company. Subject to the limitations of the Plan, the
Administrative  Committee  shall have the sole and  complete  authority:  (i) to
impose  such  limitations,  restrictions  and  conditions  as  shall  be  deemed
appropriate,  (ii) to  interpret  the  Plan  and to  adopt,  amend  and  rescind
administrative  guidelines and other rules and regulations  relating to the Plan
and  (iii) to make  all  other  determinations  and to take  all  other  actions
necessary or advisable for the  implementation  and  administration of the Plan.
Notwithstanding  the  foregoing,  the  Administrative  Committee  shall  have no



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authority, discretion or power to alter any terms or conditions specified in the
Plan, except in the sense of administering the Plan subject to the provisions of
the Plan. The  Administrative  Committee's  determinations on matters within its
authority shall be conclusive and binding upon the Company,  the Directors,  and
other persons. The Plan shall be interpreted and implemented in a manner so that
Directors  will not fail,  by reason  of the Plan or its  implementation,  to be
"disinterested persons" within the meaning of Rule 16b-3 under Section 16 of the
Exchange Act, as such rule may be amended.


Section 4.  Stock Subject to the Plan

         4.1 Number of Shares.  There shall be authorized for issuance under the
Plan, in accordance  with the  provisions of the Plan,  250,000 shares of Stock.
This  authorization  may be increased from time to time by approval of the Board
and by the shareholders of the Company if such shareholder approval is required.
The Company  shall at all times during the term of the Plan retain as authorized
and  unissued  Stock at least the  number of shares  from time to time  required
under the  provisions of the Plan, or otherwise  assure itself of its ability to
perform its obligations hereunder.  The shares of Stock issuable hereunder shall
be authorized and unissued shares or previously issued and outstanding shares of
Stock reacquired by the Company.

         4.2 Other  Shares of Stock.  Any shares of Stock that are  subject to a
Common Stock  Equivalent  and for any reason are not issued to a Director  shall
automatically become available again for use under the Plan.

         4.3 Adjustments  Upon Changes in Stock. If there shall be any change in
the  Stock  of  the  Company,  through  merger,  consolidation,  reorganization,
recapitalization,  stock dividend,  stock split, spinoff,  split up, dividend in
kind  or  other  change  in  the  corporate  structure  or  distribution  to the
shareholders,  appropriate  adjustments  shall  be  made  by the  Administrative
Committee  (or if the  Company  is not the  surviving  corporation  in any  such
transaction,  the  board  of  directors  of the  surviving  corporation)  in the
aggregate number and kind of shares subject to the Plan, and the number and kind
of shares which may be issued under the Plan.  Appropriate  adjustments may also
be made by the Administrative Committee in the terms of Common Stock Equivalents
under the Plan to  reflect  such  changes  and to modify  any other  terms on an
equitable basis as the Administrative Committee in its discretion determines.


Section 5.  Deferrals and Distributions

         5.1 Deferral Elections. A Director may elect to defer receipt of all or
a specified  portion of the annual  directors' fee, the annual committee chair's
fee,




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and/or  meeting and other fees payable in cash to the Director for serving
on the  Board or any  committee  thereof.  A  Director  may  make the  elections
permitted  hereunder by giving  written notice to the Company in a form approved
by the Administrative Committee. The notice shall include: (i) the percentage of
fees to be  deferred,  (ii) the date as of which  deferral is to  commence  and,
(iii)  subject  to the  limitations  of  this  Section  5,  the  year  in  which
distribution  is to commence and whether lump sum or  installments  (not greater
than 5 years) are  requested.  Amounts  deferred by a Director  pursuant to this
Section 5.1 shall be converted into Common Stock  Equivalents in accordance with
Section 5.3.

         5.2 Time for Electing  Deferral and Change in Election.  An election to
defer fees shall be made prior to the latest to occur of the following:  (i) the
beginning  of the calendar  year for which the fees are to be earned;  (ii) such
Director's  first day of Board service in that year;  (iii) the thirty-first day
following the date the Director  first becomes  eligible to  participate  in the
Plan;  provided  that,  an election  made after the first day of a calendar year
shall only apply to fees earned after the date of the  election.  An election to
defer,  once made, is  irrevocable  for the first  calendar year with respect to
which the  election  is made,  except as  provided in Section  5.11  hereof.  An
election to defer,  once made,  shall  continue to be effective  for  succeeding
calendar  years until revoked or modified by the Director by written  request to
the Administrative Committee prior to the beginning of a calendar year for which
fees would otherwise be deferred, provided that any change in the election other
than a complete  termination  of the deferral  shall not be effective  until six
months and one day after the date of the notice by the Director.

         5.3 Deferred Accounts. A Deferred Account shall be established for each
Director.  Fees  deferred by a Director  shall be credited to such Account as of
the date such amounts  would have  otherwise  been paid in cash to the Director,
and shall be converted into Common Stock  Equivalents based on Fair Market Value
as of the later to occur of (i) the date such amounts would have  otherwise been
paid in cash to the  Director,  (ii) the date on which this Plan is  approved by
shareholders,  or (iii) six months plus one day after the date of the Director's
election to defer;  provided that any amount deferred by the Director shall earn
interest  at eight  percent  (8%) per annum from the date on which the fees were
deferred until the date the fees are converted into Common Stock  Equivalents as
provided in this sentence.  A Director's Deferred Account shall also be credited
with dividends and other distributions pursuant to Section 5.4.

         5.4 Hypothetical  Dividends on Common Stock Equivalents.  Dividends and
other  distributions  on Common Stock  Equivalents  shall be deemed to have been
paid as if such Common Stock  Equivalents were actual shares of Stock issued and
outstanding  on the  respective  record  or  distribution  dates.  Common  Stock
Equivalents  shall be  credited  to the  Deferred  Account  in  respect  of cash
dividends and any other securities or property issued on the Stock in connection



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with  reclassifications,  spinoffs and the like on the basis of the value of the
dividend or other  asset  distributed  and the Fair  Market  Value of the Common
Stock  Equivalents  on the date of the  announcement  of the  dividend  or asset
distribution,  all at the same time and in the same amount as dividends or other
distributions  are paid or  issued  on the  Stock.  Fractional  shares  shall be
credited  to a  Director's  Deferred  Account  cumulatively,  but the balance of
shares of Common Stock  Equivalents  in a Director's  Deferred  Account shall be
rounded to the next highest  whole share for any  distribution  to such Director
pursuant to this Section 5.

         5.5 Statement of Accounts. A statement will be sent to each Director as
to the balance of his or her Deferred Account at least once each calendar year.

         5.6 Payment of Accounts.  As soon as practicable  following termination
of  services as a  Director,  a Director  shall  receive a  distribution  of his
Deferred  Account as directed by the  Director in an election  deferral  notice.
Either a lump sum or the first of equal  annual  installments  (not greater than
five) shall be paid in the year of termination. Succeeding installments (if any)
shall be paid on January 31 of each calendar year following the calendar year in
which the first  payment was made.  Such  distribution(s)  shall  consist of one
share of Stock for each Common  Stock  Equivalent  credited  to such  Director's
Deferred  Account  as of the  Payment  Date  immediately  preceding  the date of
distribution.

         5.7  Payments  to a  Deceased  Director's  Estate.  In the  event  of a
Director's  death  before the  balance of his  Deferred  Account is fully  paid,
payment of the balance of the Director's  Deferred Account shall then be made to
the  beneficiary  designated by the Director  pursuant to Section 5.8 or, in the
absence of a  designation  of a  beneficiary  pursuant  to Section  5.8,  to his
estate,  in the time and manner selected by the  Administrative  Committee.  The
Administrative  Committee  may take into  account  the  application  of any duly
appointed  administrator or executor of a Director's  estate and direct that the
balance of the Director's  Deferred  Account be paid to his estate in the manner
requested by such application.

         5.8 Designation of Beneficiary.  A Director may designate a beneficiary
on a form approved by the Administrative Committee.

         5.9 Change in Control.  Notwithstanding  any  provision of this Plan to
the contrary, in the event a Change in Control of the Company occurs, within ten
(10) days of the date of such Change in Control,  each Director  shall receive a
lump sum  distribution  in the number of shares of Stock  equal to the number of
Common Stock Equivalents  credited to such Director's Deferred Account as of the
date of the Change in Control.



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         5.10 Emergency Payments.  In the event of an "unforeseeable  emergency"
as defined  herein,  the  Administrative  Committee  may  determine  the amounts
payable  under  Section 5 hereof and pay all or a part of such amounts in shares
of Stock  without  regard to the  payment  dates  provided  in Section 5, to the
extent the Administrative  Committee determines that such action is necessary in
light of immediate and  substantial  needs of the Director (or his  beneficiary)
occasioned by severe financial  hardship.  For the purposes of this Section,  an
"unforeseeable  emergency"  is a  severe  financial  hardship  to  the  Director
resulting  from a sudden and  unexpected  illness or accident of the Director or
beneficiary,  or of a dependent  (as defined in Section  152(a) of the  Internal
Revenue Code of 1986,  as amended) of the Director or  beneficiary,  loss of the
Director's  or  beneficiary's   property  due  to  casualty,  or  other  similar
extraordinary  and  unforeseeable  circumstances  arising  as a result of events
beyond the control of the Director or  beneficiary.  Payments  shall not be made
pursuant to this Section to the extent that such hardship is or may be relieved:
(a) through  reimbursement  or  compensation  by insurance or otherwise,  (b) by
liquidation  of the  Director's  or  beneficiary's  assets,  to the  extent  the
liquidation of such assets would not itself cause severe financial hardship,  or
(c) by cessation of the Director's  deferrals  under the Plan. Such action shall
be  taken  only  if  a  Director  (or  a  Director's  legal  representatives  or
successors) signs an application  describing fully the  circumstances  which are
deemed  to  justify  the  payment,  together  with an  estimate  of the  amounts
necessary to prevent such hardship,  which  application shall be approved by the
Administrative  Committee  after  making such  inquiries  as the  Administrative
Committee deems necessary or appropriate.

         5.11 Payment of Taxable Amount.  Notwithstanding any other provision of
this Section 5 or any payment schedule  directed by a Director  pursuant to this
Section 5 and regardless of whether  payments have commenced  under this Section
5, in the event that the Internal Revenue Service should finally  determine that
part or all of the value of a Director's Deferred Account which has not actually
been distributed to the Director is nevertheless  required to be included in the
Director's  gross income for federal and/or State income tax purposes,  then the
balance of the Deferred  Account or the part thereof that was  determined  to be
includible  in gross  income  shall be  distributed  in  shares  of Stock to the
Director in a lump sum as soon as practicable after such determination,  without
any action or approval by the Administrative  Committee. A "final determination"
of the Internal  Revenue Service for purposes of this Section is a determination
in writing by said Service ordering the payment of additional tax,  reporting of
additional  gross income or otherwise  requiring  Plan amounts to be included in
gross  income,  which is not  appealable  or which the Director  does not appeal
within the time prescribed for appeals.




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Section 6.  General Creditor Status

         Each  Director,  and each  other  recipient  of a  Director's  Deferred
Amounts pursuant to Section 5, shall be and remain an unsecured general creditor
of the  Company  with  respect to any  payments  due and owing to such  Director
hereunder.  All payments to persons entitled to benefits hereunder shall be made
out of the general assets,  and shall be the sole  obligations,  of the Company.
The Plan is a promise to pay  benefits in the future and it is the  intention of
the parties  that it be  "unfunded"  for tax  purposes  (and for the purposes of
Title I of the Employee Retirement Income Security Act of 1974 ("ERISA")).


Section 7.  Claims Procedures

         If a claim for benefits made by any person (the "Applicant") is denied,
the  Administrative  Committee  shall furnish to the  Applicant,  within 90 days
after its  receipt of such  claim (or  within  180 days  after  such  receipt if
special circumstances require an extension of time), a written notice which: (i)
specifies the reasons for the denial, (ii) refers to the pertinent provisions of
the Plan on which the denial is based,  (iii) describes any additional  material
or  information  necessary for the perfection of the claim and explains why such
material  or  information  is  necessary,  and (iv)  explains  the claim  review
procedures.  Upon the written request of the Applicant  submitted within 60 days
after receipt of such written notice, the Administrative  Committee shall afford
the  Applicant a full and fair review of the decision  denying the claim and, if
so  requested:  (i)  permit the  Applicant  to review  any  documents  which are
pertinent   to  the  claim,   (ii)  permit  the   Applicant  to  submit  to  the
Administrative  Committee  issues and comments in writing,  and (iii) afford the
Applicant an opportunity to meet with the Administrative  Committee as a part of
the review  procedure.  Within 60 days after its receipt of a request for review
(or within 120 days after  such  receipt if special  circumstances,  such as the
need to hold a  hearing,  require  an  extension  of  time)  the  Administrative
Committee  shall notify the Applicant in writing of its decision and the reasons
for its decision and shall refer the  Applicant  to the  provisions  of the Plan
which form the basis for its decision.


Section 8.  Assignability

         The right to receive payments or  distributions  hereunder shall not be
transferable  or  assignable  by a  Director  other  than by will or the laws of
descent and distribution.




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Section 9.  Plan Termination, Amendment and Modification

         The Plan shall automatically  terminate at the close of business on the
tenth  anniversary of the effective date unless sooner  terminated by the Board.
The Board may at any time  terminate,  and from time to time may amend or modify
the Plan,  provided,  however,  that no  amendment  or  modification  may become
effective  without approval of the amendment or modification by the shareholders
if shareholder approval is required to enable the Plan to satisfy any applicable
statutory or regulatory requirements, and, provided further that no termination,
amendment  or  modification  shall  reduce  the  then  existing  balance  of any
Director's  Deferred  Account  or  otherwise  adversely  change  the  terms  and
conditions thereof without the Director's consent, and, provided further that no
amendment  or  modification  shall be made more than once every six months  that
would change the amount, price or timing of the Common Stock Equivalents,  other
than to  comport  with  changes  in the  Internal  Revenue  Code,  the  Employee
Retirement  Income  Security Act of 1974, as amended,  or the rules  promulgated
thereunder.


Section 10.  Governing Law/Plan Construction

         The Plan and all agreements  hereunder shall be construed in accordance
with and governed by the laws of the State of Missouri. Nothing in this document
shall be construed as an employment  agreement or in any way impairing the right
of the Company, its board, committees or shareholders, to remove a Director from
service as a  director,  to refuse to  renominate  or reelect  such  person as a
director,  or to enforce the duly  adopted  retirement  policies of the board of
directors of the Company.