Exhibit 10.2

POTLATCH CORPORATION

MANAGEMENT DEFERRED COMPENSATION PLAN

Effective June 1, 2008

Amended and Restated as of December 5, 2008

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1. ESTABLISHMENT AND PURPOSE

(a) The Potlatch Corporation Management Deferred Compensation Plan was adopted
on May 16, 2008, by the Board of Directors of Potlatch Corporation to provide an
opportunity for senior management who have made the maximum elective
contributions permitted under the 401(k) Plan to elect to defer additional
compensation and to invest and accumulate such compensation on a tax-deferred
basis.

(b) This Plan is also intended to provide the rules and regulations for deferral
of awards under the Potlatch Corporation Management Performance Award Plan II
(“MPAP II”) for the 2008 performance period and under the Potlatch Corporation
Annual Incentive Plan (the “AIP”) beginning with the 2009 performance period.

(c) Effective as of October 1, 2008, this Plan also provides the rules and
regulations for the administration of deferrals previously made under the MPAP
II. For avoidance of doubt, deferrals made under the Potlatch Corporation
Management Performance Award Plan, which are not subject to Section 409A of the
Code, continue to be subject to the rules of that plan and the administrative
rules and regulations applicable thereto.

(d) Pursuant to the Employee Matters Agreement by and between Potlatch
Corporation and Clearwater Paper Corporation (the “EMA”), all deferred
compensation liabilities with respect to “Clearwater Employees” (as defined in
the EMA) under this Plan, the MPAP II and the Potlatch Corporation Management
Performance Award Plan have been transferred to and assumed by the Clearwater
Paper Corporation Management Deferred Compensation Plan (the “Clearwater Plan”).
Deferral and payment elections made by Clearwater Employees under this Plan and
the MPAP II shall be given effect under the Clearwater Plan.

(e) The provisions of this Plan for elections to defer base salary are effective
for base salary earned on or after January 1, 2009.

(f) The Plan is intended to comply with the requirements of Section 409A of the
Code. The Plan is intended to constitute an unfunded program for the benefit of
a select group of management or highly compensated employees of ERISA, and, as
such, to be exempt from all of the provisions of Parts 2, 3, and 4 of Title I of
ERISA.

 

2. DEFINITIONS

(a) “Affiliate” means any other entity which would be treated as a single
employer with the Corporation under Section 414(b) or (c) of the Code, provided
that in applying such Sections and in accordance with the rules of Treasury
Regulations Section 1.409A-1(h)(3), the language “at least 50 percent” shall be
used instead of “at least 80 percent.”

(b) “AIP” means the Potlatch Corporation Annual Incentive Plan and any successor
plan thereto.

(c) “Beneficiary” means the person or persons designated by the Employee to
receive payment of the Employee’s Deferred Compensation Account in the event of
the death of the Employee.

 

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(d) “Board” and “Board of Directors” means the board of directors of the
Corporation.

(e) “Code” means the Internal Revenue Code of 1986, as amended.

(f) “Committee” means the Executive Compensation and Personnel Policies
Committee of the Board.

(g) “Compensation” means the amount of compensation due by the Corporation to an
Employee for his or her services as an Employee as either (i) annual base salary
or (ii) an award under the MPAP II or AIP.

(h) “Corporation” means Potlatch Corporation, a Delaware corporation.

(i) “Deferred Compensation Account” means the bookkeeping account established
pursuant to Section 6 on behalf of each Employee who elects to participate in
the Plan. Within an Employee’s Deferred Compensation Account, a Directed
Investment Account, Stock Unit Account, Cash Account, and appropriate
sub-accounts, shall be maintained as are necessary for the proper administration
of a Participant’s Deferred Compensation Account. An Employee who has made a
deferral under the MPAP II shall be deemed to have elected to participate in
this Plan.

(j) “Disabled” means an Employee is unable to engage in any substantial gainful
activity by reason of any medically determinable physical or mental impairment
which can be expected to result in death or can be expected to last for a
continuous period of not less than twelve months.

(k) “Distribution” means the distribution by the Corporation to its stockholders
of all of the outstanding shares of the common stock of Clearwater Paper
Corporation then owned by the Corporation, pursuant to the Separation and
Distribution Agreement between the Corporation and Clearwater Paper Corporation.

(l) “Dividend Equivalent” means an amount equal to the cash distribution paid on
an outstanding share of the Corporation’s common stock. Dividend Equivalents
shall be credited to Stock Units as if each Stock Unit were an outstanding share
of the Corporation’s common stock, except that Dividend Equivalents shall also
be credited to fractional Stock Units.

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

(n) “Employee” means a full-time salaried employee of the Corporation or any
subsidiary thereof.

(o) “401(k) Plan” means the Potlatch Salaried 401(k) Plan, as amended.

(p) “MPAP II” means the Potlatch Corporation Management Performance Award Plan
II, as amended.

 

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(q) “Performance-Based Compensation” means compensation the amount of which, or
the entitlement to which, is contingent on the satisfaction of preestablished
organizational or individual performance criteria relating to a performance
period of at least twelve (12) consecutive months. Organizational or individual
performance criteria are considered preestablished if established in writing by
not later than ninety (90) days after the commencement of the period of service
to which the criteria relates, provided that the outcome is substantially
uncertain at the time the criteria are established. Performance-Based
Compensation does not include any amount or portion of any amount that will be
paid either regardless of performance, or based upon a level of performance that
is substantially certain to be met at the time the criteria is established.
Compensation may be Performance-Based Compensation where the amount will be paid
regardless of satisfaction of the performance criteria due to the Employee’s
death, disability, or a Change in Control Event (as defined in Treasury
Regulation Section l .409A-3(i)(5)), provided that a payment made under such
circumstances without regard to the satisfaction of the performance criteria
will not constitute performance-based compensation. For this purpose, a
disability refers to any medically determinable physical or mental impairment
resulting in the Participant’s inability to perform the duties of his or her
position or any substantially similar position, where such impairment can be
expected to result in death or can be expected to last for a continuous period
of not less than six months. Performance-Based Compensation may include payments
based upon subjective performance criteria, provided that: (i) the subjective
performance criteria are bona fide and relate to the performance of the
Participant, a group of service providers that includes the Participant, or a
business unit for which the Participant provides services (which may include the
entire organization); and (ii) the determination that any subjective performance
criteria have been met is not made by the Participant or a family member of the
Participant (as defined in Section Code 267(c)(4) applied as if the family of an
individual includes the spouse of any member of the family), or a person under
the effective control of the Participant or such a family member, and no amount
of the compensation of the person making such determination is effectively
controlled in whole or in part by the Participant or such a family member.

(r) “Plan” means the Potlatch Corporation Management Deferred Compensation Plan.

(s) “Plan Year” means the 12-month period beginning January 1 and ending
December 31.

(t) “Separation from Service” means termination of an Employee’s service as an
Employee consistent with Section 409A of the Code and the regulations
promulgated thereunder. For purposes of the Plan, “Separation from Service”
generally means termination of an Employee’s employment as a common-law employee
of the Corporation and each Affiliate of the Corporation. A Separation from
Service will not be deemed to have occurred if an Employee continues to provide
services to the Corporation or an Affiliate in a capacity other than as an
employee and if the former employee is providing a level of bona fide services
that is fifty percent (50%) or more of the average level of services rendered,
during the immediately preceding thirty-six (36) months of employment with the
Corporation or Affiliate; provided, however, that a Separation from Service will
be deemed to have occurred if it is reasonably anticipated that an Employee’s
service with the Corporation and its Affiliates will terminate after a certain
date or the level of bona fide services that the Employee will perform after
such date

 

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(whether as an employee or another capacity) will permanently reduce to a rate
that is less than twenty percent (20%) of the bona fide level of services
rendered, on average, during the immediately preceding thirty-six (36) months
(or if employed by the Corporation and its Affiliates less than thirty-six
(36) months, such lesser period). However, the employment relationship is
treated as continuing intact while the individual is on military leave, sick
leave, or other bona fide leave of absence if the period of such leave does not
exceed six months, or if longer, so long as the individual’s right to
reemployment with the service recipient is provided either by statute or by
contract. If the period of leave exceeds six months and the individual’s right
to reemployment is not provided either by statute or by contract, the employment
relationship is deemed to terminate on the first date immediately following such
six-month period.

(u) “Stock Units” means the deferred portion of Compensation, which is converted
into a unit denominated in shares of the Corporation’s common stock.

(v) “Value” means the closing price of the Corporation’s common stock as
reported in the New York Stock Exchange, Inc., composite transactions reports
for the relevant date.

(w) “Variable Fractions Method” is a distribution method for amounts payable in
installments. The amount of the first installment is determined by dividing the
Participant’s account balance by the total number of installments due. Each
subsequent annual installment is equal to the Participant’s account balance as
adjusted for earnings or losses since the last distribution date divided by a
denominator equal to the total number of installments due minus the number of
installments previously paid.

(x) “Year” shall mean the calendar year.

 

3. ELIGIBILITY TO MAKE DEFERRALS

(a) Each Employee who is in a position that is eligible for Long-Term Incentive
awards (an “Eligible Employee”) and who has made the maximum elective deferrals
under Section 402(g) of the Code or the maximum elective contributions permitted
under the terms of the 401(k) Plan shall be eligible to elect to defer base
salary under the Plan.

(b) Each Eligible Employee who is eligible to receive an award under the MPAP II
or AIP (other than an award under an AIP Special Awards Fund) shall be eligible
to defer such award under the Plan; provided that, an Employee who is required
to defer his or her award shall automatically become a participant in this Plan.

 

4. PARTICIPATION

(a) Each Employee who is eligible to participate in the Plan pursuant to
Section 3 above shall, prior to the beginning of each Year and in accordance
with the applicable deadline established by the Committee, have the option to
make an irrevocable election to defer a percentage of his or her Compensation
earned during the following Year before the beginning of each such Year.
Compensation paid after December 31 of a Plan Year for services performed by the
Employee during the final payroll period of the calendar year and which payroll
period

 

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includes the last day of such calendar year shall be treated as earned for
services performed in the year paid.

(b) Notwithstanding the foregoing, an Employee may make an irrevocable election
to participate during a Year with respect to Compensation earned during that
Year and subsequent to the filing of such election, provided such election is
made within thirty (30) days of the Employee’s initial eligibility to
participate in this Plan and any other nonqualified deferred compensation plans
treated as a single plan with this Plan under Section 409A of the Code. Any such
initial election shall apply only to Compensation earned for services performed
after the date of the election. If compensation is due for services performed
over a period of time which includes the period both before and the period after
the date of the election, the election will apply to an amount equal to the
total amount of the compensation paid for such performance period multiplied by
the ratio of the number of days remaining in the performance period after the
election over the total number of days in the performance period.

(c) Notwithstanding the preceding rules, a deferral election for an award of
Compensation under the MPAP II or AIP, which constitutes Performance-Based
Compensation, may be made no later than six months before the end of such
performance period. This special election rule is available only (i) if the
Employee performs services for the Company or its Affiliate continuously from
the later of the beginning of the performance period or the date the performance
criteria are established through the date an Election is made with respect to
such payment, (ii) the Election is made before the amount of the
Performance-Based Compensation to be received becomes reasonably ascertainable
or, if the Performance-Based Compensation is a specified or calculable amount,
when the amount is substantially certain to be paid, and (iii) the performance
period is at least twelve (12) months in duration.

(d) The Committee may also adopt such additional or alternative election rules
provided that such rules comply with the rules of Section 409A of the Code and
applicable regulatory authority.

 

5. DEFERRAL ELECTIONS

(a) An Employee who elects to participate in the Plan with respect to annual
base salary or an award under the MPAP II or AIP for a Year shall file a
deferral election with respect to each type of Compensation on such form as the
Committee shall prescribe, which shall indicate:

(i) The amount or percentage of each type of Compensation that such Employee
elects to defer pursuant to the terms of the Plan. The percentage must be in
increments of ten percent (10%) and may not exceed fifty percent (50%) in the
case of annual base salary. An election to voluntarily defer an award under the
MPAP II or AIP shall be for not less than fifty percent (50%) of such award.
Notwithstanding the foregoing, an election to defer compensation may not reduce
the Employee’s remaining compensation below the amount necessary to satisfy
applicable employment tax withholding, income tax withholding, and benefit plan
withholding. This election shall be irrevocable with respect to each type of
Compensation for that Year to which it applies after the applicable deadline for
making such election as provided in Section 4 for that Year.

 

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(ii) The percentage of the Compensation deferred pursuant to the election that
is to be converted into Stock Units or deemed invested in any other investment
account available under Section 7.

(b) An Employee who elects to Participate in the Plan shall have only one form
of payment election in effect for all amounts deferred under the Plan. Subject
to Section 5(c), below, at the time of an Employee’s initial election to defer
base salary or an award under the MPAP II or AIP, the Employee shall file an
election and shall indicate:

(i) Whether the deferred Compensation shall be paid in a lump sum or paid in
five (5), ten (10), or fifteen (15) annual installments. For purposes of the
Plan, installment payments shall be treated as a single distribution for
purposes of Section 409A of the Code. Deferred Compensation shall be paid in
fifteen (15) annual installments unless the Employee elects otherwise.

(ii) Whether benefit payments shall commence immediately upon Separation from
Service or attainment of a specified age, if later.

(c) A Participant’s election as to the time and form of payment of deferred
Compensation shall be irrevocable and binding on all deferred Compensation under
the Plan. For avoidance of doubt it is intended that a Participant shall have
only one method of payment in effect. Notwithstanding any provision herein to
the contrary, an Employee or former Employee may revoke a previous election and
make a new election as to the time and form of distribution under the Plan. Such
new election shall take effect twelve (12) months after it is filed with the
Committee and shall apply only to that portion of the Employee’s or former
Employee’s Deferred Compensation Account and/or Stock Units scheduled to be paid
more than twelve (12) months after the date the election is filed with the
Committee; provided, however, that the newly scheduled distribution date must be
at least five years later than the originally scheduled distribution date.

(d) For purposes of determining the payment election in effect for a participant
with existing deferrals under MPAP II as of the date this Plan is effective,
such existing payment election shall remain in effect for all existing and
future deferrals under the Plan unless the Employee elects and becomes subject
to a new payment election in accordance with the rules of this paragraph.
Notwithstanding the limitations on changes in the time or form of payment under
this Section, a Participant may, not later than the date permitted by the
Committee, which shall in no event be later than December 31, 2008, change his
or her election with respect to the time or form of payment for his or her
Deferred Compensation Account, provided that such election shall not be
effective if it would defer payment of an amount otherwise payable in the year
the election to change payment is made or would accelerate any payment into the
year the election to change the payment date is made.

 

6. ESTABLISHMENT OF DEFERRED ACCOUNTS

(a) For each Employee who has deferred compensation under the MPAP II or AIP or
who has elected to defer base salary, the Corporation shall establish a Deferred
Compensation

 

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Account to which shall be credited an amount equal to that portion of the
Compensation which would have been payable currently to the Employee but for the
terms of the deferral election.

(b) If the deferral election includes an election to convert a percentage of the
Compensation deferred pursuant to the election into Stock Units, the number of
full and fractional Stock Units shall be determined as follows:

(i) For an award deferred under the MPAP II, such conversion shall be made in
accordance with Section 9(c) of the MPAP II.

(ii) For an award under the AIP that is deferred under this Plan, the number of
full and fractional Stock Units shall equal the number of shares of the
Corporation’s common stock determined by dividing the dollar value of the
portion of the award to be converted into Stock Units by the closing price of
the Corporation’s common stock on the date of the Committee meeting at which the
award payments are approved (or the most recent trading day if the Committee
does not meet on a trading day).

(iii) Amounts of base salary which are deferred and with respect to which the
Employee has elected to defer into Stock Units shall be accumulated in the Cash
Account subject to Section 7 below and shall be converted into full and
fractional Stock Units on a quarterly basis as of the first trading day of each
calendar quarter by dividing the accumulated amount by the Value of the
Corporation’s common stock on such crediting date.

(c) Notwithstanding the foregoing, if the Employee is subject to the
Corporation’s insider trading policy (the “Trading Policy”) and the conversion
to Stock Units is not then permitted under the Trading Policy, then the portion
of the Compensation to be deferred into Stock Units shall be held in the Cash
Account subject to Section 7 below and shall be converted into Stock Units as of
the first day of the next open window period (the “Open Conversion Date”) under
the Trading Policy, such Stock Units to be equal to the number of shares of the
Corporation’s common stock determined by dividing the dollar value of the
portion of the Compensation to be converted into Stock Units by the Value of the
Corporation’s common stock on the Open Conversion Date.

(d) Amounts credited to an Employee’s Deferred Compensation Account shall be
fully vested at all times.

 

7. TREATMENT OF DEFERRED COMPENSATION ACCOUNT AND STOCK UNITS DURING DEFERRAL
PERIOD

(a) Directed Investment Account. The balance of each Employee’s Directed
Investment Account shall be adjusted, for earnings and losses commencing with
the date as of which any amount is credited to the Directed Investment Account.
Such earnings or losses during the deferral period for amounts credited to a
Participant’s Directed Investment Account shall be computed by reference to the
rate of return on one or more of the investment alternatives that are available
under the 401(k) Plan and which are designated by the Committee as available
under this Plan. Each Employee may select (in ten percent (10%) increments)
which investment alternative(s) will be used for this purpose with respect to
his or her deferred Compensation, and the alternative(s) selected need not be
the same as the Employee has selected under the 401(k)

 

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Plan, but any such selection will apply only prospectively. The Committee shall
determine how frequently such selections may be changed.

(b) Stock Unit Account. On each dividend payment date, dividend equivalents
shall be credited to each full and fractional Stock Unit to the extent such
Stock Unit was in the Participant’s Stock Unit Account on the dividend record
date immediately preceding the applicable dividend payment date. Such dividend
equivalents shall be converted into Stock Units as of the dividend payment date
by dividing the amount of the dividend equivalents by the Value of the
Corporation’s common stock on the dividend payment date.

(c) Cash Account. Amounts credited to the Cash Account shall be credited with
additional amounts on a quarterly basis. For periods prior to July 1, 2008,
credits shall be determined under Section 9(d) of the MPAP II. For periods on
and after July 1, 2008, credits shall be made at a rate equal to 120% of the
long-term applicable federal rate, with quarterly compounding, as published
under Section 1274(d) of the Code for the first month of each calendar quarter.
For periods on and after January 1, 2009 (or such later date as the Committee
shall determine), the Cash Account shall be available only for the temporary
holding of amounts pending conversion into Stock Units in accordance with
Section 6, and Participants shall not be permitted to select the Cash Account as
a deemed investment for their deferrals.

(d) Effect of Certain Transactions. In the event that there occurs a dividend or
other distribution of shares of the Corporation’s common stock (“Shares”), a
dividend in the form of cash or other property that materially affects the fair
market value of the Shares, a stock split, a reverse stock split, a split-up, a
split-off, a spin-off, a combination or subdivision of Shares or other
securities of the Corporation, an exchange of Shares for other securities of the
Corporation, or a similar transaction or event that materially affects the fair
market value of the Shares, the Committee, in order to prevent diminution or
enlargement of the benefits or potential benefits intended to be made available
under the Plan, shall make appropriate adjustments in the number of each
Participant’s Stock Units determined as of the date of such occurrence.

 

8. FORM AND TIME OF PAYMENT OF DEFERRED COMPENSATION ACCOUNT

Subject to Section 8(b), payment of a Employee’s Deferred Compensation Account
shall commence on the April 15th following the later of (i) the end of the
quarter in which Separation from Service occurs, or (ii) the Participant’s
attainment of the age elected by the Participant under Section 5(b) of the Plan.
A Participant may request an earlier distribution of an amount credited to his
or her Deferred Compensation Account upon the occurrence of an unforeseeable
emergency within the meaning of Section 409A and the regulations thereunder as
determined by the Committee, but only to the extent necessary to alleviate the
emergency. Payment of a Employee’s Stock Units shall also be made at such time
except that, within the six-month period beginning on the last date on which
Compensation have been converted into Stock Units on behalf of the Employee, to
the extent that Committee reasonably determines that earlier payment would
result in a violation of Federal securities laws, payment of the Employee’s
Stock Units shall be made on the last day of the month in which such six-month
period expires. Notwithstanding the previous sentence, Stock Unit payments shall
be made following the Employee’s death, Disability or the date of the Employee’s
Separation from Service, without regard to whether such six-month period has
expired. For the purpose of payment, Stock Units

 

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shall be converted to cash based on the Value of the Corporation’s common stock
on the last trading day of the month preceding the month during which the
distribution is due to be made.

The amount of each payment due for a Deferred Compensation Account shall be
determined by application of the Variable Fractions Method. Each annual
installment for Years subsequent to the Year in which payment commences shall be
made on April 15th.

In the case of a Employee who has both Stock Units and other deemed investment
accounts available under Section 7, if a partial distribution of a deferred
portion of Compensation is to be made and if the Employee’s Stock Units are
immediately payable in accordance with the first paragraph of this Section,
payment shall be made partially from the Employee’s Stock Units and partially
from such other deemed investment accounts, in proportion to the relative value
of the Employee’s Stock Units and such other accounts. If the Employee’s Stock
Units are not immediately payable in accordance with the previous paragraph, the
partial payment shall be made entirely from such other deemed investment
accounts, in proportion to the relative value of such accounts.

Notwithstanding any other provision of the Plan to the contrary:

(a) No distribution shall be made from the Plan that would constitute an
impermissible acceleration of payment as defined in Section 409A(a)(3) of the
Code and regulations promulgated thereunder; and

(b) A distribution made to an Employee who is identified as a Key Employee at
the time of his or her Separation from Service will be delayed for a minimum of
six (6) months if the Employee’s distribution is triggered by his or her
Separation from Service. Any payment that otherwise would have been made except
for the application of this subsection (b) during such six (6)-month period will
be made in one (1) lump sum payment no later than the last day of the second
month following the month that is six (6) months from the date of the Employee’s
Separation from Service. The Employee’s Deferred Compensation Account shall
continue to be adjusted for earnings and losses and Dividend Equivalents during
the delay. The determination of which Employees are Key Employees will be made
by the Corporation in its sole discretion in accordance with this subsection
(b) and Sections 416(i) and 409A of the Code and the regulations promulgated
thereunder.

(i) “Identification Date” means each December 31.

(ii) “Key Employee” means an Employee who, on an Identification Date, is:

(A) An officer of the Corporation having annual compensation greater than the
compensation limit in Section 416(i)(1)(A) (i) of the Code, provided that no
more than fifty (50) officers of the Corporation shall be determined to be Key
Employees as of any Identification Date;

(B) A five percent (5%) owner of the Corporation; or

(C) A one percent (1%) owner of the Corporation having annual compensation from
the Corporation of more than $150,000.

 

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If an Employee is identified as a Key Employee on an Identification Date, then
such Employee shall be considered a Key Employee for purposes of the Plan during
the period beginning on the first April 1 following the Identification Date and
ending on the next March 31.

(c) Notwithstanding the foregoing, a lump sum distribution shall be made in the
Committee’s discretion to clear out a small balance held for the benefit of the
Participant (or his or her Beneficiary) provided that the Committee’s decision
is evidenced in-writing prior to the date of the distribution, the distribution
is not greater than the applicable dollar amount under Section 402(g)(1)(B) of
the Code and the payment results in the termination of all benefits due under
the plan and all other “account balance plans” treated as a single nonqualified
deferred compensation plan with this Plan under Treasury Regulation
Section 1.409A-1(c)(2).

(d) If a Plan benefit is payable to a minor or a person declared incompetent or
to a person incapable of handling the disposition of property, the Committee may
direct payment to the guardian, legal representative or person having the care
and custody of such minor, incompetent or person. The Administrator may require
proof of incompetency, minority, incapability or guardianship as it may deem
appropriate prior to distribution. Such distribution shall completely discharge
the Committee, the trustees of any trusts, and the Corporation from all
liability with respect to such benefit.

 

9. EFFECT OF DEATH OF PARTICIPANT

Upon the death of a participating Employee, all amounts, if any, remaining in
his or her Deferred Compensation Account shall be distributed to the Beneficiary
designated by the Employee. Such distribution shall be made at the time or times
specified in the Employee’s deferral election. If the designated Beneficiary
does not survive the Employee or dies before receiving payment in full of the
Employee’s Deferred Compensation Account, payment shall be made to the estate of
the last to die of the Employee or the designated Beneficiary.

 

10. CLAIMS AND REVIEW PROCEDURE

(a) Informal Resolution of Questions. Any participant who has questions or
concerns about his or her deferred Compensation under the Plan is encouraged to
communicate with the Vice President, Human Resources. If this discussion does
not give the participant satisfactory results, a formal claim for benefits may
be made within one (1) year of the event giving rise to the claim in accordance
with the procedures of this Section 10.

(b) Formal Benefits Claim - Review by Appeals Committee. A participant may make
a written request for review of any matter concerning his or her deferred
Compensation under the Plan. The claim must be addressed to the Appeals
Committee, Management Deferred Compensation Plan, Potlatch Corporation, 601 W.
First Ave., Suite 1600, Spokane, Washington 99201. The Corporation’s Appeals
Committee shall decide the action to be taken with respect to any such request
and may require additional information, if necessary, to process the request.
The Appeals Committee shall review the request and shall issue its decision, in
writing, no later than ninety (90) days after the date the request is received,
unless the circumstances require an extension of time. If such an extension is
required, written notice of the extension shall be furnished to the person
making the request within the initial ninety (90)-day period, and the

 

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notice shall state the circumstances requiring the extension and the date by
which the Appeals Committee expects to reach a decision on the request. In no
event shall the extension exceed a period of ninety (90) days from the end of
the initial period.

(c) Notice of Denied Request. If the Appeals Committee denies a request in whole
or in part, it shall provide the person making the request with written notice
of the denial within the period specified in Subsection (b) above. The notice
shall set forth the specific reason for the denial, reference to the specific
Plan provisions upon which the denial is based, a description of any additional
material or information necessary to perfect the request, an explanation of why
such information is required, and an explanation of the Plan’s appeal procedures
and the time limits applicable to such procedures, including a statement of the
claimant’s right to bring a civil action under Section 502(a) of ERISA following
an adverse benefit determination on review.

(d) Appeal to Appeals Committee.

(i) A person whose request has been denied in whole or in part (or such person’s
authorized representative) may file an appeal of the decision in writing with
the Appeals Committee within sixty (60) days of receipt of the notification of
denial. The appeal must be addressed to: Appeals Committee, Management Deferred
Compensation Plan, Potlatch Corporation, 601 W. First Ave., Suite 1600, Spokane,
Washington 99201. The Appeals Committee, for good cause shown, may extend the
period during which the appeal may be filed for another sixty (60) days. The
appellant and his or her authorized representative shall be permitted to submit
written comments, documents, records and other information relating to the claim
for benefits. Upon request and free of charge, the appellant should be provided
reasonable access to and copies of, all documents, records or other information
relevant to the appellant’s claim.

(ii) The Appeals Committee’s review shall take into account all comments,
documents, records and other information submitted by the appellant relating to
the claim, without regard to whether such information was submitted or
considered in the initial benefit determination. The Appeals Committee’s review
shall not be restricted to those provisions of the Plan cited in the original
denial of the claim.

(iii) The Appeals Committee shall issue a written decision within a reasonable
period of time but not later than sixty (60) days after receipt of the appeal,
unless special circumstances require an extension of time for processing, in
which case the written decision shall be issued as soon as possible, but not
later than one-hundred twenty (120) days after receipt of an appeal. If such an
extension is required, written notice shall be furnished to the appellant within
the initial sixty (60)-day period. This notice shall state the circumstances
requiring the extension and the date by which the Appeals Committee expects to
reach a decision on the appeal.

(iv) If the decision on the appeal denies the claim in whole or in part written
notice shall be furnished to the appellant. Such notice shall state the
reason(s) for the denial, including references to specific Plan provisions upon
which the denial was based. The notice shall state that the appellant is
entitled to receive, upon request and free of charge, reasonable access to, and
copies of, all documents, records, and other information relevant to the claim
for

 

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benefits. The notice shall describe any voluntary appeal procedures offered by
the Plan and the appellant’s right to obtain the information about such
procedures. The notice shall also include a statement of the appellant’s right
to bring an action under Section 502(a) of ERISA.

(v) The decision of the Appeals Committee on the appeal shall be final,
conclusive and binding upon all persons and shall be given the maximum possible
deference allowed by law.

(e) Exhaustion of Remedies. No legal or equitable action for benefits under the
Plan shall be brought unless and until the claimant has submitted a written
claim for benefits in accordance with Section 10(a) above, has been notified
that the claim is denied in accordance with Section 10(c) above, has filed a
written request for a review of the claim in accordance with Section 10(d)
above, and has been notified in writing that the Appeals Committee has affirmed
the denial of the claim in accordance with Section 10(d) above; provided,
however, that an action for benefits may be brought after the Appeals Committee
has failed to act on the claim within the time prescribed in Section 10(b) and
Section 10(d), respectively.

 

11. PARTICIPANT’S RIGHTS UNSECURED

The interest under the Plan of any participating Employee and such Employee’s
right to receive a distribution from the Plan shall be an unsecured claim
against the general assets of the Corporation. The Deferred Compensation Account
and all deemed investment accounts available under Section 7 shall be
bookkeeping entries only and no Employee shall have an interest in or claim
against any specific asset of the Corporation pursuant to the Plan.
Notwithstanding the foregoing, the Corporation may, in its discretion, choose to
contribute to the Potlatch Corporation Benefits Protection Trust Agreement to
assist with the payment of benefits under the Plan.

 

12. STATEMENT OF DEFERRED COMPENSATION ACCOUNT

The Committee shall provide an annual statement of each participating Employee’s
Deferred Compensation Account as soon as practicable after the end of each
calendar year.

 

13. NONASSIGNABILITY OF INTERESTS

The interest and property rights of any Employee under the Plan shall not be
subject to option nor be assignable either by voluntary or involuntary
assignment or by operation of law, including (without limitation) bankruptcy,
garnishment, attachment or other creditor’s process, and any act in violation of
this Section 13 shall be void.

 

14. ADMINISTRATION OF THE PLAN

The Plan shall be administered by the Committee. In addition to the powers and
duties otherwise set forth in the Plan, the Committee shall have full power and
authority to administer and interpret the Plan, to establish procedures for
administering the Plan and to take any and all necessary action in connection
therewith, including retaining outside managers to assist with the
administration of the Plan. The Committee’s interpretation and construction of
the Plan shall be conclusive and binding on all persons. In its discretion, the
Committee may delegate to the Vice

 

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President, Human Resources the authority for the effective administration of the
Plan and for assigning responsibility to designated managers to carry out such
duties.

Within thirty (30) days after a Change of Control (as defined in Section 17),
the Committee shall appoint an independent committee consisting of at least
three (3) current (as of the effective date of the Change of Control) or former
Corporation officers and directors, which shall thereafter administer all claims
for benefits under the Plan. Upon such appointment the Committee shall cease to
have any responsibility for claims administration under the Plan.

 

15. AMENDMENT OR TERMINATION OF THE PLAN

(a) The Board or the Committee may amend, suspend or terminate the Plan at any
time. The foregoing notwithstanding, the Plan may not be amended (including any
amendment to this Section 15) or terminated by the Board or the Committee if
such amendment or termination would or adversely affect or impair the Employee’s
right to receive amounts credited to his or her Deferred Compensation Account.

(b) Except as provided in Section 15(c) or as otherwise permitted under
Section 409A of the Code, in the event of termination of the Plan, the
Employees’ Deferred Compensation Accounts may, in the Board’s or the Committee’s
discretion, be distributed within the period beginning twelve months after the
date the Plan was terminated and ending twenty-four months after the date the
Plan was terminated, or pursuant to Section 8, if earlier. If the Plan is
terminated and Deferred Compensation Accounts are distributed, the Board or the
Committee shall terminate all account balance non-qualified deferred
compensation plans with respect to all Employees and shall not adopt a new
account balance non-qualified deferred compensation plan for at least three
(3) years after the date the Plan was terminated. A termination and liquidation
of the Plan under this Section 15(b) shall be made only in compliance with
Treasury Regulation Section 1.409A-3(j)(4)(ix)(c).

(c) The Board or the Committee may terminate the Plan upon a corporate
dissolution of the Corporation that is taxed under Section 331 of the Code or
with the approval of a bankruptcy court pursuant to 11 U.S.C.
Section 503(b)(1)(A), provided that the Employees’ Deferred Compensation
Accounts are distributed and included in the gross income of the Employees by
the latest of (i) the Year in which the Plan terminates or (ii) the first Year
in which payment of the Deferred Compensation Accounts is administratively
practicable.

(d) Notwithstanding the foregoing, the Vice President, Human Resources of the
Corporation shall have the power and authority to amend the Plan with respect to
any amendment that (i) does not materially increase the cost of the Plan to the
Corporation or (ii) is intended to comply with new or changed legal requirements
applicable to the Plan, including, but not limited to, Section 409A of the Code.

 

16. SUCCESSORS AND ASSIGNS

The Plan shall be binding upon the Corporation, its successors and assigns, and
any parent corporation of the Corporation’s successors or assigns.
Notwithstanding that the Plan may be binding upon a successor or assign by
operation of law, the Corporation shall require any successor or assign to
expressly assume and agree to be bound by the Plan in the same manner

 

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and to the same extent that the Corporation would be if no succession or
assignment had taken place.

 

17. CHANGE OF CONTROL

For purposes of the Plan, “Change of Control” shall mean

(a) Upon consummation of a merger or consolidation involving the Corporation (a
“Business Combination”), in each case, unless, following such Business
Combination,

(i) all or substantially all of the individuals and entities who were the
beneficial owners, respectively, of the then outstanding shares of common stock
of the Corporation (the “Outstanding Common Stock”) and the then outstanding
voting securities of the Corporation entitled to vote generally in the election
of directors (the “Outstanding Voting Securities”) immediately prior to such
Business Combination beneficially own, directly or indirectly, more than 50% of,
respectively, the then outstanding shares of common stock and the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors of the corporation or other entity
resulting from such Business Combination (including, without limitation, a
corporation or other entity which as a result of such transaction owns the
Corporation either directly or through one or more subsidiaries),

(ii) no individual, entity or group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act))
(a “Person”) (excluding any corporation or other entity resulting from such
Business Combination or any employee benefit plan (or related trust) sponsored
or maintained by the Corporation or any of its subsidiaries or such other
corporation or other entity resulting from such Business Combination)
beneficially owns, directly or indirectly, 30% or more of, respectively, the
then outstanding shares of common stock or common equity of the corporation or
other entity resulting from such Business Combination or the combined voting
power of the then outstanding voting securities of such corporation or other
entity except to the extent that such ownership is based on the beneficial
ownership, directly or indirectly, of Outstanding Common Stock or Outstanding
Voting Securities immediately prior to the Business Combination, and

(iii) at least a majority of the members of the board of directors or similar
governing body of the corporation or other entity resulting from such Business
Combination were members of the Board at the time of the execution of the
initial agreement, or of the action of the Board, providing for such Business
Combination; or

(b) On the date that individuals who, as of 11:59 p.m. (Pacific) on the date of
the Distribution, constitute the Board of Directors (the “Incumbent Board”)
cease for any reason to constitute at least a majority of the Board of
Directors; provided, however, that any individual who becomes a member of the
Board on or subsequent to the day immediately following the date of the
Distribution whose election, or nomination for election by the Corporation’s
stockholders, was approved by a vote of at least a majority of the members of
the Board then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for purposes of
this proviso, any such individual whose appointment to the Board occurs as a
result of an actual or threatened election contest with respect to the election
or

 

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removal of a member or members of the Board, an actual or threatened
solicitation of proxies or consents or any other actual or threatened action by,
or on behalf of, any Person other than the Incumbent Board; or

(c) Upon the acquisition on or after the date of the Distribution by any Person
of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 30% or more of either

(i) the then Outstanding Common Stock, or

(ii) the combined voting power of the Outstanding Voting Securities;

provided, however, that the following acquisitions shall not be deemed to be
covered by this paragraph (c):

(A) any acquisition of Outstanding Common Stock or Outstanding Voting Securities
by the Corporation,

(B) any acquisition of Outstanding Common Stock or Outstanding Voting Securities
by any employee benefit plan (or related trust) sponsored or maintained by the
Corporation, or

(C) any acquisition of Outstanding Common Stock or Outstanding Voting Securities
by any corporation pursuant to a transaction which complies with clauses (i),
(ii) and (iii) of paragraph (a) of this Section; or

(d) Upon the consummation of the sale, lease or exchange of all or substantially
all of the assets of the Corporation; or

(e) Upon the approval by the stockholders of the Corporation of a complete
liquidation or dissolution of the Corporation.

 

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