Exhibit (10)(h)
 
POTLATCH CORPORATION
BENEFITS PROTECTION TRUST AGREEMENT
 
As Amended and Restated Effective September 20, 2002

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POTLATCH CORPORATION
BENEFITS PROTECTION TRUST AGREEMENT
 

    
Page

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Section 1     Definitions
  
2
Section 2     Creation of Trust; Contributions
  
6
Section 3     Payments from the Trust
  
8
Section 4     Management of Trust Assets
  
11
Section 5     Powers of Trustee
  
14
Section 6     Taxes, Expenses and Compensation of Trustee
  
16
Section 7     Records and Accounting
  
17
Section 8     Indemnification
  
17
Section 9     Administration of the Plans; Communications
  
18
Section 10   Resignation or Removal of Trustee
  
18
Section 11   Amendment of Agreement; Termination of Trust
  
20
Section 12   Governing Law; Severability
  
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POTLATCH CORPORATION
BENEFITS PROTECTION TRUST AGREEMENT
 
As Amended and Restated Effective September 20, 2002
 
This amended and restated Trust Agreement, originally made as of the first day
of January, 1990, by and between POTLATCH CORPORATION, a Delaware corporation
(the “Company”) and U.S. Bank National Association (formerly First Trust
National Association)(the “Trustee”), and amended and restated to read as
follows effective September 20, 2002.
 
WITNESSETH:
 
Whereas the Company has adopted the nonqualified plans, programs and policies
and has entered into the contracts listed on Schedule 1 (collectively, the
“Plans”) and may adopt or enter into other such plans, programs, policies and
contracts which will be listed from time to time on Schedule 1; and
 
Whereas the Company’s obligations pursuant to the Plans are not funded or
otherwise secured and the Company desires to take steps to assure that, subject
to the claims of the Company’s general creditors, the future payment of amounts
under the Plans will not be improperly withheld in the event that a Change of
Control (as hereinafter defined) of the Company should occur;
 

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Now, Therefore, the Company and the Trustee agree as follows:
 
SECTION 1.  Definitions
 
(a)  “Benefit Commitments” means:
 
(i)  all benefits that are accrued or payable (whether on a current or deferred
basis) under the Plans as of the date of the Change of Control and
 
(ii)  all benefits that may become payable under the Plans as in effect on the
date of the Change of Control as a result of termination of a participant’s
employment after such Change of Control, as described in Section 2(d).
 
(b)  “Change of Control” means:
 
(i)  Upon consummation of a reorganization, merger or consolidation involving
the Company (a “Business Combination”), in each case, unless, following such
Business Combination,
 
(A)  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 Company (the “Outstanding Common Stock”) and the then outstanding voting
securities of the Company 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 resulting from such
Business Combination (including, without limitation, a corporation which as a
result of such transaction owns the Company either directly or through one or
more subsidiaries),
 

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(B)  no Person (as defined in (iii) below) (excluding any corporation resulting
from such Business Combination or any employee benefit plan (or related trust)
sponsored or maintained by the Company or such other corporation resulting from
such Business Combination) beneficially owns, directly or indirectly, 20% or
more of, respectively, the then outstanding shares of common stock of the
corporation resulting from such Business Combination or the combined voting
power of the then outstanding voting securities of such corporation 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
 
(C)  at least a majority of the members of the board of directors of the
corporation resulting from such Business Combination were members of the board
of directors of the Company (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

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(ii)  On the date that individuals who, as of December 2, 1999 constitute the
Board (the “Incumbent Board”) cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual becoming a
director subsequent to December 2, 1999 whose election, or nomination for
election by the Company’s stockholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board should be
considered as though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened election contest with
respect to the election or removal of directors, 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 Board; or
 
(iii)  Upon the acquisition after December 2, 1999 by any 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”) of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 25% or more of either
 
(A)  the then Outstanding Common Stock or
 
(B)  the combined voting power of the Outstanding Voting Securities;
 
provided, however, that the following acquisitions shall not be deemed to be
covered by this subparagraph (iii):
 
(x)  any acquisition of Outstanding Common Stock or Outstanding Voting
Securities by the Company,

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(y)  any acquisition of Outstanding Common Stock or Outstanding Voting
Securities by any employee benefit plan (or related trust) sponsored or
maintained by the Company, or
 
(z)  any acquisition of Outstanding Common Stock Outstanding Voting Securities
by any corporation pursuant to a transaction which complies with clauses (A),
(B) and (C) of Subsection 1(b)(i) of this Agreement, or
 
(iv)  Upon the consummation of the sale of all or substantially all of the
assets of the Company or approval by the stockholders of the Company of a
complete liquidation or dissolution of the Company.
 
(c)  “Company “ means Potlatch Corporation, a Delaware corporation, and its
successor and assigns.
 
(d)  “Independent Administrator” means an independent professional benefits
consulting or administrative firm appointed pursuant to Section 3(b).
 
(e)  “Insolvent” means that the company is unable to pay its debts as they
mature or is subject to a pending proceeding as a debtor under the Bankruptcy
Code.
 
(f)  “Participants” mean the active and former directors and employees of the
Company or its subsidiaries or affiliates who are entitled to benefits under the
Plans.

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(g)  “Plans” mean the nonqualified plans, programs, policies and contracts
listed on Schedule 1adopted or maintained by the Company or a subsidiary or
affiliate of the Company. The Company may from time to time add to or delete
items from Schedule 1 by notifying the Trustee in writing; provided, however,
that no such change to Schedule 1 may be made after a Change of Control has
occurred. The Company shall provide the Trustee with a current copy of each Plan
and any amendments thereto.
 
(h)  “Trust” means the Potlatch Corporation Benefits Protection Trust
established pursuant to this Agreement.
 
(i)  “Trustee” means U. S. Bank National Association, or any successor trustee
appointed pursuant to Section 10.
 
(j)  “Trust Fund” means all moneys, securities and other property held by the
Trustee under the Trust.
 
SECTION 2.  Creation of Trust; Contributions
 
(a)  Concurrently with the execution of this Agreement, the Company deposited
with the Trustee $100 in cash. From time to time the Company shall also deposit
with the Trustee such contributions as may be permitted or required pursuant to
Sections 2(c) and 2(d) of this Agreement. All such contributions and all
accumulations and accruals, and the earnings and income with respect thereto,
shall be held by the Trustee in trust pursuant to this Agreement and shall be
invested, reinvested and applied as provided herein. The Trustee hereby accepts
being named as Trustee under this Agreement and agrees to hold the Trust Fund
subject to all of the terms and conditions hereof.

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(b)  The Trust established hereunder shall be revocable by the Company at any
time before a Change of Control, but shall be irrevocable upon and after a
Change of Control. The Trust is intended at all times to be a grantor trust as
described in section 671 of the Internal Revenue Code of 1986, as amended, and
all income earned on the assets of the Trust Fund shall be taxable to the
Company, whether before or after the Trust becomes irrevocable. All taxes with
respect to the Trust shall be payable by the Company from its separate funds and
shall not be charged against the Trust Fund.
 
(c)  The Company, with the concurrence of the Trustee, may at any time deposit
with the Trustee cash or marketable securities to be credited to the Trust Fund.
 
(d)  Within 30 days after a Change of Control has occurred, the Company shall
deposit with the Trustee cash or marketable securities (other than stock or debt
obligations of the Company) to be credited to the Trust Fund in an amount which,
when added to any funds already credited to the Trust Fund, the Company
reasonably determines will be at least sufficient to pay:
 
(i)  the Benefit Commitments, and
 
(ii)  all anticipated future expenses of the Trust Fund, including the fees and
expenses of the Trustee described in Section 6(b).
 
(e)  At least annually after a Change of Control, the Independent Administrator
shall retain an actuary to re-determine the amount determined pursuant to (d)
above. Such re-determination shall be performed using the factors and
assumptions set forth in Schedule 3. If the current fair market value of the
assets of the Trust Fund does not equal or exceed 110% of the amount so
re-determined, the Independent Administrator shall so advise the Company and the
Company shall, within 30 days after receiving such notice, make an irrevocable
contribution to the Trust equal to the excess of the re-determined amount over
the current fair market value of the assets of the Trust Fund.

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(f)  The Trustee shall not be responsible for the computation or collection of
any contribution to the Trust Fund.
 
SECTION 3.  Payments from the Trust
 
(a)  Upon the effective date of this Agreement, the Company shall furnish the
Trustee with written information regarding the Participants and their
beneficiaries under the Plans and the dates of distribution and amounts of
benefits under the Plans and shall update such information on a regular basis.
 
(b)  The Company shall have the duty to notify the Trustee if a Change of
Control occurs. If the Company fails to provide such notice and the Trustee has
a reasonable basis for believing that a Change of Control has occurred, then the
Trustee shall be authorized to act under this section as if the Company had
provided such notice. After a Change of Control, the Company shall:(i) within 30
days furnish to the Trustee the information described in (a) above with respect
to the Benefit Commitments which are then payable under the Plans; (ii) update
such information with respect to all Plans not less frequently than annually;
(iii) furnish the Trustee with any other information the Trustee may reasonably
request within 30 days after such request; and (iv) within 30 days following the
Change of Control, appoint an Independent Administrator which shall assume
responsibility for the administration of the Plans and provide such information
and assistance as may be necessary or appropriate to assist the Independent
Administrator to carry out its duties in connection with the Plans.

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(c)  Before a Change of Control, the Trustee shall make payments from the Trust
Fund to Participants and their beneficiaries under the Plans if so directed by
the Company. The Company may withdraw funds from the Trust Fund for any purpose
at any time before a Change of Control.
 
(d)  After a Change of Control the Trustee shall pay the Benefit Commitments to
the Participants and their beneficiaries in the amounts and at the time directed
by the Independent Administrator.
 
(e)  Except as provided in Section 2(d) or Section 11(d), no funds shall be paid
to the Company after a Change of Control unless the Trustee determines in its
sole discretion that the funds will never be required to pay Benefit Commitments
under the Plans and expenses of the Trust Fund and the Independent
Administrator.
 
(f)  After a Change of Control the Trustee shall pay benefits (including,
without limitation, benefits accruing on account of services rendered after the
date of the applicable event or on account of a period of employment after the
applicable event) under the Plans in excess of the Benefit Commitments only if
the Company deposits additional cash or marketable securities sufficient to pay
such excess benefits or the Trustee determines in its sole discretion that the
Trust Fund is sufficient to pay all Benefit Commitments, expenses of the Trust
Fund and such excess benefits, and the Company agrees in writing that it will
not make a request pursuant to Section 3(e) prior to the termination of the
Trust that the Trustee make a distribution of funds in excess of the amount
necessary to pay the Benefit Commitments and Trust Fund expenses.

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(g)  Payments to Participants and their beneficiaries pursuant to Sections 3(c)
and 3(d) shall be made by the Trustee to the extent that funds in the Trust Fund
are sufficient for such purpose. In any month in which the Trustee determines
that the Trust Fund does not have sufficient funds to provide for the payment of
all benefits due in such month under the Plans, the amount otherwise payable to
each such Participant or beneficiary during such month shall be reduced
proportionately; provided, however, that after a Change of Control any payments
in excess of the Benefit Commitments shall be reduced as necessary or completely
terminated before payment of any Benefit Commitments shall be reduced.
 
(h)  Notwithstanding any other provisions of this Agreement, if before or after
a Change of Control the Trustee is notified by the Company or the Trustee has a
reasonable basis for believing that the Company is Insolvent, the Trustee shall
discontinue benefit payments from the Trust Fund and shall hold the assets of
the Trust Fund to satisfy the claims of the Company’s general and judgment
creditors. For this purpose, the knowledge of any of its affiliates shall not be
imputed to the Trustee. The Trustee shall resume benefit payments only after
determining that the Company is not Insolvent or as directed by a court of
competent jurisdiction.
 
(i)  The Company shall have the duty to notify the Trustee if the Company
becomes Insolvent. Except as provided in the next sentence, the Trustee shall
have no duty to inquire whether the Company is Insolvent. If a person claiming
to be a creditor of the Company alleges in writing to the Trustee that the
Company is Insolvent, the Trustee shall independently determine or, within 30
days after receipt of such notice, shall petition a court to determine whether
the Company is Insolvent and shall suspend benefit payments pending such
determination. The Company shall promptly provide all information reasonably
requested by the Trustee to enable the Trustee or the court to make such
determination.

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(j)  If the Trustee discontinues or suspends benefit payments under Section 3(h)
or 3(i) and subsequently resumes such payments, the first payment following such
discontinuance or suspension shall include the aggregate amount of all payments
that would have been made during the period of discontinuance or suspension,
less any payments made by the Company to the Participant or beneficiary pursuant
to the Plans during such period, together with interest equal to 70% of the
prime rate at large U.S. money center commercial banks as reported in the Wall
Street Journal from time to time throughout such period.
 
(k)  No Participant or beneficiary shall have any claim on or beneficial
ownership interest in any assets of the Trust Fund before such assets are paid
to the Participant or beneficiary, and all rights created under the Plans shall
be unsecured contractual rights against the Company.
 
SECTION 4.  Management of Trust Assets
 
(a)  Prior to a Change of Control, the Trust Fund shall be held, invested and
reinvested by the Trustee as directed in writing by the Company from time to
time.
 
(b)  After a Change of Control, the Trustee shall have exclusive authority and
discretion to manage and control the Trust Fund and may employ investment
managers (including affiliates of the Trustee) to manage the investment of the
Trust Fund. In exercising such authority and discretion, the Trustee shall be
guided by the investment policy guidelines established by the Company for this
purpose.

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The Trustee shall discharge its investment duties with the care, skill, prudence
and diligence under the circumstances then prevailing that a prudent person
acting in a like capacity and familiar with such matters would use in the
conduct of an enterprise of a like character and with like aims.
 
(c)  In no event shall assets of the Trust Fund be invested in debt obligations
of the Company.
 
(d)  To the fullest extent permitted by law, the Trustee is expressly authorized
to:
 
(i)  retain the services of U.S. Bancorp Piper Jaffray Inc. or any other
registered broker-dealer organization hereafter affiliated with U.S. Bank
National Association, and any future successors in interest thereto
(collectively for the purposes of this paragraph referred to as the “Affiliated
Entities”), to provide services to assist in or facilitate the purchase or sale
of investment securities in the Trust,
 
(ii)  acquire as assets of the Trust shares of mutual funds to which Affiliated
Entities provides, for a fee, services in any capacity and
 
(iii)  acquire in the Trust any other services or products of any kind or nature
from the Affiliated Entities regardless of whether the same or similar services
or products are available from other institutions.
 
The Trust may directly or indirectly (through mutual funds fees and charges, for
example) pay management fees, transaction fees and other commissions to the
Affiliated Entities for the services or products provided to the Trust and such
mutual funds at such Affiliated Entities’ standard or published rates without
offset (unless required by law) from any fees charged by the Trustee for its
services as Trustee.

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The Trustee may also deal directly with the Affiliated Entities regardless of
the capacity in which it is then acting, to purchase, sell, exchange or transfer
assets of the Trust even though the Affiliated Entities are receiving
compensation or otherwise profiting from such transaction or are acting as a
principal in such transaction.
 
(e)  Each of the Affiliated Entities is authorized to
 
(i)  effect transactions on national securities exchanges for the Trust as
directed by the Trustee, and
 
(ii)  retain any transactional fees related thereto, consistent with Section
11(a)(1) of the Exchange Act, as amended, and related Rule 11a2-2(T).
 
(iii)  Included specifically, but not by way of limitation, in the transactions
authorized by this provision are transactions in which any of the Affiliated
Entities are serving as an underwriter or member of an underwriting syndicate
for a security being purchased or are purchasing or selling a security for its
own account. In the event the Trustee is directed by the Company or any
designated investment manager, as applicable hereunder (collectively referred to
for purposes of this paragraph as the “Directing Party”), the Directing Party
shall be authorized, and expressly retains the right hereunder, to direct the
Trustee to retain the services of, and conduct transactions with, Affiliated
Entities fully in the manner described above.

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SECTION 5.  Powers of Trustee
 
Subject to Sections 3 and 4, the Trustee shall have full power and authority
with respect to any and all moneys, securities and other property at any time
received or held in the Trust Fund to do all such acts, take all such
proceedings and exercise all such rights and privileges, whether herein
specifically referred to or not, as could be done, taken or exercised by the
absolute owner thereof, including, without in any way limiting the generality of
the foregoing, the following:
 
(a)  To collect and receive the income of the Trust Fund and to invest and
reinvest the Trust Fund in investments of any kind;
 
(b)  To pay the expenses of the Trust (excluding any taxes payable by the
Company under Section 2(b)) out of the Trust Fund, including the fees and
reasonable expenses of the Independent Administrator and including reasonable
compensation for its services as Trustee (if and to the extent that the Company
does not pay such expenses and compensation);
 
(c)  To employ suitable agents and counsel, and pay their reasonable expenses
and compensation out of the Trust Fund (if and to the extent that the Company
does not pay such expenses and compensation);
 
(d)  To sell, convey, exchange or otherwise dispose of any property at any time
held in trust hereunder;
 
(e)  To hold uninvested any cash contributions to the Trust Fund and to create
reserves of cash or other assets of the Trust Fundin the banking department of
any affiliate of the Trustee, without liability for interest thereon, for the
payment of expenses, or for distributions pursuant to the Plans, or for any
other purpose in connection with the Plans, notwithstanding the affiliate’s
receipt of “float” from such uninvested cash;

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(f)  To deposit any moneys at any time held in the Trust Fund in any savings
bank, in the savings department of any bank or in a banking affiliate of the
Trustee;
 
(g)  To invest assets of the Trust Fund in any mutual funds advised by the
Trustee or any of its affiliates or for which an affiliate of the Trustee acts
as a custodian or other service provider and to receive management fees from
such mutual funds for services performed for such funds;
 
(h)  To have, respecting bonds, shares of corporate stock and other securities,
all the rights, powers and privileges of an owner, including holding securities
in the name of the Trustee or in the name of a nominee securities depository
with or without disclosure of the Trust, voting any corporate stock either in
person or by proxy, with or without power of substitution, making payment of
calls, assessments or other sums deemed by the Trustee expedient for the
protection of the Trust Fund, exchanging securities, selling or exercising stock
subscriptions or conversion rights, participating in foreclosures,
reorganizations, consolidations, mergers, liquidations, pooling agreements,
voting trusts, and assenting to corporate sales, leases and encumbrances. The
Trustee may provide to the Company (or, after a Change of Control, to the
Independent Administrator) the proxy of any security when in the Trustee’s
judgment the Trustee or one of its affiliates may have a conflict of interest;

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(i)  To enter into any contracts with, or purchase any annuities from, any
insurance company or insurance companies for the purpose of providing for
distributions under the Plans; and
 
(j)  To settle, compromise or submit to arbitration any claims, debts or damages
due or owing to or from the Trust or the Trust Fund; to commence or defend legal
proceedings for or against the Trust; and to represent the Trust in all
proceedings in any court of law or equity or before any other body or tribunal.
 
SECTION 6.  Taxes, Expenses and Compensation of Trustee
 
(a)  The Company shall pay any federal, state, local or other taxes imposed with
respect to the assets or income of the Trust Fund. At the direction of the
Company (or, following a Change of Control, at the direction of the Independent
Administrator), the Trustee shall deduct any payroll or income taxes required to
be withheld from any payments made to Participants or their beneficiaries from
the Trust Fund.
 
(b)  The fees and expenses of the Trustee set forth in Schedule 2 as it may be
amended from time to time in accordance with the published fee schedule of the
Trustee and the Trustee’s reasonable expenses, including but not limited to the
retention of legal counsel, accountants and actuaries and such other
professionals as the Trustee determines are necessary or appropriate to enable
it to perform its services as Trustee, shall be charged to and payable from the
Trust Fund on a monthly basis, or on such other basis as the Trustee deems
reasonable, except to the extent that such fees and expenses are paid by the
Company.

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SECTION 7.  Records and Accounting
 
(a)  The Trustee shall keep accurate and detailed records and accounts with
respect to all assets included in the Trust Fund and all investments, receipts
and disbursements and other transactions involving the Trust, except that the
Company shall maintain all accounts for Participants and their beneficiaries as
provided in the Plans. All accounts, books and records maintained by the Trustee
shall be open to inspection by any person designated by the Company at all
reasonable times.
 
(b)  Within 60 days following the close of each calendar year or the date of
removal or resignation of the Trustee or termination of the Trust, the Trustee
shall file with the Company a written report setting forth all investments,
receipts, disbursements and other transactions effected by it during the
calendar year or part thereof for which the report is filed, in such form as the
Company and the Trustee shall agree. The Trustee also shall render such
additional statements or reports to the Company as the Company may reasonably
request from time to time.
 
SECTION 8.  Indemnification
 
The Company shall indemnify and hold the Trustee harmless from and against any
liability that the Trustee may incur in the administration of the Trust
(including reasonable attorneys’ fees), unless arising from the Trustee’s own
gross negligence, willful misconduct, or willful breach of the provisions of or
its obligations under this Agreement. The Trustee shall not be required to give
any bond or any other security for the faithful performance of its duties under
this trust agreement, except as required by law.

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SECTION 9.  Administration of the Plans; Communications
 
(a)  The Company shall administer the Plans as provided therein and subject to
Section 3(d), the Trustee shall not be responsible in any respect for
administering the Plans. The Trustee shall not be responsible for the adequacy
of the Trust Fund to meet and discharge all payments and liabilities under the
Plans.
 
(b)  Any action of the Company, or if applicable, the Independent Administrator
under any provision of this Agreement shall be evidenced by a written instrument
signed by an authorized agent of the Company or if applicable, the Independent
Administrator. The Company, or if applicable, the Independent Administrator
shall furnish the Trustee from time to time with evidence satisfactory to the
Trustee as to the agents authorized to sign such instruments.
 
SECTION 10.  Resignation or Removal of Trustee
 
(a)  The Trustee may resign at any time and for any reason before a Change of
Control upon written notice to the Company. After receipt of such written
notice, the Company shall appoint a successor trustee that will become Trustee
upon its acceptance of the Trust. The Trustee’s resignation shall become
effective upon the earlier of the date six months after such written notice is
provided or the date the successor trustee is appointed by the Company and
accepts the Trust. The Trustee shall have no duty to find or secure the
appointment of a successor upon its resignation pursuant to this Section 10(a).

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(b)  After a Change of Control, the Trustee may resign at any time and for any
reason upon written notice to the Company, and, if applicable, the Independent
Administrator. Such resignation shall become effective only if:
 
(i)  The Trustee has obtained the agreement of a bank to act as successor
trustee which bank (A) is among the 100 largest banks in the United States, as
measured by deposits, (B) has a rating of “B/C” or greater based upon the most
current rating from Keefe, Bruyett & Woods (“KB&W”) or its successor, or if KB&W
or its successor should cease to publish ratings, then a short-term debt rating
from Moody’s of “P-1” or greater, or from Standard and Poor’s of “A-1” and (C)
has no present commercial banking relationship with the Company or any of its
subsidiaries, affiliates or successors; or
 
(ii)  A court of competent jurisdiction has appointed a successor trustee, but
only after the Trustee has used its best efforts to find a successor pursuant to
(i) above.
 
The Trustee shall continue to be trustee of the Trust Fund until the new trustee
is in place, and the Trustee shall be entitled to expenses and fees (including
expenses incurred in finding a successor trustee or petitioning a court to name
a successor trustee) through the later of the effective date of its resignation
as Trustee or the end of its custodianship of the Trust Fund.
 
(c)  Prior to a Change of Control, the Company may remove the Trustee upon 30
days written notice to the Trustee, or upon such shorter period as is acceptable
to the Trustee. Such removal shall become effective, however, only upon the
occurrence of all of the following events:
 
(i)  The appointment by the Company of a successor trustee;
 
(ii)  The acceptance of the Trust by the successor trustee; and
 
(iii)  The delivery of the Trust Fund to the successor trustee.

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(d)  Following a Change of Control, the Independent Administrator, if it agrees
to assume such power and responsibility, may remover the Trustee by following
the steps prescribed for the Company in (c) above.
 
(e)  Upon designation or appointment of a successor trustee, the Trustee shall
transfer the Trust Fund to the successor trustee reserving such reasonable sums
as the Trustee shall deem necessary to defray its expenses in settling its
accounts and to pay any of its compensation due and unpaid. If the sums so
reserved are not sufficient for these purposes, the Trustee shall be entitled to
recover the amount of any deficiency from either the Company or the Trust Fund
held by thesuccessor trustee, or both.
 
SECTION 11.  Amendment of Agreement; Termination of Trust
 
(a)  The Company shall have the right at any time prior to a Change of Control
to amend this Agreement by an instrument in writing duly executed and delivered
to the Trustee, or to terminate the Trust; provided, however, that the duties,
powers and liabilities of the Trustee hereunder shall not be substantially
changed without its written consent.
 
(b)  The provisions of this Agreement and the Trust created hereby may not be
amended or terminated by the Company after a Change of Control. The Trustee,
after a Change of Control, may amend the provisions of this Agreement to the
extent required by applicable law.

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(c)  In the event the Company terminates the Trust prior to the occurrence of a
Change of Control, the Trustee shall reserve such sums as it deems necessary to
pay its fees and expenses, and shall distribute all remaining assets of the
Trust Fund in accordance with the written directions of the Company.
 
(d)  The Trust shall be terminated upon the earlier of the exhaustion of the
Trust Fund or the final payment of all amounts payable to all of the
Participants and their beneficiaries pursuant to the Plans, and the payment of
all amounts due to the Trustee and all costs and expenses chargeable to the
Trust. Promptly upon termination of this Trust, and after payment of all fees,
expenses and indemnities due to or incurred by the Trustee hereunder, any
remaining portion of the Trust Fund shall be paid to the Company.
 
SECTION 12.  Governing Law; Severability
 
(a)  This Agreement shall be construed and enforced in accordance with the laws
of the State of Minnesota.
 
(b)  Any provision of this Agreement that is determined to be invalid or
unenforceable shall be ineffective without invalidating the remaining provisions
hereof.
 
(c)  This Agreement shall have binding effect on the successors and assigns of
the Company and on all parent an subsidiary companies related to any such
successor or assign.

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IN WITNESS WHEREOF, the parties hereto have caused this amended and restated
Agreement to be executed by their duly authorized officers as of the day and
year first above written.
 
POTLATCH CORPORATION
By:
 
/S/    GERALD L. ZUEHLKE        

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Gerald L. Zuehlke
Vice President Finance and Chief
Financial Officer

 
US BANK NATIONAL ASSOCIATION
By:
 
/S/    CRAIG R. JOHNSTON        

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Craig R. Johnston
Vice President, Trust Officer

 
 

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Schedule 1
 
The Plans
 
Potlatch Corporation Salaried Employees’ Supplemental Benefit Plan
 
Potlatch Corporation Management Performance Award Plan
 
Potlatch Corporation Severance Program for Executive Employees
 
Potlatch Corporation Directors Deferred Compensation Plan
 
Potlatch Corporation Directors Retirement Plan (frozen)
 
Potlatch Corporation Employee Severance Plan*
 
Supplemental Retirement Benefit and Life Insurance Agreement Between Potlatch
Corporation and Richard B. Madden dated as of February 19, 1988
 
Deferred Compensation Agreement Between Potlatch Corporation and Richard N.
Congreve dated as of December 2, 1982, as amended
 
Severance and/or Employment Agreements:
 
Akerman, Emery
 
Bacon, John
 
Beech, John
 
Black, Douglas L.
 
Biazzo, Thomas
 
Brenner, Richard
 
Bullard, Richard
 
Cheek, George
 
Clark, Kenneth
 
Collier, James
 
Davis, Brian
 
DeBourde, Robert
 
DeRocher, Earl
 
Deward, Carlton
 
Durand, Daniel
 
Fleshman, Nancy (survivor of James Fleshman)
 
Grove, Harry
 
Hanby, John
 
Hawley, Robert
 
Hedden, Helen
 
Johansen, Daniel
 
Kosloski, Erwin

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*
 
The contributions made to the Trust Fund by the Company with respect to the
Employee Severance Plan shall be held in a separate sub-account and the
provisions of Section 3 shall apply separately to such sub-account.

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Krantz, Irwin
 
Martin, F. Lynn
 
McAdoo, James
 
McBirney, Helen
 
Morris, James
 
Morton, William
 
Nordholm, Richard
 
Norha, Patrick
 
Page, Gordon
 
Powell, Sandra
 
Rehm, Roland
 
Robison, John
 
Rosenbaum, Lester
 
Saarela, Edward
 
Smrekar, Thomas J.
 
Tate, Terry
 
Warner, Richard
 
Wolhaupter, John
 

 

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Schedule 2
 
Fee Schedule
 
TO BE DETERMINED

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Schedule 3
 
Summary of Funding Methods and Assumptions for
Severance Contracts, Employment Agreements and
Supplement Defined Benefit Plan
 
Discount Rate
 
Moody’s Seasoned Aaa Corporate Bond Yield for the month in which the valuation
date falls, less 0.50%. At January, 2001, yield was 7.15% (6.65% after removing
50 basis points).
 
Termination and Retirement
 
All active participants terminate two years after the valuation date, or
immediately, if that produces a higher liability. Benefit payments begin at the
earliest retirement date following termination.
 
Mortality
 
No mortality before retirement. Post-retirement mortality using 1983 Group
Annuity mortality table.
 
Trust Expenses
 
5% of liabilities.

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