FOURTH AMENDMENT
                                      TO
                        TIMBERLINE SOFTWARE CORPORATION
                          EMPLOYEES' RETIREMENT PLAN


The Chairman  announced that the only order of business was the consideration by
the Board of amendments to Section(s)  3.01(k)(3)(iv)  and 3.01(k)(4)(iv) of the
Corporation's  existing retirement plan. The Chairman further explained that the
Corporation  could make the necessary  amendments by replacing  certain pages of
the plan's  adoption  agreement.  The  Chairman  then  circulated  the  proposed
amendments  to  the  Directors.   After  a  brief  discussion  of  the  proposed
amendments, motion was made, seconded and it was unanimously:

         RESOLVED,  that  the  Corporation  adopt  the  amendments  to  Sections
         3.01(k)(3)(iv) and 3.01(k)(4)(iv) of the Corporation's  retirement plan
         circulated at this meeting, the amendments to be effective for the plan
         year  commencing  January  1,  1997.  To  effect  the  amendments,  the
         Secretary  will  substitute  amended  page(s)  11 and 12 of the  plan's
         adoption  agreement  in  circulation  for  the  corresponding   page(s)
         presently within the adoption agreement.  The Secretary will retain one
         copy of the page(s)  removed as a part of the  permanent  record of the
         Corporation.


Dated:   6/9/97
      -------------


Employer:                                     Trustee:



  /s/ Thomas P. Cox                           /s/ Nicolette D. Johnston
-------------------------------               -----------------------------
Timberline Software Corporation               Administrative Committee



<PAGE>





Part III.  [Options (k) and (l)].  Special rules for Code ss.401(k) Arrangement.
               (Choose (k) or (l), or both, as applicable)
               -------------------------------------------

[x]      (k)  Salary Reduction Agreements.  The following rules and restrictions
                apply to an Employee's salary reduction agreement:
                     (Make a selection under (1), (2) (3) and (4))
                     ---------------------------------------------

         (1)  Limitation on amount.  The Employee's salary reduction
                contributions:  (Choose (i) or at least one of (ii) or (iii))
                                ---------------------------------------------

                  [  ]      (i)  No maximum limitation other than as provided in
                           the Plan.

                  [x]      (ii) May not exceed 15% of Compensation  for the Plan
                           Year,  subject  to the  annual  additions  limitation
                           described  in Part 2 of  Article  III and the  402(g)
                           limitation described in Section 14.07 of the Plan.

                  [  ]     (iii)  Based on percentages of Compensation must
                           equal at least                            .
                                          ---------------------------

         (2)  An employee may revoke, on a prospective basis, a salary reduction
                agreement:  Choose (i), (ii),(iii) or (iv))
                            -------------------------------

                  [  ]     (i)  Once during any Plan Year but not later than
                                               of the Plan Year.
                           -------------------

                  [  ]     (ii)  As of any Plan Entry Date.

                  [x]      (iii)  As of the first day of any month.

                  [  ]     (iv)  (Specify, but must be at least once per Plan
                                 ---------------------------------------------
                           Year)                                        .
                           -----      ----------------------------------

         (3)  An employee who revokes his salary reduction agreement may file a
                  new salary reduction agreement with an effective date:
                  (Choose (i), (ii), (iii) or (iv))
                  ---------------------------------

                  [  ]     (i)  No earlier than the first day of the next Plan
                            Year.

                  [  ]     (ii)  As of any subsequent Plan Entry Date.

                  [  ]     (iii)  As of the first day of any month subsequent
                           to the month in which he revoked an Agreement.

                  [x]      (iv) (Specify,  but must be at least once per Plan
                                ----------------------------------------------
                           Year following the Plan Year of revocation) As of the
                           -----------------------------------------------------
                           first subsequent January 1 or July 1.
                           -------------------------------------

         (4)  A Participant may increase or may decrease, on a prospective
                basis, his salary reduction percentage or dollar amount:
                Choose (i), (ii), (iii) or (iv))
                --------------------------------

                  [  ]     (i)  As of the beginning of each payroll period.

                  [  ]     (ii)  As of the first day of each month.

                  [  ]     (iii)  As of any Plan Entry Date.


                  [  ]     (iv)  (Specify,  but must  permit  an  increase  or
                                  --------------------------------------------
                           decrease at least once per Plan Year) As of January 1
                           -----------------------------------------------------
                           or July 1.
                           ----------
<PAGE>

[x]      (1) Cash or  deferred  contributions.  For each Plan Year for which the
         Employer  makes  a  designated   cash  or  deferred   contribution,   a
         Participant  may elect to  receive  directly  in cash not more than the
         following  portion  (or, if less,  the 402(g)  limitation  described in
         Section 14.07 of the Plan) of his  proportionate  share of that cash or
         deferred contribution: (Choose (1) or (2))
                                -------------------

         [  ]     (1)  All or any portion.

         [  ]     (2)                              %.
                       ----------------------------

         3.04  CONTRIBUTION  ALLOCATION.  The Advisory  Committee  will allocate
deferral   contributions,   matching   contributions,    qualified   nonelective
contributions and nonelective contributions in accordance with Section 14.06 and
the elections under this Adoption Agreement Section 3.04.

Part I.  [Options (a) through (d)].  Special Accounting Elections.
            (Choose whichever elections are applicable to the Employer's Plan)
            ------------------------------------------------------------------

[x]      (a) Matching  Contributions  Account.  The Advisory  Committee will
          allocate  matching  contributions  to a  Participant's:
          (Choose (1) or (2); (3) is available only in addition to (1))
          -------------------------------------------------------------

         [x]      (1)  Regular Matching Contributions Account.

         [  ]     (2)  Qualified Matching Contributions Account.

         [  ]     (3)  Except,  matching  contributions  under  Option(s)  of
                  Adoption Agreement Section 3.01 are allocable to the Qualified
                  Matching Contributions Account.

[x]      (b) Special  Allocation Dates for Salary  Reduction  Contributions.
         The Advisory  Committee will allocate salary reduction contributions as
         of the Accounting Date and as of the following additional allocation
         dates:  January 1.
                 ---------

[ ]      (c) Special Allocation Dates for Matching  Contributions.  The Advisory
         Committee will allocate matching  contributions as of the Accounting
         Date and as of the following additional allocation dates:
                                                                  --------------
                                                               .
         ------------------------------------------------------

[x]      (d)  Designated  Qualified  Nonelective  Contributions - Definition
         of  Participant.  For  purposes  of  allocating  the designated
         qualified nonelective contribution, "Participant" means:
         (Choose (1) (2) or (3))
         -----------------------

         [  ]     (1)  All Participants.

         [x]      (2)  Participants who are Nonhighly Compensated Employees for
                   the Plan Year.

         [  ]     (3)  (Specify):
                                 ----------------------------------------------.

Part II.  Method  of  Allocation  -  Nonelective  Contribution.  Subject  to any
restoration  allocation required under Section 5.04, the Advisory Committee will
allocate  and credit  each  annual  nonelective  contribution  (and  Participant
forfeitures treated as nonelective  contributions) to the Employer Contributions
Account of each  Participant  who satisfies  the  conditions of Section 3.06, in
accordance  with the allocation  method selected under this Section 3.04. If the
Employer elects Option (e)(2), Option (g)(2) or Option (h), for