<PAGE>   1
                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                    FORM 10-K



/x/   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
      ACT OF 1934
For the fiscal year ended December 31, 1996
                                       OR
/ /   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934
For the transition period from __________ to __________.

                          Commission File Number 1-7852

                               POPE & TALBOT, INC.
             (Exact name of registrant as specified in its charter)

           Delaware                                   94-0777139
 (State or other jurisdiction              (IRS Employer Identification No.)
of incorporation or organization)

1500 SW 1st Avenue, Portland, Oregon                     97201
(Address of principal executive offices)               (Zip Code)

Registrant's telephone number, including area code  (503) 228-9161

Securities registered pursuant to Section 12(b) of the Act:

<TABLE>
<CAPTION>
                                             Name of each Exchange
     Title of each class                     on which registered
     -------------------                     ---------------------
<S>                                          <C>
Common Shares, par value $1.00               New York Stock Exchange
Common Shares, par value $1.00               Pacific Stock Exchange
8-3/8% Debentures, Due June 1, 2013          None
</TABLE>

Securities registered pursuant to Section 12(g) of the Act:  None

         Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. / /

         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes /x/ No / /

The aggregate market value of voting stock held by nonaffiliates of the
registrant is $192,359,825 as of March 11, 1997 ($15.25 per share).

                            13,363,779
(Number of shares of common stock outstanding as of March 11, 1997)

Part I and Part II incorporate specified information by reference from the
annual report to shareholders for the year ended December 31, 1996. Part III
incorporates specified information by reference from the proxy statement for the
annual meeting of shareholders on April 30, 1997.
<PAGE>   2
                                     PART I

ITEM 1.  BUSINESS

INTRODUCTION AND DEVELOPMENTS IN 1996

        Pope & Talbot, Inc. (the "Company") is engaged principally in the wood
products and pulp and paper products businesses. The Company's wood products
business involves the manufacture and sale of standardized and specialty lumber
and wood chips. In its pulp and paper business, the Company manufactures and
sells private label consumer tissue, bleached kraft pulp for newsprint and
writing paper, and brokers wood chips. In December 1995, the Company entered
into a definitive agreement to sell its disposable diaper business to Paragon
Trade Brands, Inc. ("Paragon"). The sale of this business was completed on
February 8, 1996 and the disposable diaper business results for 1995 and 1994
have been reflected as discontinued operations. A gain on the sale of the
discontinued diaper business was reported in the first quarter of 1996. During
1996, wood products accounted for approximately 52 percent of the Company's
revenues of $447.5 million, consumer tissue accounted for 30 percent and
bleached kraft pulp and brokered wood chips combined to account for 18 percent.

        The Company, a Delaware corporation, was originally incorporated as a
California corporation in 1940. It is the successor to a partnership formed in
San Francisco, California in 1849 that acquired its first timberlands and opened
a lumber mill in the Seattle, Washington area in 1853. Subsequently, the Company
developed a lumber business based on timberland and facilities in the U.S.
Pacific Northwest, British Columbia, Canada, and the Black Hills region of South
Dakota and Wyoming.

        Since the mid-1980s, the Company has reduced its dependency on timber
from the Pacific Northwest, where environmental concerns have sharply restricted
the availability and increased the cost of public timber. At the same time, the
Company has increased its operations in regions presently having more stable
timber supplies, namely in British Columbia and the Black Hills region of South
Dakota and Wyoming. In 1985, the Company distributed its timber and land
development properties in the State of Washington to its shareholders through
interests in a newly formed master limited partnership. In 1989, the Company
sold its Oregon sawmill, and the Company has since sold its remaining Oregon
timberlands. In 1992, the Company acquired a sawmill in Castlegar, British
Columbia and related timber cutting rights. At the end of 1995, the Company
permanently closed its Port Gamble, Washington sawmill. The Company currently
operates five sawmills with an estimated annual capacity of 549 million board
feet, of which approximately 75 percent is located in British Columbia and 25
percent in the Black Hills.

        In order to expand and broaden its sources of revenue, the Company
acquired its pulp, consumer tissue and disposable diaper businesses in the late
1970s and 1980s. The Halsey, Oregon pulp mill produces bleached kraft pulp which
is sold to a writing paper manufacturer and newsprint manufacturers in the
Pacific Northwest and on the open market. The Company's private label tissue
business manufactures towels, napkins, bathroom tissue and facial tissue from
recycled paper at two mills in the U.S. The Company sells its tissue products
under private labels to supermarkets, drugstores, mass merchandisers, food and
drug distribution companies and warehouse club stores. Up to the completion of
the previously mentioned diaper business sale in early 1996, the Company
produced private label diapers at four mills in the U.S.

        The businesses in which the Company is engaged are extremely
competitive, and a number of the Company's competitors are substantially larger
than the Company with correspondingly greater resources. In particular,
competition in the tissue products market is extremely strong in terms of price.
See "Pulp and Paper Products Business - Paper Products."

                                       2
<PAGE>   3
        Environmental regulations to which the Company is subject require the
Company from time to time to incur significant operating costs and capital
expenditures. In addition, as discussed herein, environmental concerns have in
the past materially affected the availability and cost of raw materials used in
the Company's business. See "Wood Products Business", "Pulp and Paper Products
Business" and "Environmental Matters."

WOOD PRODUCTS BUSINESS

        The Company's wood products business involves the manufacture and sale
of standardized and specialty lumber and wood chips. The Company's principal
wood products categories and the sales generated by each over the past three
years are set forth in the following table:

<TABLE>
<CAPTION>
         Classes of Wood Products                  1996         1995          1994
         ------------------------                  ----         ----          ----
                                                           (In thousands)
<S>                                              <C>          <C>           <C>     
         Lumber                                  $194,930     $194,350      $261,322
         Wood chips                                20,835       46,514        30,284
         Logs and other                            15,948       24,712        12,599
                                                 --------     --------      --------
             Total wood products sales           $231,713     $265,576      $304,205
                                                 ========     ========      ========
</TABLE>

        Although 1996 and 1995 lumber revenues were comparable, the 1996 lumber
revenues reflected 17 percent higher prices than 1995 which offset 14 percent
lower lumber sales volumes. The 1996 volume reduction related mainly to the
permanent closure of the Company's Port Gamble, Washington sawmill in 1995, and
to a lesser degree, reduced Canadian shipments. Wood chip revenues in 1996 were
$25.7 million, or 55 percent, lower than 1995 reflecting residual chip prices
which were down nearly 50 percent from 1995 levels combined with lower chip
volumes resulting from decreased lumber production. Log sales were down in 1996
due primarily to the 1995 Port Gamble mill closure. In 1995, lumber revenues
decreased $67.0 million, or 26 percent, compared with 1994. These reduced lumber
revenues were due to a combination of 13 percent lower average lumber prices and
9 percent lower sales volumes. The volume decreases related to reduced Port
Gamble sawmill operations and the Grand Forks, British Columbia sawmill
operating at one shift, down from the two-shift basis operated prior to 1995.
The 1995 wood chip revenues increased $16.2 million, or 54 percent, over 1994 as
average chip prices nearly doubled which more than offset lower chip volumes.
Log sales were higher in 1995 due mainly to the liquidation of Port Gamble log
inventories related to the fourth quarter 1995 sawmill closure.

        The Company's lumber products consist principally of boards and
dimension lumber, some of which are specialty, value-added items, such as
stress-rated lumber. Wood chips and other similar materials are obtained as a
by-product of the Company's lumber operations.

        The principal sources of raw material for the Company's wood products
operations are timber obtained through long-term cutting licenses on public
lands, logs purchased on open log markets, timber offered for sale via
competitive bidding by federal agencies, and timber purchased under long-term
contracts to cut timber on private lands.

        During 1995, the Port Gamble sawmill was either shut down or operating
on a reduced one-shift basis due to a lack of acceptably priced timber in
relation to end-product prices. Prior to the mill's closure, timber harvest
levels in the mill's operating region had been significantly reduced as a result
of environmental pressures to reduce the amount of timber available for harvest.
A strong export log market further reduced domestic log supplies in the region.
These reduced log volumes, combined with weakened lumber markets, resulted in
operating losses at Port Gamble in 1994 and 1995 and significantly
below-capacity production. With no prospect of a resolution to the timber supply
situation, the Company permanently closed the Port Gamble sawmill in the fourth
quarter of 1995. The assets of the facility were sold in the first quarter of
1996.

                                       3
<PAGE>   4
        Approximately 75 percent of the Company's current lumber capacity is
located in British Columbia, Canada and 25 percent in the Black Hills region of
South Dakota and Wyoming. In Canada, timber requirements are obtained primarily
from the Provincial Government of British Columbia under long-term timber
harvesting licenses which allow the Company to remove timber from defined areas
annually on a sustained yield basis. The Provincial Government of British
Columbia has the authority to modify prices and harvest volumes at any time.
Under the provincial stumpage pricing formula, wood costs are based on a
relationship to end- product prices. Approximately 30 percent of the Company's
Canadian log requirements are satisfied through open market log purchases. In
the Black Hills, the Company obtains its timber from various public and private
sources under long-term timber harvesting contracts in addition to buying logs
on open markets. Under these Black Hills contracts, prices are subject to
periodic adjustment based upon formulas set forth therein.

        During the early 1990s, the Company's Canadian sawmills benefited from
processing additional volumes of pine timber which had been killed by the
mountain pine beetle. This beetle kill volume was essentially harvested by the
end of 1994. As a result, Canadian timber harvest levels were reduced and
resulted in the January 1, 1995 curtailment of the Grand Forks, British Columbia
sawmill to a one-shift production basis. This Grand Forks curtailment reduced
lumber capacity by 60 million board feet annually, or approximately 8 percent of
the Company's then existing lumber capacity.

        During 1994, the Provincial Government of British Columbia's Commission
of Resources and Environment ("CORE") began reviewing the future use of the
forest resources in the province, including reserving additional forest
resources for park lands. This review was completed in 1996 and British Columbia
land use policy groups are now reviewing related recommendations. Although no
assurances can be given, management believes that in the near term, timber
supplies for the Company's Canadian sawmills should be stable. However, based
upon preliminary information, it appears that the amount of timber available to
the Company's Canadian sawmills in the longer term could face downward pressure.

        The British Columbia government has also implemented its Forest
Practices Code ("Code"). This Code communicates how companies must perform
logging activities. Due to the additional activity required by this Code to
protect the environment, the Company's logging costs increased in 1996 and will
likely continue at these higher levels. The Code could also ultimately have a
long-term impact on the Company's timber harvest volumes.

        During the first quarter of 1996, U.S. and Canadian trade negotiators
reached an agreement establishing volume quotas on Canadian softwood lumber
shipments to the U.S. The 5-year agreement took effect April 1, 1996. The quotas
specify on a company by company basis the lumber volumes which may be shipped to
the U.S. tariff-free and those volumes which may be shipped to the U.S. subject
to a $50 per thousand board foot tariff. Shipment volumes in excess of these
established quotas are subject to a $100 per thousand board foot tariff. For
purposes of determining tariff levels, the quota volumes are evaluated annually
during the April 1 through March 31 fiscal year, and are further measured on a
quarterly basis within each fiscal year. In late October 1996, the Company was
informed of its fiscal year 1996/1997 quota volumes which applied retroactively
to April 1. The Company believes its volume allocations were determined
consistently with other Canadian lumber companies. The Canadian government may
adjust company by company allocations for future fiscal year quota periods.
Since the quota agreement was enacted, domestic lumber markets have demonstrated
periods of dramatic instability, including some positive and some negative
movements. Due to this lumber market uncertainty resulting from this quota, the
Company cannot predict with certainty the impact of these quotas on the
Company's results of operations.

                                       4
<PAGE>   5
        Marketing and Distribution. The Company's lumber products are sold
primarily to wholesale distributors. Wood chips produced by the Company's
sawmills are sold to manufacturers of pulp and paper in the U.S. and Canada.
Logs not suitable for consumption in the Company's sawmills are sold to other
U.S. and Canadian forest products companies.

        Marketing of the Company's wood products is centralized in its Portland,
Oregon office. Although the Company does not have distribution facilities at the
retail level, the Company does utilize several reload facilities around the U.S.
to assist in moving the product closer to the customer. The Company sold wood
products to numerous customers during 1996, the ten largest of which accounted
for approximately 33 percent of total wood products sales. No single wood
products customer accounted for more than 10 percent of the Company's revenues
in 1996.

        Backlog. The Company maintains a minimal finished goods inventory of
wood products. At December 31, 1996, orders were approximately $9.9 million,
compared with approximately $4.7 million at December 31, 1995. This backlog
represented an order file for the Company which generally would be shipped in
two weeks to one month. The increase from 1995 to 1996 reflects both increased
lumber sales prices and higher order volume. The higher order volume is a
function of timing and poor year-end 1996 weather conditions which delayed
shipments.

        Competition. The wood products industry is highly competitive, with a
large number of companies producing products that are reasonably standardized.
There are numerous competitors of the Company that are of comparable size or
larger, none of which is believed to be dominant. The principal means of
competition in the Company's wood products business are pricing and an ability
to satisfy customer demands for various types and grades of lumber.

        For further information regarding amounts of revenue, operating profit
and loss and identifiable assets attributable to the wood products industry
segment, see Note 11 of "Notes to Consolidated Financial Statements" in the
Company's 1996 Annual Report to Shareholders.

PULP AND PAPER PRODUCTS BUSINESS

        The Company's principal pulp and paper products categories and the sales
generated by each over the last three years are set forth in the following
table:

<TABLE>
<CAPTION>
        Classes of Pulp and Paper Products                  1996         1995           1994
        ----------------------------------                  ----         ----           ----
                                                                    (In thousands)
<S>                                                        <C>          <C>           <C>     
        Tissue products                                    $133,649     $107,013      $104,885
        Bleached kraft pulp                                  72,410      124,361        77,950
        Brokered wood chips                                   9,722       27,459        15,767
                                                           --------     --------      --------
          Total pulp and paper products sales              $215,781     $258,833      $198,602
                                                           ========     ========      ========
</TABLE>

        As discussed previously, at the end of 1995 the Company entered into a
definitive agreement to sell its disposable diaper business to Paragon. The
disposable diaper business results for 1995 and 1994 were reflected as
discontinued operations. Revenues for the discontinued diaper business, which
are excluded from the table above, were $144.0 million and $157.1 million in
1995 and 1994, respectively. In 1996, the Company reported a $3.1 million net of
tax gain related to the sale of the disposable diaper business.

        In 1996, pulp and paper revenues decreased $43.1 million, or 17 percent,
from 1995 reflecting a dramatic weakening of pulp markets which more than offset
higher tissue revenues. The increase in tissue revenues in 1996 from 1995
reflected 11 percent higher prices and 12 percent higher volumes. The 1996
tissue volume improvement related mainly to

                                       5
<PAGE>   6
the late 1995 settlement of a seven-month labor strike at the Ransom,
Pennsylvania facility. The weak 1996 pulp markets resulted in a pulp price
reduction of about 35 percent compared to 1995. Pulp sales volume in 1996 was
down 7 percent from 1995 due mainly to a two-week market induced shutdown in the
first quarter of 1996 and a brief shutdown in the 1996 third quarter caused by
an equipment failure. Lower 1996 brokered wood chip revenues resulted from a
significant decrease in wood chip prices combined with lower volume. Pulp and
paper revenues increased $60.2 million, or 30 percent, from 1994 to 1995 due
mainly to improved pulp sales prices. The Company's pulp sales prices were
nearly 70 percent higher on average in 1995 than 1994. In tissue, a 17 percent
average price improvement more than offset a 13 percent drop in volume related
mainly to the 1995 labor strike at Ransom. Higher brokered wood chip revenues
reflected the significant chip price improvement from 1994 to 1995.

        1.  PAPER PRODUCTS

        The Company produces a line of private label consumer tissue products
including towels, napkins, bathroom tissue and facial tissue. These products are
sold under private and controlled labels.

        The raw material for the Company's tissue mills is wastepaper purchased
from wastepaper dealers located in the Midwest, mid-Atlantic and on the East
Coast. During 1995, wastepaper pricing was pushed to record levels by a
combination of strong pulp markets and shortages of certain wastepaper grades
caused primarily by the start-up of new recycled fiber mills in the U.S. As a
result of these pressures, the Company's wastepaper prices during 1995 doubled
over 1994 pricing. However, by year-end 1995, wastepaper prices were declining
consistent with world pulp markets. This late 1995 decline accelerated through
the first quarter and into the early second quarter of 1996 when prices leveled.
Full year 1996 prices were about half those incurred in 1995 and approximated
1994 prices. The Company believes that there will continue to be an adequate
supply of wastepaper in the foreseeable future.

        Marketing and Distribution. The Company utilizes its own sales force and
some retail consumer products brokers to sell its products to supermarkets,
drugstores, mass merchandisers, food and drug distribution companies and
warehouse club stores. The Company's products enjoy national distribution;
however, the majority are sold east of the Rocky Mountains. Sales to the
Company's ten largest paper products customers represented 77 percent of tissue
products sales in 1996. No single paper products customer accounted for 10
percent or more of total Company revenues in 1996.

        Backlog. At the end of 1996 the tissue order file was approximately $3.0
million compared to a backlog of approximately $4.2 million at December 31,
1995. The nature of the Company's tissue business is such that the time between
order receipt and the related shipment of the order is generally less than two
weeks. Due to these short lead times, order files are minimal. The lower order
backlog at year-end 1996 as compared to year-end 1995 relates to timing of order
receipts. The Company believes it carries an adequate finished goods inventory
to meet customer order requirements.

        Competition. The tissue market is extremely competitive, with
approximately 10 major producers. Of these, Kimberly-Clark Corporation, Fort
Howard Corporation, James River Corporation and Procter & Gamble Corporation are
dominant and account for approximately 65 percent of the market. Within the
tissue market, the Company estimates that the private label tissue segment
accounts for approximately 12 percent to 30 percent of the total, depending on
the product. The principal means of competition in the tissue business are
pricing, product quality and customer service. In order to effectively compete
against much larger competitors which have lower cost structures, the Company's
focus is to differentiate itself in the areas of customer service, consistent
product quality and the use of state of the art information systems.

                                       6
<PAGE>   7
        In the tissue business, the relationship between industry-wide capacity
and operating rates significantly influences tissue pricing. Tissue industry
capacity increases in the late 1980s and early 1990s resulted in capacity which
exceeded demand growth causing tissue prices to decline an average of 14 percent
from 1989 through 1993. This condition began to stabilize in 1994, and in 1995
industry-wide tissue operating rates improved to approximately 93 percent of
capacity which, combined with high 1995 industry-wide raw material costs,
generated tissue price increases for the Company at the end of 1995 of
approximately 30 percent over year-end 1994 levels. The 1995 price increases
were the first general price increases for the Company's tissue products since
1990. Tissue industry operating rates remained favorable in 1996. Additional
industry capacity increases have been announced to come on line through 1999.
These capacity increases may affect tissue pricing.

        2.  PULP PRODUCTS

        The Company owns a pulp mill at Halsey, Oregon. This mill produces
bleached kraft pulp which is sold in various forms to a writing paper
manufacturer and newsprint manufacturers in the Pacific Northwest and on the
open market. In conjunction with the fiber acquisition program for the pulp
mill, the Company brokers pulp chips for sale primarily into the export market.
The total annual capacity of the mill is 180,000 air dry metric tons; 162,000
metric tons were produced in 1996, 175,000 metric tons were produced in 1995 and
158,000 metric tons were produced in 1994.

        In order to provide additional sales flexibility and attempt to improve
margins through higher value products, the Company initiated mill modifications
totaling $41 million, which were completed in early 1994, to improve pulp
quality and expand pulp drying capabilities. These modifications were in
addition to a $24 million oxygen delignification project which reduced the use
of chlorine in the bleaching process and brought dioxin discharges into
compliance with an agreement entered into with the Oregon Department of
Environmental Quality on meeting target emission levels. These mill improvements
have allowed the Company to expand its pulp product offerings and to dry its
total pulp production, thus providing greater access to pulp markets within and
outside the Pacific Northwest, which has historically been the Company's primary
pulp market region.

        The Company has an agreement with Grays Harbor Paper L.P. ("Grays
Harbor"), under which the Company supplies pulp to the Grays Harbor writing
grade paper mill. Grays Harbor purchased approximately 100,000 metric tons,
103,000 metric tons and 89,000 metric tons of pulp from the Company in 1996,
1995 and 1994, respectively. All output from the paper mill is sold to one
customer. In the event that the paper mill's sales to its customer are adversely
impacted for any reason, sales of the Company's pulp may be adversely impacted.
A significant portion of the pulp sold to the paper mill is produced from
sawdust, which has historically been less expensive than softwood and hardwood
chips. Pricing for this pulp sold to Grays Harbor is computed using a formula
based on prices for white paper.

        Weyerhaeuser Company ("Weyerhaeuser") owns a pulp mill, which it
upgraded and expanded, located adjacent to the North Pacific Paper Company
("Norpac") newsprint manufacturing facility in Longview, Washington.
Weyerhaeuser is a part owner of Norpac. Norpac purchased 22,000 metric tons and
48,000 metric tons from the Company in 1995 and 1994, respectively. Norpac
phased out its purchases from the Company in 1995 as Weyerhaeuser completed its
upgrade and expansion project. As a result of the mill's pulp enhancements
brought about by the previously mentioned mill modifications, the Company has
been able to effectively sell the pulp volume which had previously gone to
Norpac.

        Substantially all of the Company's wood chip and sawdust requirements
for the Halsey pulp mill are satisfied through purchases by the Company from
third parties. The Company has long-term chip supply contracts with sawmills in
the Pacific Northwest.

                                       7
<PAGE>   8
        Environmental concerns over timber harvests, which caused high log costs
and led to the shutdown of the Company's Port Gamble sawmill, have also caused
higher chip costs and reduced chip availability from historic sources at the
Halsey pulp mill over the past several years. In order to provide an adequate
supply of wood fiber for the mill, the Company has expanded its capability of
using sawdust and hardwood chips, which historically have been less expensive
than softwood chips, as raw materials for a significant portion of the
production. Additionally, the Company continues to use an expanded geographic
base to maintain an adequate supply of chips for the approximately 40 to 50
percent of the pulp mill's production which remains based on softwood chips.
Environmental restrictions on timber harvests coupled with a strong pulp market
resulted in a 71 percent increase in chip prices from year-end 1994 levels to
mid 1995 levels. However, the weakening pulp market in late 1995 and early 1996
has reduced chip demand and greatly reduced chip prices from their mid 1995
highs. The Company believes there will continue to be an adequate supply of
third-party chips and sawdust for the Halsey pulp mill in the foreseeable
future.

        Marketing and Distribution. The Company utilizes its own sales force and
pulp brokers to sell its pulp products. A large majority of the Company's pulp
products are sold in the Pacific Northwest. In 1996, sales to Grays Harbor
represented 64 percent of the Company's pulp revenues and the remaining nine
largest customers accounted for an additional 23 percent of pulp revenues. Grays
Harbor accounted for 10 percent of total Company revenues in 1996.

        Backlog. The Company's pulp customers either enter into contracts for
periods of one to three years or purchase products without obligation for future
purchases. The contractual customers provide the Company with annual estimates
of their requirements, followed by periodic orders based on more definitive
information. As of December 31, 1996, the Company's backlog of orders believed
to be firm for both contractual and non-contractual customers was $17 million
compared to $16 million at December 31, 1995. The increase in total order
backlog reflects higher order volume which is partially offset by lower sales
prices. The increase in backlog volume is due to orders amounting to $5 million
from non-contractual customers at December 31, 1996, which the Company believes
are firm. At December 31, 1995, there was minimal order volume to
non-contractual customers believed to be firm as a consistent relationship with
these customers had not been established. The backlog of pulp orders at year-end
represents orders which will be filled in the first quarter of the following
year.

        Competition. The pulp industry is highly competitive, with a substantial
number of competitors having extensive financial resources, manufacturing
expertise and sales and distribution organizations, most of which are larger
than the Company, but none of which is believed to be dominant. The principal
methods of competition in the pulp market are price, quality, volume,
reliability of supply and customer service.

        For further information regarding amounts of revenue, operating profit
and loss and identifiable assets attributable to the pulp and paper products
industry segment, see Note 11 of "Notes to Consolidated Financial Statements" in
the Company's 1996 Annual Report to Shareholders.

ENVIRONMENTAL MATTERS

        The Company is subject to federal, state, provincial and local air,
water and land pollution control, solid and hazardous waste management, disposal
and remediation laws and regulations in all areas where it has operations.
Compliance with these laws and regulations generally requires operating costs as
well as capital expenditures. It is difficult to estimate the costs related
solely to environmental matters of many capital projects which have been
completed in the past or which may be required in the future. Changes required
to comply with

                                       8
<PAGE>   9
environmental standards will affect other areas such as facility life and
capacity, production costs, changes in raw material requirements and costs and
product value. The Environmental Protection Agency ("EPA") has published
proposed regulations which would establish standards and limitations for
non-combustion sources under the Clean Air Act and revised regulations under the
Clean Water Act. These proposals are collectively referred to as the "cluster
rules" and have been the subject of extensive discussions between the pulp and
paper industry and the EPA. The Company's primary exposure to these proposals
relates to the Company's Halsey pulp mill, and to a much lesser degree the
Company's two tissue mills. Based on preliminary evaluations of the proposed
rules, the costs of required modifications to the Company's mills could range
from $15 million to $30 million. The proposed rules could become effective in
mid 1997 with compliance required as early as the year 2000. It is estimated
that during 1996, capital expenditures for environmental controls amounted to
less than $1 million. It is expected that capital expenditures will continue
into the future and may increase over time. Based on the understanding of future
compliance standards, expenditures for such purposes, with the exception of
expenditures related to cluster rule compliance beginning in 1998, are currently
estimated to be minimal in 1997 and 1998. However, the ultimate outcome of
future compliance is uncertain due to various factors such as the interpretation
of environmental laws, potential introduction of new environmental laws and
evolving technologies.

        In response to environmental concerns in Western Oregon and Western
Washington, specifically the preservation of old-growth forests and wildlife
habitat, substantial amounts of federal timberlands have been set aside as
wilderness areas. This has affected and may continue to affect the amount and
cost of timber obtainable from public agencies in this region. Currently, the
Company's exposure in this region is the Halsey, Oregon pulp mill. The Halsey
pulp mill is affected by the decrease in timber availability since its primary
raw materials, wood chips and sawdust, are by-products of the lumber
manufacturing process. The Company believes that, based on existing wood chip
and sawdust availability both within the Willamette Valley region of Oregon and
from other sources discussed previously, wood chip and sawdust resources will be
adequate for the Company's requirements at the Halsey pulp mill in the
foreseeable future.

        In Canada during 1994, the Provincial Government of British Columbia's
Commission of Resources and Environment ("CORE") began reviewing the future use
of the forest resources in the province, including reserving additional forest
resources for park lands. This review was completed in 1996 and British Columbia
land use policy groups are now reviewing related recommendations. Although no
assurances can be given, management believes that in the near term, timber
supplies for the Company's Canadian sawmills should be stable. However, based
upon preliminary information, it appears that the amount of timber available to
the Company's Canadian sawmills in the longer term could face downward pressure.

        The British Columbia government has also implemented its Forest
Practices Code ("Code"). This Code communicates how companies must perform
logging activities. Due to the additional activity required by this Code to
protect the environment, the Company's logging costs increased in 1996 and will
likely continue at these higher levels. The Code could also ultimately have a
long-term impact on the Company's timber harvest volumes.

        In 1992, the Company was contacted by the local governmental owner of a
vacant industrial site in Oregon on which the Company previously conducted
business. The owner informed the Company that the site has been identified as
one containing creosote and coal tar, and that it plans to undertake a voluntary
cleanup effort of the site. The owner has requested that the Company participate
in the cost of the cleanup. The Company is currently participating in the
investigation stage of this site with remediation and monitoring to occur over
several years, likely beginning in 1998. Based on preliminary findings, the
Company has

                                       9
<PAGE>   10
estimated the likely total cost to all parties of remediation and monitoring to
be in the range of $5 to $12 million and that no amount within this range is
more likely an outcome than another. The company has established reserves for
environmental remediation and monitoring related to this site in an amount it
believes is probable and reasonably estimable. The Company believes it is
reasonably possible that the costs associated with the cleanup of this site may
exceed cost estimates upon which current accruals are based by amounts which may
range from insignificant up to approximately $7 million over several years. The
ultimate cost to the Company for the cleanup cannot be predicted with certainty
due to the unknown magnitude of the contamination, the varying costs of
alternative cleanup methods, the cleanup time frame possibilities, the evolving
nature of remediation technologies and governmental regulations and the
inability to determine the Company's share of multi-party obligations or the
extent to which contributions will be available from other parties. The Company
has not assumed it will bear the entire cost of remediation to the exclusion of
other known potentially responsible parties, who may be jointly and severally
liable, and probable recoveries from insurance carriers.

EMPLOYEES

        At December 31, 1996, the Company employed approximately 2,300 employees
of whom 1,900 were paid hourly and a majority of which were members of various
labor unions. Approximately 55 percent of the Company's employees were
associated with the Company's wood products business, 43 percent were associated
with the Company's pulp and paper business and 2 percent were corporate
management and administration personnel.

FOREIGN AND DOMESTIC OPERATIONS AND EXPORT SALES

        The Company's foreign manufacturing operations consist of three lumber
mills located in Canada. The Company's wood products business is heavily
dependent on foreign operations in that the three Canadian sawmills account for
approximately 75 percent of the Company's lumber capacity. See "Wood Products
Business" for discussion on a U.S. and Canada agreement establishing volume
quotas on Canadian softwood lumber shipments to the U.S. The Company's primary
exports are pulp sold to Europe and brokered wood chips sold to Japan. The
Company's export sales from the United States were $23.8 million for 1996, $26.3
million for 1995 and $18.2 million for 1994. Of the 1996 export sales, 47
percent were to Japan and 45 percent were to Europe.

        Financial information regarding the Company's domestic and foreign
operations is included in Note 11 of "Notes to Consolidated Financial
Statements" on page 29 and 30 of the Company's 1996 Annual Report to
Shareholders.

                                       10
<PAGE>   11
ITEM 2.  PROPERTIES

WOOD PRODUCTS PROPERTIES

        1.  Mills and Plants

        The following tabulation briefly states the location, character,
capacity and 1996 production of the Company's lumber mills:

<TABLE>
<CAPTION>
                                                    Estimated Annual                            1996
Location                                              Capacity (3)                          Production(3)
--------                                              ------------                          -------------
<S>                                               <C>                                   <C>                
Spearfish, South Dakota                           110,000,000 bd. ft.(1)                108,000,000 bd. ft.
Newcastle, Wyoming                                 32,000,000 bd. ft.(1)                 32,000,000 bd. ft.
Grand Forks, British Columbia                      60,000,000 bd. ft.(2)                 51,000,000 bd. ft.
Midway, British Columbia                          145,000,000 bd. ft.(2)                143,000,000 bd. ft.
Castlegar, British Columbia                       211,000,000 bd. ft.(2)                215,000,000 bd. ft.
</TABLE>


    (1) Based on operating two shifts, five days per week for the Spearfish,
        South Dakota lumber mill and one shift, five days per week for the
        Newcastle, Wyoming lumber mill.
    (2) Based on operating two shifts, five days per week for the Midway and
        Castlegar, British Columbia mills and one shift, five days per week for
        the Grand Forks, British Columbia mill. These capacities reflect reduced
        operations resulting from timber license quota limitations.
    (3) Wood chips are produced as a result of the operation of the Company's
        lumber mills. It is estimated that the aggregate annual capacity for
        such production is 300,000 bone dry units. In 1996, 288,000 bone dry
        units were produced.

        The Company believes that its wood products manufacturing facilities are
adequate and suitable for current operations. The Company owns all of its wood
products manufacturing facilities.

PULP AND PAPER PROPERTIES

        1.  Tissue Mills

        The following table briefly states the location, character, capacity and
1996 production of the Company's tissue products manufacturing facilities:

<TABLE>
<CAPTION>
                                    Estimated Annual                    1996
Location                               Capacity(1)                   Production
--------                               -----------                   ----------
<S>                                    <C>                           <C>        
Eau Claire, Wisconsin                  55,000 tons                   54,000 tons
Ransom, Pennsylvania(2)                55,000 tons                   49,000 tons
</TABLE>


    (1) Based on normal industry practice of operating three shifts per day,
        seven days per week, less scheduled downtime.
    (2) Ransom's below-capacity production reflects the rebuilding of the
        customer base that had eroded due to a seven-month labor strike in 1995.

        The Company believes that its tissue manufacturing facilities are
adequate and suitable for current operations. The Company owns all of its tissue
production facilities.

                                       11
<PAGE>   12
        2.  Pulp Mill

        The Company owns a bleached kraft pulp mill near Halsey, Oregon. In
1996, 162,000 air dry metric tons of pulp were produced, compared with an
estimated annual capacity of 180,000 metric tons. The Company believes that its
pulp facility is adequate and suitable for current operations.

ITEM 3.  LEGAL PROCEEDINGS

        In 1985, shareholders of the Company approved a Plan of Distribution
pursuant to which all of the Company's timber properties and development
properties and related assets and liabilities in the State of Washington were
transferred to newly-formed Pope Resources, A Delaware Limited Partnership, with
interests in the partnership distributed to the Company's shareholders on a pro
rata basis.

        The Company assigned to the assets transferred a distribution value for
federal income tax purposes based upon the public trading price of the
partnership interests at the time of distribution. The Internal Revenue Service
(IRS) has asserted that the Company owes additional federal income tax in
connection with this transaction and the Company has disputed this asserted tax
liability. The issue was argued before the U.S. Tax Court (Tax Court) during
1995. In March 1997, the Tax Court rendered a decision which will become final
when the Company and the IRS agree to the tax liability to be based upon the
Court's decision. Based on the Company's interpretation of the Tax Court's
decision, the Company believes the additional tax due in this matter, if any,
will not have a material adverse effect on the Company's financial position.
The final tax settlement, if any, will be recognized as a reduction in equity
with respect to the partnership transaction. Primarily in 1995, the Company
incurred costs defending its tax position in this case. In 1995, these defense
costs, together with related tax settlements and interest charges totaling $4.9
million, net of tax benefits of $1.4 million, were recognized as a reduction in
equity. 

        In December 1996, the IRS proposed certain adjustments pertaining to
transactions between the Company and its wholly-owned Canadian subsidiary,
resulting in the assertion that additional taxes were due for the tax years 1993
and 1994. The Company believes it has substantial defenses against this claim
and plans to vigorously defend its position. The Company believes, based upon
consultation with independent tax counsel, that any tax ultimately due in this
matter would not have a material adverse effect on the Company's financial
position, results of operations or liquidity.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

        Not applicable.

                                       12
<PAGE>   13
           EXECUTIVE OFFICERS OF THE REGISTRANT WHO ARE NOT DIRECTORS

         In addition to the executive officers who are also directors of the
Company, the following executive officers are not directors:

CARLOS M. LAMADRID, 61, Senior Vice President, Secretary, and Chief Financial
         Officer since August 1987.

ABRAM FRIESEN, 54, Vice President - Division Manager, Wood Products Division
        since February 1996.

WILLIAM G. FROHNMAYER, 58, Vice President - Division Manager, Fiber Products
        Division since August 1987.

All officers hold office at the pleasure of the Board of Directors.


                                     PART II

ITEM 5. MARKET FOR THE COMPANY'S COMMON STOCK AND RELATED SECURITY HOLDER
        MATTERS

        Pope & Talbot, Inc. common stock is traded on the New York and Pacific
stock exchanges under the symbol POP. The number of shareholders at year-end
1996 and 1995 were 1,153 and 1,243, respectively. The high and low sales prices
for the common stock on the New York Stock Exchange and the dividends paid per
common share for each quarter in the last two fiscal years are shown below:

<TABLE>
<CAPTION>
                                        Sales price per share               Cash dividends
                                          High             Low                  per share
                                          ----             ---                  ---------
<S>      <C>                           <C>              <C>                        <C>  
         1996
         1st Quarter                   $ 15-3/8         $  13-1/4                  $ .19
         2nd Quarter                     17-5/8            13-1/4                    .19
         3rd Quarter                     16-7/8            14-1/8                    .19
         4th Quarter                     16-1/8            14-7/8                    .19
                                                                                   -----
                                                                                   $ .76

         1995
         1st Quarter                   $ 16-7/8         $   15-1/8                 $ .19
         2nd Quarter                     17-7/8             15-3/8                   .19
         3rd Quarter                     17                 15-1/4                   .19
         4th Quarter                     15-5/8             12-1/2                   .19
                                                                                   -----
                                                                                   $ .76
</TABLE>

ITEM 6.  SELECTED FINANCIAL DATA

        Information required by Item 6 of Part II is presented in the table
entitled "Five Year Summary of Selected Financial Data" on page 10 of the
Company's 1996 Annual Report to Shareholders. Such information is incorporated
herein by reference.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

        The information required by Item 7 of Part II is presented on pages 11
through 17 of the Company's 1996 Annual Report to Shareholders. Such information
is incorporated herein by reference.

                                       13
<PAGE>   14
ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

        The information required by Item 8 of Part II is presented on pages 18
through 31 of the Company's 1996 Annual Report to Shareholders. Such information
is incorporated herein by reference.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE

        Not applicable.

                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS

        The information required by Item 10 of Part III is presented on page 12
as a separate item entitled "Executive Officers of the Registrant Who are Not
Directors" in Part I of this Report on Form 10-K and on pages 2 and 3 (under the
item entitled "Certain Information Regarding Directors and Officers") of the
Company's Definitive Proxy Statement for the Annual Meeting of Shareholders on
April 30, 1997. Such information is incorporated herein by reference.

ITEM 11.  EXECUTIVE COMPENSATION

        The information required by Item 11 of Part III is presented on page 5
and pages 7 through 14 of the Company's Definitive Proxy Statement for the
Annual Meeting of Shareholders on April 30, 1997. Such information is
incorporated herein by reference.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

        The information required by Item 12 of Part III is presented on page 4
and page 6 of the Company's Definitive Proxy Statement for the Annual Meeting of
Shareholders on April 30, 1997. Such information is incorporated herein by
reference.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

        Not applicable

                                     PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a)   (1)   Financial Statements

            The financial statements listed in the accompanying Index to
            Financial Statements and Financial Statement Schedules are filed as
            part of this annual report.

(a)   (2)   Schedules

            All schedules are omitted since the required information is not
            present or is not present in amounts sufficient to require
            submission of the related schedule, or because the information
            required is included in the financial statements and notes thereto.

(a)   (3)   Exhibits

            The following exhibits are filed as part of this annual report.

                                       14
<PAGE>   15
<TABLE>
<CAPTION>
Exhibit No.
-----------
<S>               <C>
   2.1            Asset Purchase Agreement by and among Paragon Trade Brands,
                  Inc., PTB Acquisition Sub, Inc., Pope & Talbot, Inc. and Pope
                  & Talbot, Wis., Inc. dated December 11, 1995. (Incorporated
                  herein by reference to Exhibit 2.1 to the Company's Current
                  Report on Form 8-K filed February 8, 1996.)

   3.1            Certificate of Incorporation, as amended. (Incorporated herein
                  by reference to Exhibit 3(a) to the Company's Annual Report on
                  Form 10-K for the year ended December 31, 1992.)

   3.2            Bylaws.

   4.1            Indenture, dated June 2, 1993, between the Company and
                  Chemical Trust Company of California as Trustee with respect
                  to the Company's 8-3/8% Debentures due 2013. (Incorporated
                  herein by reference to Exhibit 4.1 to the Company's
                  registration statement on Form S-3 filed April 6, 1993.)

   4.2            Revolving Credit Agreement, dated May 6, 1992, among the
                  Company and United States National Bank of Oregon; CIBC, Inc.;
                  ABN AMRO Bank N.V.; Continental Bank N.A.; and Wachovia Bank
                  of Georgia, National Association. (Incorporated herein by
                  reference to Exhibit 4 to the Company's Quarterly Report on
                  Form 10-Q for the quarter ended June 30, 1992.)

   4.3            Rights Agreement, dated as of April 13, 1988, between the
                  Company and The Bank of California, as rights agent.
                  (Incorporated herein by reference to Exhibit 4(e) to the
                  Company's Annual Report on Form 10-K for the year ended
                  December 31, 1992.)

   4.4            Extension Agreement, dated as of June 30, 1994, to the
                  Revolving Credit Agreement, dated May 6, 1992, among the
                  Company and United States National Bank of Oregon; CIBC, Inc.;
                  ABN AMRO Bank N.V.; Continental Bank N.A.; and Wachovia Bank
                  of Georgia, National Association. (Incorporated herein by
                  reference to Exhibit 4.6 to the Company's Annual Report on
                  Form 10-K for the year ended December 31, 1994.)

   4.5            Modification Agreement, dated as of October 31, 1994, to the
                  Revolving Credit Agreement, dated May 6, 1992, among the
                  Company and United States National Bank of Oregon; CIBC, Inc.;
                  ABN AMRO Bank N.V.; Continental Bank N.A.; and Wachovia Bank
                  of Georgia, National Association. (Incorporated herein by
                  reference to Exhibit 4.7 to the Company's Annual Report on
                  Form 10-K for the year ended December 31, 1994.)

   4.6            Modification Agreement, dated as of December 31, 1994, to the
                  Revolving Credit Agreement, dated May 6, 1992, among the
                  Company and United States National Bank of Oregon; CIBC, Inc.;
                  ABN AMRO Bank N.V.; Continental Bank N.A.; and Wachovia Bank
                  of Georgia, National Association. (Incorporated herein by
                  reference to Exhibit 4.8 to the Company's Annual Report on
                  Form 10-K for the year ended December 31, 1994.)

   4.7            Extension/Modification Agreement, dated as of June 30, 1995,
                  to the Revolving Credit Agreement, dated May 6, 1992, among
                  the Company and United States National Bank of Oregon; CIBC,
                  Inc.; ABN AMRO Bank N.V.; Bank of America Illinois, fka
                  Continental Bank; and Wachovia Bank of Georgia, National
                  Association. (Incorporated herein by reference to Exhibit 4.7
                  to the Company's Quarterly Report on Form 10-Q for the quarter
                  ended June 30, 1995.)
</TABLE>

                                       15
<PAGE>   16
<TABLE>
<CAPTION>
<S>               <C>
    4.8           Modification Agreement dated as of October 16, 1995, to the
                  Revolving Credit Agreement, dated May 6, 1992, among the
                  Company and United States National Bank of Oregon; CIBC, Inc.;
                  ABN AMRO Bank N.V.; Bank of America Illinois; and Wachovia
                  Bank of Georgia, National Association. (Incorporated herein by
                  reference to Exhibit 4.8 to the Company's Quarterly Report on
                  Form 10-Q for the quarter ended September 30, 1995.)

    4.9           Modification Agreement, dated as of January 22, 1996, to the
                  Revolving Credit Agreement, dated May 6, 1992, among the
                  Company and United States National Bank of Oregon; CIBC, Inc.;
                  ABN AMRO Bank N.V.; Bank of America Illinois; and Wachovia
                  Bank of Georgia, National Association. (Incorporated herein by
                  reference to Exhibit 4.1 to the Company's Current Report on
                  Form 8-K filed February 8, 1996.)

    4.10          Revolving Line of Credit Agreement, dated July 25, 1996,
                  between the Company and United States National Bank of Oregon.

    4.11          Modification Agreement, dated as of November 18, 1996, to the
                  Revolving Credit Agreement, dated May 6, 1992, among the
                  Company and United States National Bank of Oregon; CIBC,
                  Inc.; ABN AMRO Bank N.V.; Bank of America Illinois; and
                  Wachovia Bank of Georgia, National Association.  

   10.1           Executive Compensation Plans and Arrangements
                  ---------------------------------------------

   10.1.1         Stock Option and Appreciation Plan. (Incorporated herein by
                  reference to Exhibit 10(a) to the Company's Annual Report on
                  Form 10-K for the year ended December 31, 1992.)

   10.1.2         Executive Incentive Plan. (Incorporated herein by reference to
                  Exhibit 10(b) to the Company's Annual Report on Form 10-K for
                  the year ended December 31, 1992.)

   10.1.3         Restricted Stock Bonus Plan. (Incorporated herein by reference
                  to Exhibit 10(c) to the Company's Annual Report on Form 10-K
                  for the year ended December 31, 1992.)

   10.1.4         Deferral Election Plan. (Incorporated herein by reference to
                  Exhibit 10(d) to the Company's Annual Report on Form 10-K for
                  the year ended December 31, 1992.)

   10.1.5         Supplemental Executive Retirement Income Plan. (Incorporated
                  herein by reference to Exhibit 10(e) to the Company's Annual
                  Report on Form 10-K for the year ended December 31, 1990.)

   10.1.6         Form of Severance Pay Agreement among the Company and certain
                  of its executive officers. (Incorporated herein by reference
                  to Exhibit 10(f) to the Company's Annual Report on Form 10-K
                  for the year ended December 31, 1990.)

   10.1.7         1996 Non-Employee Director Stock Option Plan. (Incorporated
                  herein by reference to Exhibit 10.1.7 to the Company's
                  Quarterly Report on Form 10-Q for the quarter ended March 31,
                  1996.)

   10.2           Lease agreement between the Company and Pope Resources, dated
                  December 20, 1985, for Port Gamble, Washington sawmill site.
                  (Incorporated herein by reference to Exhibit 10(g) to the
                  Company's Annual Report on Form 10-K for the year ended
                  December 31, 1990.)
</TABLE>

                                       16
<PAGE>   17
<TABLE>
<CAPTION>
<S>               <C>
   10.3           Lease agreement between the Company and Shenandoah Development
                  Group, Ltd., dated March 14, 1988, for Atlanta diaper mill
                  site as amended September 1, 1988 and August 30, 1989.
                  (Incorporated herein by reference to Exhibit 10(h) to the
                  Company's Annual Report on Form 10-K for the year ended
                  December 31, 1990.)

   10.4           Lease agreement between the Company and Shenandoah Development
                  Group, Ltd., dated July 31, 1989, for additional facilities at
                  Atlanta diaper mill as amended August 30, 1989 and February
                  1990. (Incorporated herein by reference to Exhibit 10(i) to
                  the Company's Annual Report on Form 10-K for the year ended
                  December 31, 1990.)

   10.5           Grays Harbor Paper L.P. Amended and Restated Pulp Sales Supply
                  Contract, dated September 28, 1994 (with certain confidential
                  information deleted). (Incorporated herein by reference to
                  Exhibit 10(j) to the Company's Quarterly Report on Form 10-Q
                  for the quarter ended September 30, 1994.)

   10.6           Province of British Columbia Tree Farm License No. 8, dated
                  March 1, 1995. (Incorporated herein by reference to Exhibit
                  10.6 to the Company's Quarterly Report on Form 10-Q for the
                  quarter ended September 30, 1996.)

   10.7           Province of British Columbia Tree Farm License No. 23, dated
                  March 1, 1995. (Incorporated herein by reference to Exhibit
                  10.7 to the Company's Quarterly Report on Form 10-Q for the
                  quarter ended September 30, 1996.)

   10.8           Province of British Columbia Forest License A18969, dated
                  December 1, 1993. (Incorporated herein by reference to Exhibit
                  10.8 to the Company's Quarterly Report on Form 10-Q for the
                  quarter ended September 30, 1996.)

   11.1           Statement showing computation of per share earnings.

   13.1           Portions of the annual report to shareholders for the year
                  ended December 31, 1996 which have been incorporated by
                  reference in this report.

   21.1           Listing of parents and subsidiaries.

   23.1           Consent of Arthur Andersen LLP.

   27.1           Financial Data Schedule.
</TABLE>

The undersigned registrant hereby undertakes to file with the Commission a copy
of any agreement not filed under exhibit item (4) above on the basis of the
exemption set forth in the Commission's rules and regulations.

(b)   Reports on Form 8-K

      No reports on Form 8-K were filed during the three months ended December
31, 1996.

                                       17
<PAGE>   18
                          INDEX TO FINANCIAL STATEMENTS
                        AND FINANCIAL STATEMENT SCHEDULES


<TABLE>
<CAPTION>
                                                                                 Annual
                                                                                 Report
                                                                                   to
                                                                              Shareholders
                                                                              ------------
<S>                                                                               <C>
Report of Independent Public Accountants                                             17
Consolidated balance sheets at December 31, 1996 and 1995                            18
Consolidated statements of income for each of the three years
     in the period ended December 31, 1996                                           19
Consolidated statements of stockholders' equity for each of the
     three years in the period ended December 31, 1996                               20
Consolidated statements of cash flows for each
     of the three years in the period ended December 31, 1996                        21
Notes to consolidated financial statements                                        22-30
Supplementary information:
     Quarterly financial information (unaudited)                                     31
</TABLE>


         All schedules are omitted since the required information is not present
or is not present in amounts sufficient to require submission of the schedule,
or because the information required is included in the financial statements and
notes thereto.

          The consolidated financial statements listed in the above index are
included in the Annual Report to Shareholders of Pope & Talbot, Inc. for the
year ended December 31, 1996 are hereby incorporated by reference. With the
exception of the pages listed in the above index and the items referred to in
Items 1, 6, 7 and 8, the 1996 Annual Report to Shareholders is not to be deemed
filed as part of this report.

                                       18
<PAGE>   19
                    CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS




As independent public accountants, we hereby consent to the incorporation of our
report incorporated by reference in this Form 10-K into the Company's previously
filed Registration Statement Nos. 33-34996, 333-04223 and 33-64764 on Form S-8.




                                           ARTHUR ANDERSEN LLP

Portland, Oregon
   March 27, 1997

                                       19
<PAGE>   20
                                   SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of
Portland, State of Oregon, on this 27th day of March, 1997.

                                 POPE & TALBOT, INC.

                                 BY:    \s\ Peter T. Pope
                                        --------------------------------------
                                        Peter T. Pope, Chairman of the Board
                                        and Chief Executive Officer

         Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

<TABLE>
<S>                                              <C>                                              <C>
                                                 Chairman of the Board and
\s\ Peter T. Pope                                Chief Executive Officer                          March 27, 1997
----------------------------------               ------------------------------                   --------------
Peter T. Pope

\s\ Gordon P. Andrews                            Director                                         March 27, 1997
----------------------------------               ------------------------------                   --------------
Gordon P. Andrews

\s\ Hamilton W. Budge                            Director                                         March 27, 1997
------------------------------------------       ------------------------------                   --------------
Hamilton W. Budge

\s\ Charles Crocker                              Director                                         March 27, 1997
------------------------------------------       ------------------------------                   --------------
Charles Crocker                                                                                   
                                                                                                  
\s\ Michael Flannery                             President and Director                           March 27, 1997
------------------------------------------       ------------------------------                   --------------
Michael Flannery                                                                                  
                                                                                                  
\s\ Warren E. McCain                             Director                                         March 27, 1997
------------------------------------------       ------------------------------                   --------------
Warren E. McCain                                                                                  
                                                                                                  
\s\ Robert Stevens Miller, Jr.                   Director                                         March 27, 1997
------------------------------------------       ------------------------------                   --------------
Robert Stevens Miller, Jr.                                                                        
                                                                                                  
\s\ Hugo G. L. Powell                            Director                                         March 27, 1997
------------------------------------------       ------------------------------                   --------------
Hugo G. L. Powell                                                                                 
                                                                                                  
\s\ Brooks Walker, Jr.                           Director                                         March 27, 1997
------------------------------------------       ------------------------------                   --------------
Brooks Walker, Jr.                                                                                
                                                 Senior Vice President,                      
                                                 Secretary and
\s\ Carlos M. Lamadrid                           Chief Financial Officer                          March 27, 1997
------------------------------------------       ------------------------------                   --------------
Carlos M. Lamadrid

\s\ Robert L. Bluhm                              Financial Controller                             March 27, 1997
------------------------------------------       ------------------------------                   --------------
Robert L. Bluhm
</TABLE>

                                       20