Exhibit 99.3

May 25,
2000

Mr. Terry
Cathey
Senior Vice PresidentInternational
Cascade Corporation
P.O. Box 20187
Portland, Oregon 97294-0187

Dear
Terry:

The
Compensation Committee of the Board of Directors of Cascade Corporation (Cascade) has recommended, and the Board has approved, a special severance benefit program for you and
certain other key executives. This letter agreement describes the severance benefits, the circumstances under which they would be payable, and certain limitations on their overall value. It includes a
noncompetition agreement, which was a condition established by the Board.

Your
severance benefits will become payable in the event of the Involuntary Termination of your employment within twelve months following a Change in Control of Cascade. Certain
capitalized terms in the letter are defined on Attachment A.

SEVERANCE BENEFITS

Your severance benefit will consist of the following:



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NONCOMPETITION

In consideration for Cascade's commitments in this letter agreement, you agree that, for a 24-month period following the termination of your
Cascade employment for any reason, you will not:



You
acknowledge that monetary damages may not be sufficient to compensate Cascade for any economic loss which it may incur by reason of your breach of the foregoing restrictive
covenants. In the event of any such breach, Cascade will, in addition to the cessation of any remaining benefits under this letter agreement and any remedies available at law, be entitled to obtain
equitable relief in the form of an injunction precluding you from continuing you from continuing to engage in such breach.

LIMITATION ON BENEFITS

The following limitations apply to your severance benefits in order to assure that payments to you will not be subject to a 20% penalty tax, and will be
deductible to Cascade:

|A. |  | Except as provided by Part D of this section, the aggregate Present Value (measured as of the Change in Control) of the severance benefit to which you become entitled by reason of your Involuntary Termination (namely
the Severance Payment, the Option Parachute Payment attributable to your Severance-Accelerated Options and your Health Care Continuation) will in no event exceed in amount the difference between (i) 2.99 times your Average Compensation and
(ii) the Present Value, measured as of the Change in Control, of all Other Parachute Payments to which you are entitled.
|-- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|B. |  | Accordingly, except as provided by Part E, your Options will not accelerate and no Severance Payment will be made to you pursuant to this letter agreement, to the extent the Present Value as of the Change in Control of (i) the aggregate
Option Parachute Payment attributable to your Severance-Accelerated Options plus (ii) your Severance Payment plus (iii) your Health Care Continuation would when added to the Present Value of your Other Parachute Payments, exceed 2.99 times
your Average Compensation (the "Parachute Limit").                                                  
|C. |  | Disputes concerning the application of this Limitation on Benefits will be resolved as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

| |  | (i)  |  | Should you and Cascade disagree as to whether one or more payments to which you become entitled in connection with either the Change in Control or your subsequent Involuntary Termination constitute Option Parachute Payments or Other Parachute
Payments or as to the determination of Present Value will be resolved as follows:
| |  | ---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | (ii) |  | In the event temporary, proposed or final Treasury Regulations in effect at the time under Code Section 280G (or applicable judicial decisions) specifically address the issue in dispute, the Regulations (or such decisions) will, together with
the applicable valuation methodology, be controlling.                            
| |  |      |  |                                                                                                                                                                                                                                                                                                                                     

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|   |  |       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|-- |  | ----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |  | (iii) |  | In the event Treasury Regulations (or applicable judicial decisions) do not specifically address the issue in dispute, dispute, the matter will be submitted for resolution to an arbitrator selected under the rules of the U.S. Arbitration and
Mediation Service (the Arbitrator). The resolution reached by the Arbitrator will be final and controlling; provided, however, that if in the judgment of the Arbitrator the issue in dispute can be resolved by obtaining a private letter ruling from
the Internal Revenue Service, a formal and proper request for such ruling will be prepared and submitted by the Arbitrator, and the determination made by the Internal Revenue Service in the issued ruling will be controlling. All expenses incurred in
connection with the retention of the Arbitrator and the preparation and submission of any ruling request shall be paid equally by you and Cascade.
|D. |  | (i)   |  | No Severance Payment will be made to you until the Present Value of the Option Parachute Payment attributable to both your Severance-Accelerated Options and your Acquisition-Accelerated Options has been determined and the status of any payments in
dispute has been resolved. However, you will be permitted to exercise your Severance-Accelerated Options at any time during the one year or shorter expiration period immediately following your Involuntary Termination.                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |  | (ii)  |  | Once the dispute is resolved, then to the extent the aggregate Present Value, measured as of the Change in Control, of (a) the Option Parachute Payment attributable to your Severance-Accelerated Options (or installments thereof) plus
(b) your Severance Payment would, when added to the Present Value of all your Other Parachute Payments (including the Option Parachute Payment attributable to your Acquisition-Accelerated Options), exceed the Parachute Limit, your Severance
Payment will be accordingly reduced.                                                                                                                                                                                                                                                                                                                                                                                       
|E. |  | (i)   |  | In no event shall the total Present Value of your Severance payment and the Option Parachute Payment attributable to your Severance-Accelerated Options be reduced below that amount (if any) which, when added to the Present Value of all the Other
Parachute Payments to which you are entitled, would nevertheless qualify as reasonable compensation for past services within the standards established under Code Section 280G(b)(4)(B).                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |  | (ii)  |  | The limitations of this section will in all events be interpreted in such manner as to avoid the imposition of excise taxes under Code Section 4999, and the disallowance of deductions under Code Section 280G(a), with respect to any of the
benefits paid pursuant to this letter agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

OTHER PROVISIONS







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Please
indicate your acceptance of the foregoing provisions of this agreement by signing the enclosed copy and returning it to me.

| |  | Cordially,         
| |  | -------------------
| |  | CASCADE CORPORATION
| |  | By:                

ACCEPTANCE

I hereby agree to all the terms and provisions of the foregoing letter agreement governing the special benefits to which I may become entitled in connection
with certain changes in control or ownership of Cascade Corporation.

| |  |       |  | /s/TERRY CATHEY
| |  | ----- |  | ---------------
| |  | Date: |  | June 9, 2000   

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ATTACHMENT A    DEFINITIONS

The following definitions apply to terms used in the above letter agreement:

AVERAGE
COMPENSATION means the average of your annual W-2 wages from Cascade for the three calendar years (five calendar years for purposes of application of the
Limitations on Benefits section) or such fewer number of calendar years of employment with Cascade completed immediately prior to the calendar year in which the Change of Control is effected.

BASE
SALARY means the annual rate of base salary in effect for you immediately prior to the Change in Control or (if greater) the annual rate of base salary in effect at the time of
your Involuntary Termination.

BOARD
means Cascade's Board of Directors.

CHANGE
IN CONTROL means:



CODE
means the Internal Revenue Code of 1986, as amended.

COMMON
STOCK means Cascade's common stock.

FAIR
MARKET VALUE means, with respect to any shares of Common Stock subject to any of your Options, the closing selling price per share of Common Stock on the date in question, as
reported on the New York Stock Exchange. If there is no reported sale of Common Stock on such date, Fair Market Value will be the closing selling price on the New York Stock Exchange on the next
preceding day for a quotation is available.

HEALTH
COVERAGE means the continued health care coverage to which you and your eligible dependents may become entitled under this letter agreement upon the Involuntary Termination of
your employment.

INVOLUNTARY
TERMINATION means the termination of your Cascade employment



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In
no event shall an Involuntary Termination be deemed to occur if your employment terminates by reason of your death or disability.

OPTION
means any option granted to you under the Plan which is outstanding at the time of the Change in Control or upon your subsequent Involuntary Termination. Your Options will be
divided into two (2) separate categories as follows:



OPTION
PARACHUTE PAYMENT means, with respect to any Acquisition- Accelerated Option or any Severance-Accelerated Option, the portion of that Option deemed to be a parachute payment
under Code Section 280G and the Treasury Regulations issued thereunder. The portion of such Option which is categorized as an Option Parachute Payment will be calculated in accordance with the
valuation provisions established under Code Section 280G and the applicable Treasury Regulations and will include an appropriate dollar adjustment to reflect the lapse of your obligation to
remain in Cascade's employ as a condition to the vesting of the accelerated installment. In no event, however, will the Option Parachute Payment attributable to any Acquisition-Accelerated Option or
Severance-Accelerated Option (or accelerated installment) exceed the spread (the excess of the Fair Market Value of the accelerated option shares over the option exercise price payable for those
shares) existing at the time of acceleration.

OTHER
PARACHUTE PAYMENT means any payment in the nature of compensation(other than the benefits to which you become entitled under this letter agreement) which are made to you in
connection with the Change in Control and which accordingly qualify as parachute payments within the meaning of Code Section 280G(b)(2) and the Treasury Regulations issued thereunder. Your
Other Parachute Payment will include (without limitation) the Present Value, measured as of the Change in Control, of the aggregate Option Parachute Payment attributable to your
Acquisition-Accelerated Options (if any).

PLAN
means (a) Cascade's 1995 Incentive Stock Option Plan, as amended or restated from time to time, and (b) any successor or additional stock incentive plan
subsequently implemented by Cascade.

PRESENT
VALUE means the value, determined as of the date of the Change in Control, of any payment in the nature of compensation to which you become entitled in connection with the
Change in Control or the subsequent Involuntary Termination of your employment, including (without limitation)
the Option Parachute Payment attributable to your Severance-Acceleration Options, your Severance Payment under this letter agreement and the Option Parachute Payment attributable to your
Acquisition-Accelerated Options. The Present Value of each such payment shall be determined in accordance with the provisions of Code Section 280G(d)(4), utilizing a discount rate equal to one
hundred twenty percent (120%) of the applicable Federal rate in effect at the time of such determination, compounded semi-annually to the effective date of the Change in Control.

SEVERANCE
PAYMENT means the severance payment to which you may become entitled under this letter agreement in the event of your Involuntary Termination following a Change in Control,
subject, however, to the Limitation on Benefits section.

TERMINATION
FOR CAUSE means an Involuntary Termination of your employment by reason of your having engaged in fraud or in any other intentional misconduct adversely affecting
Cascade's business or reputation in a material manner.

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