Potlatch
Intra Company Memo                                        Potlatch Corporation

Date:    March 30, 1990

To:      Participants in Stock Option Programs

From:    B. W. Davis

Subject: Amendments to Stock Option and Stock Incentive Plans 

     On February 22, 1990, the Board of Directors of
Potlatch Corporation amended the 1976 Stock Option Plan, the 1983 
Stock Option Plan and the 1989 Stock Incentive Plan to provide 
new, liberalized rules for the exercise of vested options
following termination of employment. The Board of Directors also 
authorized the amendment of outstanding nonqualified options to 
reflect these new provisions. If you wish to have the new rules
apply to your outstanding nonqualified option(s), please sign and 
return the enclosed copy of this memorandum. If you are the 
holder of more than one nonqualified option granted by Potlatch,
this amendment will apply to all of the nonqualified options you 
held on February 22, l990. A brief description of the changes in 
the option exercise rules follows:

     Under your option as originally granted, upon termina-
tion of employment you had three months to exercise the option to 
the extent that it was vested at the time of termination of
employment, except that in the case of death or disability the 
exercise period was 12 months. If employment terminated on 
account of misconduct (as defined in the option agreement) the 
option could not be exercised after termination. Under the 
amendment, if your employment terminates because of death, 
disability or Normal, Early or Late Retirement under the Potlatch 
Corporation Salaried Employees' Retirement Plan you will have 36 
months after termination to exercise your stock option(s) to the 
extent vested at the time your employment terminated. In all 
other cases, the exercise period is three months. However, if 
employment terminates by reason of misconduct, the option ceases 
to be exercisable at the time of termination. Of course, the 
extension of the exercise period does not extend the term of the 
option beyond the term set when the option was originally
granted.

     The relevant sections of your option agreement(s) that 
will be amended if you agree to the amendment are subparagraphs 
(a) and (b) of the section dealing with the term of the option. 


                                                            Exhibit (10)(m)


<PAGE>
(It is section 5, 6 or 7 of the option agreement, depending on 
which plan your option was granted under and when the option was 
granted.) If you agree to this amendment by signing and
returning this agreement, the relevant section will be amended to 
read as follows:

     "The term of this Option shall end and (any other
provision of the Plan to the contrary notwithstanding) this 
Option shall not be exercisable after seven (7) years from the 
date of Grant if this Option is designated as an Incentive Stock 
Option in Section 4 of the addendum to this Agreement or ten (10) 
years from the Date of Grant if this Option is designated as a 
Nonqualified Stock Option in Section 4 of such addendum, or, if 
earlier, upon the termination of Employee's employment with the 
Corporation or its Subsidiaries, subject to the following 
provisions:

     "(a) If the termination of employment is 
  caused by Employee's death, this Option, to the 
  extent that it was exercisable under Paragraph 3  
  of this Agreement at the date of death and had not 
  previously been exercised or called, may be exer-
  cised or called, within thirty-six (36) months 
  after Employee's death by Employee's executors or  
  administrators or by any person or persons who shall 
  have acquired this Option directly from Employee by 
  bequest or inheritance.

     "(b) If the termination of Employee's employ-
  ment is caused by Disability or Early, Normal or 
  Late Retirement under the Potlatch Corporation 
  Salaried Employee's Retirement Plan, this Option, to 
  the extent it was exercisable under Paragraph 3 of
  this Agreement at the date of such termination and 
  had not previously been exercised, may be exercised 
  or called within thirty-six (36) months after the 
  date of such termination.

     "(c) If the termination of Employee's employ-
  ment is for any reason other than death, Disability, 
  or Normal, Early or Late Retirement under the Potlatch 
  Corporation Salaried Employees' Retirement Plan, this 
  Option, to the extent that it was exercisable under 
  Paragraph 3 of this Agreement at the date of such 
  termination and had not previously been exercised, may 
  be exercised within three (3) months after the date of 
  such termination; provided, however, that in such case 
  the right to call a stock appreciation right shall 
  terminate on the date Employee's employment terminates 
  unless Employee requests and the Company permits the

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<PAGE>
   call of the stock appreciation right within three (3)
   months after the date of such termination.Notwith-
   standing the foregoing, if the termination of employ-
   ment is by reason of Employee's misconduct, the option
   shall cease to be exercisable or callable at the time
   of such termination. As used herein "misconduct"
   means that Employee has engaged in unfair competition
   with the Corporation or a Subsidiary, induced any
   customer of the Corporation or a Subsidiary to breach
   any contract with the Corporation or a Subsidiary, 
   made any unauthorized disclosure of any of the secrets 
   or confidential information of the Corporation or a
   Subsidiary, committed an act of embezzlement, fraud or
   theft with respect to the property of the Corporation 
   or a Subsidiary, or engaged in conduct which is not 
   in good faith and which directly results in material 
   loss, damage or injury to the business, reputation or
   employees of the Corporation or a Subsidiary. The
   Committee shall determine whether Employee's employ-
   ment is terminated by reason of misconduct. In making 
   such determination the Committee shall act fairly and 
   shall give Employee an opportunity to be heard and 
   present evidence on Employee's behalf."

     If you have any questions regarding the proposed amend-
ment to your nonqualified stock option(s), please call me at 
(415) 576-8807.

                                           POTLATCH CORPORATION

                                           By /s/Brian W. Davis
                                              Secretary

I agree to the foregoing
amendments to my nonqualified
stock option agreement(s):

_____________________________
        Employee

_____________________________
          Date

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