STOCK OPTION AGREEMENT

           POTLATCH CORPORATION 1989 STOCK INCENTIVE PLAN

     THIS AGREEMENT made and entered into the day
specified in the attached addendum to this Agreement by and
between POTLATCH CORPORATION, a Delaware corporation (the
"Corporation") and the employee of the Corporation named in
the attached ("Employee"),

                      W I T N E S S E T H:

     That to encourage stock ownership by employees of
the Corporation and for other valuable consideration, the
parties agree as follows:

     1. Definitions.

     (a) "Agreement" shall mean this stock option
agreement.

     (b) "Board" shall mean the Board of Directors of
the Corporation.

     (c) "Change in Control" shall mean an event or
transaction described in Subparagraph (a), (b), (c) or (d) of
Paragraph 3 (without regard to the thirty (30) and three
hundred sixty-five (365) day periods also described in those
Subparagraphs).

     (d) "Code" shall mean the Internal Revenue Code of
1986, as amended.

     (e) "Common Stock" shall mean the $1 par value
Common Stock of the Corporation.

     (f) "Committee" shall mean the Committee appointed
by the Board to administer the Plan.

     (g) "Corporation" shall mean Potlatch Corporation,
a Delaware corporation.

     (h) "Date of Grant" shall mean the date on which
the Committee determined to grant this Option, as specified
in Section 1 of the addendum to this Agreement.

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                                                      Exhibit (10)(l)(ii)



<PAGE>
     (i) "Disability" shall mean the Employee is unable
to engage in any substantial gainful activity by reason of
any medically determinable physical or mental impairment
which can be expected to result in death or which has lasted
or can be expected to last for a continuous period of not
less than twelve (12) months.

     (j) "Exercise Price" shall mean the price per
Share designated in Section 2 of the addendum to this
Agreement at which this Option may be exercised.

     (k) "Fair Market Value" of a Share as of a speci-
fied date shall mean the closing price at which such Shares
are traded as of the close of business on such date as
reported on the composite tape, or if no trading of the
Common Stock is reported for that day, on the next preceding
day on which trading was reported.

     (l) "Incentive Stock Option" shall mean an Option
described in Code section 422A(b).

     (m) "Nonqualified Stock Option" shall mean an
Option other than an Incentive Stock Option.

     (n) "Option" shall mean a stock option granted
pursuant to the Plan.

     (o) "Option Period" shall mean the term of this
Option as provided in Paragraph 3 of this Agreement.

     (p) "Partial Exercise" shall mean an exercise with
respect to less than all of the accrued but unexercised
Shares subject to Option held by the person exercising the
Option.

     (q) "Plan" shall mean the Potlatch Corporation
1989 Stock Incentive Plan, as adopted by the Board on
December 8, 1988, and as amended by the Board on
February 24, 1989, to be effective on January 1, 1989, and
pursuant to which the parties have entered into this
Agreement.

     (r) "Purchase Price" shall mean the Exercise
Price times the number of whole shares with respect to which
this Option is exercised.

     (s) "Rules" shall mean the regulations and rules
adopted from time to time by the Committee.


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     (t) "Securities Act" shall mean the Securities Act
of 1933, as amended.

     (u) "Share" shall mean one share of Common Stock,
adjusted in accordance with Section 11 of the Plan.

     (v) "Subsidiary" shall mean any corporation in an
unbroken chain of corporations beginning with the Corporation
if each of the corporations other than the last corporation
in the unbroken chain owns stock possessing fifty percent
(50%) or more of the total combined voting power of all
classes of stock in one of the other corporations in such
chain.

     2.  The Corporation hereby grants to Employee the
option to purchase that number of shares of Common Stock
specified in Section 3 of the addendum to this Agreement for
the Exercise Price specified in Section 2 of the addendum to
this Agreement, on the terms and conditions hereinafter
stated, and in consideration for which Employee hereby agrees
to continue in the employment of the Corporation or its
Subsidiaries for a period of at least one (1) year from the
date of this Agreement .

     This Option has been granted pursuant to the Plan,
a copy of the text of which Employee may obtain upon request
to the Corporation.

     3.  Subject to the conditions stated herein,
unless a different period is specified in Section 5 of the
addendum to this Agreement, the period during which the
option may be exercised (the "Vesting Schedule") and the Call
Periods applicable to such Vesting Schedule pursuant to
Paragraph 4 shall be as follows:


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<PAGE>
Number of Shares          Vesting Schedule*          Call Period**

50% of the number         From one year              From one year
of shares                 from the Date of           from the Date of
specified in              Grant to end of            Grant to end of
Section 3 of the          term for Option            term for Option
addendum

50% of the number         From two years             From two years
of shares                 from the Date of           from the Date of
specified in              Grant to end of            Grant to end of
Section 3 of the          term for Option            term for Option
addendum

No Partial Exercise of this Option may be for less than ten
(10) Share lots or multiples thereof:

          If a period of six (6) months has elapsed from the
Date of Grant, Employee shall have the right to exercise the
Option (or in lieu thereof to call the related stock
appreciation right), in whole or in part:

          (a)  Within thirty (30) days following the
     consummation of any transaction approved by the
     stockholders of the Corporation in which the
     Corporation will cease to be an independent
     publicly owned corporation (including, without
     limitation, a reverse merger transaction in which
     the Corporation becomes the subsidiary of another
     corporation) or the sale or other disposition of
     all or substantially all of the assets of the
     Corporation;

          (b)  Within three hundred sixty-five (365)
     days following the date on which more than one-
     third (determined by rounding down to the next
     whole number) of the individual members of the
     Board neither (i) were directors of the Corporation
     on a date three years earlier nor (ii) are
     individuals whose election or nomination for
     election as directors was affirmatively voted on by
     at least a majority of those directors described in

*  See Paragraph 5 for further explanation of end of term
   for Option.

** This column is applicable only if the Option is granted
   with a stock appreciation right as indicated in Sec-
   tion 6 of the addendum to this Agreement.

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<PAGE>
     (i) above who were still in office as of the date
     the Board approved such election or nomination;

          (c)  Within three hundred sixty-five (365)
     days following the date on which any "person" (as
     such term is used in Sections 13(d) and 14(d) of
     the Securities Exchange Act of 1934, as amended
     (the "1934 Act")) that has acquired Shares pursuant
     to a tender offer subject to Section 14(d) of the
     1934 Act becomes entitled to vote twenty percent
     (20%) or more of the aggregate voting power of the
     capital stock of the Corporation issued and
     outstanding; and

          (d)  Within thirty (30) days prior to any
     dissolution or liquidation of the Corporation or
     any merger or consolidation in which the Corpo-
     ration is not the surviving corporation, but not
     earlier than the date on which any required
     stockholder approval is obtained.

If an option is not exercised during any thirty (30) day
period described in (a) or (b) above, the option shall
terminate at the close of business on the last day of the
thirty (30) day period; provided, however, that if periods
described in (a) and (b) are contiguous or overlap, unexer-
cised options shall terminate at the close of business on the
last day of the second thirty (30) day period.

     4. If the Option is designated in Section 6 of
the addendum to this Agreement as being granted with a stock
appreciation right, under the conditions described herein,
Employee may surrender all or part of this Option and exer-
cise the stock appreciation right in lieu of exercising all
or any part of this Option, provided that the Fair Market
Value of the Common Stock on the date of such exercise is
higher than the Exercise Price specified in Section 2 of the
addendum to this Agreement.  The exercise of a stock appreci-
ation right shall be referred to herein as the "call"
thereof.  Upon the call of a stock appreciation right
Employee shall be entitled to receive payment of an amount
equal to the difference obtained by subtracting the aggregate
option price of the shares subject to the Option (or the
portion thereof) from the Fair Market Value of such Shares on
the date of such call.  For all purposes under this Agreement
(unless the context requires otherwise), the terms "exercise"
or "exercisable" shall be deemed to include the terms "call"
or "callable" as such terms may apply to a stock appreciation
right granted in conjunction with the Option and in the event
of the call of the stock appreciation right the underlying


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<PAGE>
Option will be deemed to have been exercised for all
purposes under the Plan.

     If the Option is not designated in Section 6 of the
addendum to this Agreement as being granted with a stock
appreciation right, the Option shall nevertheless automati-
cally include a stock appreciation right that may be called
in the event of a Change in Control, only during the periods
described in Subparagraphs (a), (b), (c) or (d) of Para-
graph 3 In the case of any stock appreciation right that
is called during either of the thirty (30) day periods
described in Paragraph 3(a) or 3(d), for purposes of
measuring the value of the stock appreciation right, "Fair
Market Value" shall be the greater of (a) the value of the
consideration per share that the Employee would have
received in connection with such transaction as a
stockholder of the Corporation if he or she had exercised
the Option prior to the consummation of the transaction
described in Paragraph 3(a) or Paragraph 3(d) or (b) the
value determined in good faith by the Committee (as
composed on the day preceding the date of consummation of
the transaction described in Paragraph 3(a) or 3(d)), taking
into consideration all relevant facts and circumstances.

     Payment of a stock appreciation right shall be
made as soon as reasonably practicable following receipt by
the Corporation of the form described in Paragraph 8.  Pay-
ment of the stock appreciation right shall be made in such
form as may be permitted pursuant to the Rules as in effect
on the date the stock appreciation right is called.

     5.  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
   exercised or called, within thirty-six (36) months
   after Employee's death by Employee's executors or
   administrators or by any person or persons who

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<PAGE>
   shall have acquired this Option directly from
   Employee by bequest or inheritance.

       (b)  If the termination of Employees'
   employment is caused by disability or retirement
   under the Potlatch Corporation Salaried Employees'
   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
   employment is for any reason other than death,
   disability, or 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 Committee permits the
   call of the stock appreciation right within three
   (3) months after the date of such termination.
   Notwithstanding the foregoing, if the termination
   of employment 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 employment is
   terminated by reason of misconduct.  In making such
   determination the Committee shall act fairly and

                              -7-


<PAGE>
   shall give Employee an opportunity to be heard and
   present evidence on Employee's behalf.

     6.  The Corporation agrees that it will at all
times during the Option Period reserve and keep available
sufficient authorized but unissued or reacquired Common
Stock to satisfy the requirements of this Agreement.  The
number of Shares so reserved and the Exercise Price thereof
shall be proportionately adjusted for any increase or
decrease in the number of issued and outstanding Shares by
reason of stock dividends, split-ups, consolidations,
recapitalizations, reorganizations or like events, as
determined by the Committee pursuant to the Plan.

     7.  Subject to any required action by the
stockholders, if the Corporation shall be the surviving
corporation in any merger, consolidation or other
reorganization, this Option shall pertain and apply to the
securities to which a holder of the number of Shares subject
to this Option would have been entitled.  Except insofar as
Paragraph 3 (and Paragraph 4) permit the exercise of Options
(and stock appreciation rights) within a specified time
period before or after a Change in Control, a dissolution or
liquidation of the Corporation or a merger, consolidation or
other reorganization in which the Corporation is not the
surviving corporation shall cause this Option to terminate on
the effective date of such dissolution, liquidation or
reorganization, unless the agreement of merger, consolidation
or reorganization shall otherwise provide.  In the event that
the Corporation undergoes a reverse merger transaction,
Employee (or Employee's representative) shall be entitled to
receive the same consideration in such transaction
(including, without limitation, cash) as other shareholders
are entitled to receive .

     8.  Employee, or Employee's representative, may
call twenty percent (20%) or more of that portion of the
Option which has become vested in accordance with Paragraph 3
of this Agreement at any time during each applicable Call
Period, except as requested by Employee or Employee's
representative and approved by the Committee.  For purposes
of the Plan, the date of call shall be the date a form
provided by the Corporation for this purpose is filed by the
Employee or the Employee's representative and received by the
Vice President, Employee Relations of the Corporation.

     Employee, or Employee's representative, may exercise
this Option by giving written notice to the Corporation at
San Francisco, California, attention of the Vice President,
Employee Relations, specifying the election to exercise

                              -8-


<PAGE>
the Option, the number of Shares in respect of which it is
being exercised and the method of payment for the amount of
the Purchase Price of the Shares as to which this Option is
exercised.  Such payment shall be made:

       (a)  In United States dollars delivered at the
    time of exercise;

       (b)  Subject to the conditions stated in rules
    and regulations adopted by the Corporation to
    govern its stock option program, by the surrender
    of Shares in good form for transfer, owned by the
    person exercising this Option and having an
    aggregate Fair Market Value on the date of exercise
    equal to the Purchase Price; or

       (c)  In any combination of Subparagraphs (a)
    and (b) above, if the total of the cash so paid and
    the Fair Market Value of the Shares so surrendered
    equals the Purchase Price of the Shares with
    respect to which this Option is being exercised.

       The notice shall be signed by the person or persons
exercising this Option, and in the event this Option is being
exercised by the representative of Employee, it shall be
accompanied by proof satisfactory to the Corporation of the
right of the representative to exercise the Option.  No Share
shall be issued until full payment therefor has been made.
The Corporation shall thereafter cause to be issued a cer-
tificate or certificates for the Shares as to which this
Option shall have been so exercised, registered in the name
of the person or persons so exercising the Option (or in the
name of such person or persons and another person as community
property or as joint tenants), and cause such certificate
or certificates to be delivered to or upon the order of such
person or persons.

     9.  Payments or transfers to the Employee under
this Agreement shall be limited to the amount (the "Capped
Amount") necessary to avoid characterization of any amount
payable to the Employee (including, but not limited to,
amounts payable under this Agreement) as an "excess
parachute payment" as defined in section 280G of the Code,
except in the event that the total amount that the Employee
would receive from all "parachute payments" (as defined in
Code section 280G), net of all applicable taxes, including
the excise tax that would be imposed pursuant to Code section
4999, would exceed the Capped Amount, net of all applicable
taxes.

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<PAGE>
         The firm of independent certified public accountants
serving as the Corporation's outside auditor as of the date of
a Change in Control shall determine whether any amount would
constitute an "excess parachute payment," disregarding any
payments or benefits available to the Employee under any plan,
contract or program if the Employee irrevocably elects to
relinquish or not exercise such payments or benefits before
the payment or enjoyment thereof.

     10.  In the event the Corporation determines that
it is required to withhold state or federal income tax as a
result of the exercise of this Option, as a condition to the
exercise of the Option, Employee will make arrangements
satisfactory to the Corporation to enable it to satisfy such
withholding requirements.

     11.  Neither Employee nor Employee's
representative shall have any rights as a stockholder with
respect to any Shares subject to this Option until such
Shares shall have been issued and delivered to Employee or
Employee's representative.

     12.  Unless the Shares to be acquired are regis-
tered under the Securities Act, Employee represents and
agrees that upon the exercise of the Option herein granted
Employee will purchase such Shares for the purpose of
investment and without present intention of resale.  Unless
at the time Employee gives notice of the exercise of this
Option, the Shares to be issued are registered under the
Securities Act, the notice shall include a statement to the
effect that all Shares in respect of which this Option is
being exercised are being purchased for investment, and
without present intention of resale, and will not be sold
without registration under the Securities Act or exemption
therefrom, and such other representations as the Committee
may require.  The Corporation may permit the sale or other
disposition of any Shares acquired pursuant to any such
representation if it is satisfied that such sale or other
disposition would not be in contravention of applicable state
or Federal securities laws.  Unless the Corporation shall
determine that, in compliance with the Securities Act or
other applicable statute or regulation, it is necessary to
register any of the Shares with respect to which the exercise
of this Option has been made, and unless such registration,
if required, has been completed, certificates to be issued
upon the exercise of this Option shall contain the following
legend:

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<PAGE>
          "The Shares represented by this certificate
     have not been registered under the Securities Act
     of 1933 and may be offered, sold or transferred
     only if registered pursuant to the provisions of
     that Act or if an exemption from registration is
     available."

     13.  Except as otherwise provided herein, the
Option herein granted and the rights and privileges
conferred hereby shall not be transferred, assigned, pledged
or hypothecated in any way (whether by operation of law or
otherwise) and shall not be subject to sale under execution,
attachment or similar process.  Upon any attempt to
transfer, assign, pledge, hypothecate or otherwise dispose of
this Option, or of any right or privilege conferred hereby,
contrary to the provisions hereof, or upon any attempted
sale under any execution, attachment or similar process upon
the rights and privileges conferred hereby, this Option and
the rights and privileges conferred hereby shall immediately
become null and void.

     14.  Nothing in this Agreement shall be construed
as giving Employee the right to be retained as an employee or
as impairing the rights of the Corporation to terminate his
or her employment at any time, with or without cause.

     15.  This Agreement shall be interpreted and con-
strued in accordance with the laws of the State of
California.

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<PAGE>
                  ADDENDUM TO STOCK OPTION AGREEMENT
            POTLATCH CORPORATION 1989 STOCK INCENTIVE PLAN

Name of Employee:___________________________

1. Date of Grant: December 13 , 1990.

2. Exercise Price: $ 29.50 per share, which is agreed
   to be one hundred percent (100%) of the Fair Market Value
   of the common stock subject to the Option on the Date of
   Grant.

3. The number of Shares subject to this Stock Option
   Agreement is ___________, subject to adjustment as provided
   in Section 10 of the Plan and Paragraph 6 of this
   Agreement.

4. This Option is:

   X   A Nonqualified Stock option

5. The Vesting Schedule for this Option is:

   __  The schedule specified in Paragraph 3 of the Stock
       Option Agreement except that no exercise or call
       will be permitted for a fractional Share.

6. This Option is granted:

   __  With a stock appreciation right

   __  Without a stock appreciation right

The document entitled Stock Option Agreement Potlatch
Corporation 1989 Stock Incentive Plan is hereby incorporated
by reference into this addendum.

     IN WITNESS WHEREOF, the Corporation has caused this
addendum to the Stock Option Agreement to be executed on its
behalf by its duly authorized representative and the Employee
has executed the same on the day and year indicated below.

                                 POTLATCH CORPORATION

Date:__________________    By__________________________________
                             Vice President, Employee Relations


Date:__________________    By__________________________________
                             Employee