POTLATCH CORPORATION

                          1989 STOCK INCENTIVE PLAN

            (As Amended and Restated Effective December 2, 1999)



                  1.   PURPOSE.

                  This 1989 Stock Incentive Plan of Potlatch Cor-

         poration (the "Corporation") and its eligible subsidiaries

         is intended to provide incentive to employees of the Cor-

         poration or of its subsidiaries, to encourage employee

         proprietary interest in the Corporation and to encourage

         employees to remain in the employ of the Corporation or of

         its subsidiaries.


                  2.   DEFINITIONS.

                  (a)  "Award" shall mean any award of an Option

         (with or without a related stock appreciation right),

         Restricted Stock or an Other Share-Based Award under the

         Plan.

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

         the Corporation.

                  (c)  "Code" shall mean the Internal Revenue Code

         of 1986, as amended.

                  (d)  "Committee" shall mean the Committee appoint-

         ed by the Board in accordance with Section 4 of the Plan.

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

         common stock of the Corporation.

                                                         Exhibit (10)(l)

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                  (f)  "Corporation" shall mean Potlatch Corpora-

         tion, a Delaware corporation.

                  (g)  "Disability" shall mean the condition of an

         Employee who 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 con-

         tinuous period of not less than twelve (12) months.

                  (h)  "Employee" shall mean an individual (who may

         be an officer or a director) employed by the Corporation or

         a Subsidiary (within the meaning of Code section 3401 and

         the regulations thereunder).

                  (i)  "Exercise Price" shall mean the price per

         Share of Common Stock, determined by the Committee, at which

         an Option may be exercised.

                  (j)  "Fair Market Value" of a Share as of a

         specified date shall mean the closing price at which such

         Shares are traded at the close of business on such date as

         reported in the New York Stock Exchange composite transac-

         tions published in the Western Edition of the Wall Street

         Journal, or if no trading of the Common Stock is reported

         for that day, on the next preceding day on which trading was

         reported.

                  (k)  "Incentive Stock Option" shall mean an Option

         described in Code section 422A(b).

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                  (l)  "Nonqualified Stock Option" shall mean an

         Option not described in Code sections 422(b), 422A(b),

         423(b) or 424(b).

                  (m)  "Option" shall mean a stock option granted

         pursuant to Section 7 of the Plan.  "Option Agreement" shall

         mean the agreement between the Corporation and the Optionee

         which contains the terms and conditions pertaining to such

         Option.

                  (n)  "Optionee" shall mean an Employee who has

         received an Option.

                  (o)  "Other Share-Based Award" shall mean an Award

         granted pursuant to Section 9 of the Plan.  "Other Share-

         Based Award Agreement" shall mean the agreement between the

         Corporation and the recipient of an Other Share-Based Award

         which contains the terms and conditions pertaining to such

         Other Share-Based Award.

                  (p)  "Participant" shall mean an Employee who has

         received an Award.

                  (q)  "Plan" shall mean this Potlatch Corporation

         1989 Stock Incentive Plan.

                  (r)  "Purchase Price" shall mean the Exercise

         Price times the number of whole Shares with respect to which

         an Option is exercised.

                  (s)  "Restricted Stock" shall mean Shares granted

         pursuant to Section 8 of the Plan.  "Restricted Stock

         Agreement" shall mean the agreement between the Corporation

         and the recipient of Restricted Stock which contains the

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         terms, conditions and restrictions pertaining to such

         Restricted Stock.

                  (t)  "Rules" shall mean the regulations and rules

         adopted from time to time by the Committee.

                  (u)  "Share" shall mean one Share of Common Stock,

         adjusted in accordance with Section 11 of the Plan (if

         applicable).

                  (v)  "Stock Right" shall mean a bookkeeping entry

         representing a right to the equivalent of one Share.

                  (w)  "Subsidiary" shall mean any corporation in an

         unbroken chain of corporations beginning with the Corpo-

         ration 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 corpora-

         tions in such chain.


                  3.   EFFECTIVE DATE.

                  This Plan was adopted by the Board on December 8,

         1988, and was last amended and restated effective

         December 2, 1999.


                  4.   ADMINISTRATION.

                  The Plan shall be administered by a committee (the

         "Committee") appointed by the Board, consisting of not less

         than three disinterested members thereof.  The Board may

         from time to time remove members from, or add members to,

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         the Committee.  Vacancies on the Committee, howsoever

         caused, shall be filled by the Board.  The Board shall

         appoint one of the members of the Committee as Chairman.

         The term "Disinterested Members of the Board" shall include

         only members of the Board who are not active Employees of

         the Corporation or of any of its Subsidiaries, who are not

         eligible to receive discretionary Awards under this Plan or

         any other stock incentive plan of the Corporation and who

         have not been eligible to receive such Awards for at least

         one year preceding appointment as a member of the Committee.

                  The Committee shall hold meetings at such times

         and places as it may determine.  Acts of a majority of the

         Committee at which a quorum is present, or acts reduced to

         or approved in writing by a majority of the members of the

         Committee, shall be the valid acts of the Committee.  The

         Committee shall from time to time at its discretion make

         determinations with respect to Employees who shall be

         granted Awards, the number of Shares or Share equivalents to

         be subject to each Award, the vesting of Awards, the desig-

         nation of Options as Incentive Stock Options or Nonqualified

         Stock Options and other conditions of Awards.

                  The interpretation and construction by the Commit-

         tee of any provisions of the Plan or of any Award granted

         thereunder shall be final.  No member of the Committee shall

         be liable for any action or determination made in good faith

         with respect to the Plan or any Award granted thereunder.

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                  5.   ELIGIBILITY.

                  Participants shall be such key Employees (who may

         be officers, whether or not they are directors) of the

         Corporation or of its Subsidiaries as the Committee shall

         select, but subject to the terms and conditions set forth

         below.

                  (a)  Ten Percent Shareholders.

                  An Employee who owns more than ten percent (10%)

         of the total combined voting power of all classes of out-

         standing stock of the Corporation, its parent or any of its

         Subsidiaries is not eligible to receive an Incentive Stock

         Option pursuant to this Plan.  For purposes of this Sec-

         tion 5(a) the stock ownership of an Employee shall be

         determined pursuant to section 425(d) of the Code.

                  (b)  Number of Awards.

                  A Participant may receive more than one Award,

         including Awards of the same type, but only on the terms and

         subject to the restrictions hereinafter set forth.


                  6.   STOCK.

                  The stock subject to Options, Restricted Stock, or

         Other Share-Based Awards granted under the Plan shall be

         Shares of the Corporation's authorized but unissued or

         reacquired Common Stock.  The aggregate number of Options,

         Restricted Stock or Other Share-Based Awards issued under

         this Plan shall not exceed one million, five hundred thousand

         (1,500,000) Shares.  The number of Shares subject to Awards

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         outstanding under the Plan at any time may not exceed the

         number of Shares remaining available for issuance under the

         Plan.  In the event that any outstanding Option under the

         Plan for any reason expires or is terminated or any

         Restricted Stock or Other Share-Based Award is forfeited,

         the Shares allocable to the unexercised portion of such

         Option or the forfeited Restricted Stock or Other Share-Based

         Award may again be subjected to Options, Restricted Stock or

         Other Share-Based Awards under the Plan.  However, if one

         Award is granted in tandem with another, so that the exercise

         of one causes the other to expire, then the number of shares

         subject to the expired Award shall not be restored to the

         pool available for Awards.

                  The limitations established by this Section 6

         shall be subject to adjustment upon the occurrence of the

         events specified and in the manner provided in Section 11

         hereof.


                  7.   TERMS AND CONDITIONS OF OPTIONS.

                  Options granted pursuant to the Plan shall be

         evidenced by written Option Agreements in such form as the

         Committee shall from time to time determine, which agree-

         ments shall comply with and be subject to the following

         terms and conditions:

                  (a)  Optionee's Agreement.

                  Each Optionee shall agree to remain in the employ

         of and to render to the Corporation or to a Subsidiary his

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         or her services for a period of one (1) year from the date

         of the granting of the Option, subject to the terms of

         Section 12(b).

                  (b)  Number of Shares.

                  Each Option shall state the number of Shares to

         which it pertains and shall provide for the adjustment

         thereof in accordance with the provisions of Section 11

         hereof.

                  (c)  Exercise Price.

                  Each Option shall state the Exercise Price, which

         in the case of an Incentive Stock Option shall not be less

         than the Fair Market Value of a Share on the date of grant.

                  (d)  Medium and Time of Payment.

                  The Purchase Price shall be payable in full in

         United States dollars upon the exercise of the Option;

         provided, however, that, with the consent of the Committee

         and in accordance with its rules, the Purchase Price may be

         paid by the surrender of Shares in good form for transfer,

         owned by the person exercising the Option and having a Fair

         Market Value on the date of exercise equal to the Purchase

         Price, or in any combination of cash and Shares, so long as

         the total of the cash so paid and the Fair Market Value of

         the Shares surrendered equals the Purchase Price.  No Share

         shall be issued until full payment therefor has been made.

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                  (e)  Term and Exercise of Options;  Nontrans-

                       ferability of Options.

                  Each Option shall state the time or times when it

         becomes exercisable and the time or times any stock appreci-

         ation right granted pursuant to Section 7(j) may be called,

         which shall be determined by the Committee.  No Option shall

         be exercisable after the expiration of ten (10) years from

         the date it is granted.  During the lifetime of the Optionee,

         the Option shall be exercisable only by the Optionee and

         shall not be assignable or transferable.  In the event of

         the Optionee's death, no Option shall be transferable by the

         Optionee otherwise than by will or the laws of descent and

         distribution.

                  Subject to the foregoing, beginning six (6)

         months from the date of grant of the Optionee shall have

         the right to exercise the option (or in lieu thereof to

         call the related stock appreciation right as described in

         Section 7(j)) in whole or in part:

                  (i) Upon consummation of a reorganization,

         merger or consolidation involving the Corporation (a

         "Business Combination"), in each case, unless, following

         such Business Combination, (A) all or substantially all of

         the individuals and entities who were the beneficial owners,

         respectively, of the then outstanding shares of Common

         Stock (the "Outstanding Common Stock") and then

         outstanding voting securities of the Corporation entitled

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         to vote generally in the election of directors (the

         "Outstanding Voting Securities") immediately prior to such

         Business Combination beneficially own, directly or

         indirectly, more  than 50% of, respectively, the then

         outstanding shares of common stock and the combined

         voting power of the then outstanding voting securities

         entitled to vote generally in the election of directors

         of the corporation resulting from such Business Combination

         (including, without limitation, a corporation which as a

         result of such transaction owns the Corporation either

         directly or through one or more subsidiaries), (B) no

         Person (as defined in subparagraph (iii) below)

         (excluding any corporation resulting from such Business

         Combination or any employee benefit plan (or related

         trust) sponsored or maintained by the Corporation or such

         other corporation resulting from such Business Combination)

         beneficially owns, directly or indirectly, 20% or more of,

         respectively, the then outstanding shares of common stock

         of the corporation resulting from such Business Combination

         or the combined voting power of the then outstanding voting

         securities of such corporation except to the extent that

         such ownership is based on the beneficial ownership,

         directly or indirectly, of Outstanding Common Stock or

         Outstanding Voting Securities immediately prior to the

         Business Combination and (C) at least a majority of the

         members of the board of directors of the corporation

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         resulting from such Business Combination were members

         of the Board at the time of the execution of the initial

         agreement, or of the action of the Board, providing for

         such Business Combination; provided, however, if the

         Corporation and the other party to the Business Combination

         agree that the transaction is to be treated as a pooling

         of interests for financial reporting purposes, and if

         the transaction in fact is so treated, then the right

         to exercise the Option (or to call the related stock

         appreciation right) shall not be accelerated upon

         consummation of the Business Combination to the extent

         that the Corporation's independent accountants and the

         other party's independent accountants separately determine

         in good faith that the acceleration would preclude the use

         of pooling of interests accounting; or

               (ii) On the date that individuals who, as of

         December 2, 1999 constitue the Board (the "Incumbent

         Board") cease for any reason to constitute at least a

         majority of the Board; provided, however, that any

         individual becoming a director subsequent to December

         2, 1999 whose election, or nomination for election by

         the Corporation's stockholders, was approved by a vote

         of at least a majority of the directors then comprising

         the Incumbent Board shall be considered as though such

         individual were a member of the Incumbent Board, but

         excluding, for this purpose, any such individual

         whose initial assumption of office occurs as a result

         of an actual or threatened election contest with

         respect to the election or removal of directors, an

         actual or threatened solicitation of proxies or

         consents or any other actual or threatened action by,

         or on behalf of any Person other than the Board; or

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                  (iii) Upon acquisition after December 2,

         1999 by any individual, entity or group (within the

         meaning of Section 13(d)(3) or 14(d)(2) of the Securities

         Exchange Act of 1934, as amended (the "Exchange Act"))

         (a "Person") of beneficial ownership (within the meaning

         of Rule 13d-3 promulgated under the Exchange Act) of

         20% or more of either (A) the then Outstanding Common

         Stock or (B) the combined voting power of the Outstanding

         Voting Securities; provided, however, that the following

         acquisitions shall not be deemed to be covered by this

         subsection (iii):  (x) any acquisition of Outstanding

         Common Stock or Outstanding Voting Securities by the

         Corporation, (y) any acquisition of Outstanding Common

         Stock or Outstanding Voting Securities by any employee

         benefit plan (or related trust) sponsored or maintained

         by the Corporation or (z) any acquisition of Outstanding

         Common Stock or Oustanding Voting Securities by any

         corporation pursuant to a transaction which complies

         with clauses (A), (B) and (C) of subsection (i) of

         this Section 7(e); or

                  (iv) Upon the consummation of the sale of all

         or sustantially all of the assets of the Corporation

         or approval by the stockholders of the Corporation of

         a complete liquidation or dissolution of the

         Corporation.

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                  (f)  Termination of Employment Except Death.

                  Except as provided in Subsection (k) below, in the

         event that an Optionee shall cease to be employed by the

         Corporation or its Subsidiaries for any reason other than

         his or her death, such Optionee shall have the right,

         subject to the restrictions of Subsection (e) hereof, to

         exercise the Option either:

                (i) at any time within three (3) months after such

         termination of employment; or

                (ii) (in the case of Early, Normal or Late

         Retirement under the Salaried Employees' Retirement Plan

         or Disability), at any time before the end of the option

         period specified in the Option Agreement,

         to the extent that, at the date of termination of

         employment, the Optionee's right to exercise such Option

         had accrued pursuant to the terms of the Option Agreement

         with respect to which such option was granted and had not

         previously been exercised; provided, however, that if the

         employment of an Optionee is terminated by the Corporation

         or a Subsidiary by reason of misconduct, such Option shall

         cease to be exercisable at the time of the Optionee's

         termination of employment.  As used herein "misconduct"

         means that the Optionee has engaged in unfair competition

         with the Corporation or a Subsidiary, induced any customer

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         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 an Optionee's employment is termi-

         nated by reason of misconduct.  In making such determination

         the Committee shall act fairly and shall give the Optionee

         an opportunity to be heard and present evidence on his or

         her behalf.

                  For this purpose, the employment relationship will

         be treated as continuing intact while the Optionee is on

         military leave, sick leave or other bona fide leave of

         absence (to be determined in the sole discretion of the

         Committee, in accordance with rules and regulations constru-

         ing Code section 422A(a)(2)).  Notwithstanding the forego-

         ing, in the case of an Incentive Stock Option, employment

         shall not be deemed to continue beyond the ninetieth (90th)

         day after the Optionee ceased active employment, unless the

         Optionee's reemployment rights are guaranteed by statute or

         by contract.

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                  (g)  Death of Optionee.

                  Except as provided in Subsection (k) below, if the

         Optionee shall die while in the employ of the Corporation or

         a Subsidiary and shall not have fully exercised the Option,

         an Option may be exercised at any time before the end of the

        option period specified in the Option Agreement by the

        executors or administrators of the Optionee's estate or by

        any persons who shall have acquired the Option directly from

        the Optionee by bequest or inheritance, to the

         extent that, at the date of the Optionee's death, the

         Optionee's right to exercise such Option had accrued

         pursuant to the terms of the Option Agreement and had not

         previously been exercised.

                  (h)  Rights as a Stockholder.

                  An Optionee or a transferee of an Optionee shall

         have no rights as a stockholder with respect to any Shares

         covered by his or her Option until the date of the issuance

         of a stock certificate for such Shares.  No adjustment shall

         be made for dividends (ordinary or extraordinary, whether in

         cash, securities or other property) or distributions or

         other rights for which the record date is prior to the date

         such stock certificate is issued, except as provided in

         Section 11.

                  (i)  Modification, Extension and Renewal of

                       Options.

                  Subject to the terms and conditions and within the

         limitations of the Plan, the Committee may modify, extend or

         renew outstanding Options granted under the Plan, or accept

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         the exchange of outstanding Options (to the extent not

         theretofore exercised) for the granting of new Options (at

         the same or a different price) in substitution therefor.

         Notwithstanding the foregoing, however, no modification of

         an Option shall, without the consent of the Optionee, alter

         or impair any rights or obligations under any Option

         theretofore granted under the Plan.

                  (j)  Stock Appreciation Rights.

                  In connection with the grant of any Option pursu-

         ant to the Plan, the Committee, in accordance with its

         Rules, may also grant a stock appreciation right pursuant to

         which the Optionee shall have the right to surrender all or

         part of such Option and to exercise the stock appreciation

         right (the "call") and thereby to obtain payment of an

         amount equal to the difference obtained by subtracting the

         aggregate Exercise Price of the Shares subject to the Option

         (or the portion thereof) so surrendered from the Fair Market

         Value of such Shares on the date of such surrender.  In the

         case of a stock appreciation right called after an event

         described in Section 7(e)(i) or (iv) above, "Fair Market

         Value" for purposes of this Subsection (j) shall be the

         greater of (A) the Fair Market Value of such Shares as of

         the date immediately prior to the event described in Section

         7(e)(i) or (iv) above, or (B) the value of such Shares

         determined as of the date of the call in good faith by the

         Committee (as composed on the day preceeding the date of

         the event described in Section 7(e)(i) or (iv) above),

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         taking into consideration all relevant facts and

         circumstances.  The call of such stock appreciation right

         shall be subject to such limitations (including, but not

         limited to, limitations as to time and amount) as the

         Committee shall deem appropriate.  The payment may be made

         in shares of Common Stock (determined with reference to its

         Fair Market Value on the date of call), or in cash, or partly

         in cash and in shares of Common Stock, at the discretion of

         the Committee, provided that the Committee determines that

         such settlement is consistent with the purpose set forth in

         Section 1 hereof, and provided further, that if the stock

         appreciation right is called after an event described in

         Section 7(e)(i) or (iv), the payment shall be made in cash.

         For all purposes under the Plan, 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 an

         Option, and in the event of the call of a stock appreciation

         right, the underlying Option will be deemed to have been

         exercised for all purposes under the Plan.

                  (k)  Effect of Termination of Employment on Stock

                       Appreciation Right.

                  In the event that an Optionee shall cease to be

         employed by the Corporation or its Subsidiaries for any

         reason, any stock appreciation right which may have been

         granted in conjunction with the grant of an Option shall

         expire on the date provided in the Option Agreement or in

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         rules and regulations adopted by the Committee.

                  (l)  Limitation of Annual Awards.

                  The aggregate Fair Market Value (determined as of

         the date the Option is granted) of the stock with respect to

         which any Incentive Stock Options are exercisable for the

         first time by an Optionee during any calendar year commenc-

         ing after December 31, 1986 under this Plan and all other

         plans maintained by the Corporation, its parent or its

         Subsidiaries shall not exceed $100,000.

                  (m)  Other Provisions.

                  The Option Agreements authorized under the Plan

         shall contain such other provisions not inconsistent with

         the terms of the Plan, including, without limitation,

         restrictions upon the exercise of the Option, as the Commit-

         tee shall deem advisable.

                  8.   RESTRICTED STOCK.

                  (a)  Grants.

                  Subject to the provisions of the Plan, the

         Committee shall have sole and complete authority to

         determine the persons to whom, and the time or times at

         which, grants of Restricted Stock will be made, the number

         of shares of Restricted Stock to be awarded, the price (if

         any) to be paid by the recipient of Restricted Stock, the

         time or times within which such Awards may be subject to

         forfeiture, and all other terms and conditions of the

         Awards.  The Committee may condition the grant of Restricted

         Stock upon the attainment of specified performance goals or

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         such other factors as the Committee may determine, in its

         sole discretion.

                  The terms of each Restricted Stock Award shall be

         set forth in a Restricted Stock Agreement between the

         Corporation and the Employee, which Agreement shall contain

         such provisions as the Committee determines to be necessary

         or appropriate to carry out the intent of the Plan with

         respect to such Award.  Each Participant receiving a

         Restricted Stock Award shall be issued a stock certificate

         in respect of such shares of Restricted Stock.  Such certif-

         icate shall be registered in the name of such Participant,

         and shall bear an appropriate legend referring to the terms,

         conditions, and restrictions applicable to such Award.  The

         Committee shall require that stock certificates evidencing

         such shares be held by the Company until the restrictions

         thereon shall have lapsed, and that, as a condition of any

         Restricted Stock Award, the Participant shall have delivered

         to the Company a stock power, endorsed in blank, relating to

         the stock covered by such Award.

                  (b)  Restrictions and Conditions.

                  The shares of Restricted Stock awarded pursuant to

         this Section 8 shall be subject to the following

         restrictions and conditions:

                  (i)  During a period set by the Committee

              commencing with the date of such Award (the

              "Restriction Period"), the Participant shall not

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              be permitted to sell, transfer, pledge, assign or

              encumber shares of Restricted Stock awarded under

              the Plan.  Within these limits, the Committee, in

              its sole discretion, may provide for the lapse of

              such restrictions in installments and may acceler-

              ate or waive such restrictions in whole or in

              part, based on service, performance, a change of

              control of the Corporation and/or such other

              factors or criteria as the Committee may determine

              in its sole discretion.

                  (ii)  Except as provided in this para-

              graph (ii) and paragraph (i) above, the Partici-

              pant shall have, with respect to the shares of

              Restricted Stock, all of the rights of a share-

              holder of the Corporation, including the right to

              vote the shares, and the right to receive any cash

              dividends.  The Committee, in its sole discretion,

              as determined at the time of Award, may provide

              that the payment of cash dividends shall or may be

              deferred and, if the Committee so determines,

              reinvested in additional Shares of Restricted

              Stock to the extent available under Section 6, or

              otherwise reinvested.  Stock dividends issued with

              respect to Restricted Stock shall be treated as

              additional shares of Restricted Stock that are

              subject to the same restrictions and other terms

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              and conditions that apply to the shares with

              respect to which such dividends are issued.

                  (iii)  The Committee shall specify the condi-

              tions under which shares of Restricted Stock shall

              vest or be forfeited and such conditions shall be

              set forth in the Restricted Stock Agreement.

                  (iv)  If and when the Restriction Period

              applicable to shares of Restricted Stock expires

              without a prior forfeiture of the Restricted

              Stock, certificates for an appropriate number of

              unrestricted Shares shall be delivered promptly to

              the Participant, and the certificates for the

              shares of Restricted Stock shall be cancelled.

                  9.   OTHER SHARE-BASED AWARDS.

                  (a)  Grants.

                  Other Awards of Shares and other Awards that are

         valued in whole or in part by reference to, or are otherwise

         based on, Shares ("Other Share-Based Awards"), may be

         granted either alone or in addition to or in conjunction

         with other Awards under this Plan.  Awards under this

         Section 9 may include, but are not limited to, Stock Rights,

         stock appreciation rights not granted in connection with the

         grant of any Option pursuant to Section 7, the grant of

         Shares conditioned upon some specified event, the payment of

         cash based upon the performance of the Shares or the grant

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         of securities convertible into Shares.

                  Subject to the provisions of the Plan, the Commit-

         tee shall have sole and complete authority to determine the

         persons to whom and the time or times at which Other Share-

         Based Awards shall be made, the number of Shares or other

         securities, if any, to be granted pursuant to Other Share-

         Based Awards, and all other conditions of the Other Share-

         Based Awards.  In making an Other Share-Based Award, the

         Committee may determine that the recipient of an Other

         Share-Based Award shall be entitled to receive, currently or

         on a deferred basis, interest or dividends or dividend

         equivalents with respect to the Shares or other securities

         covered by the Award, and the Committee may provide that

         such amounts (if any) shall be deemed to have been

         reinvested in additional Shares or otherwise reinvested.

         The terms of any Other Share-Based Award shall be set forth

         in an Other Share-Based Award Agreement between the

         Corporation and the Employee, which Agreement shall contain

         such provisions as the Committee determines to be necessary

         or appropriate to carry out the intent of the Plan with

         respect to such Award.

                  (b)  Terms and Conditions.

                  In addition to the terms and conditions specified

         in the Other Share-Based Award Agreement, Other Share-Based

         Awards made pursuant to this Section 9 shall be subject to

         the following:

                                  -22-
<PAGE>
                  (i)  Any Other Share-Based Award may not be

              sold, assigned, transferred, pledged or otherwise

              encumbered prior to the date on which the Shares

              are issued or the Award becomes payable, or, if

              later, the date on which any applicable restric-

              tion, performance or deferral period lapses.

                  (ii)  The Other Share-Based Award Agreement

              shall contain provisions dealing with the disposi-

              tion of such Award in the event of a termination

              of the Employee's employment prior to the exer-

              cise, realization or payment of such Award, and

              the Committee in its sole discretion, may provide

              for payment of the Award in the event of the

              Employee's retirement, Disability or death or the

              change of control of the Corporation, with such

              provisions to take account of the specific nature

              and purpose of the Award.


                  10.   TERM OF PLAN.

                  Awards may be granted pursuant to the Plan until

         the termination of the Plan on December 31, 1998.


                  11.   RECAPITALIZATION.

                  Subject to any required action by the stockhold-

         ers, the number of Shares covered by this Plan as provided

         in Section 6, the number of Shares covered by or referenced

         in each outstanding Award, and the Exercise Price of each

         outstanding Option and any price required to be paid for

                                   -23-
<PAGE>
         Restricted Stock or Other Share-Based Award shall be propor-

         tionately adjusted for any increase or decrease in the

         number of issued Shares resulting from a subdivision or

         consolidation of Shares, the payment of a stock dividend

         (but only of Common Stock) or any other increase or decrease

         in the number of such Shares effected without receipt of

         consideration by the Corporation or the declaration of a

         dividend payable in cash that has a material effect on the

         price of issued Shares.

                  Subject to any required action by the stockhold-

         ers, if the Corporation shall be a party to

         any merger, consolidation or other reorganization, each

         outstanding Award shall pertain and apply to the securities

         to which a holder of the number of Shares subject to the

         Award would have been entitled.

                  In the event of a change in the Common Stock as

         presently constituted, which is limited to a change of all

         of its authorized shares with par value into the same number

         of shares with a different par value or without par value,

         the shares resulting from any such change shall be deemed to

         be the Common Stock within the meaning of the Plan.

                                 -24-
<PAGE>
                  To the extent that the foregoing adjustments

         relate to stock or securities of the Corporation, such

         adjustments shall be made by the Committee, whose determina-

         tion in that respect shall be final, binding and conclusive,

         provided that each Incentive Stock Option granted pursuant

         to this Plan shall not be adjusted in a manner that causes

         the Option to fail to continue to qualify as an incentive

         stock option within the meaning of section 422 of the Code.

                  Except as hereinbefore expressly provided in this

         Section 11, a Participant shall have no rights by reason of

         any subdivision or consolidation of shares of stock of any

         class or the payment of any stock dividend or any other

         increase or decrease in the number of shares of stock of any

         class or by reason of any dissolution, liquidation, merger

         or consolidation or spin-off of assets or stock of another

         Corporation, and any issue by the Corporation of shares of

         stock of any class or securities convertible into shares of

         stock of any class, shall not affect, and no adjustment by

         reason thereof shall be made with respect to, the number or

         price of Shares subject to the Option.

                  The grant of an Option pursuant to the Plan shall

         not affect in any way the right or power of the Corporation

         to make adjustments, reclassifications, reorganizations or

         changes of its capital or business structure or to merge or

         consolidate or to dissolve, liquidate, sell or transfer all

         or any part of its business or assets.

                                -25-
<PAGE>
                  12.  SECURITIES LAW REQUIREMENTS AND LIMITATION OF

                       RIGHTS.

                  (a)  Securities Law.  No Shares shall be issued

         pursuant to the Plan unless and until the Corporation has

         determined that:  (i) it and the Participant have taken all

         actions required to register the Shares under the Securities

         Act of 1933 or perfect an exemption from the registration

         requirements thereof; (ii) any applicable listing

         requirement of any stock exchange on which the Common Stock

         is listed has been satisfied; and (iii) any other applicable

         provision of state or federal law has been satisfied.

                  (b)  Employment Rights.  Neither the Plan nor any

         Award granted under the Plan shall be deemed to give any

         individual a right to remain employed by the Corporation or

         a Subsidiary.  The Corporation and its Subsidiaries reserve

         the right to terminate the employment of any employee at any

         time, with or without cause, subject only to a written

         employment contract (if any).

                  (c)  Shareholders' Rights.  A Participant shall

         have no dividend rights, voting rights or other rights as a

         shareholder with respect to any Shares covered by his or her

         Award prior to the issuance of a stock certificate for such

         Shares.  No adjustment shall be made for cash dividends or

         other rights for which the record date is prior to the date

         when such certificate is issued.

                  (d)  Creditors' Rights.  A holder of an Other

                                    -26-
<PAGE>
         Share-Based Award shall have no rights other than those of a

         general creditor of the Corporation.  An Other Share-Based

         Award shall represent an unfunded and unsecured obligation

         of the Corporation, subject to the terms and conditions of

         the applicable Other Share-Based Award Agreement.


                  13.   AMENDMENT OF THE PLAN.

                  The Board may, insofar as permitted by law, from

         time to time, with respect to any Shares at the time not

         subject to Awards, suspend or discontinue the Plan or revise

         or amend it in any respect whatsoever except that, without

         approval of the holders of Common Stock of the Corporation,

         no such revision or amendment shall:

                  (a)  Increase the number of Shares subject to

              the Plan;

                  (b)  Change the designation in Section 5 of

              the Plan of the class of Employees eligible to

              receive Awards;

                  (c)  Decrease the price at which Incentive

              Stock Options may be granted;

                  (d)  Remove the administration of the Plan

              from the Committee;

                  (e)  Render any member of the Committee

              eligible to receive an Award under the Plan while

              serving thereon; or

                  (f)  Amend this Section 13 to defeat its

              purpose.

                                  -27-
<PAGE>
                  14.   APPLICATION OF FUNDS.

                  The proceeds received by the Corporation from the

         sale of Common Stock pursuant to the exercise of an Option

         or the grant of Restricted Stock will be used for general

         corporate purposes.

                  15.   NO OBLIGATION TO EXERCISE OPTION.

                  The granting of an Option shall impose no obliga-

         tion upon the Optionee to exercise such Option.


                  16.   APPROVAL OF STOCKHOLDERS.

                  This Plan and any amendments requiring shareholder

         approval pursuant to Section 13 hereof shall be subject to

         approval by affirmative vote of the shareholders in accor-

         dance with applicable law.  Such vote shall be taken at the

         first annual meeting of stockholders of the Corporation

         following the adoption of the Plan or of any such

         amendments, or any adjournment thereof.


                  17.  PAYMENT OF EXCISE TAXES.

                  If any payments or transfers to or for the

         benefit of the Participant is deemed an "excess parachute

         payment" as defined in Section 280G of the Internal Revenue

         Code of 1986 (the "Code") subject to the excise tax

         imposed by Section 4999 of the Code, the Corporation shall

         pay to the Participant an additional amount such that the

         total amount of all such payments and benefits (including

         payments made pursuant to this Section) to the Participant

                                -28-
<PAGE>
         shall equal the total amount of all such payments and

         benefits to which the Participant would have been entitled

         (but for the Section) net of all applicable federal, state

         and local taxes except the excise tax.  For purposes of

         this Section, the Participant shall be deemed to pay

         federal, state and local taxes at the highest marginal rate

         of taxation for the applicable calendar year.  The amount

         of the payment to the Participant shall be estimated by the

         firm of independent certified public accountants serving

         as the outside auditor of the Corporation, as of the date

         of the applicable event as described in Section 7(e)(i)-(iv).

                  18.  WITHHOLDING TAXES.

                  (a)  General.  To the extent required by

         applicable federal, state, local or foreign law, the

         recipient of any payment or distribution under the Plan

         shall make arrangements satisfactory to the Corporation for

         the satisfaction of any withholding tax obligations that

         arise by reason of such payment or distribution.  The

         Corporation shall not be required to make such payment or

         distribution until such obligations are satisfied.

                  (b)  Nonqualified Options.  The Committee may

         permit an Optionee who exercises Nonqualified Stock Options

         to satisfy all or part of his or her withholding tax obliga-

         tions by having the Company withhold a portion of the Shares

         that otherwise would be issued to him or her under such

         Nonqualified Stock Options.  Such Shares shall be valued at

                                   -29-
<PAGE>
         their Fair Market Value on the date when taxes otherwise

         would be withheld in cash.  The payment of withholding taxes

         by surrendering Shares to the Corporation, if permitted by

         the Committee, shall be subject to such restrictions as the

         Committee may impose, including any restrictions required by

         rules of the Securities and Exchange Commission.


                  19.   EXECUTION.

                  To record the amendment and restatement of the Plan

         to read as set forth herein effective as of December 2,

         1999, the Corporation has caused its authorized officer to

         execute the same.


                                     POTLATCH CORPORATION

                                     By /s/ Betty R Fleshman

                                           Secretary


                                -30-