STOCK OPTION AGREEMENT
        POTLATCH CORPORATION l995 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
addendum ("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" means this stock option agreement.

     (b) "Board" means the Board of Directors of the
Corporation.

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

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

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

     (f) "Committee" means the committee appointed by the Board
to administer the Plan.

     (g) "Corporation" means Potlatch Corporation, a Delaware
corporation.

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

     (i) "Disability" means 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 at least 12 months.

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

                                     -1-               Employee Option

                                                            Exhibit (10)(n)(i)
<PAGE>
     (k) "Fair Market Value" of a Share as of a specified date
means the closing price at which Shares are traded at the close of
business on such date as reported in the New York Stock 
Exchange composite transactions published in the Western Edition 
of The Wall Street Journal, or if no trading of Shares is 
reported for that day, on the next preceding day on which 
trading was reported.

     (l) "Incentive Stock Option" means an Option described in
Code section 42Z(b).

     (m) "Nonqualified Stock Option" means an Option other than
an Incentive Stock option.

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

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

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

     (q) "Plan" means the Potlatch Corporation 1995 Stock
Incentive PIan, pursuant to which the parties have entered into
this Agreement.

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

     (s) "Securities Act" means the Securities Act of 1933, as
amended.

     (t) "Share" means one share of Common Stock, adjusted in
accordance with Section 13 of the Plan.

     (u) "Subsidiary" means 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 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 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 stated in 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.

                                     -2-               Employee Option

<PAGE>
     3. Subject to the conditions stated in this Agreement,
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") shall be as follows:

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

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

     No Partial Exercise of this Option may be for less than a
multiple of 10 Shares.

     Beginning six months after the bate of Grant, Employee
shall have the right to exercise the Option ( or to call the
related stock appreciation right as described in Paragraph 4),
in whole or in part:

          (a) Within 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 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 Corpora-
     tion 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 (i) above who 
     were still in office as of the date the Board approved  
     such election or nomination;

          (c) Within 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 20% or more of

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

                                     -3-             Employee  Option

<PAGE>
the aggregate voting power of the capital stock of the
Corporation issued and outstanding; and

          (d) Within 30 days prior to any dissolution or
     liquidation of the Corporation or any merger or
     consolidation in which the Corporation 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 30-day period described
in (a) or (d) above, the option shall terminate at the close of
business on the last day of the 30-day period; provided that if
periods described in (a) and (d) are contiguous or overlap,
unexercised options shall terminate at the close of business on
the last day of the second 30-day period.

     4. In the event of a Change in Control, this Option shall
automatically include a stock appreciation right that may be
called only during the periods described in Subparagraphs (a),
(b), (c) or (d) of Paragraph 3. During any such period, 
Employee may surrender all or part of this Option and exercise 
the stock appreciation right in lieu of exercising all or any 
part of this Option, provided that at least six months have 
elapsed from the Date of Grant and 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 appreciation right is 
referred to in this Paragraph 4 as the "call."  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 of such Option) from the Fair Market 
Value of such Shares on the date of such call. In the case of a 
stock appreciation right that is called during either of the 30-
day periods described in Paragraph 3(a) or 3(d), for purposes of 
measuring the value of the stock appreciation right, "Fair Mar-
ket Value" shall be the greater of (a) the value of the 
consideration per share that the Employee would have received in 
connection with the transaction described in Paragraph 3(a) or 
3(d) as a stockholder of the Corporation if he or she had 
exercised the Option prior to the consummation of such
transaction, 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.

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

                                     -4-              Employee Option 

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

     Payment of a stock appreciation right shall be made as soon
as reasonably practicable following receipt by the Corporation 
of the notice described in Paragraph 8. Payment of the stock
appreciation right shall be made in such form as may be 
permitted pursuant to the rules and regulations adopted from 
time to time by the Committee, as in effect on the date the 
stock appreciation right is called.

     5. The term of this Option shall end and this Option 
shall not be exercisable after seven 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 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, may be exercised within 36 months after
     Employee's death by Employee's executors or admin-
     istrators or by any person or persons who shall have
     acquired this Option directly from Employee by bequest
     or inheritance.

          (b) If the termination of employment is caused 
     by Disability or Early, Normal or Late 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 within 36 months after the 
     date of such termination.

          (c) If the termination of employment is for any
     reason other than death, Disability, or Early, Normal
     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 months after the date of such 
     termination; provided that in such case the right to 
     call a stock appreciation right as described in 
     Paragraph 4 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 months after the date of such 
     termination, Notwithstanding the foregoing, if the

                                     -5-              Employee Option

<PAGE>
     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 
     in this Paragraph, "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 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
reserved and the Exercise Price shall be proportionately
adjusted for any increase or decrease in the number of issued
and outstanding Shares by reason of stock dividends, stock
splits, 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 
apply to the securities to which a holder of the number of 
Shares subject to this Option would have been entitled. Except 
to the extent 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 stockholders are entitled to receive.

     8. Employee, or Employee's representative, may exercise 
20% or more of the portion of this Option that has become vested

                                     -6-              Employee Option

<PAGE>
under Paragraph 3 of this Agreement by giving written notice to
the Corporation at San Francisco, California, attention of the
Vice President, Employee Relations, specifying the election to
exercise the Option, the number of Shares for which it is being
exercised and the method of payment for the amount of the
Purchase Price of the Shares for 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 Committee, 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 paid and the Fair
     Market Value of the Shares surrendered equals the
     Purchase Price of the Shares for 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, 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 has been made. After receipt 
of full payment, the Corporation shall cause to be issued a cer-
tificate or certificates for the Shares for which this Option 
has been exercised, registered in the name of the person or 
persons 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 applica-
ble taxes, including the excise tax that would be imposed
pursuant to Code section 4999, would exceed the Capped Amount,
net of all applicable taxes.

     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 con-
stitute an "excess parachute payment," disregarding any payments

                                     -7-              Employee Option

<PAGE>
or benefits available to the Employee under any plan, contract 
or program if the Employee irrevocably elects to relinquish such
payments or benefits before receipt of such payments or 
benefits.

     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
to Employee or Employee's representative.

     12. 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 for 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 from 
registration, 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 contravene 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 for which this Option has been exercised, and unless such
registration, if required, has been completed, certificates to 
be issued upon the exercise of this Option shall contain the 
following legend:

          "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 in this Agreement, this
Option and the rights and privileges conferred by this Agreement
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 by this Agreement, contrary to the
provisions of this Paragraph, or upon any attempted sale under
any execution, attachment or similar process upon the rights and
privileges conferred by this Agreement, this Option and the

                                     -8-              Employee Option 

<PAGE>
rights and privileges conferred by this Agreement 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 construed in
accordance with the laws of the State of California.



                                     -9-              Employee Option

<PAGE>
                     ADDENDUM TO STOCK OPTION AGREEMENT

               POTLATCH CORPORATION 1995 STOCK INCENTIVE PLAN

Name of Employee:

1. Date of Grant: December 7, 1995.

2. Exercise Price: $ 41.25 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 13 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:

    X       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

    X       Without a stock appreciation right

The document entitled Stock Option Agreement Potlatch Corporation 1995 
Stock Incentive Plan is hereby incorporated by reference into this 
Addendum.

The options specified in Section 3 of this Addendum shall be cancelled 
and the Agreement with respect to the options specified in this Addendum 
shall be without force and effect if the 1995 Stock Incentive Plan
adopted by the Board of Directors of this corporation on December 7, 
1995 is not approved by the stockholders of this Corporation at the 1996 
annual meeting of stockholders or any adjournment thereof.

     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