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                                                             Exhibit 10(c)(ii)
                             STOCK OPTION AGREEMENT
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                 POTLATCH CORPORATION 2000 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 outside director of the Corporation
named in the attached addendum ("Outside Director"),

                              W I T N E S S E T H:

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

         1. Definitions.
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         (a) "Agreement" means this stock option agreement.
              ---------

         (b) "Board" means the Board of Directors of the Corporation.
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         (c) "Change in Control" means an event or transaction described in
              -----------------
Subparagraph (a), (b), (c) or (d) of Paragraph 3.


         (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. If Outside Director is a member of such Committee, Outside
Director shall not participate in any actions and determinations of the
Committee with respect to this Agreement.

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

         (h) "Date of Grant" means the date specified in Section 1 of the
              -------------
addendum to this Agreement.

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

         (j) "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


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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.

         (k) "Nonqualified Stock Option" means an Option other than an incentive
              -------------------------
stock option described in Code section 422(b).

         (l) "Option" means a stock option granted pursuant to the Plan.
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         (m) "Option Period" means the term of this Option as provided in
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Paragraph 3 of this Agreement.

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

         (o) "Plan" means the Potlatch Corporation 2000 Stock Incentive Plan,
              ----
pursuant to which the parties have entered into this Agreement.

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

         (q) "Securities Act" means the Securities Act of 1933, as amended.
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         (r) "Share" means one share of Common Stock, adjusted in accordance
              -----
with Section 13 of the Plan.

         (s) "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 Outside Director 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 Outside Director may obtain upon request to the Corporation.

         3. Subject to the conditions stated in this Agreement, the period
during which the Option may be exercised (the "Vesting Schedule") shall be as
follows:


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      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

-----------------------------

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





         Beginning six months after the Date of Grant, Outside Director 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) 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 the then outstanding
         voting securities of the Corporation entitled 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 (c) 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 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; or

                  (b) On the date that individuals who, as of December 2, 1999
         constitute 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


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         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

                  (c) Upon the 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 (c): (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 Outstanding Voting Securities by any corporation
         pursuant to a transaction which complies with clauses (A), (B) and (C)
         of subsection (a) of this Paragraph 3; or

                  (d) Upon the consummation of the sale of all or substantially
         all of the assets of the Corporation or approval by the stockholders of
         the Corporation of a complete liquidation or dissolution of the
         Corporation.

         4. In the event of a Change in Control, this Option shall automatically
include a stock appreciation right that may be called by the Outside Director.
After a Change in Control event, Outside Director 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, Outside Director 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 after an event 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 Outside Director 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 immediately
prior to the event

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described in Paragraph 3(a) or 3(d), or (b) the value determined as of the date
of the call 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 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 10 years from the Date of Grant or, if earlier, upon the
termination of Outside Director's services as a director of the Corporation
subject to the following provisions:

                  (a) If the termination of services is caused by Outside
         Director'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 at any time before the end
         of the Option Period as specified in the Option Agreement by Outside
         Director's executors or administrators or by any person or persons who
         shall have acquired this Option directly from Outside Director by
         bequest or inheritance.

                  (b) If the termination of services is caused by retirement
         after five years of service as an Outside Director of the Corporation,
         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 at any time before the end of the Option
         Period as specified in the Option Agreement.

                  (c) If the termination of services is for any reason other
         than death or retirement, 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 Outside Director's services
         terminate unless Outside Director 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
         termination of services is for cause, the option shall cease to be
         exercisable or callable at the time of such


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         termination. The Board shall determine whether Outside Director's
         services are terminated for cause in accordance with the Corporation's
         Restated Certificate of Incorporation.

         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 a party to 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.

         8. Outside Director, or Outside Director's representative, may exercise
this Option by giving written notice to the Corporation at Spokane, Washington,
attention of the Secretary, 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
Outside Director, 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 certificate 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.

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         9. 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, Outside Director will make
arrangements satisfactory to the Corporation to enable it to satisfy such
withholding requirements.

         10. Neither Outside Director nor Outside Director'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 Outside Director or
Outside Director's representative.

         11. Unless at the time Outside Director 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."

         12. 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 rights and
privileges conferred by this Agreement shall immediately become null and void.

         13. Nothing in this Agreement shall be construed as giving Outside
Director the right to be retained as a director of the Corporation.

         14. This Agreement shall be interpreted and construed in accordance
with the laws of the State of Delaware without regard to choice of law
principles.

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                       ADDENDUM TO STOCK OPTION AGREEMENT
                       ----------------------------------

                 POTLATCH CORPORATION 2000 STOCK INCENTIVE PLAN
                 ----------------------------------------------

Name of Outside Director:  _____________________________

1.       Date of Grant:  _______________________

2.       Exercise Price: $ ____________ 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 Option is (check one):


         [ _ ]             5,000 Shares (Director Election)


         [ _ ]             2,500 Shares (Annual Grant)


         This number is subject to adjustment as provided in Section 13 of the
         Plan and Paragraph 6 of this stock option agreement.

The document entitled Stock Option Agreement - Potlatch Corporation 2000 Stock
Incentive Plan is incorporated by this reference into this addendum.

         IN WITNESS WHEREOF, the Corporation has caused this addendum to the
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stock option agreement to be executed on its behalf by its duly authorized
representative and the Outside Director has executed the same on the date
indicated below.

                           POTLATCH CORPORATION

Date:                      By
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                                      Secretary



Date:                      By
     -------------------     -------------------------------------
                                      Outside Director


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