STOCK OPTION AGREEMENT

   POTLATCH CORPORATION 1995 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.

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                                                       Exhibit (10)(n)(iv)
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     (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.

     (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.

     (1) "Incentive Stock Option" means an Option described in 
Code section 422(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 Plan, 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.

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<PAGE>

     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.

     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 Date 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 Corporation on a date three years 
  earlier nor (ii) are individuals whose election or 
  nomination for election as directors was affirmatively voted 

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

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<PAGE>
  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 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- periods described in Paragraph 
3(a) or 3(d), for purposes of measuring the value of the stock 
appreciation right, "Fair Market Value" shall be the greater of 
(a) the value of the consideration per share that the Employee 
would have received in connection with 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 

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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 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 at any time before the end of the Option Period as 
  specified in the Option Agreement by Employee's executors or 
  administrators or by any person or persons who shall have 
  acquired this Option directly from Employee by bequest or 
  inheritance.

     (b) If the termination of 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 at any time before the end of the Option Period as 
  specified in the Option Agreement.

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<PAGE>

     (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 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 

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<PAGE>

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 
under Paragraph 3 of this Agreement by giving written notice to 
the Corporation at Spokane, Washington, 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 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), 

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<PAGE>

and cause such certificate or certificates to be delivered to or 
upon the order of such person or persons.

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

     The firm of independent certified public accountants serving 
as the Corporation's outside auditor as of the date of a Change 
in Control shall determine whether any amount would constitute an 
"excess parachute payment," disregarding any payments or benefits 
available to the Employee under any plan, contract or program if 
the Employee irrevocably elects to relinquish 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 

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<PAGE>

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 
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 Delaware without regard 
to choice of law principles.

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<PAGE>


          ADDENDUM TO STOCK OPTION AGREEMENT
    POTLATCH CORPORATION 1995 STOCK INCENTIVE PLAN


Name of Employee:	_________________________ 


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 Stock Option Agreement 
     is _______, subject to adjustment as provided in Section 13 
     of the Plan and Paragraph 6 of this Stock Option Agreement.
 
4.   This Option is:  A Nonqualified Stock Option
 
5.   The Vesting Schedule for this Option is:  The schedule    
     specified in Paragraph 3 of the Stock Option Agreement, 
     except that no exercise or call will be permitted for a 
     fractional Share.


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

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


                                   POTLATCH CORPORATION



Date: ________________	           By _________________________________
						                               Vice President Employee Relations



Date: ________________	           By _________________________________
                                               Employee


                                                       Employee Option
                                10
                                                       Adopted 12/3/98