WILLAMETTE INDUSTRIES

                         1999 DEFERRED COMPENSATION PLAN

                                  FOR DIRECTORS









                            Effective January 1, 2000
<PAGE>

                                TABLE OF CONTENTS

                                                                           PAGE

ARTICLE I         PURPOSE; EFFECTIVE DATE....................................1

ARTICLE II        DEFINITIONS................................................1

        2.1    Account.......................................................1

        2.2    Beneficiary...................................................1

        2.3    Board.........................................................1

        2.4    Committee.....................................................1

        2.5    Company.......................................................1

        2.6    Compensation..................................................1

        2.7    Determination Date............................................1

        2.8    Earnings......................................................1

        2.9    Mirror Investment Fund........................................2

        2.10   Participant...................................................2

        2.11   Participation Agreement.......................................2

        2.12   Plan..........................................................2

        2.13   Retirement....................................................2

        2.14   Subaccount....................................................2

ARTICLE III       PARTICIPATION AND DEFERRALS................................3

        3.1    Eligibility and Participation.................................3

        3.2    Form of Deferral..............................................3

        3.3    Selection of Mirror Investment Fund...........................3

        3.4    Continuation of Deferral Amount...............................3

        3.5    Suspension....................................................4

ARTICLE IV        DEFERRED COMPENSATION ACCOUNT..............................4

        4.1    Account.......................................................4

        4.2    Timing of Credits; Withholding................................4

        4.3    Determination of Accounts and Subaccounts.....................4

        4.4    Vesting of Accounts...........................................4

        4.5    Statement of Accounts.........................................4

ARTICLE V         MERGER OF PRIOR DEFERRED COMPENSATION PLAN.................5

        5.1    Merger........................................................5


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                                TABLE OF CONTENTS
                                   (CONTINUED)
                                                                           PAGE

        5.2    Current Directors.............................................5

        5.3    Former Directors..............................................5

ARTICLE VI        TERMINATION OF RETIREMENT PLAN.............................5

        6.1    Termination...................................................5

        6.2    Current Directors.............................................5

        6.3    Former Directors..............................................6

ARTICLE VII       PLAN BENEFITS..............................................6

        7.1    Retirement; Death.............................................6

        7.2    Form of Benefits..............................................6

        7.3    Death.........................................................6

        7.4    Accelerated Distribution......................................7

        7.5    Valuation Date................................................7

        7.6    Payment to Guardian...........................................7

        7.7    Election......................................................7

ARTICLE VIII      BENEFICIARY DESIGNATION....................................8

        8.1    Beneficiary Designation.......................................8

        8.2    Amendments....................................................8

        8.3    No Beneficiary Designation....................................8

ARTICLE IX        ADMINISTRATION.............................................8

        9.1    Committee; Duties.............................................8

        9.2    Agents........................................................8

        9.3    Binding Effect of Decisions...................................9

        9.4    Indemnity of Committee........................................9

ARTICLE X         CLAIMS PROCEDURE...........................................9

        10.1   Claim.........................................................9

        10.2   Denial of Claim...............................................9

        10.3   Review of Claim...............................................9

        10.4   Final Decision................................................9

ARTICLE XI        AMENDMENT AND TERMINATION OF PLAN.........................10

        11.1   Amendment....................................................10


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                                TABLE OF CONTENTS
                                   (CONTINUED)
                                                                           PAGE

        11.2   Company's Right to Terminate.................................10

ARTICLE XII       MISCELLANEOUS.............................................10

        12.1   Unfunded Plan................................................10

        12.2   Unsecured General Creditor...................................11

        12.3   Trust Fund...................................................11

        12.4   Nonassignability.............................................11

        12.5   Governing Law................................................11

        12.6   Validity.....................................................11

        12.7   Notice.......................................................11

        12.8   Successors...................................................12


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<PAGE>
                              WILLAMETTE INDUSTRIES

                         1999 DEFERRED COMPENSATION PLAN

                                  FOR DIRECTORS



                                   ARTICLE I

                             PURPOSE; EFFECTIVE DATE
                             -----------------------

               The  purpose  of this  Deferred  Compensation  Plan is to provide
current tax planning opportunities for Directors of Willamette Industries,  Inc.
It is intended  that the Plan will aid in attracting  and  retaining  persons of
exceptional  ability to serve as  Directors.  The Plan shall be  effective as of
January 1, 2000.

                                   ARTICLE II

                                   DEFINITIONS
                                   -----------

               Whenever used in this  document,  the following  terms shall have
the meanings set forth in this Article unless a contrary or different meaning is
expressly provided:

               2.1  Account.  "Account"  means the device used by the Company to
measure and determine  the amounts to be paid to a  Participant  under the Plan.
Each Account shall consist of one (1) or more Subaccounts.

               2.2  Beneficiary.  "Beneficiary"  means the person,  persons,  or
entity entitled under Article VIII to receive any Plan benefits  payable after a
Participant's death.

               2.3 Board. "Board" means the Board of Directors of the Company.

               2.4 Committee.  "Committee" means the committee  appointed by the
Board to administer the

Plan pursuant to Article IX.

               2.5 Company.  "Company  means  Willamette  Industries,  Inc.,  an
Oregon corporation.

               2.6  Compensation.  "Compensation"  means  director  fees (annual
retainer, and board and committee meeting attendance fees).

               2.7 Determination Date.  "Determination  Date" means the last day
of each calendar month.

               2.8 Earnings.  "Earnings" for each  Subaccount  means the rate of
growth  credited or debited to the  Subaccount on each  Determination  Date in a
calendar year,  which shall


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<PAGE>

be  credited  or  debited at the rates  described  in the  definition  of Mirror
Investment  Fund  (Section  2.9).  "Earnings"  for an  Account  shall  mean  the
aggregate Earnings for each Subaccount making up the Account.

               2.9 Mirror Investment Fund.  "Mirror  Investment Fund" means each
fund selected by a Participant  pursuant to Article III. Each Mirror  Investment
Fund shall be a phantom  investment  fund, which shall be credited with earnings
(whether a gain or a loss) at the same rate as one (1) of the  investment  funds
offered by the  Willamette  Industries  Stock  Purchase  Plan (or any  successor
defined  contribution  plan  maintained  by the  Company  that  qualifies  under
Sections 401(a) and 401(k) of the Internal Revenue Code). As of January 1, 2000,
there are five (5) Mirror  Investment Funds whose deemed earnings will track the
earnings of the following Stock Purchase Plan investment funds:

               (a) The Investment Contract Fund

               (b) The Balanced Index Fund

               (c) The Value Index Fund

               (d) The Growth Index Fund

               (e) The Institutional Index Fund

               2.10 Participant. "Participant" means any Director of the Company
who has elected to defer Compensation under this Plan or who is credited with an
opening Account balance under Article V or VI.

               2.11 Participation Agreement. "Participation Agreement" means the
agreement  submitted by a Participant to the Committee  specifying the amount to
be deferred beginning with the agreement's effective date.

               2.12 Plan. "Plan" means this 1999 Deferred  Compensation Plan for
Directors as amended from time to time.

               2.13 Retirement. The date on which the Participant ceases to be a
Director of the Company or, if the Participant has so elected,  the later of (a)
the date on which the Participant ceases to be a Director of the Company, or (b)
the date on which  the  Participant  retires  from the  Participant's  principal
occupation.

               2.14  Subaccount.  "Subaccount"  means  the  device  used  by the
Company to measure  and  determine  the amount of  deferrals  allocated  to each
Mirror Investment Fund selected by the Participant,  and the Earnings  allocated
therein.


                                      -2-
<PAGE>

                                  ARTICLE III

                           PARTICIPATION AND DEFERRALS
                           ---------------------------

               3.1 Eligibility and Participation.

               (a) Eligibility.  Eligibility to participate in the Plan shall be
       limited to Directors of the Company.

               (b)  Participation.  A Director may elect to  participate  in the
       Plan by submitting a Participation Agreement to the Committee. An initial
       or amended  Participation  Agreement may be submitted at any time, but an
       amended  Participation  Agreement  shall not be effective  until the date
       (the  "effective  date")  which is 120 days  after  the date the  amended
       Participation  Agreement is submitted.  The effective  date of an initial
       Participation Agreement is the date it is submitted to the Committee.

               3.2  Form  of   Deferral.   A   Participant   may  elect  in  the
Participation  Agreement to defer all or any portion of the Compensation that is
payable to the Participant on or after the effective date referred to in Section
3.1(b).  The amount to be  deferred  shall be stated as a flat  percentage;  the
percentage  may be  different  for the annual  retainer fee than for the meeting
attendance fees.

               3.3 Selection of Mirror Investment Fund.

               (a) As of each  selection  date, a  Participant  shall select the
       Mirror Investment  Fund(s) in which the Participant wishes to have future
       deferrals  deemed  invested,  and may also change the selection of Mirror
       Investment  Fund(s) in which existing  Account  balances  attributable to
       past deferrals are to be thereafter deemed invested. Unless and until the
       Committee  determines  otherwise,  the  selection  dates  shall  be  each
       December 31 and June 30.

               (b) The selection with respect to future  deferrals may be of any
       combination of one (1) or more of the Mirror  Investment Funds as long as
       at least the  required  minimum  percentage  is  allocated to each of the
       Mirror Investment Funds selected.  Similarly,  the selection with respect
       to existing Account balances may be of any combination of one (1) or more
       of the Mirror  Investment  Funds as long as at least the required minimum
       percentage is allocated to each of the Mirror  Investment Funds selected.
       The  allocation  among Mirror  Investment  Funds with respect to existing
       Account balances need not be the same as for future deferrals. Unless and
       until the Committee determines otherwise, the required minimum percentage
       to be allocated to a Mirror Investment Fund shall be 5%.

               3.4  Continuation of Deferral  Amount.  The amount to be deferred
under a Participation  Agreement shall remain in effect until the effective date
of an amended  Participation  Agreement as  described  in Section  3.1(b) or the
effective date of a notice of suspension as described in Section 3.5.


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<PAGE>

               3.5 Suspension.  A Participant may elect to suspend  deferrals by
submitting a notice of suspension to the  Committee.  A notice of suspension may
be  submitted  at any time,  but it shall not be  effective  until the date (the
"effective date") which is 120 days after the date the notice is submitted.  The
notice must specify the period (the  "suspension  period") which begins with the
effective  date  and  during  which  no  Compensation  shall  be  deferred.  The
suspension  period may be for any period,  but it must be a minimum of 120 days,
and may be for an indefinite period.  Deferrals will be resumed after the end of
the   suspension   period  in  accordance   with  the   Participant's   existing
Participation  Agreement.  If the Participant specified an indefinite suspension
period,  deferrals  may not be resumed  until the  effective  date of an amended
Participation  Agreement  submitted by the  Participant  as described in Section
3.1(b).

                                   ARTICLE IV

                          DEFERRED COMPENSATION ACCOUNT
                          -----------------------------

               4.1 Account. The amounts deferred by a Participant under the Plan
and  Earnings  shall  be  credited  to  the  Participant's   Account.   Separate
Subaccounts will be maintained to reflect Mirror Investment Fund selections. The
Account and  Subaccounts  shall be  bookkeeping  devices  utilized  for the sole
purpose  of  determining  the  benefits  payable  under  the Plan and  shall not
constitute a separate fund of assets.

               4.2 Timing of  Credits;  Withholding.  A  Participant's  deferred
Compensation  shall be credited to the  Account and  Subaccounts  at the time it
would have been payable to the Participant.

               4.3 Determination of Accounts and Subaccounts. Each Participant's
Account and  Subaccount(s)  as of each  Determination  Date shall consist of the
balance  of  the  Account  and  Subaccount(s)  as of the  immediately  preceding
Determination Date, adjusted as follows:

               (a)  New  Deferrals.  The  Account  and  Subaccount(s)  shall  be
       increased by any deferred  Compensation credited since such Determination
       Date.

               (b) Distributions. The Account and Subaccount(s) shall be reduced
       by any benefits  distributed to the Participant since such  Determination
       Date.

               (c) Earnings. The Account and Subaccount(s) shall be increased by
       the  Earnings  credited on the average  daily  balance in the Account and
       each Subaccount since such Determination Date.

               4.4 Vesting of Accounts.  Except as otherwise provided in Section
7.4, each Participant shall be one hundred percent (100%) vested at all times in
the amounts credited to such  Participant's  Account,  Subaccount,  and Earnings
thereon.

               4.5  Statement  of  Accounts.  The  Committee  shall give to each
Participant a statement  showing the balances in the  Participant's  Account and
Subaccount(s)  on a quarterly basis and at such other times as may be determined
by the Committee.


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<PAGE>

                                   ARTICLE V

                   MERGER OF PRIOR DEFERRED COMPENSATION PLAN
                   ------------------------------------------

               5.1 Merger. The Deferred Compensation Plan for Directors that was
adopted in 1983 ("the prior  plan") is merged with and into this Plan  effective
January 1, 2000.

               5.2 Current  Directors.  The prior plan's  "Deferred Fee Account"
balances as of December 31, 1999,  for those  Directors who are deferring  under
the prior plan shall be deemed to be their opening Account balance as of January
1, 2000, under this Plan, and will be subject to all the terms and conditions of
this  Plan.  However,  elections  made  under the prior  plan as to the form and
timing of payments  (annual or  quarterly  payments,  time when  payments are to
commence,  period over which installments are to be made) shall, even though the
form and timing may not be among the choices under this Plan,  remain  effective
until superseded by a valid election made under this Plan as provided in Section
7.7 (the election will not be considered as the Participant's first election, so
in order to be valid, the election must be made no later than December 31 of the
second  calendar  year  preceding  the  calendar  year in which the  earlier  of
Retirement or death  occurs).  The  percentage  elected to be deferred under the
prior plan shall remain effective under this Plan until the effective date of an
amended Participation  Agreement as described in Section 3.1(b) or the effective
date of a notice of suspension as described in Section 3.5.

               5.3 Former  Directors.  With respect to a former  Director who is
entitled  to receive  payments  under the prior  plan,  this Plan will make such
payments  under the same terms and conditions as they would have been made under
the prior plan, including the monthly crediting of the Account with the interest
rate specified in the prior plan.

                                   ARTICLE VI

                         TERMINATION OF RETIREMENT PLAN
                         ------------------------------

               6.1  Termination.  The Retirement Plan for Nonemployee  Directors
that was  adopted  in 1989  ("the  retirement  plan")  is  terminated  effective
December 31, 1999.

               6.2 Current Directors. The  actuarially-determined  present value
of projected  future  benefits as of December 31, 1999, for those  Directors who
were  eligible  for the  retirement  plan  shall be deemed  to be their  opening
Account balance (or deemed to be included in their opening Account balance,  for
a Director who otherwise has an opening  Account  balance under Section 5.1), as
of January 1,  2000,  under this Plan,  and will be subject to all the terms and
conditions of this Plan. However, the form and timing of payments of the Account
(to the extent attributable to the 1989 retirement plan) shall, until superseded
by a valid  election made under this Plan as provided in Section 7.7, be monthly
installments  over a period of 120 months  commencing  with the first day of the
first calendar month following the month in which the Participant ceased to be a
Director  of the  Company;  in the  event of the  Participant's  death  prior to
complete distribution of the Participant's Account,  installment payments are to
be made to the


                                      -5-
<PAGE>

Beneficiary over the 120-month  installment period (or over the remainder of the
period). The foregoing form and timing of payments of the Account (to the extent
attributable to the 1989 retirement plan) may be superseded by an election under
Section 7.7, but the election will not be considered as the Participant's  first
election,  so in order to be  valid,  the  election  must be made no later  than
December 31 of the second calendar year preceding the calendar year in which the
earlier of Retirement or death occurs).

               6.3 Former  Directors.  With respect to a former  Director who is
currently  receiving payments under the retirement plan, this Plan will continue
such payments  under the same terms and  conditions as they would have been made
under the retirement plan (including the cessation of payments on the earlier of
the  death of the  former  Director  or his  receipt  of the  maximum  number of
payments under the terms of the retirement plan).

                                   ARTICLE VII

                                  PLAN BENEFITS
                                  -------------

               7.1  Retirement;  Death. A Participant  shall become  entitled to
payment of the  Participant's  Account upon the occurrence of the  Participant's
Retirement as defined in Section 2.13. If the  Participant  dies (whether before
or after  Retirement  has  occurred),  the  Participant's  Beneficiary  shall be
entitled to payment of the Account.

               7.2 Form of  Benefits.  Except as provided  below,  benefits as a
result  of  Retirement  or  death  shall  be paid  in the  form  elected  by the
Participant in accordance with Section 7.7. Forms of benefit payment shall be:

               (a) A lump sum amount  which is equal to the  applicable  Account
       balance.

               (b) Monthly  installments  of the Account  over a period of sixty
       (60),  one hundred  twenty  (120),  or one hundred  eighty (180)  months.
       Earnings  on  the  unpaid  balance  shall  continue  to  be  credited  to
       Subaccounts at the appropriate Mirror Investment Fund rate.

               Notwithstanding  an installment  election,  if the  Participant's
Account  is fifty  thousand  dollars  ($50,000)  or less on the  valuation  date
referred to in Section 7.5, the benefit shall be paid in a lump sum.

               7.3 Death.  A Participant  who elects  payment of benefits in the
form of installments  may also elect in accordance with Section 7.7 whether,  in
the event of the  Participant's  death  prior to  complete  distribution  of the
Participant's Account:

               (a) The remaining  amount of the  Participant's  Account is to be
       paid in a lump sum to the  Beneficiary  (in which case  payment  shall be
       made within sixty (60) days after the date of death), or

               (b) Installment  payments are to be made to the Beneficiary  over
       the elected installment period (or over the remainder of the period).


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<PAGE>

               7.4 Accelerated Distribution. Notwithstanding any other provision
of the Plan,  a  Participant  at any time shall be  entitled  to  receive,  upon
written  request  to the  Committee,  a lump sum  distribution  equal to  ninety
percent (90%) of the Account balance as of the  Determination  Date  immediately
preceding  the date on which the  Committee  receives the written  request.  The
remaining  balance  shall be forfeited by the  Participant  and the  Participant
shall no longer be eligible to  participate  in the Plan from that date forward.
The amount  payable  under this section shall be paid in a lump sum within sixty
(60)  days  following  the  receipt  of the  notice  by the  Committee  from the
Participant.

               7.5  Valuation  Date.  The  last day of the  month  in which  the
earlier of Retirement or death occurs shall be the valuation date.

               The amount of a lump sum  payment  shall be based on the value of
the  Participant's  Account on the  valuation  date.  Payments  shall be made or
commence within thirty (30) days after the valuation date.

               7.6 Payment to Guardian.  If a distribution is payable to a minor
or a person  declared  incompetent  or to a person  incapable  of  handling  the
disposition of property, the Committee may direct payment to the guardian, legal
representative,   or  person   having  the  care  and  custody  of  such  minor,
incompetent,  or  person.  The  Committee  may  require  proof of  incompetence,
minority,  incapacity,  or  guardianship  as it may  deem  appropriate  prior to
distribution.  Such distribution  shall completely  discharge the Committee from
all liability with respect to such benefit.

               7.7  Election.  Under  procedures  fixed by the  Committee,  each
Participant shall have the right to elect:

               (a) Between the Retirement date alternatives described in 2.13;

               (b) Among the forms of distribution described in Section 7.2; and

               (c)  Whether  (if  installment  payments  are  to  be  made)  the
       installment payments will be accelerated or continued in the event of the
       Participant's death as described in Section 7.3.

               A Participant may revoke an election and make a new election.  An
election shall apply to the entire amount of the Participant's Account. In order
to be  valid,  however,  the  election  (unless  it is the  Participant's  first
election)  must be made no later than  December 31 of the second  calendar  year
preceding  the calendar year in which the earlier of Retirement or death occurs;
a new  election  made either  during the  calendar  year in which the earlier of
Retirement or death occurs or during the  immediately  prior calendar year shall
not be valid.


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<PAGE>

                                  ARTICLE VIII

                             BENEFICIARY DESIGNATION
                             -----------------------

               8.1  Beneficiary  Designation.  Each  Participant  shall have the
right,  at any  time,  to  designate  one (1) or more  persons  or an  entity as
Beneficiary (both primary as well as secondary) to whom benefits under this Plan
shall  be  paid  in  the  event  of a  Participant's  death  prior  to  complete
distribution of the Participant's Account. Each Beneficiary designation shall be
in a written form  prescribed by the  Committee and will be effective  only when
filed with the Committee during the Participant's lifetime.

               8.2 Amendments.  Any designation of Beneficiary may be changed by
a  Participant  without the consent of such  Beneficiary  by the filing of a new
designation with the Committee. The filing of a new designation shall cancel all
designations previously filed.

               8.3 No  Beneficiary  Designation.  If any  Participant  fails  to
designate a Beneficiary  in the manner  provided  above,  or if the  Beneficiary
designated  by a deceased  Participant  dies  before the  Participant  or before
complete   distribution  of  the  Participant's   benefits,   the  Participant's
Beneficiary  shall be the person in the first of the following  classes in which
there is a survivor:

               (a) The Participant's surviving spouse;

               (b) The  Participant's  children in equal shares,  except that if
       any  of  the  children  predeceases  the  Participant  but  leaves  issue
       surviving,  then such  issue  shall take by right of  representation  the
       share the parent would have taken if living;

               (c) The Participant's estate.

                                   ARTICLE IX

                                 ADMINISTRATION
                                 --------------

               9.1 Committee;  Duties.  This Plan shall be  administered  by the
Committee, which shall be the Compensation and Nomination Committee of the Board
or such other Committee as the Board may designate. The Committee shall have the
authority  to make,  amend,  interpret,  and enforce all  appropriate  rules and
regulations for the administration of the Plan and decide or resolve any and all
questions,  including  interpretations  of  the  Plan,  as  may  arise  in  such
administration.  A majority  vote of the  Committee  members  shall  control any
decision. Members of the Committee may be Participants under this Plan.

               9.2 Agents.  The Committee may, from time to time,  employ agents
and  delegate to them such  administrative  duties as it sees fit,  and may from
time to time consult with counsel who may be counsel to the Company.


                                      -8-
<PAGE>

               9.3 Binding  Effect of  Decisions.  The decision or action of the
Committee with respect to any question  arising out of or in connection with the
administration,  interpretation,  and  application of the Plan and the rules and
regulations promulgated hereunder shall be final,  conclusive,  and binding upon
all persons having any interest in the Plan.

               9.4 Indemnity of Committee.  The Company shall indemnify and hold
harmless the members of the Committee against any and all claims,  loss, damage,
expense,  or liability arising from any action or failure to act with respect to
this Plan on account of such person's  service on the  Committee,  except in the
case of gross negligence or willful misconduct.

                                   ARTICLE X

                                CLAIMS PROCEDURE
                                ----------------

               10.1  Claim.  Any  person  claiming  a  benefit,   requesting  an
interpretation  or ruling under the Plan,  or requesting  information  under the
Plan shall present the request in writing to the Committee,  which shall respond
in writing as soon as practicable.

               10.2  Denial of Claim.  If the claim or request  is  denied,  the
written notice of denial shall state:

               (a) The reasons for denial,  with specific  reference to the Plan
       provisions on which the denial is based.

               (b) A  description  of any  additional  material  or  information
       required and an explanation of why it is necessary.

               (c) An explanation of the Plan's claim review procedure.

               10.3 Review of Claim. Any person whose claim or request is denied
or who has not received a response within thirty (30) days may request review by
notice given in writing to the Committee. The claim or request shall be reviewed
by the  Committee  which may, but shall not be required to, grant the claimant a
hearing.  On review,  the claimant may have  representation,  examine  pertinent
documents, and submit issues and comments in writing.

               10.4 Final  Decision.  The decision on review  shall  normally be
made within  sixty (60) days.  If an extension of time is required for a hearing
or other  special  circumstances,  the  claimant  shall be notified and the time
limit shall be one hundred  twenty (120) days.  The decision shall be in writing
and shall state the reasons and the relevant Plan  provisions.  All decisions on
review shall be final and bind all parties concerned.


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<PAGE>

                                   ARTICLE XI

                        AMENDMENT AND TERMINATION OF PLAN
                        ---------------------------------

               11.1  Amendment.  The  Board  may at any time  amend  the Plan by
written  instrument,  notice of which shall be given to all  Participants and to
Beneficiaries receiving installment payments. However, no amendment shall reduce
the amount  accrued in any Account to the date such notice of the  amendment  is
given.

               11.2  Company's  Right to  Terminate.  The  Board may at any time
partially  or  completely  terminate  the Plan  if,  in its  judgment,  the tax,
accounting,  or  other  effects  of the  continuance  of the  Plan or  potential
payments thereunder would not be in the best interests of the Company.

               (a) Partial  Termination.  The Board may partially  terminate the
       Plan  by   instructing   the  Committee  not  to  accept  any  additional
       Participation  Agreements. If such a partial termination occurs, the Plan
       shall continue to operate and be effective  with regard to  Participation
       Agreements  entered  into  prior to the  effective  date of such  partial
       termination.

               (b) Complete Termination.  The Board may completely terminate the
       Plan  by   instructing   the  Committee  not  to  accept  any  additional
       Participation  Agreements,  and by terminating all ongoing deferrals.  If
       such a complete  termination  occurs, the Plan shall cease to operate and
       the Company shall pay out each  Account.  Payment shall be made as a lump
       sum or in equal monthly  installments over the following period, based on
       the Account balance:

                  Account Balance                                 Payout Period
                  ---------------                                 -------------

               Less than $100,000                                   Lump Sum

               $100,000 but less than $500,000                      3 Years

               $500,000 or more                                     5 Years

               Earnings at the appropriate rate shall continue to be credited on
the unpaid balance in each Account.

                                   ARTICLE XII

                                  MISCELLANEOUS
                                  -------------

               12.1 Unfunded Plan.  This Plan is an unfunded plan  maintained to
provide deferred compensation benefits for non-employee Directors of the Company
and therefore is exempt from the  provisions of the Employee  Retirement  Income
Security Act of 1974.


                                      -10-
<PAGE>

               12.2  Unsecured   General   Creditor.   Participants   and  their
Beneficiaries,  heirs,  successors,  and assigns  shall have no secured legal or
equitable rights,  interest, or claims in any property or assets of the Company,
nor shall they be beneficiaries of, or have any rights,  claims, or interests in
any life insurance policies,  annuity contracts, or the proceeds therefrom owned
or which may be acquired  by the  Company.  Except as provided in Section  12.3,
such policies,  annuity  contracts,  or other assets of the Company shall not be
held  under any trust for the  benefit  of  Participants,  their  Beneficiaries,
heirs, successors, or assigns, or held in any way as collateral security for the
fulfilling of the obligations of the Company under this Plan. Any and all of the
Company's  assets and policies  shall be, and remain,  the  general,  unpledged,
unrestricted  assets of the Company.  The Company's  obligations  under the Plan
shall be that of an unfunded and unsecured promise to pay money in the future.

               12.3 Trust Fund. At its discretion, the Company may establish one
(1) or more trusts, with such trustees as the Board may approve, for the purpose
of providing  for the payment of benefits  owed under the Plan.  Although such a
trust  shall be  irrevocable,  its assets  shall be held for  payment of all the
Company's  general  creditors  in the event of  insolvency.  To the  extent  any
benefits provided under the Plan are paid from any such trust, the Company shall
have no  further  obligation  to pay  them.  If not paid  from the  trust,  such
benefits  shall  remain  the  obligation  of the  Company.  Notwithstanding  the
existence  of such a trust,  it is intended  that the Plan be  unfunded  for tax
purposes.

               12.4 Nonassignability. Neither a Participant nor any other person
shall have any right to commute,  sell, assign,  transfer,  pledge,  anticipate,
mortgage, or otherwise encumber, transfer,  hypothecate, or convey in advance of
actual  receipt the amounts,  if any,  payable  hereunder,  or any part thereof,
which are, and all rights to which are,  expressly  declared to be  unassignable
and  nontransferable.  No part of the  amounts  payable  shall,  prior to actual
payment,  be subject to seizure or  sequestration  for the payment of any debts,
judgments,  alimony, or separate  maintenance owed by a Participant or any other
person,  nor be transferable by operation of law in the event of a Participant's
or any other person's bankruptcy or insolvency.

               12.5  Governing  Law.  The  provisions  of  this  Plan  shall  be
construed and interpreted according to the laws of the state of Oregon.

               12.6  Validity.  In case any provision of this Plan shall be held
illegal or invalid for any  reason,  said  illegality  or  invalidity  shall not
affect the remaining parts hereof, but this Plan shall be construed and enforced
as if such illegal and invalid provision had never been inserted herein.

               12.7  Notice.  Any notice  required or  permitted  under the Plan
shall be  sufficient  if in writing and hand  delivered or sent by registered or
certified  mail. Such notice shall be deemed as given as of the date of delivery
or, if  delivery  is made by mail,  as of the date shown on the  postmark on the
receipt for registration or certification.  Mailed notice to the Committee shall
be  directed  to the  Company's  address.  Mailed  notice  to a  Participant  or
Beneficiary  shall be directed  to the  individual's  last known  address in the
Company's records.


                                      -11-
<PAGE>

               12.8 Successors. The provisions of this Plan shall bind and inure
to the  benefit  of the  Company  and  its  successors  and  assigns.  The  term
successors as used herein shall include any corporate or other  business  entity
which shall, whether by merger,  consolidation,  purchase, or otherwise, acquire
all  or  substantially  all of the  business  and  assets  of the  Company,  and
successors of any such corporation or other business entity.



Date signed:                                 WILLAMETTE INDUSTRIES, INC.



------------------------------, 1999         By---------------------------------
                                                 Executive Vice President


                                      -12-