AMENDED AND RESTATED
                              WILLAMETTE INDUSTRIES
                            1995 LONG-TERM INCENTIVE
                                COMPENSATION PLAN


               (Amended and Restated Effective December 21, 2000)

          1.  General.   Pursuant   to  the   terms  and   conditions   of   the
WILLAMETTE  INDUSTRIES 1995 LONG-TERM INCENTIVE  COMPENSATION PLAN (the "Plan"),
hereinafter  set forth,  the  Committee  specified in Article 2 may from time to
time  grant  or award to  eligible  employees  of  Willamette  Industries,  Inc.
("Company"), and of those corporations ("Subsidiaries") in which Company owns at
least 50 percent of the total  combined  voting  power of all  classes of stock,
options to  purchase  shares of the $.50 par value  common  stock  ("Stock")  of
Company,  stock appreciation rights, and restricted Stock. In addition, the Plan
provides for the automatic grant of options to Non-Employee Directors as defined
in Article 8. Such options,  stock appreciation rights, and restricted Stock are
sometimes  referred to  collectively  as "grants and awards." The purpose of the
Plan is to motivate  special  achievement by officers and other key employees of
Company and its  Subsidiaries  by assisting  them in acquiring or  increasing an
equity interest in Company, and, in the case of Non-Employee Directors, to align
their  interest  more  closely  to  that  of  Company.   The  options  shall  be
nonqualified  stock options subject to Section 83 of the Internal  Revenue Code,
and not incentive stock options subject to Section 422A of the Internal  Revenue
Code.

          2.  Administration.  The Board  of Directors of Company  ("the Board")
shall  designate  a  Committee  of not less than two  members of the Board ("the
Committee")  who  shall  administer  the Plan and serve at the  pleasure  of the
Board.  The number and  identity  of the  members  of, and any name given to the
Committee,  may be changed  by the Board at any time and from time to time.  The
Committee may also have other  duties,  as would be the case if the Board should
designate the Company's  Compensation  and Nomination  Committee (or a successor
thereto) to act as the Committee  under the Plan. No person shall be eligible or
continue  to  serve  as a  member  of the  Committee  unless  such  person  is a
"disinterested  person"  within the meaning of Rule 16b-3 ("Rule  16b-3") of the
General  Rules and  Regulations  under the  Securities  Exchange Act of 1934, as
amended (the "Exchange Act"), or any law, rule,  regulation,  or other provision
that may  hereafter  replace  such  rule.  Also,  unless  the  Board  determines
otherwise,  members of the  Committee  must be  "outside  directors"  within the
meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended,  and
the rules  thereunder.  Subject  to the  express  provisions  of the  Plan,  the
Committee shall have full and final authority, acting in its sole discretion, to
interpret the Plan, to establish rules and regulations relating to the Plan, and
to take such  action  and make such  determinations  as the  Committee  may deem
necessary or advisable in the  administration  of the Plan.  However,  Committee
shall have no discretion as to any aspect of grants to  Non-Employee  Directors;
these grants shall be governed by Article 8. No member of the Committee shall be
liable for any action or  determination  made in good faith with  respect to the
Plan or any grant or award  made  thereunder,  nor be liable  for any good faith
reliance  upon any report or other  information  furnished  to the  Committee by
Company's officers,  its independent public accountants,  or by any other person
or entity.

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<PAGE>

          3.  Eligibility. Except as otherwise provided in Article 8,  employees
eligible to receive grants and awards under the Plan shall be such key employees
(including  officers,  regardless whether they are directors) of Company and its
Subsidiaries  as may be selected from time to time by the Committee.  Except for
the provisions in Articles 5, 6, and 7 setting a  per-employee  maximum limit on
the number of stock options,  stock appreciation rights, or shares of restricted
Stock whose vesting is based on attainment of one or more performance  goals, no
provision of the Plan shall be construed to prohibit the  Committee  from making
additional  grants or awards  under the Plan to  employees  who have  previously
received  grants or  awards.  No  provision  of the Plan shall be  construed  as
automatically  entitling an employee to a grant or award, regardless whether the
employee  has  received  a grant  or  award in a prior  year or has  attained  a
particular executive position or salary level.

          4.  Shares Subject to the Plan. Subject to Article 16 hereof,the total
number of shares of Stock  issuable  under the Plan shall not exceed  2,750,000.
For  purposes of this  limitation,  (a) any option or stock  appreciation  right
which  terminates or expires without  exercise shall thereafter be deemed not to
have been granted,  and (b) shares of restricted Stock which are forfeited shall
thereafter  be deemed not to have been  issued.  Shares of Stock  available  for
issue under the Plan shall be authorized and unissued  shares or shares acquired
by Company and held in treasury.

          5. Stock Options. The Committee may from time to time grant options to
eligible employees. Subject to appropriate adjustment pursuant to Article 16, no
employee may receive, under the Plan, stock options or stock appreciation rights
which in the aggregate would exceed 350,000 shares of Stock.  The price at which
a share of Stock may be purchased on exercise of an option shall be fixed by the
Committee  at the date of grant of such  option  and  shall not be less than the
fair market value of a share of Stock at that date.  Fair market value,  as used
in this Article 5 and elsewhere in the Plan,  shall,  unless the Committee shall
determine  otherwise,  be the  closing  price of Stock on the date the option is
granted as  reported  on the New York Stock  Exchange  for such date or, if such
closing price is not available for a date (because the date is not a trading day
or  otherwise),  for the next  preceding  date for which such  closing  price is
available.

            At the time an option is granted,  the  Committee  shall specify the
period  during  which it is not  exercisable,  and  whether  the option is to be
thereafter  exercisable  in full or in  installments.  The  Committee  may  also
specify that all the shares become exercisable no later than upon termination of
employment for certain reasons, such as death,  disability,  or retirement.  The
Committee may at any time after the grant accelerate the  exercisability  of the
option.  Options granted under the Plan shall expire not more than ten years and
two days from the date of the grant of the option as specified by the  Committee
(the "stated period of the option") at date of grant.

            No employee to whom an option is granted shall be entitled to any of
the rights of a shareholder of Company with respect to any shares covered by the
option  until  certificates  representing  such  shares  have been issued to the
employee.

            No option may be  transferred  except by will or the laws of descent
and  distribution  and,  during the lifetime of an employee to whom an option is
granted,  such option

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<PAGE>

may be  exercised  only by the  employee,  the  employee's
guardian or legal representative.  Notwithstanding the foregoing, the Committee,
in its sole discretion,  may include in the agreement  referred to in Article 12
evidencing  the grant of an option to an  employee a  provision  permitting  the
employee to transfer such option upon the terms and conditions specified in such
agreement,  provided that the foregoing  provisions of this sentence shall apply
to any  person  subject to the  reporting  provisions  of  Section  16(a) of the
Exchange  Act only to the extent  that the  exemption  given by Rule 16b-3 shall
continue to be available to the grant of such option.

            Upon  termination  of  employment  for any reason  other than death,
disability,   or  retirement  ("disability"  and  "retirement"  are  defined  in
Article 11) of an employee to whom an option has been granted, the employee may,
at any time prior to the earlier of (a) 30 days after  termination of employment
or (b) the expiration of the stated period of the option, exercise the option to
the same extent,  if any, that the option was exercisable by the employee on the
date of termination of employment under the terms of the option. Notwithstanding
the foregoing,  the Committee may in its discretion,  after giving consideration
to the  circumstances of the termination of employment of an employee to whom an
option has been  granted,  extend said 30-day  period to a period of three years
after  termination  of  employment.  The  option  shall  expire  on the  date of
termination  of  employment  to the  extent  it was  not  then  exercisable  and
otherwise  shall  expire  upon  the  earlier  of 30 days  (three  years,  if the
Committee  has extended  the period)  after  termination  of  employment  or the
expiration of the stated period of the option.

            Upon the  termination of employment by reason of death,  disability,
or retirement  of an employee to whom an option has been  granted,  the employee
(or, in case of death, any person or persons, including the legal representative
of the  employee's  estate,  to whom the option passes by will or by the laws of
descent and distribution) may, at any time prior to the expiration of the stated
period of the option,  exercise the option to the same extent,  if any, that the
option was  exercisable by the employee on the date of termination of employment
under  the  terms  of the  option.  The  option  shall  expire  on the  date  of
termination  of  employment  to the  extent  it was  not  then  exercisable  and
otherwise shall expire upon the expiration of the stated period of the option.

            Payment  upon  exercise  of an  option  shall  be made in  cash,  by
certified  check or bank  draft  payable  to the  order of  Company  or,  at the
Committee's  discretion,  in whole or in part in any other  form,  including  by
personal  check or by the  delivery  to  Company  of shares of Stock  previously
acquired by the employee or by any combination of the foregoing.

            6. Stock Appreciation  Rights.  The  Committee may from time to time
award stock  appreciation  rights to eligible  employees  and determine the base
price for each stock  appreciation right (which may be higher than, equal to, or
less than the fair  market  value of a share of Stock on the date of  award).  A
"stock  appreciation  right"  is a right to  receive  cash as  provided  in this
Article 6. Subject to appropriate adjustment pursuant to Article 16, no employee
may receive, under the Plan, stock options or stock appreciation rights which in
the aggregate would exceed 350,000 shares of Stock.

            Upon the exercise of a stock appreciation  right, the optionee shall
be entitled to the excess of the fair market  value of one share of Stock on the
date of such exercise over the base price  specified in the award  agreement for
the stock appreciation right.

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           Except as otherwise  provided in  this   Article  6,  the  terms  and
conditions  relating to exercise and  expiration  of stock  appreciation  rights
shall be as  determined  by the  Committee  under the same rules as  provided in
Article 5 for stock  options  and shall be  subject  to the same  restraints  on
transferability,  except that the exercise of stock appreciation rights shall be
subject  to such  conditions  as are  required  to  prevent  the  employee  from
incurring liability under Section 16(b) of the Exchange Act.

           7. Awards of Restricted Stock. The  Committee may  from time  to time
make awards of restricted Stock under the Plan to eligible  employees.  An award
may be either of two types:

           (a) Stock whose  vesting is based on  years of continuous  employment
after the date of award.

           (b) Stock  whose  vesting  is  based  on  attainment  of  one or more
performance goals.

            Years of  Continuous  Employment.  At the time of an award of shares
whose vesting is based on years of continuous  employment,  the Committee  shall
specify the number of  continuous  years of  employment  required  for  vesting,
except  that  full  vesting  shall  occur  no later  than  upon  termination  of
employment  by reason of death,  disability,  or  retirement  ("disability"  and
"retirement" are defined in Article 11). The Committee may at any time after the
award  accelerate the vesting as to part or all the shares awarded.  There is no
per-employee  maximum  limit on the number of shares of  restricted  Stock whose
vesting is based on years of continuous employment.

            Attainment of Goals. At the time of an award of shares whose vesting
is based on attainment of  performance  goals,  the Committee  shall specify the
performance  goal or goals  which must be  attained,  and the date by which they
must be attained,  in order to cause the shares to vest. The performance goal or
goals shall be one or more of earnings  per share,  return on equity,  return on
assets, growth in earnings, growth in sales revenue, corporate profitability, or
shareholder returns. These can be measured in comparison to the performance of a
group of peer companies selected by the Committee or based on Company's results.
Notwithstanding   the  foregoing,   full  vesting  shall  occur  upon  death  or
disability.  Also, the Committee may, in its discretion, at the time an award is
made,  specify that the shares shall become fully vested upon  retirement in the
event retirement  occurs before the attainment of the performance goal or goals.
If the  specified  performance  goal  or  goals  are  not met  within  the  time
specified,  the  nonvested  shares  subject  to such  goal  or  goals  shall  be
forfeited. Furthermore, upon termination of employment for any reason other than
death,  disability,  or (in those cases where the Committee  has specified  full
vesting on retirement) retirement of an employee to whom an award has been made,
any  nonvested  shares shall be  forfeited.  Subject to  appropriate  adjustment
pursuant to Article  16, no  employee  may  receive,  under the Plan,  more than
50,000  shares of  restricted  Stock  whose  vesting is based on  attainment  of
performance goals.

            General  Provisions.  While the shares are not vested,  the employee
shall  have all the  rights of a  shareholder  of  Company  as to the  nonvested
shares, except that the shares may not be sold, assigned, transferred,  pledged,
or  otherwise  encumbered.  Certificates  representing

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<PAGE>

awarded  shares shall be registered in the name of the employee but held (with a
stock power endorsed in blank) by Company until the shares have vested, at which
time they shall be  delivered to the  employee or legal  representative  free of
restrictions.

            The Committee may, in its discretion,  provide that a portion of the
award of  restricted  Stock shall be made in cash rather than  shares.  Any such
cash  shall be payable at the same time or times as the shares to which the cash
relates  become vested.  If shares are  forfeited,  the related amount of unpaid
cash shall also be forfeited.

            8. Non-Employee  Directors.  Grants  shall be made to members of the
Board  who  are  not  employees  of  Company  or any  Subsidiary  ("Non-Employee
Directors")  only under this Article 8. No person,  including the members of the
Board  or the  Committee,  shall  have any  discretion  as to the  selection  of
eligible recipients or the determination of the type, amount, or terms of grants
pursuant to this Article 8. The persons  eligible to receive grants  pursuant to
this Article 8 are all Non-Employee Directors.

            Initial Options.  Upon the date of approval of the Plan by Company's
shareholders  (the  "Approval  Date"),  each  person who is then a  Non-Employee
Director  shall be  automatically  granted an option (a  "Director  Option")  to
purchase 1,000 shares of Stock. Each person who becomes a Non-Employee  Director
after the Approval Date shall be automatically  granted, on the date such person
becomes a Non-Employee  Director,  an initial  Director Option to purchase 2,000
Shares; provided, however, that a director who was at any time an officer of the
Company  or any  Subsidiary  shall  not be  entitled  to a grant of the  initial
Director Option.

            Annual  Options.  Upon the date of each annual  meeting of Company's
shareholders  beginning  with the  meeting  in 2001,  each  person who is then a
Non-Employee  Director and who is to continue as a member of the Board following
the  annual  meeting,  and  without  regard  to how long the  person  has been a
Non-Employee  Director or whether the person had ever been an officer of Company
or any Subsidiary,  shall be automatically  granted an annual Director Option to
purchase 2,000 shares of Stock.

            Option Price.  The  option  price for  all Director Options shall be
the fair market value of a share of Stock at the date of grant.

            Option  Agreements.  Each grant of Director Options made pursuant to
this  Article  8 shall be  governed  by and  shall be  subject  to the terms and
conditions set forth in an Option  Agreement in the form attached to the Plan as
Exhibit A. Except to the extent otherwise  provided in this Article 8 or in such
Option  Agreement,  each such grant shall be  governed by the Plan's  provisions
relating to the grant of options to, and the exercise of options by, employees.

            9. Change in Control.

            Definition of Change in Control. For purposes of the Plan, a "Change
in Control" of Company means:

            (a) The   acquisition   by  any  individual,   corporation,  limited
liability company, partnership, trust, group, association, or other "person," as
such term is used in Section 13(d)(3) or 14(d) of the Securities Exchange Act of
1934 (the "Exchange Act") (any "Person") (or by any

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group of Persons that would  constitute a "group" for purposes of Section  13(d)
and Rule 13d-5  under the  Exchange  Act) of  beneficial  ownership  (within the
meaning of Rule 13d-3  promulgated  under the Exchange Act), other than a Person
or group that acquires such beneficial  ownership  solely because such Person or
group has voting  power with  respect to any issued and  outstanding  securities
ordinarily  having  the  right  to vote at  elections  of  Company's  directors,
including without limitation shares of Stock ("Voting  Securities") arising from
a revocable  proxy or consent  given in  response  to a public  proxy or consent
solicitation made pursuant to the Exchange Act (as in effect from time to time),
of 20  percent  or more of the  combined  voting  power of the then  outstanding
Voting Securities;  provided,  however, that for purposes of this paragraph (a),
the  following  acquisitions  will not  constitute a Change in Control:  (A) any
acquisition  directly  from  Company;  (B)  any  acquisition  by  Company  or  a
Subsidiary,  (C) any acquisition by any employee benefit plan (or related trust)
sponsored  or  maintained  by  Company or any corporation controlled by Company,
(D) any acquisition by any corporation  pursuant to a transaction which complies
with clauses (A), (B), and (C) of paragraph (c) below, or (E) any acquisition by
any Person who is a party to an  agreement  (a "New  Stand-Together  Agreement")
similar  to  the  former  Shareholder  Stand-Together   Agreement  dated  as  of
January   21,  1985  (the   "Former   Stand-Together   Agreement"),   which  New
Stand-Together Agreement (1) provides for unified action by Persons who have, or
whose families have,  historically held substantial amounts of Company Shares in
the event of a  threatened  change of  control  and (2) which has as  parties at
least ten shareholders of Company who were parties to the Former  Stand-Together
Agreement, but only while such Person remains a party to such New Stand-Together
Agreement; or

          (b)  Individuals who, as of December  21, 2000,  the date the plan was
amended  and  restated  (the  "Restatement  Date"),  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 subsequent to
the  Restatement  Date whose  election,  or nomination for election by Company's
shareholders,  was approved by a vote of at least  two-thirds  of the  directors
then comprising the Incumbent Board will 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
or other  actual or  threatened  solicitation  of proxies or  consents  by or on
behalf of a Person other than the Board; or

          (c) Consummation of a reorganization, merger, or consolidation or sale
or other  disposition  of all or  substantially  all of the assets of Company (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 of the Voting  Securities  outstanding  immediately
prior to such Business  Combination  beneficially  own,  directly or indirectly,
more than 50  percent  (66 2/3  percent  if  Company  is not the  continuing  or
surviving   corporation   resulting   from  such   Business   Combination)   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,  as the case may be, of the  corporation
resulting  from such Business  Combination  (including,  without  limitation,  a
corporation  that  as a  result  of  such  transaction  owns  Company  or all or
substantially  all of Company's  assets  either  directly or through one or more
subsidiaries)  in  substantially   the  same  proportions  as  their  ownership,
immediately prior to such Business Combination, of the Voting Securities, (B) no
Person

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(excluding  any  employee  benefit  plan (or  related  trust) of Company or such
corporation  resulting  from  such  Business  Combination)   beneficially  owns,
directly  or  indirectly,  20  percent  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 existed
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  Incumbent  Board at the earlier of the time of
the  execution  of  the  initial   agreement   with  respect  to  such  Business
Combination,  or of  the  action  of  the  Board  providing  for  such  Business
Combination; or

          (d) Approval by  the shareholders  of Company of any  plan or proposal
for the liquidation or dissolution of Company.

          Definition of Unapproved  Change in Control. For purposes of the Plan,
an "Unapproved  Change in Control" means an event or series of events that would
constitute a change in control under the Plan prior to its  amendment  effective
December 21, 2000.

          Effect of a Change in Control.  Subject  to the  limitation  set forth
in Article 10 of the Plan,  if any  Change in  Control or  Unapproved  Change in
Control occurs:

          (a) All options and stock  appreciation rights  previously  granted or
awarded which are not fully  exercisable  shall become  exercisable in full upon
the date of such occurrence; provided that for any Change in Control that is not
an Unapproved Change in Control, the Committee may, in its discretion, condition
such vesting on the  employee's  agreement to accept a cash amount (based on the
amount being received by Company  shareholders  in connection with the Change in
Control)  in  exchange  for  cancellation  of the  applicable  option  or  stock
appreciation right.

          (b)  Notwithstanding  the  provisions  of  Articles 5 or 6 relating to
the  expiration  of options and stock  appreciation  rights in  connection  with
termination of employment,  upon termination of employment for any reason (other
than by reason of conduct  which  constitutes  a felony under federal law or the
law of the state in which the  employee  resides)  within  the  two-year  period
following the occurrence of the Change in Control,  the option and rights may be
exercised at any time prior to the earlier of (i) three years after  termination
of employment or (ii) the expiration of the stated period of the option.

          (c) All  shares of  restricted Stock previously  awarded which are not
vested shall become vested upon the date of such occurrence.

          Effect of Unapproved Change in  Control.  If an  Unapproved  Change in
Control occurs:

          (a) All options and stock appreciation  rights that were granted prior
to December 21, 2000,  and become  exercisable in full pursuant to the foregoing
provisions  under  "Effect of a Change in Control"  shall remain so  exercisable
until the earlier of (A) three years after the date of such  occurrence,  or (B)
the  expiration  of the  stated  period  of the  option.  After  the  end of the
three-year  period,  the options and rights shall revert to being exercisable in
accordance with their terms,  although no option or rights which have previously
been exercised or otherwise terminated shall become exercisable. Notwithstanding
the foregoing, no stock appreciation rights may be exercised

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within six months of the date of award of the rights.

          (b)  Each employee (including those who are not officers)  holding  an
unexercised  option that was granted prior to December 21, 2000,  and regardless
whether the option is then otherwise fully exercisable, may make a cash exercise
of all or any  portion of the option in lieu of the  purchase of Stock under the
option.  A cash  exercise  may be made,  without  any  payment  to  Company,  by
surrendering  unexercised the option or any portion thereof.  Upon such exercise
and surrender,  the optionee shall be entitled to receive cash (less  applicable
withholding taxes) in an amount equal to the excess of the aggregate fair market
value of the shares of Stock  covered by the  option,  or the  relevant  portion
thereof,  on the date of such exercise and surrender over the aggregate exercise
price of such Stock under the option.  The cash exercise may be made only during
the period  beginning on the first day  following  the date on which Company has
actual knowledge of the actual occurrence of the Change in Control and ending on
the 45th  day  following  such  date.  Notwithstanding  the  foregoing,  no cash
exercise may be made by an officer (as defined  under Section 16 of the Exchange
Act) of Company within six months of the date of grant of the option and no cash
exercise may be made by any optionee  after the  expiration of the stated period
of the option.

          10. Effect on Pooling.  Notwithstanding  any other provisions of  this
Plan,  upon the  occurrence  of any Change in Control that is not an  Unapproved
Change in Control,  the exercisability of options or stock  appreciation  rights
and the vesting of restricted stock will not be accelerated  pursuant to Article
9 of the Plan if and to the extent  necessary (as  reasonably  determined by the
Board) to preserve "pooling of interest" financial  accounting  treatment of any
business transaction.

          11. Disability;  Retirement. Except as otherwise provided in Exhibit A
for  Non-Employee  Directors,  "disability" for purposes of this Plan shall have
the same  meaning  as "total  and  permanent  disability"  under the  Willamette
Industries,  Inc., and Associated Companies Salaried Employees'  Retirement Plan
(regardless  whether  the  employee  is covered by such  Retirement  Plan),  and
"retirement" shall mean:

          (a) Termination  of  employment  at  or  after  attainment  of age 62,
provided the employee has (or would have, if covered by such Retirement Plan) at
least ten vesting credits as defined under such Retirement Plan, or

          (b) Termination  of  employment  at  or  after  attainment  of age 65,
regardless of the number of such vesting credits, if any.

          12.  Agreement.  Each employee  to whom a grant or award is made under
the Plan shall execute an  appropriate  agreement  with respect to such grant or
award referring to the terms and conditions thereof and of the Plan. The form of
agreements  may be  changed  from time to time and need not be  identical  among
those receiving the grants or awards.

          13. Withholding Taxes. Company shall have the right to deduct from all
cash payments made under the Plan any federal, state, or local taxes required by
law to be withheld  with respect to such cash  payments,  and, in the event such
cash payments are insufficient to

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cover the required  withholding,  the employee or other  person  receiving  such
payment may be required to pay to Company the  additional  amount  necessary for
this purpose.  In the case of an exercise of an option or an award of restricted
Stock,  the  employee  or other  person  exercising  such  option or  taxable in
connection  with such award may be  required to pay to Company the amount of any
such taxes that Company is required to withhold with respect to such exercise or
award.  Company  shall  also have the right to deduct  any such  taxes  from the
shares  that  would  otherwise  be  issued to or vest in the  employee  or other
person.

          The Committee  may, in its  discretion,  allow  the employee or  other
person  to make the  required  payment  to  Company  by  delivery  of  shares of
previously acquired Stock.

          14.  Employment.  Nothing  contained  in the Plan or in  any  grant or
award under the Plan shall  confer upon any  employee  any right with respect to
the  continuation of employment with Company or its Subsidiaries or interfere in
any way  with  the  right  of  Company  or its  Subsidiaries  to  terminate  the
employee's  employment at any time.  Nothing  contained in the Plan shall confer
upon any employee or other person any claim or right to any grant or award under
the Plan.

          15. Governmental Compliance. Each grant and award under the Plan shall
be subject to the requirement that, if at any time the Committee shall determine
that  the  listing,  registration,  or  qualification  of  any  shares  issuable
thereunder  upon any  securities  exchange or under any federal or state law, or
the consent or approval of any governmental or self-regulatory body is necessary
or desirable as a condition thereof, or in connection  therewith,  no such grant
or award may be exercised or shares issued  unless such  listing,  registration,
qualification, consent, or approval shall have been effected or obtained free of
any conditions not acceptable to the Committee.

          16.   Adjustments.   The  right  and   power  of  Company  to  provide
for reclassifications,  reorganizations,  recapitalizations, stock splits, stock
dividends,  combination of shares, merger, consolidation, or any other change in
the capital structure or shares of Company shall not be affected by the Plan. In
the  event of any  such  action,  the  Committee  or the  Board  may  make  such
adjustments,  if  any,  as it may  deem  appropriate  in the  number  of  shares
available  for grants and awards under the Plan,  that may be granted or awarded
to an individual  employee or  Non-Employee  Director,  and to grants and awards
made under the Plan.

          17.  Expenses. The expenses of  administering  the Plan shall be borne
by Company.

          18.  Termination.  No grants or  awards  under the Plan  shall be made
after April 27, 2005, or such earlier date as the Board may determine.

          19. Successors  and  Assigns.  The  provisions  of   the   Plan  (and
interpretations and determinations made by the Committee pursuant thereto) shall
be conclusive and binding upon Company and its  Subsidiaries,  their  successors
and assigns,  and upon each employee  receiving  grants or awards under the Plan
and the employee's heirs, successors, and assigns.

          20. Amendment.   The  Plan  may  be  amended  by the Board as it deems
advisable, provided that no such amendments shall adversely affect the rights of
participants to

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<PAGE>

whom grants and awards  under the Plan shall have been made  without the consent
of the participants  affected thereby,  nor shall the Board, without approval of
Company's shareholders:

          (a) Except as provided in Article 16, increase the number of shares of
Stock that are  subject to the Plan or the number of shares that may be received
by any one employee;

          (b) Extend the period  during  which  grants and awards under the Plan
may be made;

          (c) Otherwise   materially   increase   the   benefits   accruing   to
participants under the Plan;

          (d) Amend the  requirements  of  the Plan in respect of eligibility to
receive grants and awards under the Plan; or

          (e) Establish  the  price  at  which  shares  may  be purchased on the
exercise  of an option at less  than the fair  market  value of the Stock at the
time the option is granted.

     The provisions of Article 8 of the Plan shall not be amended more than once
every six months,  other than to comport with  changes in the  Internal  Revenue
Code or in Rule 16b-3 under the Exchange Act.

     Willamette has adopted this Plan effective as of December 21, 2000.


                                     By:
                                         -------------------------------
                                         Executive Vice President and
                                         Chief Financial Officer

                                       -10-