WILLAMETTE INDUSTRIES, INC.
                           1986 STOCK OPTION AND STOCK
                            APPRECIATION RIGHTS PLAN
                                   AS AMENDED

         1.  General.  Pursuant to the terms and  conditions  of the  WILLAMETTE
INDUSTRIES,  INC.,  1986 STOCK  OPTION AND STOCK  APPRECIATION  RIGHTS 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 (shares of Stock which
are awarded subject to restrictions  during the vesting  period).  Such options,
stock appreciation rights, and restricted Stock are sometimes referred to herein
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.  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 three  members of the Board ("the
Committee")  who  shall  administer  the Plan and serve at the  pleasure  of the
Board.  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.  All members of the
Committee shall be disinterested persons. For the purposes of the Plan, a member
of the Committee shall be a  "disinterested  person" only if such member is not,
at the time any action is taken  with  regard to the Plan,  eligible  to receive
grants and awards under the Plan,  and has not at any time within one year prior
thereto been so eligible.  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.  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.

         3. Eligibility.  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.  Any such key  employee  shall be eligible to receive
grants of options to purchase  Stock and awards of  restricted  Stock,  but only
officers shall be eligible to receive awards of stock  appreciation  rights.  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



                                                      A-1




<PAGE>



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 13 hereof, the total
number of shares of Stock issuable under the Plan shall not exceed 1,500,000, of
which no more than 250,000 may be issued as  restricted  Stock.  For purposes of
these  limitations,  (a) shares  previously issued (or that may be issued in the
future)  on the  exercise  of  options  granted  prior  to  this  amendment  and
restatement shall reduce the 1,500,000 maximum limitation,  (b) any option which
terminates  or  expires   without   exercise  and  without   exercise  of  stock
appreciation  rights (and without the making of a cash exercise under Article 8)
related to that option shall thereafter be deemed not to have been granted,  and
(c) 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
under the Plan to eligible employees. 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
NASDAQ  national  market  system for such date or, if such closing  price is not
available for a date (because the date is not a trading date 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 at any time
after the grant accelerate the exercisability of the option. Notwithstanding the
foregoing,  no portion of an option covered by related stock appreciation rights
may be exercised  within six months of the date of grant.  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 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 may be  exercised  only by the  employee,  the  employee's
guardian or legal representative.

         Upon  termination  of  employment  for any  reason  other  than  death,
disability,  or retirement ("disability" and "retirement" are defined in Article
8A) of an employee to whom an option has been granted,  the employee may, at any
time prior to the earlier of (a) 30 days



                                                      A-2




<PAGE>



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 earlier of (a) three
years 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.  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  three  years  after  termination  of  employment  or 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, at the time of grant
of an  option,  or at such  later  date  during  the term of the  option  as the
Committee  may  determine,  make  an  award  of  stock  appreciation  rights  in
conjunction with the option. A "stock  appreciation right" is a right to receive
cash as provided in this  Article 6. The  maximum  number of stock  appreciation
rights  that may be awarded to an optionee is 50 percent of the number of shares
of Stock covered by the related option. Any exercise of the related option shall
reduce the number of stock appreciation rights available for exercise.  For each
one share of Stock covered by the exercise of the related option,  the number of
stock  appreciation  rights  shall  be  reduced  by  50  percent  of  one  stock
appreciation right (except that, if the number of stock appreciation rights that
had been  awarded  to the  optionee  is a  lesser  percentage  than the  maximum
allowable 50 percent of the number of shares covered by the related option, then
the  reduction  shall  be  limited  to  such  lesser  percentage  of  one  stock
appreciation right).

         A stock appreciation right may be exercised only at the same time as an
exercise of the related option. The maximum number of stock appreciation  rights
that can be then  exercised is 50 percent of the number of shares of Stock to be
purchased  at that time under the option  (except  that,  if the number of stock
appreciation rights that had been awarded to



                                                      A-3




<PAGE>



the optionee is a lesser percentage than the maximum allowable 50 percent of the
number of shares covered by the related option, then the maximum number of stock
appreciation  rights that can be then exercised shall be such lesser  percentage
of the  number  of  shares  of Stock to be  purchased).  Any  exercise  of stock
appreciation  rights shall  reduce the number of shares of Stock  covered by the
related option. For each one stock  appreciation right exercised,  the number of
shares shall be reduced by two (unless the number of stock  appreciation  rights
that had been  awarded to the optionee is a lesser  percentage  than the maximum
allowable 50 percent,  in which case the  reduction  shall be a  correspondingly
higher number of shares).

         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 purchase price per share specified in the related
option, multiplied by the number of stock appreciation rights so exercised.

         Except as  otherwise  provided  in this  Article 6, stock  appreciation
rights shall be  exercisable  and expire on the same terms and conditions as the
options to which they  relate  and shall be  subject to the same  restraints  on
transferability, except that stock appreciation rights shall be exercisable only
during such periods as may be permissible  without causing the employee to incur
liability  under Section 16(b) of the Securities  Exchange Act of 1934, and if a
termination  of employment  occurs by reason of discharge for cause or voluntary
resignation the employee's stock appreciation rights shall expire on the date of
termination of employment.

         6A.  Awards of  Restricted  Stock.  The Committee may from time to time
make awards of restricted Stock under the Plan to eligible employees.

         At the time an award is made,  the Committee  shall specify the waiting
period or periods during which the shares are not vested.  The vesting of shares
may be dependent on a period of  subsequent  employment,  on the  attainment  of
performance  goals,  or both.  The  Committee  may at any time  after  the award
accelerate the vesting as to part or all the shares awarded.

         During the waiting period,  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 awarded shares shall be registered in the name of the
employee but held (with a stock power  endorsed in blank) by Company  during the
vesting period.

         The  shares  shall  vest  and be  delivered  to the  employee  or legal
representative  free of  restrictions  at the end of the original or accelerated
vesting  period,  upon the  attainment  of  specified  performance  goals or, if
earlier, upon death,  disability,  or retirement  ("disability" and "retirement"
are defined in Article 8A).

         Upon  termination  of  employment  for any  reason  other  than  death,
disability,  or  retirement  of an employee to whom an award has been made,  any
nonvested shares shall be



                                                      A-4




<PAGE>



forfeited. If any performance criteria are not met within the time specified for
such criteria, the nonvested shares subject to such criteria shall be forfeited.

         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.

         7. Change in  Control.  For  purposes of the Plan,  "change in control"
means the  occurrence of any of the  following  events  without  approval by the
affirmative  vote of at least two  thirds of those  members of the Board who (i)
are  members  of the  Board  immediately  prior to the  event,  and (ii) are not
employees of Company or a Subsidiary:

                  (a) The merger or  consolidation  of Company with, or the sale
         of all or  substantially  all the assets of  Company  to, any person or
         entity or group of associated persons or entities.

                  (b) The attainment of direct or indirect beneficial  ownership
         of securities of Company which in the aggregate represent 20 percent or
         more of the total  combined  voting power of Company's  then issued and
         outstanding  securities  by any person or entity or group of associated
         persons or entities acting in concert who is not affiliated (within the
         meaning of the  Securities Act of 1933) with Company as of February 13,
         1986;  provided,  however,  the Board may at any time in its discretion
         increase the 20 percent requirement but not beyond 40 percent.

                  (c) The approval by the shareholders of Company of any plan or
         proposal for the liquidation or dissolution of Company.

         A change in control  shall also be deemed to occur upon a change in the
membership of the Board at any time during any consecutive  24-month period such
that the  "continuity"  directors cease for any reason to constitute at least 70
percent of the Board.  The  continuity  directors are those members of the Board
who were either (i) members of the Board at the  beginning  of such  consecutive
24-month period, or (ii) elected by, or on the nomination or recommendation  of,
at least two thirds of the members of the Board.

         If a change in  control  occurs,  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 and 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, neither stock appreciation rights nor the portion
of the related option covered by the stock



                                                      A-5




<PAGE>



appreciation  rights may be exercised  within six months of the date of award or
grant of the rights or option.

         Notwithstanding  the  provisions  of  Articles 5 and 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 a change in control,  the option and rights may be
exercised at any time prior to the earlier of (a) three years after  termination
of employment or (b) the expiration of the stated period of the option.

         If  a  change  in  control  occurs,  all  shares  of  restricted  Stock
previously  awarded  which are not vested shall  become  vested upon the date of
such occurrence.

         8. Right to Receive Cash on Change in Control.  If a change in control,
as defined in Article 7,  occurs,  each  employee  (including  those who are not
officers) holding an unexercised  option,  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 (and any related stock appreciation rights) 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  of  Company  or its
Subsidiaries  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.

         8A.  Disability;  Retirement.  "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).  With  respect  to grants  and  awards  made on or after  August 9, 1990,
"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.




                                                      A-6




<PAGE>



         9. Employee  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.

         10. 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 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.

         11. 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.

         12. 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.

         13.  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 and to grants and awards  made
under the Plan.




                                                      A-7




<PAGE>


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

         15. Termination. No grants or awards under the Plan shall be made after
April 14, 1996, or such earlier date as the Board may determine.

         16.   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.

         17.  Amendment.  The  Plan  may be  amended  by the  Board  as it deems
advisable, provided that no such amendments shall adversely affect the rights of
employees  to whom grants and awards under the Plan shall have been made without
the consent of the  employees  affected  thereby,  nor shall the Board,  without
approval of Company's shareholders:

                  (a) Except as provided in Article 13,  increase  the number of
         shares of Stock that are subject to the Plan;

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

                  (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 or to exercise 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.



                                                      A-8