Potlatch Forest Products Corporation Severance Program for Executive Employees



 Exhibit 10(b) 
 POTLATCH FOREST PRODUCTS CORPORATION 
 SEVERANCE PROGRAM FOR EXECUTIVE EMPLOYEES 
 Effective January 1, 2005 
 Amended and Restated as of April 4, 2007 







 POTLATCH FOREST PRODUCTS CORPORATION 
 SEVERANCE PROGRAM FOR EXECUTIVE EMPLOYEES 
 Effective January 1, 2005

 Amended and Restated as of April 4, 2007 
 SECTION 1. ADOPTION AND PURPOSE OF PROGRAM. 
 The Potlatch Forest Products Corporation
Severance Program for Executive Employees, formerly known as the Potlatch Corporation Severance Program for Executive Employees (the “Program”) was adopted effective September 30, 1978, by Potlatch Corporation and was assumed by
Potlatch Forest Products Corporation (the “Corporation”) effective December 30, 2005, to provide a program of severance payments to certain employees of Potlatch Corporation, the Corporation, and their designated subsidiaries. The
Program was amended effective January 1, 2005 to comply with Section 409A of the Code. The Program was last amended and restated effective as of May 24, 2005, to read as set forth herein. The Program is an employee welfare benefit
plan within the meaning of section 3(1) of ERISA and section 2510.3-1 of the regulations issued thereunder. The plan administrator of the Program for purposes of ERISA is the Corporation. 
 SECTION 2. DEFINITIONS 
 (a) “Base
Compensation” means an Eligible Employee’s base rate of pay as in effect at the time the Eligible Employee Separates from Service, or, if greater, the rate in effect at the time the material change described in Section 5(a)(iv)
occurs or the time a Change of Control described in Section 5(b) occurs, if applicable. An Eligible Employee’s base rate of pay shall be determined without reduction for (i) any Deferred Contributions made by the Eligible Employee
pursuant to the Potlatch Corporation Salaried Employees’ Savings Plan or (ii) any contributions made by the Eligible Employee pursuant to the Potlatch Corporation Custom Benefits Plan 
  

 2 








 (b) “Board” means the Board of Directors of Potlatch Corporation. 
 (c) “Change of Control” means the effective date of any one of the following events but only to the extent that such change in control
transaction is a change in the ownership or effective control of Potlatch Corporation or a change in the ownership of a substantial portion of the assets of Potlatch Corporation as defined in the regulations promulgated under Section 409A of
the Code: 
 (i) Upon consummation of a reorganization, merger or consolidation involving Potlatch Corporation (a
“Business Combination”), in each case, unless, following such Business Combination, (A) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the then outstanding shares of Common
Stock (the “Outstanding Common Stock”) and the then outstanding voting securities of Potlatch Corporation entitled to vote generally in the election of directors (the “Outstanding Voting Securities”) immediately prior to such
Business Combination beneficially own, directly or indirectly, more than 50% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the
election of directors of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns Potlatch Corporation either directly or through one or more subsidiaries),
(B) no Person (as defined in Section 2(b)(iii) below) (excluding any corporation resulting from such Business Combination or any employee benefit plan (or related trust) sponsored or maintained by Potlatch 

  

 3 








 
Corporation or such other corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 30% or more of, respectively, the
then outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership is based on the
beneficial ownership, directly or indirectly, of Outstanding Common Stock or Outstanding Voting Securities immediately prior to the Business Combination and (C) at least a majority of the members of the board of directors of the corporation
resulting from such Business Combination were members of the Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or 
 (ii) On the date that individuals who, as of May 19, 2006 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 May 19, 2006 whose election, or nomination for election by Potlatch Corporation’s stockholders, was approved by a vote
of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office
occurs as a result of an actual or threatened election contest with respect to the election or removal of directors, an actual or threatened solicitation of proxies or consents or any other actual or threatened action by, or on behalf of any Person
other than the Board; or 
 (iii) Upon the acquisition after May 19, 2006 by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 

  

 4 








 
1934, as amended (the “Exchange Act”)) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 30% or more of either (A) the then Outstanding Common Stock or (B) the combined voting power of the Outstanding Voting Securities; provided, however, that the following acquisitions shall not be deemed to be covered by
this Section 2(b)(iii): (x) any acquisition of Outstanding Common Stock or Outstanding Voting Securities by Potlatch Corporation, (y) any acquisition of Outstanding Common Stock or Outstanding Voting Securities by any employee benefit
plan (or related trust) sponsored or maintained by Potlatch Corporation or (z) any acquisition of Outstanding Common Stock or Outstanding Voting Securities by any corporation pursuant to a transaction which complies with clauses (A),
(B) and (C) of Section 2(b)(i); or 
 (iv) Upon the consummation of the sale of all or substantially all of the
assets of Potlatch Corporation or approval by the stockholders of Potlatch Corporation of a complete liquidation or dissolution of Potlatch Corporation. 
 (d) “COBRA” means the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended. 
 (e) “Code” means the Internal Revenue Code of 1986, as amended. 
 (f) “Committee” means the
Executive Compensation and Personnel Policies Committee of the Board of Directors of Potlatch Corporation. 
 (g)
“Corporation” means Potlatch Forest Products Corporation and its affiliates. 
 (h) “Eligible Employee”
means a Principal Officer or other employee who participates in the Program. 
  

 5 








 (i) “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

 (j) “Identification Date” means each December 31. 
 (k) “Key Employee” means an Eligible Employee who, on an Identification Date, is: 
 (A) An officer of the Corporation having annual compensation greater than the compensation limit in Section 416(i)(1)(A)(i) of the
Code, provided that no more than fifty officers of the Corporation shall be determined to be Key Employees as of any Identification Date; 
 (B) A five percent owner of the Corporation; or 
 (C) A one percent owner of the Corporation
having annual compensation from the Corporation of more than $150,000. 
 If an Eligible Employee is identified as a Key Employee on an
Identification Date, then such Eligible Employee shall be considered a Key Employee for purposes of the Plan during the period beginning on the first April 1 following the Identification Date and ending on the next March 31. 
 (l) “Misconduct” means that the Eligible Employee 
 (A) Has been convicted of any felony or crime involving fraud, dishonesty or moral turpitude; 
 (B) Has engaged in unfair competition with a Participating Company or any successor to a Participating Company; 
  

 6 








 (C) Has induced any customer of a Participating Company or any successor to a
Participating Company to breach any contract with a Participating Company or any successor to a Participating Company; 
 (D)
Has made any unauthorized disclosure of any of the secrets or confidential information of a Participating Company or any successor to a Participating Company; 
 (E) Has committed an act of embezzlement, fraud or theft with respect to the property of a Participating Company or any successor to a
Participating Company; or 
 (F) Has engaged in conduct, including any intentional, material violation of any contractual or
statutory duty that is not corrected following thirty (30) days written notice, which is not in good faith and which directly results in material loss, damage or injury to the business, reputation or employees of a Participating Company or any
successor to a Participating Company. 
 (m) “MPAP” means the Potlatch Corporation Management Performance Award Plan or its
successor the Potlatch Corporation Management Performance Award Plan II, as in effect from time to time. 
 (n) “Normal Retirement
Date” means “normal retirement date” as determined under the Retirement Plan. 
 (o) “Participating
Company” means Potlatch Corporation, the Corporation and their subsidiaries designated by the Committee to participate in the Program. 
 (p) “Present Value” means the present value calculated using the assumed discount rate applied in projecting the Corporation’s pension benefit obligations for financial reporting purposes and the RP 2000 mortality
table. 
  

 7 








 (q) “Principal Officers” means the president and chief executive officer, secretary,
treasurer and controller and any elected vice-president of a Participating Company. 
 (r) “Program” means the Potlatch
Forest Products Corporation Severance Program for Executive Employees, formerly known as the Potlatch Corporation Severance Program for Executive Employees. 
 (s) “Reduction in Authority or Responsibility” means 
 (A) The assignment to
the Eligible Employee of any duties that are materially inconsistent in any respect with the Eligible Employee’s position (which may include status, offices, titles and reporting requirements), authority, duties, or responsibilities as in
effect immediately prior to such assignment, or 
 (B) Any other action by a Participating Company or any successor to a
Participating Company which results in a material diminution in such position, authority, duties, or responsibilities, excluding for this purpose (i) an isolated, insubstantial, and inadvertent action taken in good faith and which is remedied
by the Corporation promptly after receipt of notice thereof given by the Eligible Employee, or (ii) any temporary Reduction in Authority or Responsibility while the Eligible Employee is absent from active service on any approved disability, or
other approved leave of absence. 
 By way of example, a reduction under this definition shall include, but not be limited to: 
 (I) The removal of any material division, business or operating unit, or other business organization from the direct managerial
responsibilities of the Eligible Employee, or material reduction in the size or scope of responsibility or operating budget of any division, business, operating unit, or other business organization for which the Eligible Employee has direct
managerial responsibility; or 
  

 8 








 (II) A reduction in the Eligible Employee’s authority to legally bind a
Participating Company or any successor to a Participating Company without first obtaining any additional authority or approval. 
 (t)
“Retirement Plan” means the Potlatch Forest Products Corporation Salaried Employees’ Retirement Plan as in effect from time to time. 
 (u) “Review Panel” means the review panel described in Section 11. 
 (v)
“Salaried Employees’ Savings Plan” means the Potlatch Forest Products Corporation Salaried Employees’ Savings Plan as in effect from time to time. 
 (w) “Separation from Service” means termination of an Eligible Employee’s employment as a common-law employee of a Participating
Company. A Separation from Service will not be deemed to have occurred if an Eligible Employee continues to provide services to a Participating Company in a capacity other than as an employee and if the former Eligible Employee is providing services
at an annual rate that is fifty percent or more of the services rendered, on average, during the immediately preceding three full calendar years of employment with the Participating Company (or if employed by the Participating Company less than
three years, such lesser period) and the annual remuneration for such services is fifty percent or more of the annual remuneration earned during the final three full calendar years of employment (of if less, such lesser period); provided, however,
that a Separation from Service will be deemed to have occurred if an Eligible Employee’s service with the Participating Company is reduced to an annual rate that is less than twenty percent of the services rendered, on average, during the
immediately preceding three full calendar years of employment with the Participating Company (or if employed by the Participating Company less than three years, such lesser period) or the annual remuneration for such services is less than twenty
percent of the annual remuneration earned during the three full calendar years of employment with the Participating Company (or if less, such lesser period). 
  

 9 








 (x) “Supplemental Plans” means the Potlatch Forest Products Corporation Salaried
Employees’ Supplemental Benefit Plan and its successor the Potlatch Forest Products Corporation Salaried Employees’ Supplemental Benefit Plan II. 
 (y) “Year of Vesting Service” means a year of vesting service as determined under the Retirement Plan. 
 SECTION 3. ELIGIBILITY AND DETERMINATION OF VESTING SERVICE. 
 All Principal Officers and appointed vice presidents of
the Participating Companies and such other employees of the Participating Companies who are designated by the Committee to participate in the Program shall be eligible to participate in the Program. As a condition to participation in the Program,
each Eligible Employee shall agree in writing to become bound by its terms, including, without limitation, the provisions of Section 11. 
 SECTION
4. SEVERANCE BENEFITS. 
 (a) Basic Severance Benefits. Upon the occurrence of any of the events specified in
Section 5(a), an Eligible Employee shall receive (in lieu of any other severance benefit payable under any other plan or program now or hereafter maintained by a Participating Company) Basic Severance Benefits under the Program as follows:

 (i) A cash benefit equal to three (3) weeks of the Eligible Employee’s Base Compensation for each full Year of
Vesting Service completed by such Eligible Employee; 
  

 10 








 (ii) The Eligible Employee’s unused and accrued vacation pay, if any, determined as
of the date when the Eligible Employee Separates from Service under the terms of the Participating Company’s officer vacation policy as in effect when the applicable event specified in Section 5(a) occurs (which, in the case of Separation
from Service pursuant to Section 5(a)(iv), shall be the date of the material change rather than the date the Eligible Employee Separates from Service); 
 (iii) Eligibility for an “Award” under the MPAP for the “Award Year” in which he or she Separates from Service,
determined under all the terms and conditions of the MPAP; and 
 (iv) Continued coverage as an employee during a period of
weeks equal to three (3) times the number of full Years of Vesting Service completed by the Eligible Employee, under the following employee benefit plans of the Corporation: 
 (A) Medical coverage in the amount, if any, that the Eligible Employee had in effect on the day preceding the date of his or her
Separation from Service; 
 (B) Dental coverage in the amount, if any, that the Eligible Employee had in effect on the day
preceding the date of his or her Separation from Service; and 
 (C) Basic life insurance coverage in the amount, if any, that
the Eligible Employee had in effect on the day preceding the date of his or her Separation from Service. 
 Notwithstanding any of the foregoing provisions
of this Section 4(a)(iv): 
 (I) Any such continued coverage shall terminate when the Eligible Employee becomes eligible
for coverage by the life insurance, medical or dental plan of another employer. 
  

 11 








 (II) In the event that after an Eligible Employee’s Separation from Service with a
Participating Company he or she is otherwise entitled to continued coverage under the Corporation’s basic life insurance, medical and dental plans pursuant to any employee benefit plan or program of the Corporation (other than this Program),
the total benefits paid for by the Participating Companies during the period described above shall not exceed the benefits to which the Eligible Employee is entitled under this Section 4(a)(iv). 
 (III) For purposes of this Section 4(a)(iv), the Corporation’s basic life insurance plan shall not include any other type of
life insurance coverage provided through or by the Corporation to or on behalf of its employees. 
 (IV) During the period of
such continued coverage, the Eligible Employee shall not be eligible to participate in the Corporation’s disability income plan or as an employee in the Retirement Plan, the Salaried Employees’ Savings Plan, any qualified or nonqualified
stock incentive or phantom stock plan of the Corporation or any employee benefit plan or program now or hereafter maintained by any Participating Company other than those plans listed in the first sentence of this Section 4(a)(iv). 

Notwithstanding the foregoing provisions of this subsection (a), the sum of the amounts payable under (i) above shall be not less than six (6) months of the
Eligible Employee’s Base Compensation nor greater than one (1) year of the Eligible Employee’s Base Compensation and the period of continued coverage described in (iv) above shall be not less than six (6) months nor more
than one (1) year from the Eligible Employee’s Separation from Service. The Committee may, in its discretion, increase the benefit payable to any Eligible Employee without regard to the foregoing limitation. 
  

 12 








 (b) Change of Control Benefits. Upon the occurrence of any of the events specified in
Section 5(b), an Eligible Employee shall receive (in lieu of any severance benefit payable under Section 4(a) or any other severance benefit payable under any other plan or program now or hereafter maintained by a Participating Company)
Change of Control Benefits under the Program as follows: 
 (i) Within ten (10) business days following the effective
date an Eligible Employee Separates from Service, a lump sum cash benefit equal to the Eligible Employees’ annual Base Compensation plus his or her annual Base Compensation multiplied by his or her standard bonus percentage (as determined
pursuant to the MPAP), determined as of the date of the Change of Control or the effective date the Eligible Employee Separates from Service, whichever produces the larger amount, multiplied by the appropriate factor from the following table:

  

			
	 Eligible Employee
	  	Pay Multiple Factor
	 Chief Executive Officer
	  	3.00
	 Other Eligible Employees
	  	2.50

 Notwithstanding the foregoing, if the Eligible Employee Separates from Service on or after the
date thirty (30) months prior to the Eligible Employee’s Normal Retirement Date, the applicable factor shall be a fraction, the numerator of which is the number of full months between the date the Eligible Employee Separates from Service
and such Normal Retirement Date and the denominator of which is twelve (12). An Eligible Employee described in the preceding sentence shall be entitled to an additional benefit equal to the difference between the benefit payable to the Eligible
Employee, if any, 

  

 13 








 
under the Retirement Plan and the Retirement Plan Supplemental Benefit provisions of the Supplemental Plans, and such benefits that would have been payable,
if any, under the Retirement Plan and Supplemental Plans if the Eligible Employee had remained an Eligible Employee and continued to earn his or her Base Compensation until his or her Normal Retirement Date; provided, however, that the Present Value
of such additional benefit shall not exceed the difference between the lump sum benefit determined under the preceding sentence and the lump sum benefit determined using the otherwise applicable factor from the table above. Such additional benefit
shall be paid at the same time and in the same form as any benefit payable to the Eligible Employee under the Potlatch Forest Products Corporation Salaried Employees’ Supplemental Benefit Plan II or, if no benefit is payable to the Eligible
Employee under the such plan, the Present Value of such additional benefit shall be paid in a lump sum at the same time as the Eligible Employee’s Change of Control Benefits are paid; 
 (ii) A lump sum cash benefit equal to the Eligible Employee’s unused and accrued vacation pay, if any, under the terms of the
Participating Company’s officer vacation policy. For this purpose, (I) an Eligible Employee’s Base Compensation and the terms of the officer vacation policy shall be determined as of the date when the Eligible Employee Separates from
Service or as of the date of the Change of Control, whichever produces the larger amount and (II) accrued vacation pay shall be paid notwithstanding any minimum service requirement of the Participating Company’s officer vacation policy;

 (iii) Eligibility for an “Award” for the “Award year” in which he or she Separates from Service under
the MPAP (or, if the MPAP is no longer in effect at that 

  

 14 








 
time, any applicable substituted or successor short-term incentive plan maintained by the Corporation or its successor in interest) determined under all the
terms and conditions of such plan but based on the Eligible Employee’s target or standard bonus determined pursuant to such plan; provided, however, that such benefit shall not be payable with respect to any Award Year for which the Eligible
Employee receives a payment pursuant to Section 15 of the MPAP; 
 (iv) COBRA premium payments during the number of years
equal to the applicable factor determined under (b)(i) above, subject to all of the conditions and limitations described in Section 4(a)(iv)(I) through (IV) above (determined without regard to the last paragraph of Section 4(a)) under the
following employee benefit plans of the Corporation; 
 (A) Provided that the Eligible Employee timely elects continued
coverage under COBRA, medical coverage in the amount, if any, that the Eligible Employee had in effect on the day preceding the date of his or her Separation from Service; 
 (B) Provided that the Eligible Employee timely elects continued coverage under COBRA, dental coverage in the amount, if any, that the
Eligible Employee had in effect on the day preceding the date of his or her Separation from Service; and 
 (C) Basic life
insurance coverage in the amount, if any, that the Eligible Employee had in effect on the day preceding the date of his or her Separation from Service; 
 (v) In the case of an Eligible Employee who has less than two (2) Years of Vesting Service on the date he or she Separates from Service, a lump sum cash benefit equal to (A) the value of that portion of the
Eligible Employee’s “Company Stock 

  

 15 








 
Account” in the Salaried Employees’ Savings Plan attributable to “Company Contributions” under such plan made on the Eligible
Employee’s behalf in a “Plan Year” which are unvested, plus (B) the unvested portion, if any, of the Eligible Employee’s “Savings Plan Supplemental Benefit” account under the Supplemental Plans. The value of those
portions of the Eligible Employee’s “Company Stock Account” and the “Savings Plan Supplemental Benefit” accounts referred to in the preceding sentence shall be determined as of the date the Eligible Employee Separates from
Service with the Participating Companies; and 
 (vi) A lump sum cash benefit equal to the Present Value of the Eligible
Employee’s “Normal Retirement Benefit” and “Retirement Plan Supplemental Benefit” determined under the Retirement Plan and the Supplemental Plans, respectively, if the Eligible Employee was not entitled to a “Vested
Benefit” under the Retirement Plan as of the date the Eligible Employee Separates from Service with the Participating Companies. 
 (c)
Payment of Excise Taxes. If any payment or benefit to or for the benefit of the Eligible Employee in connection with a Change of Control is deemed an “excess parachute payment” as defined in Section 280G of the Code subject to
the excise tax imposed by Section 4999 of the Code, than in the event it shall be determined that any payment or distribution by the Company to or for the benefit of the Eligible Employee (whether paid or payable or distributed or distributable
pursuant to the terms of this Program or otherwise, but determined without regard to any additional payments required under this Section 4 (c) (a “Payment”)) would be subject to the excise tax imposed by Section 4999 of the
Code or any interest or penalties are incurred by the Eligible Employee with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as 

  

 16 








 
the “Excise Tax”), then the Eligible Employee shall be entitled to receive an additional payment (a “Gross-Up Payment”) in an amount such
that after payment by the Eligible Employee of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any income taxes (and any interest and penalties imposed with respect thereto) and
Excise Tax imposed upon the Gross-Up Payment, the Eligible Employee retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments. Notwithstanding the foregoing provisions of this Section 4(c), if it shall be
determined that the Eligible Employee is entitled to a Gross-Up Payment, but that the Payments would not exceed the safe harbor amount of 2.99 times the Eligible Employee’s “base amount,” as defined in Code section 280G(b)(3), by
$100,000 or more for the Chief Executive Officer and by $50,000 for other Eligible Employees, then no Gross-Up Payment shall be made to the Eligible Employee and the Payments, in the aggregate, shall be reduced to an amount such that the receipt of
Payments would not give rise to any Excise Tax. In that event, the Eligible Employee shall direct which Payments are to be modified or reduced (the “Reduced Amount”). For purposes of this Section 4(c), the Eligible Employee shall be
deemed to pay federal, state and local taxes at the highest marginal rate of taxation for the applicable calendar year. The amount of the payment to the Eligible Employee shall be estimated by a third-party service provider selected by the
Corporation as of the date of the event specified in Section 5(a) or, if earlier, as of the date of the Change of Control as determined pursuant to Section 5(b). Within thirty (30) business days following the effective date of an
Eligible Employee’s Separation from Service, the estimated amount due the Eligible Employee pursuant to this Section 4(c) shall be paid to the Eligible Employee. In the event that the amount of the estimated payment is less than the amount
actually due to the Eligible Employee under this Section 4(c), the amount of any such shortfall shall be paid to the Eligible Employee within ten (10) business days after the existence of the shortfall is discovered. 
  

 17 








 (d) No Duty to Mitigate ; Offset. The Eligible Employee shall not be required to mitigate the
amount of any payments provided under Section 4(b) and 4(c), nor shall any payment or benefit provided for in Section 4(b) and 4(c) be offset by any compensation earned by the Eligible Employee as the result of employment by another
employer or by retirement benefits. Notwithstanding the foregoing, the Committee in its discretion may reduce any payments provided under Section 4(a), 4(b) and 4(c) (to an amount not less than zero) by any payment(s) that an Eligible Employee
has or will receive pursuant to an arrangement or agreement with the Company that provides for severance payment(s), including related tax payment(s), to which such Eligible Employee may be entitled in the event of termination of employment.

 SECTION 5. CONDITIONS FOR PAYMENT OF SEVERANCE BENEFITS. 
 (a) Payment Of Basic Severance Benefits. Subject to the provisions of Section 5(c), an Eligible Employee will be eligible for the benefits specified in Section 4(a) upon the occurrence of any of the
following events (except that an Eligible Employee who has satisfied the conditions of Section 5(b) will be eligible for the benefits specified in Section 4(b) rather than the benefits specified in Section 4(a)): 
 (i) The Eligible Employee’s involuntary termination of employment that constitutes a Separation from Service by a Participating
Company or by the Eligible Employee’s Separation from Service at the request of the Company for any reason other than Misconduct, subject to the limitations of Section 5(c)(ii); provided, however, that if the Separation from Service is due
to death or because the Eligible Employee is disabled (as defined in section 409A(a)(2)(C) of the Code), the Eligible Employee shall not be eligible for any severance benefits under the Program; or 
  

 18 








 (ii) Termination of the Eligible Employee’s employer’s status as a
Participating Company due to the sale to a third party or a spin-off of a designated subsidiary, subject to the limitations of Section 5(c)(ii) and provided that such transaction is a change in the ownership or effective control of the
Corporation or a change in the ownership of a substantial portion of the assets of the Corporation as defined in the regulations promulgated under Section 409A of the Code; or 
 (iii) The Participating Company requires the Eligible Employee to relocate his or her principal place of work and the new principal place
of work is fifty (50) or more miles further from the Eligible Employee’s primary residence than was his or her former principal place of work, and the Eligible Employee elects to Separate from Service rather than to relocate; or

 (iv) The Eligible Employee Separates from Service with a Participating Company within twenty-four (24) months
following: 
 (A) A material Reduction in Authority or Responsibility of the Eligible Employee. Whether a Reduction in
Authority or Responsibility of the Eligible Employee is material shall be determined in accordance with the criteria set forth in Section 2(s) in the definition of Reduction in Authority or Responsibility; provided, however, that (i) a
change in the Eligible Employee’s reporting relationship to another executive who is within the same reporting level or (ii) a reduction in the Eligible Employee’s business unit budget or a reduction in the Eligible Employee’s
business unit headcount or number of direct reports, by themselves, shall not constitute a material Reduction in Authority or Responsibility, or 
  

 19 








 (B) Any reduction in the Eligible Employee’s Base Compensation, standard bonus
opportunity or long term incentive opportunity or a fifteen percent or greater reduction in the Eligible Employee’s aggregate benefits or perquisites as compared to those of all other employees similarly situated, unless in each case the
reduction is applicable to all salaried employees or all other employees similarly situated; provided, however, that this Section 5(a)(iv) shall apply to the Separation from Service of an Eligible Employee only if the Eligible Employee or the
Participating Company has notified the other party in writing within three (3) months following the occurrence of any such change that the party giving notice considers such change to be a material change encompassed by this
Section 5(a)(iv). If the party receiving such notice does not agree that the change in question is a material change encompassed by this Section 5(a)(iv), it shall give written notice thereof to the party first giving notice hereunder
within thirty (30) days after receiving notice and the matter shall be immediately referred to the Review Panel; provided, however, that, within thirty (30) days after receiving written notice that the other party does not agree that the
change in question is covered by this Section 5(a)(iv), the Eligible Employee may request that the matter be submitted directly to arbitration as provided in Section 11. If necessary, the twenty-four (24) month period specified above
shall be extended to a date not later than thirty (30) days following (i) the announcement of the decision of the Review Panel or, if the matter is referred to arbitration within thirty (30) days following the announcement of the
Review Panel’s decision, the announcement of the award of the arbitrator, or (ii) if the matter is referred 
  

 20 








 
directly to arbitration, the announcement of the award of the arbitrator. The Participating Company or the Eligible Employee may each give the notice
described in this Section 5(a)(iv) only once while this Program is in effect. If one party has given notice and the twenty-four (24) month period specified above has commenced running, the other party may not give notice hereunder with
respect to a change occurring during such twenty-four (24) month period. If an Eligible Employee gives notice pursuant to this Section 5(a)(iv) and the Corporation thereafter in good faith makes an adjustment in the Eligible
Employee’s compensation, benefits, assigned job or duties, responsibilities, privileges or perquisites, the Eligible Employee and the Corporation may mutually agree in writing that the notice shall be null and void. 
 Notwithstanding the foregoing, no benefits shall be available under the Program (i) if the Eligible Employee Separates from Service with a Participating Company
because he or she is eligible for or receiving long-term or permanent disability benefits under the Corporation’s disability income plan as in effect on the date of onset of disability or (ii) if the Eligible Employee satisfies all of the
following conditions: 
 (I) He or she Separates from Service on or after his or her Normal Retirement Date; 
 (II) For the two-year period immediately before retirement, he or she qualified as an Eligible Employee; and 
 (III) He or she is entitled to benefits under the Retirement Plan, Salaried Employees’ Savings Plan and Supplemental Plans which,
when converted to a straight life annuity (and excluding any portion of the benefit under the Salaried Employees’ Savings Plan which represents contributions by the Eligible Employee), equals, in the aggregate, at least $44,000. 
  

 21 








 (b) Payment Of Change Of Control Benefits. An Eligible Employee will be eligible for the benefits
specified in Section 4(b) if, within two (2) years following a Change of Control, the Eligible Employee Separates from Service under the conditions described in Section 5(a)(i), (ii) or (iii) or a material change described
in Section 5(a)(iv) occurs and the Eligible Employee thereafter Separates from Service under the conditions described in Section 5(a)(iv); provided, that the Eligible Employee was employed by a Participating Company on the date preceding
the Change of Control. 
 (c) Limitations On Eligibility For Benefits. 
 (i) If an Eligible Employee is assigned from one to another Participating Corporation, he or she shall not be considered to have Separated
from Service under the provisions of the Program. 
 (ii) The provisions of Section 5(a)(i) and 5(a)(ii) to the contrary
notwithstanding, no benefit will be payable hereunder due to an Eligible Employee’s Separation from Service because of the sale to a third party or spin-off of a division (or other operating assets) of a Participating Company or to termination
of the Eligible Employee’s employer’s status as a Participating Company upon the sale to a third party or spin-off of a designated subsidiary where such sale or spin-off is a change in the ownership or effective control the Corporation or
a change in the ownership of a substantial portion of the assets of the Corporation as defined in the regulations promulgated under Section 409A of the Code, if (A) (I) the Eligible Employee is employed by the purchaser of such
division, assets, or subsidiary or such other spun-off 

  

 22 








 
entity or (II) such purchaser or spun-off entity is contractually obligated to offer the Eligible Employee the same or a better job and (B) such
purchaser or spun-off entity is contractually obligated to maintain a plan which in all material respects is equivalent to the Program, providing for continuing coverage of the Eligible Employee for two (2) years following the sale or spin-off
of such division, assets or subsidiary. 
 SECTION 6. TIME AND FORM OF BENEFIT. 
 (a) Time of Benefit. Except as provided in Sections 4(b) and 6(b), distributions made to Eligible Employees will commence on the first payroll pay
date following the Eligible Employee’s Separation from Service. 
 (b) Notwithstanding any other provision of the Program, a
distribution made to Eligible Employee who is identified as a Key Employee at the time of his or her Separation from Service will be delayed for a minimum of six months if the Eligible Employee’s distribution is triggered by his or her
Separation from Service. Any payment that otherwise would have been made except for the application of this Section 6(a) during such six-month period will be made in one lump sum payment not later than the last day of the second month following
the month that is six months from the date the Eligible Employee Separates from Service. The determination of which Eligible Employees are Key Employees will be made by the Corporation in its sole discretion in accordance with this Section 6(a)
and Sections 416(i) and 409A of the Code and the regulations promulgated thereunder. 
 (c) Form of Benefit. The benefits described in
Section 4(a)(i) shall be paid in monthly installments over a period not to exceed twelve (12) months from the date the Eligible Employee Separates from Service pursuant to Section 4, as determined by the Corporation. The benefit
described in Section 4(a)(ii) shall be paid in a lump sum. The benefits described in Sections 4(b)(i), (ii), (v) and (vi) shall be paid in a lump sum. 
  

 23 








 SECTION 7. EFFECT OF DEATH OF EMPLOYEE. 
 Should an Eligible Employee die after Separation from Service but while participating in the Program and prior to the payment of the entire benefit due
hereunder, the balance of the benefit payable under the Program shall be paid in a lump sum to the estate of the Eligible Employee. Continued medical and dental coverage as provided in Section 4(a)(iv) and Section 4(b)(iv), as applicable,
shall be available to the Eligible Employee’s surviving spouse only if and to the extent that such coverage would have been available to such surviving spouse if the Eligible Employee had died as an active salaried employee of a Participating
Company. Such coverage shall be determined under the terms of the applicable plan as in effect on the earlier of (i) the date the Eligible Employee Separated from Service or (ii) the date of the Change of Control or the material change
described in Section 5(a)(iv), if applicable. 
 SECTION 8. AMENDMENT AND TERMINATION. 
 The Committee reserves the right to amend or terminate the Program at any time and to increase or decrease the amount of any benefit provided under the
Program; provided, however, that any individual who has qualified as an Eligible Employee may become entitled to any Change of Control Benefit under Section 4(b), the Program cannot be terminated or amended to reduce any benefit provided under
Section 4(b) or make any condition pertaining to qualification for the Change of Control Benefit under Section 4(b) materially more restrictive. Once an individual has qualified as an Eligible Employee, the Program may not be amended to
cause such individual to cease to qualify as an Eligible Employee for purposes of determining 

  

 24 








 
that individual’s eligibility for the Change of Control Benefit under Section 4(b). Notwithstanding any other provision of the Program, following a
Change of Control this Section 8 may not be amended for a period of three (3) years. 
 Notwithstanding the foregoing, the Vice
President, Human Resources of the Corporation shall have the power and authority to amend the Plan with respect to any amendment that (i) does not materially increase the cost of the Plan to the Company or (ii) is required to comply with
new or changed legal requirements applicable to the Plan, including, but not limited to, section 409A of the Code. 
 SECTION 9. CLAIMS
PROCEDURE. 
 (a) Claims. All applications for benefits and all inquiries concerning claims under the program shall be submitted to
the Corporation addressed as follows: “Potlatch Forest Products Corporation, Plan Administrator under the Potlatch Corporation Severance Program for Executive Employees, 601 West Riverside Avenue, Suite 1100, Spokane, Washington 99201.”

 (b) Denial Of Claims. In the event that any application for benefits under the Program is denied in whole or in part, the
Corporation shall notify the applicant in writing of such denial and shall advise the applicant of the right to a review thereof. Such written notice shall set forth, in a manner calculated to be understood by the applicant, specific reasons for
such denial, specific references to the provisions of the Program on which such denial is based, a description of any information or material necessary for the applicant to perfect his or her application, an explanation of why such material is
necessary and an explanation of the Program’s review procedure and the time limits applicable to such procedures, including a statement of the applicant’s right to bring a civil action under section 502(a) of ERISA following a denial on
review of the claim, as described in Section 10. Such written notice shall be given to 

  

 25 








 
the applicant within ninety (90) days after the Corporation receives the application, unless special circumstances require an extension of time up to an
additional ninety (90) days for processing the application. If such an extension of time for processing is required, written notice of the extension shall be furnished to the applicant prior to the termination of the initial ninety
(90) day period. This notice of extension shall indicate the special circumstances requiring the extension of time and the date by which the Corporation expects to render its decision on the application for benefits. 
 SECTION 10. REVIEW PROCEDURE. 
 (a)
Appointment Of Review Panel. The Corporation shall appoint a Review Panel which shall consist of three (3) or more individuals who may (but need not) be employees of the Corporation; provided, however, that at all times following a
Change of Control the Review Panel shall consist of at least three current (as of the effective date of the Change of Control) or former Corporation officers and directors. The Review Panel shall be the named fiduciary which shall have authority to
act with respect to appeals from denials of benefits under the Program. 
 (b) Right To Appeal. Any person whose application for
benefits is denied (or is deemed denied) in whole or in part (or such person’s authorized representative) may appeal the denial by submitting to the Review Panel a written request for review of the application within sixty (60) days after
receiving written notice from the Corporation of the denial. The Corporation shall give the applicant (or the applicant’s representative) an opportunity to review pertinent documents in preparing such request for review. 
 (c) Form Of Request For Review. The request for review must be in writing and shall be addressed as follows: “Review Panel under the Potlatch
Forest Products 

  

 26 








 
Corporation Severance Program for Executive Employees, 601 West Riverside Avenue, Suite 1100, Spokane, Washington 99201.” The request for review shall
set forth all of the grounds upon which it is based, all facts in support thereof, and any other matters which the applicant deems pertinent. The Review Panel may require the applicant to submit such additional facts, documents or other material as
the Review Panel may deem necessary or appropriate in making its review. 
 (d) Time For Review Panel Action. The Review Panel shall
act upon each request for review within sixty (60) days after receipt thereof unless special circumstances require an extension of time of up to an additional sixty (60) days for processing the request for review. If such an extension of
time for review is required, written notice of the extension shall be furnished to the applicant prior to the end of the initial sixty (60) day period. 
 (e) Review Panel Decision. Within the time prescribed in Section 10(d), the Review Panel shall give written notice of its decision to the applicant and to the Corporation. In the event the Review Panel
confirms the denial of the application for benefits in whole or in part, such notice shall set forth, in a manner calculated to be understood by the applicant, the specific reasons for such denial, specific references to the provisions of the
Program on which the decision was based, a statement that the applicant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant to his or her claim, and a
statement of the applicant’s right to bring a civil action under section 502(a) of ERISA. In the event that the Review Panel determines that the application for benefits should not have been denied in whole or in part, the Corporation shall
take appropriate remedial action as soon as reasonably practicable after receiving notice of the Review Panel’s decision. 
  

 27 








 (f) Section 5(a)(iv) Dispute. In the event that a dispute involving the application or
interpretation of Section 5(a)(iv) is referred to the Review Panel as provided therein, the Review Panel shall treat such dispute as an appeal from the denial of a claim for benefits under this Program that is subject to all of the terms and
conditions of this Section 10. 
 (g) Rules And Procedures. The Review Panel shall establish such rules and procedures,
consistent with the Program and with ERISA, as it may deem necessary or appropriate in carrying out its responsibilities under this Section 10. The Review Panel may require an applicant who wishes to submit additional information in connection
with an appeal from the denial of benefits in whole or in part to do so at the applicant’s own expense. 
 (h) Exhaustion of
Remedies. No legal action for benefits under the Program may be brought until the claimant (i) has submitted a written application for benefits in accordance with the procedures described in Section 9, (ii) has been notified by
the Corporation that the application is denied, (iii) has filed a written request for review of the application in accordance with the appeal procedures described in Section 10, and (iv) has been notified that the Review Panel has
denied the appeal. Notwithstanding the foregoing, if the Corporation or the Review Panel does not respond to an Eligible Employee’s claim or appeal within the relevant time limits specified in Sections 9 and 10, the Eligible Employee may bring
legal action for benefits under the Program pursuant to section 502(a) of ERISA. 
 SECTION 11. RESOLUTION OF DISPUTES INVOLVING SECTION 5.

 (a) Arbitration Of Section 5 Dispute. Any dispute, controversy or question arising under Section 5 which is not resolved
by the decision of the Review Panel (or which the Eligible Employee requests be submitted directly to arbitration as provided herein) shall be referred for decision by an arbitrator selected by the parties. The proceeding shall be governed 

  

 28 








 
by the Rules of the American Arbitration Association then in effect or such rules last in effect (in the event such Association is no longer in existence).
If the parties are unable to agree upon such an Arbitrator within thirty (30) days after either party has given the other party written notice of its desire to submit the dispute, controversy or question for decision as aforesaid, then either
party may apply to the American Arbitration Association for the appointment of an arbitrator or, if such Association is not then in existence or does not desire to act in the matter, either party may apply to the Presiding Judge of the Superior
Court of the City and County of Spokane, State of Washington, for the appointment of an arbitrator to hear the parties and settle the dispute, controversy or question, and such Judge is authorized to make such appointment pursuant to the Program.
The arbitration shall take place at the location mutually agreed to by the parties or, if the parties are unable to agree upon the location, at the location designated by the Arbitrator. The compensation and expenses of the Arbitrator shall be borne
by the Corporation, unless the Arbitrator determines that an Eligible Employee acted willfully and maliciously in connection with his or her claim for benefits under the Program, in which case the Arbitrator shall direct the Eligible Employee to pay
all or a portion of the compensation and expenses of the Arbitrator. 
 (b) Arbitration Exclusive Remedy. Arbitration shall be the
exclusive remedy for the settlement of disputes involving the application or interpretation of Section 5. The decision of the Arbitrator shall be final, conclusive and binding on all interested persons and no action at law or inquity involving
the application or interpretation of Section 5 shall be instituted other than to enforce the award of the Arbitrator. 
 SECTION 12. BASIS OF
PAYMENTS TO AND FROM PROGRAM. 
 All benefits under the Program shall be paid by the Corporation. The Program shall be unfunded and
benefits hereunder shall be paid only from the general assets of the 

  

 29 








 
Corporation. Nothing contained in the Program shall be deemed to create a trust of any kind for the benefit of Eligible Employees, or create any fiduciary
relationship between the Corporation and the Eligible Employees with respect to any assets of the Corporation. The Corporation is under no obligation to fund the benefits provided herein prior to payment, although it may do so if it chooses. Any
assets which the Corporation chooses to use for advance funding shall not cause the Program to be a funded plan within the meaning of ERISA. 
 SECTION
13. NO EMPLOYMENT RIGHTS. 
 Nothing in the Program shall be deemed to give any individual the right to remain in the employ of a
Participating Company or a subsidiary or to limit in any way the right of a Participating Company or a subsidiary to terminate an individual’s employment, which right is hereby reserved. 
 SECTION 14. NON-ALIENATION OF BENEFITS. 
 No
benefit payable under the Program shall be subject to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or charge, and any attempt to do so shall be void. 
 SECTION 15. SUCCESSORS AND ASSIGNS. 
 The Program shall be binding on the Corporation, its
successors and assigns, and any parent corporation of the Corporation’s successors or assigns. Notwithstanding that the Program may be binding upon a successor or assign by operation of law, the Corporation shall require any successor or assign
to expressly assume and agree to be bound by the Program in the same manner and to the same extent that the Corporation would be if no succession or assignment had taken place. 
  

 30 








 SECTION 16. NOTICES. 
 All notices pertaining to the Program shall be in writing and shall be deemed given if delivered by hand or mailed with postage prepaid and addressed, in the case of the Corporation to the address set forth in
Section 9(a), attention of its Secretary, and the case of the Eligible Employee to his or her last known address as reflected in the records of the Corporation. 
  

 31