Document:

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Exhibit 10.2

                    2002 NON-QUALIFIED STOCK OPTION AGREEMENT
                    -----------------------------------------

     Ralcorp  Holdings, Inc. (the "Company"), effective January 31, 2002, grants
this  Non-Qualified  Stock  Option  to  [Name]  ("Optionee") to purchase a total
of  [number]  shares  of its $.01 par value Common Stock (the "Common Stock") at
a  price  of  $25.09  per  share  pursuant  to  the  Ralcorp Holdings, Inc. 2002
Incentive  Stock  Plan  (the "Plan").  Subject to the provisions of the Plan and
the  following  terms,  Optionee  may  exercise this option from time to time by
tendering  to  the Company written notice of exercise together with the purchase
price  in either cash, or in shares of Common Stock of the Company at their fair
market  value  as determined by the Nominating and Compensation Committee of the
Company's Board of Directors (the "Committee"), or in both cash and such shares.

     NOW  THEREFORE, the Company and Optionee agree, for and in consideration of
the  terms  hereof,  as  follows:

1.   Normal  Exercise  -  This  Option becomes exercisable at the rate of 25% of
     ----------------
     the  total  shares  on  January  31, 2005, 2006, 2007 and 2008. This Option
     remains  exercisable through January 30, 2012, unless Optionee is no longer
     employed  by  the  Company, in which case the Option is exercisable only if
     permitted  by, and in accordance with, the provisions of paragraph 2 below.

2.   Accelerated  Exercise  -  Notwithstanding  the  above,  this  Option  shall
     ---------------------
     become  exercisable before the normal exercise dates set forth in paragraph
     1  above  upon  the  occurrence  of any of the events set forth below while
     Optionee  is  employed by the Company. This Option shall become exercisable
     in  full  on  the  date  of such event and shall remain exercisable for the
     periods  set forth below or until January 30, 2012, whichever occurs first.
     Thereafter, the unexercised portion of this Option is forfeited and may not
     be  exercised.

     a.   Death  of  Optionee  (exercisable  for  three  years).
     b.   Declaration  of Optionee's total and permanent disability (exercisable
          for  three  years).
     c.   Voluntary  termination of Optionee's employment at or after attainment
          of  age  62  (exercisable  for  three  years).
     d.   Involuntary  termination  of  employment  of  Optionee,  other  than a
          Termination  for  Cause  (exercisable  for  six  months).
     e.   Occurrence  of  a  Change in Control (exercisable for six months after
          the  Optionee's  voluntary  or  involuntary  termination of employment
          following  the  Change  in  Control).

3.   Forfeiture  -  This paragraph sets forth the circumstances under which this
     ----------
     Option  will  be  forfeited.  All shares not exercisable shall be forfeited
     upon  the  occurrence  of  any  of  the  following  events (any of which is
     referred  to  as  a  "Forfeiture  Event"):

     a.   Optionee  is  Terminated  for  Cause;
     b.   Optionee  voluntarily  terminates  prior  to  age  62;
     c.   Optionee  engages  in  competition  with  the  Company;  or
     d.   Optionee  engages  in  any  of  the  following  actions:

          (i)  intentional  misconduct in the performance of Optionee's job with
               the  Company  or  any  subsidiary;
          (ii) being  openly  critical  in  the  media  of  the  Company  or any
               subsidiary  or  its directors, officers, or employees or those of
               any  subsidiary;
          (iii)  pleading  guilty or nolo contendere to any felony or any charge
               involving  moral  turpitude;

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          (iv) misappropriating  or  destroying  Company  or subsidiary property
               including, but not limited to, trade secrets or other proprietary
               property;
          (v)  improperly  disclosing  material  nonpublic information regarding
               the  Company  or  any  subsidiary;
          (vi) after ceasing employment with the Company, inducing or attempting
               to  induce any employee of the Company or any Subsidiary to leave
               the  employ  of  the  Company  or  any  subsidiary;
          (vii) after ceasing employment with the Company, hiring any person who
               was a manager level employee of the Company or any subsidiary; or
          (viii)  inducing  or  attempting  to  induce  any  customer, supplier,
               lender,  or  other  business  relation  of  the  Company  or  any
               subsidiary  to  cease  doing  business  with  the  Company or any
               subsidiary.

     Upon  the  occurrence  of a Forfeiture Event, those portions of this Option
     not exercisable at the time of a Forfeiture Event will be forfeited and may
     not  be  exercised. Notwithstanding any other provision of this Option, any
     portion  of  this  Option exercisable (either in accordance with the normal
     exercise  dates  set forth in paragraph 1 or pursuant to an acceleration of
     exercisability  under  paragraph 2) at the occurrence of a Forfeiture Event
     shall  remain  exercisable  for  seven  days  following the occurrence of a
     Forfeiture Event. Therefore, any exercisable portion of this Option that is
     not exercised within such seven day period will be forfeited and may not be
     exercised.  The  Committee  or  entire  Board  of  Directors  may waive any
     condition  of  forfeiture  described  in  this  paragraph.

4.   Change  in  Control  -  In  the  case  of a Change in Control (other than a
     -------------------
     transaction in which the Company is the continuing or surviving corporation
     and  which  does not result in the outstanding shares of Common Stock being
     converted  into  or  exchanged  for  different  securities,  cash  or other
     property,  or  any  combination  thereof),  Optionee  shall  have the right
     (subject to the provisions of the Plan and any limitation applicable to the
     Option  contained  herein) thereafter and during the term of the Option, to
     receive  upon  exercise  thereof  the Acquisition Consideration (as defined
     below)  receivable  upon the Change in Control by a holder of the number of
     shares  of Common Stock which would have been obtained upon exercise of the
     Option  or  portion  thereof,  as the case may be, immediately prior to the
     Change  in  Control.

5.   Definitions  -  For  purposes  of  this Agreement, the following terms have
     -----------
     the  meanings  as  set  forth  below:

          a.  "Acquisition  Consideration"  -  Shall mean the kind and amount of
               --------------------------
               shares  of  the  surviving  or new corporation, cash, securities,
               evidence  of  indebtedness,  other  property  or  any combination
               thereof  receivable  in  respect of one share of the Common Stock
               upon consummation of a Change in Control. In the case of a Change
               in  Control  resulting  from  the  event  set  forth in paragraph
               5(b)(i),  the  value  of  the  Acquisition Consideration shall be
               equal to the highest price paid by such person for a share of the
               Company's  Common  Stock during the two-year period preceding the
               date  on  which  such  person became the beneficial owner of more
               than  50% of the Company's Common Stock. If such price is paid in
               the  form of non-cash consideration, the value of the Acquisition
               Consideration  shall  be  equal  to the fair market value of such
               consideration  at  the  time  of  the  purchase  of  such  share.

          b.  "Change  in  Control"  -  Shall mean when (i) a person, as defined
               -------------------
               under  the  securities  laws  of  the  United  States,  acquires
               beneficial  ownership  of more than 50% of the outstanding voting
               securities  of the Company; or (ii) the directors of the Company,

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               immediately before a business combination between the Company and
               another entity, or a proxy contest for the election of directors,
               shall  as  a  result  of  such  business  combination  or  proxy
               contest, cease to constitute a majority of the Board of Directors
               of  the  Company  or  any  successor  to  the  Company.

          c.  "Termination for Cause" - Shall mean the Optionee's termination of
               ---------------------
               employment  with  the  Company because of the willful engaging by
               the  Optionee  in  gross  misconduct;  provided,  however, that a
               termination  for cause shall not include termination attributable
               to  (i)  poor work performance, bad judgment or negligence on the
               part  of  the  Optionee,  (ii) an act or omission believed by the
               Optionee in good faith to have been in or not opposed to the best
               interests  of the Company and reasonably believed by the Optionee
               to  be lawful, or (iii) the good faith conduct of the Optionee in
               connection  with  a Change in Control (including opposition to or
               support  of  such  Change  in  Control).

6.   This  Agreement  shall  be  governed  by  the laws of the State of Missouri
     without  reference  to  the  conflict  of  laws  provisions  thereof.

7.   No  amendment or modification of this Option shall be valid unless the same
     shall  be in writing and signed by the Company and Optionee. The foregoing,
     however,  shall not prevent the Company from amending or modifying the Plan
     except  that  no  such amendment or modification shall adversely affect the
     Optionee's  rights  under  this  Option  Agreement.

ACKNOWLEDGED                         RALCORP  HOLDINGS,  INC.
AND  ACCEPTED:

/s/                                  BY:  /s/ R. W. Lockwood
-------------------------------           ---------------------------
Optionee                                  R.  W.  Lockwood
                                          Secretary
     xx/xx/xx
-------------------------------
Date

     xxxxxxxx
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Location

     xxx-xx-xxxx
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S.S.#<PAGE>

                                                             Exhibit (10)(o)(iv)

March 19, 2002

To the Lenders under the Credit Agreement referenced below

     Re:  Credit Agreement dated as of June 29, 2001 (as amended by that First
          Amendment to Credit Agreement dated as of August 27, 2001, that Second
          Amendment to Credit Agreement dated as of December 19, 2001 and that
          Third Amendment to Credit Agreement dated of January 24, 2002 and as
          otherwise modified from time to time pursuant to the terms thereof,
          the "Credit Agreement") among Potlatch Corporation (the "Borrower"),
               ----------------                                    --------
          the Guarantors from time to time party thereto, the Lenders from time
          to time party thereto and Bank of America, N.A. ("Bank of America"),
                                                            ---------------
          as Administrative Agent.

Ladies and Gentlemen:

     Reference is hereby made to the above-referenced Credit Agreement.
Capitalized terms used herein without definition shall have the meanings
ascribed to such terms in the Credit Agreement.

     The Borrower hereby requests that the Required Lenders consent to:

          (a) Notwithstanding the terms of Section 8.5 of the Credit Agreement,
     the sale of its Cloquet, Minnesota, pulp and printing papers facilities and
     associated assets to a subsidiary of Sappi Limited, as more fully described
     in the press release issued by the Borrower on March 18, 2002 and filed
     with the Securities and Exchange Commission in a filing on Form 8-K on
     March 18, 2002 (the "Cloquet Sale"); provided that:
                          ------------    --------

               (i) the Borrower shall receive as consideration for the Cloquet
          Sale (x) gross cash proceeds of at least $470 million and (y) Net Cash
          Proceeds of at least $400 million;

               (ii) no later than five (5) Business Days prior to the Cloquet
          Sale, the Borrower shall have delivered to the Agent (x) a Pro Forma
          Compliance Certificate demonstrating that, upon giving effect on a Pro
          Forma Basis to such transaction (and giving effect to this letter
          agreement, to the extent it has been executed by the Required
          Lenders), the Credit Parties would be in compliance with the financial
          covenants set forth in Section 7.10(a)-(c) of the Credit Agreement,
          (y) a notification

<PAGE>

To the Lenders under the Potlatch Corporation Credit Agreement
March 19, 2002
Page 2

          from the Borrower in form and substance satisfactory to the Agent and
          specifying the anticipated date of such Asset Disposition, briefly
          describing the assets to be sold or otherwise disposed of and setting
          forth the net book value of such assets, the aggregate consideration
          and the Net Cash Proceeds to be received for such assets in connection
          with such Asset Disposition and (z) a certificate of an Executive
          Officer of the Borrower stating that the Cloquet Sale is permitted
          under the Senior Subordinated Note Indenture; and

               (iii) the Credit Parties shall, immediately upon consummation of
          the Cloquet Sale, apply (or cause to be applied) an amount equal to
          the Net Cash Proceeds of the Cloquet Sale to prepay the Loans (and, if
          necessary, cash collateralize LOC Obligations) in accordance with the
          terms of Section 3.3(b)(ii)(A) of the Credit Agreement; provided that
                                                                  --------
          in the calculating the Net Cash Proceeds, the Credit Parties may
          subtract from the gross cash proceeds received from the Cloquet Sale
          those applicable amounts permitted to be subtracted pursuant to the
          definition of Net Cash Proceeds, including the amount necessary to
          prepay or retire debt related to the Cloquet property in accordance
          with clause (c) of such definition to the extent such amounts are
          actually paid as contemplated.

     Furthermore, notwithstanding the terms of Section 8.5 of the Credit
     Agreement, the net book value of the assets of the Credit Parties sold in
     connection with the Cloquet Sale shall not count toward the baskets for
     permitted Asset Dispositions contained in Section 8.5(e) of the Credit
     Agreement.

          (b) Notwithstanding the definition of Consolidated Net Worth and the
     terms of Section 7.10(b) of the Credit Agreement, the after-tax charge
     taken by the Borrower in the first quarter of its 2002 fiscal year to cover
     costs associated with the write-down of the book value of assets and
     closure costs in connection with the Borrower's closure of its remaining
     printing papers mill in Brainerd, Minnesota, and its exit from the coated
     printing papers business, as more fully described in the press release
     issued by the Borrower on March 18, 2002 and filed with the Securities and
     Exchange Commission in a filing on Form 8-K on March 18, 2002 (the
     "After-Tax Charge"), shall be excluded from calculating Consolidated Net
      ----------------
     Worth for the purposes of determining compliance with Section 7.10(b);
     provided that such exclusion in connection with the After-Tax Charge shall
     --------
     be limited to $150 million.

     In consideration of the Required Lenders granting their consent to the
foregoing, the Borrower hereby agrees that (1) promptly following the
consummation of the Cloquet Sale, it will negotiate in good faith with the Agent
and the Lenders an amendment to and/or restatement of the Credit Agreement so as
to modify the terms thereof to more appropriately reflect (in the reasonable
determination of the Agent and the Required Lenders) the Borrower's business and
financial condition and prospects (including based upon pro forma financial
information and projections) after giving effect to the Cloquet Sale and (II) it
will use commercially reasonable efforts to conclude such negotiations and enter
into such an amendment to and/or restatement of the Credit Agreement that will
become effective on or prior to July 31, 2002.

<PAGE>

To the Lenders under the Potlatch Corporation Credit Agreement
March 19, 2002
Page 3

     Except to the extent specifically provided to the contrary in this letter,
all terms and conditions of the Credit Agreement and the other Credit Documents
shall remain in full force and effect, without modification or limitation. This
letter shall not operate as a consent to any action or inaction by the Borrower,
or as a waiver of any other right, power, or remedy of any Lender or the Agent
under, or any provision contained in, the Credit Agreement or any other Credit
Document except as specifically provided herein. This letter shall constitute a
Credit Document and may be executed by the parties hereto in several
counterparts, each of which shall be deemed to be an original and all of which
shall constitute together but one and the same agreement. Delivery of an
executed counterpart by telecopy shall be as effective as an original. This
letter shall become effective upon the Agent's receipt of counterparts hereof
duly executed by the Borrower and the Required Lenders.

     To evidence your consent to the foregoing, please sign and return a copy of
this letter to the Agent by no later than 5 p.m. EST, Thursday, March 21, 2002
via facsimile to the attention of Stacy McIlvain of Moore & Van Allen PLLC at
(704) 339-5961.

<PAGE>

     Thank you for your time and consideration of this matter.

                                        Very truly yours,

                                        POTLATCH CORPORATION

                                        By: /s/ Gerald L. Zuehlke
                                            ------------------------------------
                                        Name:  Gerald L. Zuehlke
                                        Title: Vice President and
                                               Chief Financial Officer

The undersigned hereby acknowledge their
consent and agreement to the foregoing:

SUBSIDIARY
GUARANTORS:                             DULUTH & NORTHEASTERN RAILROAD CO.
----------

                                        By: /s/ Malcolm A. Ryerse
                                            ------------------------------------
                                        Name:  Malcolm A. Ryerse
                                        Title: Secretary

                                        THE PRESCOTT AND NORTHWESTERN
                                        RAILROAD COMPANY

                                        By: /s/ Malcolm A. Ryerse
                                            ------------------------------------
                                        Name:  Malcolm A. Ryerse
                                        Title: Secretary and Assistant
                                               Treasurer

                                        ST. MARIES RIVER RAILROAD
                                        COMPANY

                                        By: /s/ Malcolm A. Ryerse
                                            ------------------------------------
                                        Name:  Malcolm A. Ryerse
                                        Title: Secretary and Assistant
                                               Treasurer

                                        WARREN AND SALINE RIVER RAILROAD
                                        COMPANY

                                        By: /s/ Malcolm A. Ryerse
                                            ------------------------------------
                                        Name:  Malcolm A. Ryerse
                                        Title: Secretary and Assistant
                                               Treasurer

<PAGE>

AGENT:                                  BANK OF AMERICA, N.A.,
-----                                   in its capacity as Administrative Agent

                                        By: /s/ Kevin F. Sullivan
                                            ------------------------------------
                                        Name:  KEVIN F. SULLIVAN
                                        Title: MANAGING DIRECTOR

<PAGE>

LENDERS:                                BANK OF AMERICA, N.A.,
-------                                 individually in its capacity as a Lender

                                        By: /s/ Kevin F. Sullivan
                                            ------------------------------------
                                        Name:  KEVIN F. SULLIVAN
                                        Title: MANAGING DIRECTOR

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