Document:

Employee Matters Agreement

 Exhibit 10.3 
 EMPLOYEE MATTERS AGREEMENT 
 by and between 
 POTLATCH CORPORATION 
 and 
 CLEARWATER PAPER CORPORATION 
 Dated as of December 15, 2008 

 TABLE OF CONTENTS 
  

					
	 	  	 	  	Page
	ARTICLE I DEFINITIONS	  	2
	 1.1
	  	Action	  	2
	 1.2
	  	Affiliate	  	2
	 1.3
	  	Agreement	  	2
	 1.4
	  	Administrative Service Organization Contracts or ASO Contracts	  	2
	 1.5
	  	Assignment Agreement	  	2
	 1.6
	  	Clearwater	  	2
	 1.7
	  	Clearwater Common Stock	  	2
	 1.8
	  	Clearwater Employee	  	3
	 1.9
	  	Clearwater Group	  	3
	 1.10
	  	Clearwater Ratio	  	3
	 1.11
	  	Clearwater Stock Value	  	3
	 1.12
	  	Clearwater Terminated Employee	  	3
	 1.13
	  	COBRA	  	3
	 1.14
	  	Code	  	3
	 1.15
	  	Contract	  	3
	 1.16
	  	Director Deferred Compensation Plan	  	4
	 1.17
	  	Disability Plans	  	4
	 1.18
	  	Distribution	  	4
	 1.19
	  	Distribution Date	  	4
	 1.20
	  	DOL	  	4
	 1.21
	  	ERISA	  	4
	 1.22
	  	Executive Severance Plan	  	4
	 1.23
	  	Facilities	  	4
	 1.24
	  	Flexible Benefits Plan	  	5
	 1.25
	  	FMLA	  	5
	 1.26
	  	Fringe Benefits	  	5
	 1.27
	  	Frozen Supplemental Plan	  	5
	 1.28
	  	Governmental Entity	  	5
	 1.29
	  	Group Insurance Policies	  	5
	 1.30
	  	HCFA	  	5
	 1.31
	  	Health and Welfare Plans	  	5
	 1.32
	  	Health Plans	  	6
	 1.33
	  	Incentive Pay Plan.	  	6
	 1.34
	  	IRS	  	6
	 1.35
	  	Labor Agreements	  	6
	 1.36
	  	Law	  	6
	 1.37
	  	Leave of Absence Programs	  	6
	 1.38
	  	Liability or Liabilities	  	6
	 1.39
	  	Management Deferred Compensation Plan	  	6
	 1.40
	  	Material Feature	  	6
	 1.41
	  	Option	  	7

  

 i 

					
	 1.42
	    	Other Post-Retirement Benefits (OPEB) Program	  	7
	 1.43
	    	Outsource	  	7
	 1.44
	    	Participating Company	  	7
	 1.45
	    	Party or Parties	  	7
	 1.46
	    	PBGC	  	7
	 1.47
	    	Pension Plans	  	7
	 1.48
	    	Performance Shares	  	7
	 1.49
	    	Person	  	8
	 1.50
	    	Plan	  	8
	 1.51
	    	Potlatch	  	8
	 1.52
	    	Potlatch Common Stock	  	8
	 1.53
	    	Potlatch Employee	  	8
	 1.54
	    	Potlatch Group	  	8
	 1.55
	    	Potlatch Post-Distribution Stock Value	  	8
	 1.56
	    	Potlatch Pre-Distribution Stock Value	  	8
	 1.57
	    	Potlatch Ratio	  	8
	 1.58
	    	Potlatch Terminated Employee	  	9
	 1.59
	    	Premium Plan	  	9
	 1.60
	    	Pulp-Based Business	  	9
	 1.61
	    	QDRO	  	9
	 1.62
	    	QMCSO	  	9
	 1.63
	    	Record Date	  	9
	 1.64
	    	Restricted Stock Units	  	9
	 1.65
	    	RetainCo	  	9
	 1.66
	    	Retained Business	  	10
	 1.67
	    	Retirement Plans	  	10
	 1.68
	    	Salaried Severance Plan	  	10
	 1.69
	    	Savings Plans	  	10
	 1.70
	    	SEC	  	10
	 1.71
	    	Separation	  	10
	 1.72
	    	Separation Agreement	  	10
	 1.73
	    	Stock Incentive Plan	  	10
	 1.74
	    	Subsidiary	  	10
	 1.75
	    	Supplemental Benefit Plan	  	11
	 1.76
	    	Time Off Policies	  	11
	 1.77
	    	Transfer Amount	  	11
	 1.78
	    	Transfer Date	  	11
	 1.79
	    	Transition Services Agreement	  	11
	 1.80
	    	Unemployment Insurance Program	  	11
	 1.81
	    	Valuation Date	  	11
	 1.82
	    	Wood Products Mills	  	11
		
	ARTICLE II GENERAL PRINCIPLES	  	13
	 2.1
	    	Assumption of Liabilities	  	13
	 2.2
	    	Establishment of Plans	  	13
	 2.3
	    	Parties Under Certain Obligations to Maintain Plans	  	14
	 2.4
	    	Participation in Other Party’s Plans.	  	14

  

 ii 

					
	 2.5
	  	Terms of Participation.	  	15
		
	ARTICLE III DEFINED BENEFIT PENSION PLANS	  	17
	 3.1
	  	Establishment of Potlatch Pension Plans and Master Trust.	  	17
	 3.2
	  	Assumption of Liabilities and Transfer of Trust Assets.	  	17
	 3.3
	  	No Distributions to Potlatch Employees	  	18
		
	ARTICLE IV DEFINED CONTRIBUTION PLANS	  	19
	 4.1
	  	Establishment of Potlatch Savings Plans and Master Trust.	  	19
		
	ARTICLE V NON-QUALIFIED AND SUPPLEMENTAL PLANS	  	21
	 5.1
	  	Supplemental Benefit Plans.	  	21
	 5.2
	  	Deferred Compensation Plans.	  	21
		
	ARTICLE VI EQUITY AND OTHER MANAGEMENT COMPENSATION	  	23
	 6.1
	  	Incentive Pay Plans	  	23
	 6.2
	  	Clearwater Stock Incentive Plan	  	23
	 6.3
	  	Potlatch Options	  	23
	 6.4
	  	Potlatch Restricted Stock Units	  	24
	 6.5
	  	Potlatch Performance Shares	  	24
	 6.6
	  	Severance Plans	  	25
	 6.7
	  	Deferred Payment Contracts and Severance Contracts	  	25
		
	ARTICLE VII HEALTH AND WELFARE PLANS	  	26
	 7.1
	  	Establishment of Potlatch Health and Welfare Plans.	  	26
	 7.2
	  	Insured Health and Welfare Benefits	  	26
	 7.3
	  	Self-Insured Health and Welfare Benefits	  	26
	 7.4
	  	Disability Plans	  	27
	 7.5
	  	Outsourcing of Claims	  	27
	 7.6
	  	Post-Distribution Transitional Arrangements.	  	27
	 7.7
	  	Vendor Arrangements	  	28
	 7.8
	  	Business Travel Accident Insurance	  	28
	 7.9
	  	Flexible Benefits Plans	  	28
	 7.10
	  	COBRA	  	28
	 7.11
	  	Other Post-Retirement Benefits (OPEB) Programs	  	29
		
	ARTICLE VIII FRINGE AND OTHER BENEFITS	  	30
	 8.1
	  	Employee Assistance Program	  	30
	 8.2
	  	Educational Assistance Program.	  	30
	 8.3
	  	Other Benefits	  	30
		
	ARTICLE IX TRANSITION ADMINISTRATIVE PROVISIONS	  	31
	 9.1
	  	Transition Services Agreement	  	31
	 9.2
	  	Payment of Liabilities, Plan Expenses and Related Matters	  	31
	 9.3
	  	Sharing of Participant Information	  	31
	 9.4
	  	Reporting and Disclosure Communications to Participants	  	31
	 9.5
	  	Audits Regarding Vendor Contracts	  	32

  

 iii 

					
	 9.6
	  	Beneficiary Designations	  	32
	 9.7
	  	Requests for IRS, PBGC and DOL Opinions	  	32
	 9.8
	  	Fiduciary Matters	  	32
	 9.9
	  	Consent of Third Parties	  	32
	 9.10
	  	Tax Cooperation	  	32
		
	ARTICLE X EMPLOYMENT-RELATED MATTERS	  	34
	 10.1
	  	Terms of Employment	  	34
	 10.2
	  	Non-Solicitation of Employees	  	34
	 10.3
	  	Confidentiality and Proprietary Information	  	34
	 10.4
	  	Time Off Policies	  	34
	 10.5
	  	Payroll Systems.	  	35
	 10.6
	  	Personnel and Pay Records	  	35
	 10.7
	  	Unemployment Insurance Program.	  	35
	 10.8
	  	Non-Termination of Employment	  	36
	 10.9
	  	Leave of Absence Programs and FMLA.	  	36
	 10.10
	  	Employment Litigation	  	36
	 10.11
	  	Workers’ Compensation	  	37
		
	ARTICLE XI LABOR AGREEMENTS	  	38
		
	ARTICLE XII GENERAL PROVISIONS	  	39
	 12.1
	  	Relationship of Parties	  	39
	 12.2
	  	Incorporation of Separation Agreement Provisions	  	39
	 12.3
	  	Conflict	  	39
	 12.4
	  	Entire Agreement	  	39
	 12.5
	  	Choice of Law and Forum	  	39
	 12.6
	  	Amendment	  	39
	 12.7
	  	Waiver	  	39
	 12.8
	  	Partial Invalidity	  	40
	 12.9
	  	Execution in Counterparts	  	40
	 12.10
	  	Successors and Assigns	  	40
	 12.11
	  	No Third Party Beneficiaries	  	40
	 12.12
	  	Notices	  	40
	 12.13
	  	Performance	  	41
	 12.14
	  	Force Majeure	  	41
	 12.15
	  	No Public Announcement	  	41
	 12.16
	  	Termination	  	41

  

 iv 

			
	 SCHEDULE 1.31 HEALTH AND WELFARE BENEFITS PLANS
	  	I
		
	 SCHEDULE 3.2(C)(I) ACTUARIAL ASSUMPTIONS FOR DEFINED BENEFIT PLAN TERMINATION BASIS DETERMINATIONS
	  	III
		
	 SCHEDULE 6.7 DEFERRED PAYMENT CONTRACTS AND SEVERANCE CONTRACTS
	  	IV
		
	 SCHEDULE 7.7(B) GROUP INSURANCE POLICIES
	  	VI
		
	 SCHEDULE 8.3 FRINGE BENEFITS
	  	VIII

  

 v 

 EMPLOYEE MATTERS AGREEMENT 
 This EMPLOYEE MATTERS AGREEMENT (this “Agreement”) is made as of December 15, 2008, by and between Potlatch Corporation, a Delaware
corporation, and Clearwater Paper Corporation, a Delaware corporation (formerly named Potlatch Forest Products Corporation) (each a “Party” and together, the “Parties”). Capitalized terms used herein (other than the
formal names of Plans (as defined below) and related trusts) and not otherwise defined, shall have the respective meanings assigned to them in Article I hereof. 
 RECITALS 
 WHEREAS, Potlatch and Clearwater have entered into a Separation and Distribution
Agreement, dated as of the date hereof (the “Separation Agreement”), in order to, among other things, separate the Retained Business from the Pulp-Based Business (the “Separation”); and 
 WHEREAS, in furtherance of the Separation, Potlatch and Clearwater have agreed to enter into this Agreement to allocate between them assets, liabilities
and responsibilities with respect to certain employee compensation, benefit Plans, and certain employment matters. 
 NOW, THEREFORE, in
consideration of the mutual promises contained herein, the Parties hereto agree as follows: 
  

 1 

 ARTICLE I 
 DEFINITIONS 
 Wherever used in this Agreement, the following terms shall have the meanings
indicated below, unless a different meaning is plainly required by the context. The singular shall include the plural, unless the context indicates otherwise. Headings of sections are used for convenience of reference only, and in case of conflict,
the text of this Agreement, rather than such headings, shall control. 
 1.1 Action. “Action” means any action, claim,
demand, suit, arbitration, inquiry, subpoena, discovery request, proceeding or investigation by or before any Governmental Entity or any arbitration tribunal, domestic or foreign. 
 1.2 Affiliate. “Affiliate” means, as defined in the Separation Agreement, with respect to any Person, any other Person that directly or
indirectly controls, is controlled by or is under common control with such Person. For the purpose of this definition, the term “control” means the power to direct the management of an entity, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise; and the term “controlled” has the meaning correlative to the foregoing. After the Distribution, Potlatch and Clearwater shall not be deemed to be under common control for purposes
hereof due solely to the fact that Potlatch and Clearwater may have common stockholders. 
 1.3 Agreement. “Agreement” means
this Employee Matters Agreement, including all the Addendums, Schedules and Exhibits hereto, and all amendments made hereto from time to time. 
 1.4 Administrative Service Organization Contracts or ASO Contracts. “Administrative Service Organization Contracts” or “ASO Contracts” is defined in Section 7.7(a) and the Schedule 7.7(a). 
 1.5 Assignment Agreement. “Assignment Agreement” means the Transfer and Assumption Agreement, effective as of the date immediately prior
to the Distribution Date, by and among Potlatch, RetainCo, and Clearwater. 
 1.6 Clearwater. “Clearwater” means Clearwater
Paper Corporation, a Delaware corporation, formerly named Potlatch Forest Products Corporation. In all such instances in which Clearwater is referred to in this Agreement, it shall also be deemed to include a reference to each member of the
Clearwater Group, unless the context specifically requires otherwise; Clearwater shall be solely responsible to Potlatch for ensuring that each member of the Clearwater Group complies with the applicable terms of this Agreement. 
 1.7 Clearwater Common Stock. “Clearwater Common Stock” means, as defined in the Separation Agreement, Clearwater common stock, par value
$0.0001 per share. 
  

 2 

 1.8 Clearwater Employee. “Clearwater Employee” means an individual who is:
(a) either actively employed primarily in connection with, or on leave of absence from, the Pulp-Based Business immediately prior to the Distribution Date; (b) a Clearwater Terminated Employee; (c) an employee or a member of a group
of employees designated as Clearwater Employees (as of the specified date(s)) by Potlatch and Clearwater by mutual written agreement; or (d) an alternate payee under a QDRO, alternate recipient under a QMCSO, beneficiary, covered dependent, or
qualified beneficiary (as such term is defined under COBRA), in each case, of an employee or former employee described in any of Sections 1.8(a) through (c) with respect to that employee’s or former employee’s benefit under the
applicable Plan(s) (unless specified otherwise in this Agreement, such an alternate payee, alternate recipient, beneficiary, covered dependent, or qualified beneficiary shall not otherwise be considered a Clearwater Employee with respect to any
benefits he or she accrues or accrued under any applicable Plan(s), unless he or she is a Clearwater Employee by virtue of any of Sections 1.8(a) through (c)). 
 1.9 Clearwater Group. “Clearwater Group” means, as defined in the Separation Agreement, Clearwater, its Subsidiaries and Affiliates (other than RetainCo), and any Subsidiaries or Affiliates of
Clearwater formed or acquired after the Distribution Date. 
 1.10 Clearwater Ratio. “Clearwater Ratio” means the ratio
determined by dividing the Clearwater Stock Value by the Potlatch Pre-Distribution Stock Value. 
 1.11 Clearwater Stock Value.
“Clearwater Stock Value” means the average per-share trading price of Clearwater Common Stock as quoted on the New York Stock Exchange (“NYSE”) during the first four (4) hours of “regular way” trading in Clearwater
Common Stock after the Distribution. 
 1.12 Clearwater Terminated Employee. “Clearwater Terminated Employee” means an
individual who was employed primarily in connection with the Pulp-Based Business or a discontinued business specified or described on Schedule 2B or Schedule 19 to the Assignment Agreement and who terminated employment from the Pulp-Based Business
or such discontinued business on or before the Distribution Date; provided, however, that to the extent a former employee has not been, or cannot be, allocated in accordance with such Schedule, then such former employee shall be deemed a Potlatch
Terminated Employee. Notwithstanding the foregoing, “Clearwater Terminated Employee” shall not, unless otherwise expressly provided to the contrary in this Agreement, include an individual who is a Potlatch Employee on the Distribution
Date. 
 1.13 COBRA. “COBRA” means the continuation coverage requirements for “group health plans” under Title X
of the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended from time to time, and as codified in Code Section 4980B and ERISA Sections 601 through 608. 
 1.14 Code. “Code” means, as defined in the Separation Agreement, the Internal Revenue Code of 1986, as amended. 
 1.15 Contract. “Contract” means, as defined in the Separation Agreement, any agreement, license, contract, obligation, indenture,
instrument, lease, promise, arrangement, 
  

 3 

 
release, warranty, commitment or undertaking (whether written or oral and whether express or implied). 
 1.16 Director Deferred Compensation Plan. “Director Deferred Compensation Plan,” when immediately preceded by “Potlatch,”
means the Potlatch Corporation Deferred Compensation Plan for Directors II. When immediately preceded by “Clearwater,” “Director Deferred Compensation Plan” means the deferred compensation plan to be established by Clearwater
pursuant to Sections 2.2 and 5.2 that corresponds to the Potlatch Corporation Deferred Compensation Plan for Directors II. 
 1.17
Disability Plans. “Disability Plans,” when immediately preceded by “Clearwater,” means the Clearwater short-term and long-term disability plans (including, where an employee works in a state that offers a statutory state
disability plan, any alternative voluntary state disability plan provided by Clearwater). When immediately preceded by “Potlatch,” “Disability Plans” means the short-term and long-term disability plans to be established or
provided by Potlatch pursuant to Section 2.2 and Article VII that correspond to the Clearwater Disability Plans. 
 1.18
Distribution. “Distribution” means, as defined in the Separation Agreement, the distribution on a pro rata basis to the holders of Potlatch’s Common Stock, without any consideration being paid by such holders, all of the
outstanding shares of Clearwater Common Stock then owned by Potlatch. 
 1.19 Distribution Date. “Distribution Date” means,
as defined in the Separation Agreement, the date determined by the Board of Directors of Potlatch as the date on which the Clearwater Common Stock is payable to holders of Potlatch Common Stock as of the Record Date. 
 1.20 DOL. “DOL” means the United States Department of Labor. 
 1.21 ERISA. “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time. 
 1.22 Executive Severance Plan. “Executive Severance Plan,” when immediately preceded by “Clearwater,” means the Potlatch
Forest Products Corporation Severance Program for Executive Employees, an ERISA severance program, to be retained by Clearwater. When immediately preceded by “Potlatch,” “Executive Severance Plan” means the severance program for
eligible executives to be established by Potlatch pursuant to Sections 2.2 and 6.6(a). 
 1.23 Facilities. “Facilities”
means, as defined in the Separation Agreement, each of the following mills and facilities: 
 (a)(i) sawmill, (ii) pulp and paperboard
mill and (iii) tissue mill and tissue converting facility at Lewiston, Idaho; 
 (b) pulp and paperboard mill at Cypress Bend, Arkansas;

  

 4 

 (c) tissue mill and converting facility in North Las Vegas, Nevada; and 
 (d) tissue converting facility in Elwood, Illinois. 
 1.24 Flexible Benefits Plan. “Flexible Benefits Plan,” when immediately preceded by “Clearwater,” means the Clearwater Plan established pursuant to Code Section 125 for eligible employees to make pre-tax
contributions to flexible spending accounts. When immediately preceded by “Potlatch,” “Flexible Benefits Plan” means the Plan to be established by Potlatch for eligible employees to make pre-tax contributions to flexible spending
accounts pursuant to Section 2.2 and Article VII that corresponds to the respective Clearwater Flexible Benefits Plan. 
 1.25
FMLA. “FMLA” means the Family and Medical Leave Act of 1993, as amended from time to time. 
 1.26 Fringe Benefits.
“Fringe Benefits,” when immediately preceded by “Clearwater,” means the Clearwater employee assistance program, the educational assistance program and other fringe benefits, plans, programs and arrangements sponsored and
maintained by Clearwater (as set forth in Article VIII and Schedule 8.3). When immediately preceded by “Potlatch,” “Fringe Benefits” means the fringe benefits, plans, programs and arrangements to be established by Potlatch
pursuant to Section 2.2 and Article VIII that correspond to the respective Clearwater Fringe Benefits. 
 1.27 Frozen Supplemental
Plan. “Frozen Supplemental Plan” is defined in Section 5.1(a). 
 1.28 Governmental Entity. “Governmental
Entity” means, as defined in the Separation Agreement, any nation or government, any state, municipality or other political subdivision thereof and any entity, body, agency, commission, department, board, bureau or court, whether domestic,
foreign or multinational, exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government; and any official thereof. 
 1.29 Group Insurance Policies. “Group Insurance Policies” is defined in Section 7.7(b) and Schedule 7.7(b). 
 1.30 HCFA. “HCFA” means the United States Health Care Financing Administration. 
 1.31
Health and Welfare Plans. “Health and Welfare Plans,” when immediately preceded by “Clearwater,” means the Clearwater Health Plans, the Clearwater Flexible Benefit Plans, the Clearwater Premium Plan, the Clearwater
Disability Plans and the other health and welfare plans listed on Schedule 1.31 established and maintained by Clearwater for the benefit of employees and retirees of the Clearwater Group, and such other welfare plans or programs as may apply
to such employees and retirees as of the Distribution Date. When immediately preceded by “Potlatch,” “Health and Welfare Plans” means the Potlatch Health Plans, the Potlatch Flexible Benefit Plans, the Potlatch Premium Plan, the
Potlatch Disability Plans and the other health and welfare Plans to be established by Potlatch pursuant to Section 2.2 and Article VII that correspond to the respective Clearwater Health and Welfare Plans. 
  

 5 

 1.32 Health Plans. “Health Plans,” when immediately preceded by “Clearwater,”
means the Plans designated as Health Plans on Schedule 1.31, and any similar or successor Plans. When immediately preceded by “Potlatch,” “Health Plans” means the Plans providing health coverage and benefits to be
established by Potlatch pursuant to Section 2.2 and Article VII that correspond to the respective Clearwater Health Plans. 
 1.33
Incentive Pay Plan. “Incentive Pay Plan,” when immediately preceded by “Potlatch,” means either the Potlatch Corporation Management Performance Award Plan II or the Potlatch Corporation Annual Incentive Plan, whichever is
in effect as of the Distribution Date. When immediately preceded by “Clearwater,” “Incentive Pay Plan” means the incentive pay plan to be established by Clearwater pursuant to Sections 2.2 and 6.1 that corresponds to the Potlatch
Incentive Pay Plan. 
 1.34 IRS. “IRS” means, as defined in the Separation Agreement, the Internal Revenue Service and any
successor agency. 
 1.35 Labor Agreements. “Labor Agreements” means the collective bargaining agreements set forth on
Schedule 1.35. 
 1.36 Law. “Law” means, as defined in the Separation Agreement, any United States or non-United
States federal, national, supranational, state, provincial, local or similar statute, law, ordinance, regulation, rule, code, order, consent decree, requirement or rule of law (including common law and in equity). 
 1.37 Leave of Absence Programs. “Leave of Absence Programs,” when immediately preceded by “Clearwater,” means the personal,
medical, military and FMLA leave offered from time to time under the personnel policies and practices of Clearwater. When immediately preceded by “Potlatch,” “Leave of Absence Programs” means the leave of absence programs to be
established by Potlatch pursuant to Sections 2.2 and 10.9 that correspond to the respective Clearwater Leave of Absence Programs. 
 1.38
Liability or Liabilities. “Liability” or “Liabilities” means, as defined in the Separation Agreement, any and all debts, liabilities and obligations, absolute or contingent, matured or unmatured, liquidated or
unliquidated, accrued or unaccrued, known or unknown, whenever arising, including all costs and expenses relating thereto, and including those debts, liabilities and obligations arising under any Law, Action or threatened Action, or any award of any
arbitrator of any kind, and those arising under any Contract. 
 1.39 Management Deferred Compensation Plan. “Management Deferred
Compensation Plan,” when immediately preceded by “Potlatch,” means the Potlatch Corporation Management Deferred Compensation Plan. When immediately preceded by “Clearwater,” “Management Deferred Compensation Plan”
means the deferred compensation plan to be established by Clearwater pursuant to Sections 2.2 and 5.2 that corresponds to the Potlatch Corporation Management Deferred Compensation Plan. 
 1.40 Material Feature. “Material Feature” means any feature of a Plan that would reasonably be expected to be of material importance to
the sponsoring employer or the participants (or their dependents or beneficiaries) (in the aggregate) of that Plan, which could 
  

 6 

 
include, depending on the type and purpose of the particular Plan, the class or classes of employees eligible to participate in such Plan, the nature, type,
form, source, and level of benefits provided under such Plan and the amount or level of contributions, if any, required to be made by participants (or their dependents or beneficiaries) to such Plan. 
 1.41 Option. “Option,” when immediately preceded by “Potlatch,” means an option to purchase Potlatch Common Stock pursuant to
a Stock Incentive Plan. When immediately preceded by “Clearwater,” “Option” means an option to purchase Clearwater Common Stock pursuant to a Stock Incentive Plan. 
 1.42 Other Post-Retirement Benefits (OPEB) Program. “Other Post-Retirement Benefits (OPEB) Program,” when immediately preceded by
“Clearwater,” means the health and life insurance programs that permit certain retirees and former employees of the Clearwater Group, and their eligible spouses and dependents to continue to receive coverage and benefits under certain
Clearwater Health and Welfare Plans for a designated period of time. When immediately preceded by “Potlatch,” “Other Post-Retirement Benefits (OPEB) Programs” means such continuation programs to be established by Potlatch
pursuant to Sections 2.2 and 7.11 that correspond to the Clearwater Other Post-Retirement Benefits (OPEB) Programs. 
 1.43 Outsource.
“Outsource” is defined in Section 7.5. 
 1.44 Participating Company. “Participating Company” means any
Person (other than an individual) whose employees participate in a Plan, other than the Plan sponsor. 
 1.45 Party or Parties.
“Party” or “Parties” has the meaning set forth in the first paragraph of this Agreement. 
 1.46 PBGC.
“PBGC” means the Pension Benefit Guaranty Corporation. 
 1.47 Pension Plans. “Pension Plans,” when immediately
preceded by “Clearwater,” means the Potlatch Forest Products Corporation Salaried Employees’ Retirement Plan (the “Salaried Pension Plan”), the Potlatch Forest Products Corporation Retirement Plan for Hourly Non-Represented
Employees of the Idaho Operations of the Wood Products Division (the “Hourly Non-Represented Pension Plan”), and the Potlatch Forest Products Corporation Hourly Employees’ Retirement Plan (the “Hourly Represented Pension
Plan”). When immediately preceded by “Potlatch,” “Pension Plans” means the defined benefit plans to be established pursuant to Section 2.2 and Article III. 
 1.48 Performance Shares. “Performance Shares” means, when preceded by “Potlatch,” awards denominated in shares of Potlatch
Common Stock pursuant to which the holder can earn, in whole or in part, the right to receive a specified number of shares of Potlatch Common Stock based upon attainment of performance objectives, pursuant to a Potlatch Stock Incentive Plan. When
preceded by “Clearwater,” “Performance Shares” means awards denominated in shares of Clearwater Common Stock pursuant to which the holder can earn, in whole or in part, the right to receive a specified number of shares of
Clearwater Common Stock based upon attainment of performance objectives, pursuant to a Clearwater Stock Incentive Plan. 
  

 7 

 1.49 Person. “Person” means, as defined in the Separation Agreement, any individual,
corporation, partnership, joint venture, limited liability company, association, joint-stock company, trust, unincorporated organization or Governmental Entity. 
 1.50 Plan. “Plan” means any plan, policy, program, payroll practice, arrangement, contract, trust, insurance policy, or any agreement or funding vehicle providing compensation or benefits to
employees, former employees or directors of Potlatch or Clearwater. 
 1.51 Potlatch. “Potlatch” means Potlatch Corporation,
a Delaware corporation. In all such instances in which Potlatch is referred to in this Agreement, it shall also be deemed to include a reference to each member of the Potlatch Group, unless the context specifically requires otherwise; Potlatch shall
be solely responsible to Clearwater for ensuring that each member of the Potlatch Group complies with the applicable terms of this Agreement. 
 1.52 Potlatch Common Stock. “Potlatch Common Stock” means, as defined in the Separation Agreement, Potlatch common stock, par value $1.00 per share. 
 1.53 Potlatch Employee. “Potlatch Employee” means an individual who is: (a) either actively employed primarily in connection with,
or on leave of absence from, the Retained Business immediately prior to the Distribution Date; (b) a Potlatch Terminated Employee; (c) an employee or a member of a group of employees designated as Potlatch Employees (as of the specified
date(s)) by Potlatch and Clearwater by mutual written agreement; or (d) an alternate payee under a QDRO, alternate recipient under a QMCSO, beneficiary, covered dependent, or qualified beneficiary (as such term is defined under COBRA), in each
case, of an employee or former employee described in any of Sections 1.53(a) through (c) with respect to that employee’s or former employee’s benefit under the applicable Plan(s) (unless specified otherwise in this Agreement, such an
alternate payee, alternate recipient, beneficiary, covered dependent, or qualified beneficiary shall not otherwise be considered a Potlatch Employee with respect to any benefits he or she accrues or accrued under any applicable Plan(s), unless he or
she is a Potlatch Employee by virtue of any of Sections 1.53(a) through (c)). 
 1.54 Potlatch Group. “Potlatch Group”
means, as defined in the Separation Agreement, Potlatch, its Subsidiaries and Affiliates (including RetainCo and those Subsidiaries and Affiliates formed or acquired after the date hereof), other than members of the Clearwater Group. 
 1.55 Potlatch Post-Distribution Stock Value. “Potlatch Post-Distribution Stock Value” means the average per-share trading price of
Potlatch Common Stock as quoted on the New York Stock Exchange during the first four (4) hours of “ex-dividend” trading in Potlatch Common Stock after the Distribution. 
 1.56 Potlatch Pre-Distribution Stock Value. “Potlatch Pre-Distribution Stock Value” means the closing per-share price of Potlatch Common
Stock as quoted on the New York Stock Exchange for trading in Potlatch Common Stock on the last trading day preceding the trading day on which Potlatch Common Stock first trades on an “ex-dividend” basis. 
 1.57 Potlatch Ratio. “Potlatch Ratio” means the ratio determined by dividing the Potlatch Post-Distribution Stock Value by the Potlatch
Pre-Distribution Stock Value. 
  

 8 

 1.58 Potlatch Terminated Employee. “Potlatch Terminated Employee” means an individual
who was employed primarily in connection with the Retained Business or a discontinued business specified or described on Schedule 17 to the Assignment Agreement and who terminated employment from the Retained Business or such discontinued business
on or prior to the Distribution Date. In addition, a “Potlatch Terminated Employee” shall include a former employee who might otherwise be deemed a Clearwater Terminated Employee, but who has not been, or cannot be, allocated as such
pursuant to Section 1.12. Notwithstanding the foregoing, “Potlatch Terminated Employee” shall not, unless otherwise expressly provided to the contrary in this Agreement, include an individual who is a Clearwater Employee on the
Distribution Date. 
 1.59 Premium Plan. “Premium Plan,” when immediately preceded by “Clearwater” means the
Clearwater Plan established pursuant to Code Section 125 for eligible employees to pay for their coverage under the Health and Disability Plans with pre-tax contributions. When immediately preceded by Potlatch, “Premium Plans” means
the Plan to be established by Potlatch pursuant to Code Section 125 for eligible employees to pay for their coverage under the Health and Disability Plans with pre-tax contributions. 
 1.60 Pulp-Based Business. “Pulp-Based Business” means, as defined in the Separation Agreement, Clearwater’s consumer tissue
products business, Clearwater’s pulp and paperboard business and the portion of Clearwater’s wood products business operated at Clearwater’s lumber mill in Lewiston, Idaho, which such businesses are generally comprised of
Clearwater’s ownership and operation of the Facilities and the sale of products manufactured at the Facilities. 
 1.61 QDRO.
“QDRO” means a domestic relations order which qualifies under Code Section 414(p) and ERISA Section 206(d) and which creates or recognizes an alternate payee’s right to, or assigns to an alternate payee, all or a portion of
the benefits payable to a participant under any of the Retirement Plans. 
 1.62 QMCSO. “QMCSO” means a medical child
support order which qualifies under ERISA Section 609(a) and which creates or recognizes the existence of an alternate recipient’s right to, or assigns to an alternate recipient the right to, receive benefits for which a participant or
beneficiary is eligible under any of the Health Plans. 
 1.63 Record Date. “Record Date” shall have the meaning assigned to
it in Section 6.5(a). 
 1.64 Restricted Stock Units. “Restricted Stock Units,” when immediately preceded by
“Potlatch,” means awards denominated in shares of Potlatch Common Stock pursuant to which the holder has the right to receive a specified number of shares of Potlatch Common Stock over a specified period of time, pursuant to a Potlatch
Stock Incentive Plan. When immediately preceded by “Clearwater,” “Restricted Stock Units” means rights to receive shares of Clearwater Common Stock that are subject to transfer restrictions or to employment or performance vesting
conditions, pursuant to a Clearwater Stock Incentive Plan. 
 1.65 RetainCo. “RetainCo” means, as defined in the Separation
Agreement, Potlatch Land & Lumber, LLC, a Delaware limited liability company. 
  

 9 

 1.66 Retained Business. “Retained Business” means, as defined in the Separation
Agreement, all of the current businesses and operations of Potlatch and its Affiliates other than the Pulp-Based Business, and includes: (a) the real estate business, which acquires and sells timberland and other real property, sells
conservation easements and undertakes certain land development activities, (b) the harvest and log sale business, which harvests standing timber and purchases and sells logs, (c) the wood products business, which is generally comprised of
Clearwater’s ownership and operation of the Wood Products Mills and the sale of wood products manufactured at the Wood Products Mills (for the avoidance of doubt, the Retained Business does not include the portion of Clearwater’s wood
products business operated at Clearwater’s lumber mill in Lewiston, Idaho), and (d) the timberland management business that manages Potlatch timberlands. 
 1.67 Retirement Plans. “Retirement Plans,” when immediately preceded by “Clearwater,” means the Clearwater Pension Plans and the Clearwater Savings Plans. When immediately preceded by
“Potlatch,” “Retirement Plans” means the Potlatch Pension Plans and Potlatch Savings Plans. 
 1.68 Salaried Severance
Plan. “Salaried Severance Plan,” when immediately preceded by “Clearwater,” means the Potlatch Forest Products Corporation Salaried Severance Benefit Plan, an ERISA severance program, to be retained by Clearwater. When
immediately preceded by “Potlatch,” “Salaried Severance Plan” means the severance program to be established by Potlatch pursuant to Section 6.6(b). 
 1.69 Savings Plans. “Savings Plans,” when immediately preceded by “Clearwater,” means the Potlatch Forest Products Corporation
Savings Plan for Hourly Employees and the Potlatch Forest Products Corporation Salaried Employees’ Savings Plan. When immediately preceded by “Potlatch,” “Savings Plans” means the defined contribution Plans to be established
by Potlatch pursuant to Section 2.2 and Article IV. 
 1.70 SEC. “SEC” means, as defined in the Separation Agreement,
means the United States Securities and Exchange Commission. 
 1.71 Separation. “Separation” means, as defined in the
Separation Agreement, the separation of the Retained Business from the Pulp-Based Business. 
 1.72 Separation Agreement.
“Separation Agreement” shall have the meaning set forth in the recitals. 
 1.73 Stock Incentive Plan. “Stock Incentive
Plan,” when immediately preceded by “Potlatch,” means any plan, program or arrangement pursuant to which directors, employees and other service providers hold Potlatch Options, Potlatch Restricted Stock Units, Potlatch Performance
Shares or other Potlatch equity incentives. When immediately preceded by “Clearwater,” “Stock Incentive Plan” means the Plans to be established by Clearwater pursuant to Sections 2.2 and 6.2. 
 1.74 Subsidiary. “Subsidiary” means, as defined in the Separation Agreement, when used with reference to any Person, any corporation,
limited liability company, partnership or other organization of which at least a majority of the securities or interests having by the terms 
  

 10 

 
thereof ordinary voting power to elect at least a majority of the board of directors or others performing similar functions with respect to such corporation
or other organization is directly or indirectly owned or controlled by such Person; provided, however, that no Person that is not directly or indirectly wholly owned by any other Person shall be a Subsidiary of such other Person unless such other
Person controls, or has the right, power or ability to control, that Person. After the Distribution, Potlatch and Clearwater shall not be deemed to be under common control for purposes hereof due solely to the fact that Potlatch and Clearwater may
have common stockholders. 
 1.75 Supplemental Benefit Plan. “Supplemental Benefit Plan,” when immediately preceded by
“Clearwater,” means the Potlatch Forest Products Corporation Salaried Employees’ Supplemental Benefit Plan II. When immediately preceded by “Potlatch,” “Supplemental Benefit Plan” means the non-qualified
supplemental excess benefit retirement plan to be established by Potlatch pursuant to Sections 2.2 and 5.1 that corresponds to the Clearwater Supplemental Benefit Plan. 
 1.76 Time Off Policies. “Time Off Policies,” when immediately preceded by “Clearwater,” means the Clearwater vacation, holidays and other time off policies. When immediately preceded by
“Potlatch,” “Time Off Policies” means the vacation, holidays and other time off policies to be established by Potlatch pursuant to Sections 2.2 and 10.4 that correspond to the Clearwater Time Off Policies. 
 1.77 Transfer Amount. “Transfer Amount” shall have the meaning assigned to it in Section 3.2(c)(ii). 
 1.78 Transfer Date. “Transfer Date” shall have the meaning assigned to it in Section 3.2(c)(ii). 
 1.79 Transition Services Agreement. “Transition Services Agreement” means, as defined in the Separation Agreement, the Transition
Services Agreement, dated the date hereof, between RetainCo and Clearwater. 
 1.80 Unemployment Insurance Program. “Unemployment
Insurance Program,” when immediately preceded by “Clearwater,” means the group unemployment insurance policies purchased by Clearwater from time to time. When immediately preceded by “Potlatch,” “Unemployment Insurance
Program” means any group unemployment insurance policies to be established by Potlatch pursuant to Section 10.7. 
 1.81
Valuation Date. “Valuation Date” shall have the meaning assigned to it in Section 3.2(c)(ii). 
 1.82 Wood Products
Mills. “Wood Products Mills” means, as defined in the Separation Agreement, each of the following mills and facilities: 
 (a)
sawmill in Prescott, Arkansas (which was permanently closed in May 2008); 
 (b) sawmill in Warren, Arkansas; 
  

 11 

 (c)(i) sawmill, (ii) dry kilns and (iii) plywood mill in St. Maries, Idaho; 
 (d) sawmill in Bemidji, Minnesota; 
 (e)
sawmill in Gwinn, Michigan; and 
 (f) particleboard mill in Post Falls, Idaho. 
  

 12 

 ARTICLE II 
 GENERAL PRINCIPLES 
 2.1 Assumption of Liabilities. 
 (a) Clearwater Employees. Except as specified otherwise in this Agreement, or as mutually agreed upon in writing by Clearwater and Potlatch from
time to time, Clearwater hereby retains, or, as applicable, assumes and agrees to pay, perform, fulfill and discharge, in accordance with their respective terms, all of the following: (i) all Liabilities to or relating to Clearwater Employees,
in each case relating to, arising out of or resulting from employment prior to the Distribution Date (including Liabilities to or relating to Clearwater Employees arising under, relating to or resulting from Potlatch Plans or Clearwater Plans and
including Liabilities to or relating to Clearwater Employees under or relating to workers compensation Laws or claims); (ii) all Liabilities to or relating to Clearwater Employees, to the extent relating to, arising out of, or resulting from
employment with the Clearwater Group on and after the Distribution Date (including Liabilities to or relating to Clearwater Employees arising under, relating to or resulting from Clearwater Plans); and (iii) all other Liabilities relating to,
arising out of, or resulting from obligations, liabilities and responsibilities expressly assumed or retained by the Clearwater Group, or a Clearwater Plan, pursuant to this Agreement. 
 (b) Potlatch Employees. Except as specified otherwise in this Agreement, or as mutually agreed upon in writing by Clearwater and Potlatch from
time to time, Potlatch hereby retains, or, as applicable, assumes and agrees to pay, perform, fulfill and discharge, in accordance with their respective terms, all of the following: (i) all Liabilities to or relating to Potlatch Employees, in
each case relating to, arising out of or resulting from employment prior to the Distribution Date (including Liabilities to or relating to Potlatch Employees arising under, relating to or resulting from Potlatch Plans or Clearwater Plans and
including Liabilities to or relating to Potlatch Employees, under or relating to workers compensation Laws or claims); (ii) all Liabilities to or relating to Potlatch Employees, to the extent relating to, arising out of, or resulting from
employment with the Potlatch Group on and after the Distribution Date (including Liabilities to or relating to Potlatch Employees arising under or relating to Potlatch Plans); and (iii) all other Liabilities relating to, arising out of, or
resulting from obligations, liabilities and responsibilities expressly assumed or retained by the Potlatch Group, or a Potlatch Plan, pursuant to this Agreement. 
 2.2 Establishment of Plans. Effective as of the Distribution Date or such later date(s) as Potlatch and Clearwater may mutually agree in writing: 
 (a) Potlatch shall adopt the Potlatch Pension Plans as provided in Article III; 
 (b) Potlatch shall adopt the Potlatch Savings Plans as provided in Article IV; 
  

 13 

 (c) Potlatch shall adopt the Potlatch Supplemental Benefit Plan, and Clearwater shall adopt the
Clearwater Management Deferred Compensation Plan and the Clearwater Director Deferred Compensation Plan, as provided in Article V; 
 (d)
Clearwater shall adopt the Clearwater Incentive Pay Plan and the Clearwater Stock Incentive Plan, and Potlatch shall adopt the Potlatch Salaried Severance Plan and the Potlatch Executive Severance Plan, as provided in Article VI; 
 (e) Potlatch shall adopt the Potlatch Health and Welfare Plans and the Potlatch Other Post-Retirement Benefits (OPEB) Program, as provided in Article
VII; 
 (f) the Parties shall establish the Fringe Benefit and other Plans as provided in Article VIII; and 
 (g) Potlatch shall establish the Potlatch Time Off Policies and the Potlatch Leave of Absence Programs, as provided in Article X. 
 2.3 Parties Under Certain Obligations to Maintain Plans. Clearwater and Potlatch agree that they each will continue to maintain and sponsor their
respective Plans on the terms and conditions in effect immediately prior to the Distribution Date, as modified by this Agreement, for at least twelve (12) months from the Distribution Date; provided, however, that: (a) any such Plan can be
amended or otherwise altered with regard to any individual who is not a current employee of a Party as of the Distribution Date; (b) any such Plan can be amended to ensure compliance with applicable law, or to maintain its tax-favored,
tax-qualified or tax-exempt status; and (c) any such Plan can be amended, modified, merged, terminated, or otherwise altered to ensure compliance with a Labor Agreement. Except as specified in this Section 2.3 or a Labor Agreement, nothing
in this Agreement shall otherwise preclude Potlatch or Clearwater, at any time after twelve (12) months from the Distribution Date, from amending, merging, modifying, terminating, eliminating, reducing, or otherwise altering in any respect any
of their respective Plans, any benefit under any of their respective Plans or any trust, insurance policy or funding vehicle related to any of their respective Plans. 
 2.4 Participation in Other Party’s Plans. 
 (a) General Obligations as Plan Sponsor. To
the extent that, after the Distribution Date, Clearwater is a Participating Company in any Potlatch Plan or Potlatch is a Participating Company in any Clearwater Plan, Potlatch and Clearwater (as applicable) shall continue to administer, or cause to
be administered, in accordance with their terms and applicable Law, their respective Plans, and shall have the sole and absolute discretion and authority to interpret their respective Plans, as set forth therein. Notwithstanding the foregoing,
neither Party shall, without first consulting with the other Party, amend any Material Feature of a Plan in which the other Party is a Participating Company, except to the extent such amendment would not affect any benefits of the other Party’s
employees under such Plan or as may be necessary or appropriate to comply with applicable law or a Labor Agreement. 
 (b) General
Obligations as Participating Company. To the extent that, after the Distribution Date, Clearwater is a Participating Company in any Potlatch Plan or Potlatch is a Participating Company in any Clearwater Plan, Clearwater or Potlatch (as
applicable) shall 
  

 14 

 
perform with respect to its participation in the other Party’s Plan, the duties of a Participating Company as set forth in each such Plan or any
procedures adopted pursuant thereto, including (without limitation): (i) assisting in the administration of claims, to the extent requested by the claims administrator of the applicable Plan; (ii) cooperating fully with Plan auditors,
benefit personnel and benefit vendors; (iii) preserving the confidentiality of all financial arrangements the Plan sponsor has or may have with any vendors, claims administrators, trustees or any other entity or individual with whom the Plan
sponsor has entered into an agreement relating to the Plan; and (iv) preserving the confidentiality of participant information (including, without limitation, health information in relation to FMLA leaves) to the extent not specified otherwise
in this Agreement. 
 2.5 Terms of Participation. 
 (a) Non-Duplication of Benefits. As of the Distribution Date or such later date that applies to the particular Plan established thereafter, (i) the Potlatch Plans shall be, with respect to Potlatch
Employees, in all respects the successors in interest to, and shall not provide benefits that duplicate benefits provided by, the corresponding Clearwater Plans, and (ii) the Clearwater Plans shall be, with respect to Clearwater Employees, in
all respects the successors in interest to, and shall not provide benefits that duplicate benefits provided by, the corresponding Potlatch Plans. Potlatch and Clearwater shall agree on methods and procedures, including amending their respective Plan
documents, to prevent Potlatch Employees and Clearwater Employees from receiving duplicate benefits from the Potlatch Plans and the Clearwater Plans. 
 (b) Service Credit. Except as specified otherwise in this Agreement, to the extent that Potlatch and Clearwater establish new Plans to replace and succeed the existing Plans maintained by the other Party prior
to the Distribution Date, they shall cause their respective Plans to recognize all service, all compensation and all other benefit-affecting determinations that, as of the Distribution Date, were recognized under the corresponding Plan maintained by
the other Party, except to the extent that duplication of benefits would result. Notwithstanding the foregoing: (i) Potlatch and Clearwater shall recognize service with either Potlatch or Clearwater that was recognized as of the Distribution
Date, except to the extent provided in Section 2.5(a) above, and (ii) Potlatch and Clearwater shall each recognize and grant service credit to any employee who is employed by the Potlatch Group or the Clearwater Group, terminated from such
employment and then hired by the other Party as an employee at any time during the twelve (12) month period following the Distribution Date; provided, however, no service credit shall be required for any such period that he/she is not employed
by either the Potlatch Group or the Clearwater Group. The service crediting provisions shall be subject to any respective applicable “service bridging,” “break in service,” “vesting service,” “employment
date,” or “eligibility date” rules under the Clearwater Plans and the Potlatch Plans. 
 (c) Assumption of Liabilities.
The provisions of this Agreement for the transfer of assets from certain Clearwater Plans to the appropriate Potlatch Plans are based upon the understanding of the Parties that the appropriate Potlatch Plan will assume all Liabilities to or relating
to Potlatch Employees under the corresponding Clearwater Plan, as provided for herein. If any such Liabilities are not effectively assumed by the appropriate Potlatch Plan, then the amount of transferred assets shall be recomputed accordingly,
taking into account the retention of such Liabilities by such Clearwater Plan, and assets shall be transferred from the appropriate Potlatch Plan to the appropriate Clearwater Plan so as to place the appropriate 
  

 15 

 
Potlatch Plan in the position it would have been in, had the initial asset transfer been made in accordance with such recomputed amount of assets.

  

 16 

 ARTICLE III 
 DEFINED BENEFIT PENSION PLANS 
 3.1 Establishment of Potlatch Pension Plans and Master
Trust. 
 (a) Pension Plans. Effective as of January 1, 2009, Potlatch shall establish, or cause to be established, the
Potlatch Salaried Pension Plan and the Potlatch Hourly Represented Pension Plan, which shall be substantially identical in all Material Features to the corresponding Clearwater Pension Plans as in effect on December 31, 2008. The sponsorship of
the existing Clearwater Hourly Non-Represented Pension Plan shall be transferred from Clearwater to Potlatch as of January 1, 2009, and, as of the Distribution Date, Potlatch shall assume all liabilities relating to such Plan. 
 (b) Master Trust. Effective as of January 1, 2009, Potlatch shall establish, or cause to be established, a new master trust which is intended
to be exempt from taxation under Code Section 501(a), to hold the assets of the Potlatch Pension Plans. 
 3.2 Assumption of
Liabilities and Transfer of Trust Assets. 
 (a) Assumption of Liabilities. Subject to the completion of each of the asset
allocations and transfers described in Section 3.2(b) and (c), effective as of January 1, 2009, (i) all accrued benefits of the Potlatch Employees under each of the Clearwater Pension Plans shall be transferred to the corresponding
Potlatch Pension Plan, and (ii) each such Potlatch Pension Plan shall assume and be solely responsible for all Liabilities for or relating to the accrued benefits of the Potlatch Employees under the corresponding Clearwater Pension Plan.

 (b) Hourly Non-Represented Pension Plan. In conjunction with the assumption by Potlatch of the sponsorship of the Clearwater Hourly
Non-Represented Pension Plan, all of the assets of the Clearwater Hourly Non-Represented Pension Plan shall be transferred from the existing trust established under such Plan to the master trust established by Potlatch pursuant to
Section 3.1(b). 
 (c) Salaried Pension Plan and Hourly Represented Pension Plan. 
 (i) As soon as reasonably practicable after the Distribution Date, the Parties shall engage an enrolled actuary to determine for each of
the Clearwater Salaried Pension Plan and the Clearwater Hourly Represented Pension Plan, the total accrued benefit Liabilities as of the Distribution Date for all participants in such Plans, calculated on a plan termination basis in accordance with
Title IV of ERISA. The particular actuarial assumptions that will be used to value the benefit Liabilities described in the preceding sentence shall be set forth in Schedule 3.2(c)(i) hereto. The enrolled actuary shall allocate such accrued
Liabilities to the priority categories described in ERISA Section 4044 and shall determine, for each such priority category, the amount of accrued Liabilities attributable to Potlatch Employees and the amount of accrued Liabilities attributable
to Clearwater Employees. 
  

 17 

 (ii) As soon as reasonably practicable after the determinations described in
Section 3.2(c)(i), the Parties shall designate a date for valuing the assets of each of the Clearwater Salaried Pension Plan and the Clearwater Hourly Represented Pension Plan (the “Valuation Date”), and a date as soon as
practicable after the Valuation Date on which there shall occur the initial transfer of assets from each such Clearwater Pension Plan to the corresponding Potlatch Pension Plan (the “Transfer Date”). The fair market value of the
assets of each such Clearwater Pension Plan as of the Valuation Date (excluding the effect of any contributions made to such Clearwater Pension Plan after the Distribution Date and any distributions made by the Clearwater Pension Plan to Potlatch
Employees after the Distribution Date) shall be allocated to the priority categories of accrued Liabilities determined under Section 3.2(c)(i), in the order specified under ERISA Section 4044, until all such assets have been fully
allocated. On the Transfer Date, the amount of assets allocated to the accrued Liabilities attributable to Potlatch Employees in each of the priority categories (the “Transfer Amount”) shall be transferred from the trust established
under the Clearwater Pension Plans to the trust established under the Potlatch Pension Plans, and Potlatch shall cause the trust established under its Plans to accept such transfer. The Parties agree and acknowledge that a second Transfer Date will
likely be necessary to reconcile any erroneous transfers and provide for an interest adjustment. Such additional Transfer Date, if necessary, shall occur as soon as administratively feasible following the Transfer Date but in no event later than
December 31, 2009. 
 (iii) Notwithstanding the foregoing, in no event shall the Transfer Amount be less than the minimum
amount required to satisfy the requirements of Code Section 414(l) and the regulations thereunder. 
 (iv) Each of the
Parties shall bear an equal portion of the cost of the enrolled actuary’s determinations under this Section 3.2(c). 
 3.3 No
Distributions to Potlatch Employees. The Clearwater and Potlatch Pension Plans shall provide that no distribution of retirement benefits shall be made to any Potlatch Employee on account of the Potlatch Group ceasing to be an Affiliate of the
Clearwater Group as of the Distribution Date. 
  

 18 

 ARTICLE IV 
 DEFINED CONTRIBUTION PLANS 
 4.1 Establishment of Potlatch Savings Plans and Master
Trust. 
 (a) Savings Plans. Effective as of the Distribution Date or such other date as Potlatch and Clearwater may mutually agree
in writing, Potlatch shall establish, or cause to be established, the Potlatch Savings Plans, which shall be substantially identical in all Material Features to the corresponding Clearwater Savings Plans as in effect on the Distribution Date.

 (b) Master Trust. Effective as of the Distribution Date or such other date as the Parties agree to in Section 4.1(a), Potlatch
shall establish, or cause to be established, a new master trust, which is intended to be exempt from taxation under Code Section 501(a), to hold the assets of the Potlatch Savings Plans. 
 (c) Assumption of Liabilities and Transfer of Assets. Effective as of the Distribution Date: (i) each Potlatch Savings Plan shall assume and
be solely responsible for all Liabilities for or relating to Potlatch Employees under the corresponding Clearwater Savings Plan, subject to the completion of the asset transfers; and (ii) Clearwater shall cause the accounts of the Potlatch
Employees under each Clearwater Savings Plan that are held by its related trust as of the Distribution Date to be transferred to the corresponding Potlatch Savings Plan and related trust, and Potlatch shall cause such transferred accounts to be
accepted by each such Potlatch Plan and related trust. As soon as reasonably practicable after the Distribution Date, Potlatch shall use its commercially reasonable efforts to enter into agreements satisfactory to Potlatch to accomplish such
assumption and transfer, the maintenance of the necessary participant records, the appointment of an initial trustee under the Potlatch Savings Plans, and the engagement of an initial record keeper under the Potlatch Savings Plans. Clearwater and
Potlatch each agree to use their commercially reasonable efforts to effectuate this Section 4.1. 
 (d) Stock Fund
Considerations. As a result of the Distribution and the transfers of liabilities and assets described in Section 4.1(c), each Clearwater Savings Plan and each Potlatch Savings Plan shall include investment funds comprised of Potlatch Common
Stock and Clearwater Common Stock. Clearwater and Potlatch shall assume sole responsibility for ensuring that their respective company stock funds, and underlying employer securities held in each such fund, are maintained in compliance with all
requirements of the SEC including, without limitation, filing Forms S-8 and 11-K, and the prospectus requirements for such funds. Notwithstanding Section 2.3 or any other provision in this Agreement, on and after the Distribution Date, nothing
shall preclude either Clearwater or Potlatch from imposing restrictions through their respective Savings Plans on future investments in securities issued by the other Party, or from discontinuing any investment fund holding securities issued by the
other Party. 
 (e) No Distribution to Potlatch Employees. The Potlatch and Clearwater Savings Plans shall provide that no
distribution of account balances shall be made to any 
  

 19 

 Potlatch Employee on account of the Potlatch Group ceasing to be an Affiliate of the Clearwater Group as of the
Distribution Date. 
  

 20 

 ARTICLE V 
 NON-QUALIFIED AND SUPPLEMENTAL PLANS 
 5.1 Supplemental Benefit Plans. 
 (a) Establishment of Potlatch Supplemental Benefit Plan. Effective as of the Distribution Date, Potlatch shall establish the Potlatch Supplemental
Benefit Plan that shall be substantially identical in all Material Features to the Clearwater Supplemental Benefit Plan. Potlatch shall continue to sponsor the Potlatch Corporation Salaried Employees’ Supplemental Benefit Plan, which was frozen
as of December 31, 2004 (the “Frozen Supplemental Plan”). 
 (b) Assumption of Liabilities by Potlatch Supplemental
Benefit Plan. Effective as of the Distribution Date, all accrued benefits of Potlatch Employees under the Clearwater Supplemental Benefit Plan shall be transferred to the Potlatch Supplemental Benefit Plan. The Potlatch Supplemental Benefit Plan
shall assume and be solely responsible for all Liabilities for or relating to the accrued benefits of the Potlatch Employees under the Clearwater Supplemental Benefit Plan as of the Distribution Date. 
 (c) Assumption of Liabilities by Clearwater Supplemental Benefit Plan. Effective as of the Distribution Date, all accrued benefits of Clearwater
Employees under the Frozen Supplemental Plan shall be transferred to the Clearwater Supplemental Benefit Plan. The Clearwater Supplemental Benefit Plan shall assume and be solely responsible for all Liabilities for or relating to the accrued
benefits of the Clearwater Employees under the Frozen Supplemental Plan as of the Distribution Date. 
 5.2 Deferred Compensation
Plans. 
 (a) Establishment of Clearwater Deferred Compensation Plans. Effective as of the Distribution Date, Clearwater shall
establish the Clearwater Management Deferred Compensation Plan and the Clearwater Director Deferred Compensation Plan, which shall be substantially identical in all Material Features to the Potlatch Management Deferred Compensation Plan and the
Potlatch Director Deferred Compensation Plan, respectively. 
 (b) Assumption of Liabilities by Clearwater Management Deferred
Compensation Plan. Effective as of the Distribution Date, all deferred compensation benefits of Clearwater Employees under the Potlatch Management Deferred Compensation Plan shall be transferred to the Clearwater Management Deferred Compensation
Plan. The Clearwater Management Deferred Compensation Plan shall assume and be solely responsible for all Liabilities for or relating to the deferred compensation benefits of the Clearwater Employees under the Potlatch Management Deferred
Compensation Plan as of the Distribution Date. 
 (c) Clearwater Assumption of Other Management Deferred Compensation Liabilities.
Effective as of the Distribution Date, all deferred compensation benefits of Clearwater Employees under the Potlatch Corporation Management Performance Award Plan and the Potlatch Corporation Management Performance Award Plan II shall be transferred
to the 
  

 21 

 
Clearwater Management Deferred Compensation Plan or to an alternative plan or plans established by Clearwater. Such Clearwater Plan or Plans shall assume and
be solely responsible for all Liabilities for or relating to the deferred compensation benefits of the Clearwater Employees under such Potlatch Plans. 
 (d) Director Deferred Compensation Liabilities. Potlatch shall retain all Liabilities to current and former directors of Potlatch under the Potlatch Director Deferred Compensation Plan and any predecessor
deferred compensation Plans for Potlatch directors. Clearwater shall establish the Clearwater Director Deferred Compensation Plan to provide benefits for directors of Clearwater comparable to those provided under the Potlatch Director Deferred
Compensation Plan. 
 (e) Treatment of Stock Units. With respect to the deferred compensation benefits under the Potlatch Plans
described in this Section 5.2 that have been deemed invested in “stock units” (units denominated in shares of Potlatch Common Stock) prior to the Distribution Date, the following provisions shall apply: 
 (i) Potlatch shall cause the number of stock units allocated to each deferred compensation account to be adjusted as of the Distribution
Date. The adjusted number of units shall equal the number of units allocated to the account immediately prior to the Distribution Date divided by the Potlatch Ratio, rounded to three (3) decimal places. 
 (ii) For account balances that will be assumed by the Clearwater Plans, Clearwater shall assume the obligation to treat such accounts as
deemed invested in Potlatch stock units, as adjusted by Potlatch pursuant to Section 5.2(e)(i). Notwithstanding the foregoing, Clearwater shall be permitted to give Clearwater Employees and Clearwater directors an election to have their
Potlatch stock units converted into Clearwater stock units (units denominated in shares of Clearwater Common Stock) as of the Distribution Date, in lieu of the adjustment described in Section 5.2(e)(i). For Clearwater Employees and directors
who make such an election, the number of Clearwater stock units allocated to each such account as a result of such conversion shall equal the total number of Potlatch stock units allocated to the account immediately prior to the Distribution Date
divided by the Clearwater Ratio, rounded to three (3) decimal places. 
 (f) No Distributions to Potlatch or Clearwater
Employees. Potlatch and Clearwater agree that the Separation and Distribution shall not be viewed as a separation from service or other termination of employment entitling Potlatch Employees or Clearwater Employees or other participants in the
Plans described in this Article V to distributions of their deferred compensation benefits. Potlatch and Clearwater shall cause their respective deferred compensation Plans to be amended (if necessary) and to be administered in a manner consistent
with this understanding. 
  

 22 

 ARTICLE VI 
 EQUITY AND OTHER MANAGEMENT COMPENSATION 
 6.1 Incentive Pay Plans. Clearwater
Employees shall cease participating in the Potlatch Incentive Pay Plan as of the Distribution Date. Clearwater shall establish the Clearwater Incentive Pay Plan to provide annual incentive bonuses for periods beginning on or after the Distribution
Date. The Clearwater Incentive Pay Plan may, but is not required to, contain the same Material Features as the Potlatch Incentive Pay Plan. Notwithstanding the foregoing, if the Distribution Date occurs in 2008 or in 2009 prior to the date when 2008
bonuses would be payable under the Potlatch Incentive Pay Plan, Clearwater shall assume the obligation to pay 2008 bonuses to the Clearwater Employees (such bonuses to be determined as if the Clearwater Employees had continued to participate in the
Potlatch Incentive Pay Plan for all of 2008), and Potlatch shall have no responsibility for the payment of 2008 bonuses to the Clearwater Employees. 
 6.2 Clearwater Stock Incentive Plan. Clearwater shall establish the Clearwater Stock Incentive Plan to provide equity incentives to Clearwater Employees after the Distribution Date. The Clearwater Stock
Incentive Plan may, but is not required to, contain the same Material Features as the Potlatch Stock Incentive Plan. 
 6.3 Potlatch
Options. 
 (a) Adjustment of Potlatch Options. As of the Distribution Date, each outstanding Potlatch Option held by Potlatch
Employees and Clearwater Employees shall be, in connection with the Distribution, adjusted by Potlatch. Each such Potlatch Option shall continue to have, and be subject to, the same terms and conditions set forth in the Potlatch Stock Incentive
Plans and as provided in the respective option agreements governing such Potlatch Option as of the Distribution Date, except that (i) such Potlatch Option shall be exercisable for that number of whole shares of Potlatch Common Stock equal to
the number of shares of Potlatch Common Stock that were issuable upon exercise of such Potlatch Option as of the Distribution Date divided by the Potlatch Ratio, rounded up to the nearest whole share, and (ii) the per share exercise price for
the shares of Potlatch Common Stock issuable upon exercise of such Potlatch Option shall be equal to the exercise price per share at which such Potlatch Option was exercisable as of the Distribution Date multiplied by the Potlatch Ratio, rounded to
four (4) decimal places. 
 (b) Potlatch Options Held by Clearwater Employees. In addition to the adjustment described in
Section 6.3(a), Potlatch shall amend the Options held by Clearwater Employees to provide that the Separation and Distribution shall not give rise to a forfeiture of the Options held by the Clearwater Employees after ninety (90) days from
the Distribution Date, so that they can exercise the Options in accordance with their terms, subject to continued employment with Clearwater. Upon the request of Potlatch in connection with the exercise of an Option held by a Clearwater Employee and
in order to determine whether such Option is being 
  

 23 

 
validly exercised by the Clearwater Employee, Clearwater shall confirm to Potlatch such Clearwater Employee’s current employment status with Clearwater.

 6.4 Potlatch Restricted Stock Units. 
 (a) Adjustment of Potlatch Restricted Stock Units. As of the Distribution Date, each outstanding Potlatch Restricted Stock Unit held by Potlatch Employees, whether vested or unvested, shall be, in connection
with the Distribution, adjusted by Potlatch. Each such Potlatch Restricted Stock Unit shall continue to have, and be subject to, the same terms and conditions set forth in the Potlatch Stock Plans and as provided in the respective award agreements
governing such Potlatch Restricted Stock Unit as of the Distribution Date, except that the number of shares of Potlatch Common Stock for which such Potlatch Restricted Stock Unit can be settled shall be equal to the number of shares of Potlatch
Common Stock that were issuable upon settlement of such Potlatch Restricted Stock Unit as of the Distribution Date divided by the Potlatch Ratio, rounded to three (3) decimal places. 
 (b) Potlatch Restricted Stock Units Held by Clearwater Employees. Potlatch Restricted Stock Units held by Clearwater Employees shall be forfeited
as of the Distribution Date in accordance with the terms of the applicable award agreements. Clearwater shall be responsible for issuing cash incentives or equity incentives based on Clearwater Common Stock, which may include Clearwater Restricted
Stock Units, to provide a substitute of comparable value for such terminated Potlatch Restricted Stock Units. 
 6.5 Potlatch Performance
Shares. 
 (a) Adjustment of Potlatch Performance Shares for the 2006-2008 Performance Period. Prior to the record date for the
Distribution (the “Record Date”), each outstanding Potlatch Performance Share award held by a Potlatch Employee or Clearwater Employee for the 2006-2008 performance period shall be settled by Potlatch. Each such Potlatch Performance
Share award shall continue to have, and be subject to, the same terms and conditions set forth in the Potlatch Stock Incentive Plans and as provided in the respective award agreements governing such Potlatch Performance Shares, except that the
determination of the extent to which the performance goals for the 2006-2008 period shall have been attained shall be made as of the last day of the calendar quarter preceding the Record Date. 
 (b) Adjustment of Potlatch Performance Shares for the 2007-2009 and 2008-2010 Performance Periods. As of the Distribution Date, each outstanding
Potlatch Performance Share award held by Potlatch Employees for the 2007-2009 and 2008-2010 performance periods, whether vested or unvested, shall be, in connection with the Distribution, adjusted by Potlatch. Each such Potlatch Performance Share
award shall continue to have, and be subject to, the same terms and conditions set forth in the Potlatch Stock Incentive Plans and as provided in the respective award agreements governing such Potlatch Performance Shares as of the Distribution Date,
except that (i) the number of shares of Potlatch Common Stock for which such Potlatch Performance Share award can be settled shall be equal to the number of shares of Potlatch Common Stock that were issuable upon settlement of such Potlatch
Performance Share award as of the Distribution Date divided by the Potlatch Ratio, rounded to three (3) decimal places, and 
  

 24 

 
(ii) the Distribution shall be treated as a dividend for purposes of measuring attainment of the total shareholder return performance objectives. 

(c) Potlatch Performance Shares Held by Clearwater Employees. Potlatch Performance Share Awards for the 2006-2008 performance periods that are
held by Clearwater Employees shall be settled and paid in the manner described in Section 6.5(a). Potlatch Performance Share awards for the 2007-2009 and 2008-2010 performance periods held by Clearwater Employees shall be forfeited as of the
Distribution Date in accordance with the terms of the applicable award agreements. Clearwater shall be responsible for issuing cash incentives or equity incentives based on Clearwater Common Stock, which may include Clearwater Performance Share
awards, to provide a substitute of comparable value for such terminated Potlatch Performance Share awards. 
 6.6 Severance Plans.

 (a) Executive Severance Plan. Effective as of the Distribution Date, Potlatch shall establish the Potlatch Executive Severance Plan
that shall be substantially identical in all Material Features to the Clearwater Executive Severance Plan. 
 (b) Salaried Severance
Plan. Effective as of the Distribution Date, Potlatch shall establish the Potlatch Salaried Severance Plan that shall be substantially identical in all Material Features to the Clearwater Salaried Severance Plan. 
 (c) No Separation from Service. The Parties agree that the Separation and Distribution shall not be considered a separation from service or
termination of employment entitling Potlatch Employees or Clearwater Employees to be eligible to participate in or to receive payment of severance benefits under the Executive Severance Plans or Salaried Severance Plans. Potlatch and Clearwater
shall cause their respective Executive Severance Plans and Salaried Severance Plans to be amended (if necessary) and to be administered in a manner consistent with this understanding. 
 6.7 Deferred Payment Contracts and Severance Contracts. All Liabilities with respect to, and all responsibilities for administering, the deferred
payment contracts and severance contracts for the individuals listed on Schedule 6.7 shall be allocated between the Parties as set forth on Schedule 6.7. 
  

 25 

 ARTICLE VII 
 HEALTH AND WELFARE PLANS 
 7.1 Establishment of Potlatch Health and Welfare Plans.

 (a) New Plans. Effective as of January 1, 2009, Potlatch shall establish, or cause to be established, the Potlatch Health and
Welfare Plans which shall be substantially identical in all Material Features to the corresponding Clearwater Health and Welfare Plans as in effect on the Distribution Date. Potlatch shall cause the Potlatch Health and Welfare Plans to be
responsible for all claims incurred by Potlatch Employees on and after January 1, 2009 (subject to the terms of such Plans). 
 (b)
Existing Arrangement. Clearwater, as sponsor of the existing Health and Welfare Plans through December 31, 2008, agrees not to make any modification, amendment or other change to any Health and Welfare Plan without Potlatch’s
consent through December 31, 2008. 
 7.2 Insured Health and Welfare Benefits. Effective as of the Distribution Date and through
December 31, 2008, Potlatch shall be liable to Clearwater for premiums owed for coverage for Potlatch Employees under the Clearwater Health and Welfare Plans (other than the Disability Plan). 
 7.3 Self-Insured Health and Welfare Benefits. 
 (a) Administration of Claims of Potlatch Employees. Clearwater shall cause the Clearwater Health and Welfare Plans, other than Disability Plans, to administer all claims incurred by Potlatch Employees and Clearwater Employees under
such Plans prior to January 1, 2009, including claims incurred but not yet reported prior to January 1, 2009. The Clearwater Health and Welfare Plans, other than Disability Plans, shall be responsible for claims incurred (including claims
incurred but not yet reported) prior to January 1, 2009. Potlatch shall be liable to Clearwater for any such claims incurred by Potlatch Employees from the Distribution Date through December 31, 2008. Thereafter, the Potlatch Health and
Welfare Plans, other than Disability Plans, shall be responsible for and assume Liability for claims incurred on or after January 1, 2009. For this purpose, a claim shall be deemed to be incurred: 
 (i) when an individual obtains professional services, equipment or prescription drugs covered by a medical, prescription drug, dental or
vision benefit plan; 
 (ii) upon death in the case of a life insurance plan; and 
 (iii) as of the date of the accident or injury in the case of an accidental death and dismemberment or business travel accident plan.

 (b) Clearwater Health Plans. Notwithstanding the foregoing, the Clearwater Health Plans shall be responsible for but not liable for
the cost of all professional services, 
  

 26 

 
equipment and prescription drugs provided during a hospital stay or similar confinement of a Potlatch Employee that begins prior to January 1, 2009, and
ends after January 1, 2009 (subject to the terms and conditions of the Clearwater Health Plans). Potlatch shall be liable to Clearwater for any and all such costs incurred by Potlatch Employees from the Distribution Date through the end of such
stay or confinement. Thereafter, the Potlatch Health Plans shall be responsible and assume related Liability for the cost of all professional services, equipment and prescription drugs provided during a hospital stay or similar confinement of a
Potlatch Employee that begins on or after January 1, 2009 (subject to the terms and conditions of the Potlatch Health Plans). 
 7.4
Disability Plans. Effective as of the Distribution Date and through December 31, 2008, the Disability Plans will be administered by Clearwater as set forth in the Transition Services Agreement. Effective as of the Distribution Date,
Potlatch shall assume responsibility and accompanying Liability for any Potlatch Employee who is absent from work on account of a short term disability. Furthermore, effective as of the Distribution Date and through December 31, 2008, Potlatch
shall be liable to Clearwater for premiums owed for long-term disability coverage for Potlatch Employees under the Clearwater Disability Plans. Effective as of January 1, 2009, the Potlatch Disability Plans (short-term and long-term) shall
assume responsibility and accompanying Liability for Potlatch Employees. 
 7.5 Outsourcing of Claims. Potlatch and Clearwater shall
have the right to engage a third party administrator, vendor, or insurance company to administer (“Outsource”) claims incurred under their respective Health and Welfare Plans, including claims incurred before January 1, 2009. Each
Party may determine the manner and extent of such Outsourcing, including the selection of one or more third party administrators, vendors, or insurance companies and the ability to transfer the Liability for such claims to one or more independent
insurance companies. 
 7.6 Post-Distribution Transitional Arrangements. 
 (a) Transition Period. Both Clearwater and Potlatch will participate in the Clearwater Health and Welfare Plans through December 31, 2008.
Accordingly, Potlatch shall reimburse Clearwater for any and all direct and indirect expenses and costs for claims incurred through December 31, 2008, by Potlatch Employees. 
 (b) Continuance of Elections, Co-Payments and Maximum Benefits. 
 (i) As of January 1, 2009, Potlatch shall cause the Potlatch Health and Welfare Plans to recognize and maintain all coverage and
contribution elections made by Potlatch Employees under the Clearwater Health and Welfare Plans and apply such elections under the Potlatch Health and Welfare Plans for the remainder of the period or periods for which such elections are by their
terms applicable. The direct transfer or other movement of employment between Potlatch and Clearwater at any time upon or before January 1, 2009, shall neither constitute nor be treated as a “status change” or termination of
employment under the Potlatch Health and Welfare Plans or the Clearwater Health and Welfare Plans. 
  

 27 

 (ii) On and after January 1, 2009, Potlatch shall cause the Potlatch Health Plans to
recognize and give credit for all benefits paid to Potlatch Employees under the Clearwater Health Plans for purposes of determining when such persons have reached their lifetime maximum benefits under the Potlatch Health Plans. 
 (c) HCFA Administration. As of the Distribution Date, Potlatch shall assume all Liabilities relating to, arising out of or resulting from claims
verified by Potlatch or Clearwater under the HCFA data match reports that relate to Potlatch Employees. 
 7.7 Vendor Arrangements.
The Parties shall use their commercially reasonable efforts to enable Potlatch to procure, effective as of January 1, 2009: (a) third party ASO Contracts with the Material Features of the ASO Contracts entered into by Clearwater, as set
forth in Schedule 7.7(a) (the “ASO Contracts”); and (b) Group Insurance Policies, with the Material Features of the Group Insurance Policies entered into by Clearwater, as set forth in Schedule 7.7(b) (the
“Group Insurance Policies”). In each case, Potlatch shall, as of January 1, 2009, be responsible for establishing, adopting and implementing such contracts, agreements and arrangements for the Potlatch Health and Welfare Plans,
and Clearwater shall be responsible for maintaining such contracts, agreements and arrangements for the Clearwater Health and Welfare Plans. 
 7.8 Business Travel Accident Insurance. Potlatch shall procure a business travel accident insurance policy with the Material Features of the Clearwater business travel accident policy, effective as of the Distribution Date.

 7.9 Flexible Benefits Plans. Through December 31, 2008, Potlatch and designated members of the Potlatch Group shall remain
Participating Companies in the Clearwater Flexible Benefits Plan. The existing elections for Potlatch Employees shall remain in effect through December 31, 2008. Potlatch shall reimburse Clearwater for any and all direct and indirect expenses
and costs attributable to Potlatch Employees through December 31, 2008. Effective as of January 1, 2009, Potlatch shall establish, or caused to be established, the Potlatch Flexible Benefits Plan and shall be solely responsible for
implementing and maintaining the Potlatch Flexible Benefits Plan. The Potlatch Flexible Benefits Plan shall be Liable for any and all outstanding claims incurred and made by Potlatch Employees attributable to their 2008 elections after
December 31, 2008, in accordance with the terms of the Potlatch Flexible Benefits Plan. Accordingly, Clearwater and Potlatch shall each take all actions necessary to cause a spin-off of the portion of the Clearwater Flexible Benefits Plan
covering Potlatch Employees to the Potlatch Flexible Benefits Plan for the outstanding recordkeeping account balances after December 31, 2008, in accordance with Revenue Ruling 2002-32 and subsequent guidance thereunder. Such actions shall
include, but not be limited to, a transfer by or on behalf of Clearwater to Potlatch of the amount equal to participant contributions to the Clearwater Flexible Benefits Plan from January 1, 2008 through the Distribution Date, less the
participant reimbursements for such period. 
 7.10 COBRA. Clearwater shall be responsible through December 31, 2008, for
compliance with the health care continuation coverage requirements of COBRA and the Clearwater Health and Welfare Plans with respect to Potlatch Employees and qualified beneficiaries (as such term is defined under COBRA). On or about
December 31, 2008, 
  

 28 

 
Clearwater shall provide Potlatch, through hard copy, electronic format or such other mechanism as is appropriate under the circumstances, with a list of all
qualified beneficiaries (as such term is defined under COBRA) that relate to the Potlatch Group and the relevant information pertaining to their coverage elections and remaining COBRA time periods. Effective as of January 1, 2009, Potlatch
shall be solely responsible for compliance with the health care continuation coverage requirements of COBRA and the Potlatch Health and Welfare Plans for Potlatch Employees and their qualified beneficiaries (as such term is defined under COBRA).

 7.11 Other Post-Retirement Benefits (OPEB) Programs. 
 (a) Administration. As soon as reasonably practicable after December 31, 2008, Clearwater shall provide to Potlatch, through hard copy, electronic format or such other mechanism as is appropriate under the
circumstances, a list detailing all Potlatch Employees who are, to the knowledge of Clearwater, eligible to participate in the Clearwater Other Post-Retirement Benefits Program as of January 1, 2009, and the type of coverage and level of
coverage for which they are eligible, as applicable. Effective as of January 1, 2009, Clearwater shall be solely responsible for the administration of the Clearwater Other Post-Retirement Benefits (OPEB) Program for Clearwater Employees, and
Potlatch shall be solely responsible for the administration of the Potlatch Other Post-Retirement Benefits (OPEB) Program for the Potlatch Employees. 
 (b) Assumption of Liabilities. Effective as of January 1, 2009, (i) the Potlatch Other Post-Retirement Benefits (OPEB) Program shall assume and be solely responsible for any and all Liabilities for or
relating to Potlatch Employees under the corresponding Clearwater Other Post-Retirement Benefits (OPEB) Program, and (ii) the Clearwater Other Post-Retirement Benefits (OPEB) Program shall assume and be solely responsible for any and all
Liabilities for or relating to Clearwater Employees under the Clearwater Other Post-Retirement Benefits (OPEB) Program. 
 (c) Transition
Period. Potlatch shall reimburse Clearwater for any and all direct and indirect expenses and costs attributable to the Potlatch Employees’ coverage under the Clearwater Other Post-Retirement Benefits (OPEB) Program from the Distribution
Date through December 31, 2008 (or such other date as the Parties may mutually agree upon in writing). 
  

 29 

 ARTICLE VIII 
 FRINGE AND OTHER BENEFITS 
 8.1 Employee Assistance Program. The Parties shall use
their commercially reasonable efforts to procure, effective as of the Distribution Date or such other date as Potlatch and Clearwater may mutually agree in writing, contracts and arrangements with Clearwater’s vendors to establish an employee
assistance program for Potlatch Employees that contains the Material Features of the existing contracts and arrangements of Clearwater’s employee assistance program. Potlatch shall cease to be a Participating Company in the Clearwater employee
assistance program coincident with Potlatch’s establishment of the Potlatch employee assistance program. 
 8.2 Educational
Assistance Program. 
 (a) Establishment of Educational Assistance Program. Effective as of the Distribution Date or such other
date as Clearwater and Potlatch may mutually agree in writing, each Party shall provide an educational assistance program to its respective Employees that have the Material Features of the Clearwater educational assistance program. Potlatch shall
cease to be a Participating Company in the Clearwater educational assistance program coincident with Potlatch’s establishment of the Potlatch educational assistance program. 
 (b) Reimbursement of Expenses. As of the Distribution Date, any and all outstanding approved reimbursements under the Clearwater educational
assistance program for Potlatch Employees shall be made by Potlatch. Potlatch and Clearwater each agree to be responsible for providing benefits to their respective Employees who are enrolled in a class or other program as of the Distribution Date
for which approval has been granted under the Clearwater educational assistance program on or before the Distribution Date. 
 8.3 Other
Benefits. To the extent that Potlatch or Clearwater maintains, sponsors or provides other fringe benefits including, without limitation, the benefits specified in Schedule 8.3 to its employees, then each Party shall, to the extent
permitted by law, continue to make such benefits available to Clearwater Employees and Potlatch Employees, respectively, on substantially similar terms and conditions as are currently offered through the Distribution Date or such other date upon
which Clearwater and Potlatch mutually agree in writing. Each Party shall reimburse the other Party for any and all direct and indirect costs and expenses arising out of or relating to or resulting from making any such fringe benefits available to
the other Party’s employees. Clearwater and Potlatch agree to make commercially reasonable efforts to mutually agree in writing, whether, when, and on what terms any member of the Clearwater Group and Potlatch Group shall maintain, sponsor or
offer fringe benefits. 
  

 30 

 ARTICLE IX 
 TRANSITION ADMINISTRATIVE PROVISIONS 
 9.1 Transition Services Agreement. On the date
hereof, Potlatch and Clearwater have entered into the Transition Services Agreement covering the provision of various interim services, including financial, accounting, legal, and other services between the Parties. 
 9.2 Payment of Liabilities, Plan Expenses and Related Matters. For the period from the Distribution Date until such date as each Party maintains
its own Plan(s), the following provisions shall be in effect: 
 (a) Shared Costs. Each Party shall pay its share, as mutually
determined by Clearwater in good faith, of any contributions made to any trust maintained in connection with a Clearwater Plan while the Parties both participate in that Clearwater Plan. 
 (b) Contributions to Trusts. With respect to Plans to which Potlatch Employees make contributions, Clearwater shall use reasonable procedures to
determine Potlatch’s Liabilities associated with such Plans, taking into account such contributions, settlements, refunds and similar payments. 
 (c) Administrative Expenses Not Chargeable to a Trust. Plan administration expenses shall be allocated in the manner described in Article IX of the Separation Agreement to the extent not (i) charged
pursuant to the Transition Services Agreement or another provision of this Agreement, (ii) otherwise mutually agreed to in writing by Potlatch and Clearwater, or (iii) chargeable to a trust established in connection with a Clearwater Plan
or a Potlatch Plan. 
 9.3 Sharing of Participant Information. In addition to the responsibilities and obligations of Potlatch and
Clearwater specified in Article XII of the Separation Agreement, Potlatch and Clearwater shall share, or cause to be shared, all participant information that is necessary or appropriate for the efficient and accurate administration of each of the
Potlatch Plans and the Clearwater Plans during the respective periods applicable to such Plans as Clearwater and Potlatch may mutually agree in writing. Potlatch and Clearwater and their respective authorized agents shall, subject to applicable laws
of confidentiality and data protection, duplicate all files no matter in what format relating to the subjects of this Agreement and that are in the custody of the other Party or its agents, to the extent necessary or appropriate for such
administration. 
 9.4 Reporting and Disclosure Communications to Participants. While Potlatch is a Participating Company in the
Clearwater Plans or Clearwater is a Participating Company in the Potlatch Plans, each Party shall take, or cause to be taken, all actions necessary or appropriate to facilitate the distribution of all Plan-related communications and materials to its
respective Employees, participants and beneficiaries, including (without limitation) summary plan descriptions and related summaries of material modification(s), summary annual reports, investment information, prospectuses, notices and enrollment
materials. The Parties shall assist 
  

 31 

 
each other in complying with all reporting and disclosure requirements of ERISA for their respective Plans, including the preparation of Form Series 5500
annual reports, where applicable. 
 9.5 Audits Regarding Vendor Contracts. From the period beginning as of the Distribution Date and
ending eight (8) years thereafter, or such earlier date as Potlatch and Clearwater may mutually agree in writing, Potlatch and Clearwater and their duly authorized representatives shall have the right to conduct joint audits with respect to any
vendor contracts that relate to both the Potlatch Plans and the Clearwater Plans. The scope of such audits shall encompass the review of all correspondence, account records, claim forms, canceled drafts (unless retained by the bank), provider bills,
medical records submitted with claims, billing corrections, vendor’s internal corrections of previous errors and any other documents or instruments relating to the services performed by the vendor under the applicable vendor contracts. Potlatch
and Clearwater shall agree on the performance standards, audit methodology, auditing policy and quality measures, reporting requirements, and the manner in which costs incurred in connection with such audits will be allocated between the Parties.

 9.6 Beneficiary Designations. Subject to Section 9.9, all beneficiary designations made by Potlatch Employees under Clearwater
Plans, and all beneficiary designations made by Clearwater Employees under Potlatch Plans, shall be transferred to and be in full force and effect under the corresponding Plans established by the other Party until such beneficiary designations are
replaced or revoked by the Potlatch Employee or Clearwater Employee who made the beneficiary designation. 
 9.7 Requests for IRS, PBGC
and DOL Opinions. Potlatch and Clearwater shall make such applications to regulatory agencies, including the PBGC, IRS and DOL, as may be reasonable under the circumstances. Clearwater and Potlatch shall cooperate fully with one another on any
issue relating to the transactions contemplated by this Agreement for which Potlatch or Clearwater elects to seek a determination letter or private letter ruling from the IRS or an advisory opinion from the DOL. 
 9.8 Fiduciary Matters. Potlatch and Clearwater each acknowledge that actions contemplated to be taken pursuant to this Agreement may be subject to
fiduciary duties or standards of conduct under ERISA or other applicable law, and no Party shall be deemed to be in violation of this Agreement if such Party fails to comply with any provisions hereof based upon such Party’s good faith
determination that to do so would violate such a fiduciary duty or standard. 
 9.9 Consent of Third Parties. If any provision of this
Agreement is dependent on the consent of any third party (such as a vendor) and such consent is withheld, Potlatch and Clearwater shall use commercially reasonable efforts to implement the applicable provisions of this Agreement. If any provision of
this Agreement cannot be implemented due to the failure of such third party to consent, Potlatch and Clearwater shall negotiate in good faith to implement the provision in a mutually satisfactory manner. 
 9.10 Tax Cooperation. In connection with the interpretation and administration of this Agreement, Potlatch and Clearwater shall take into account
the agreements and policies 
  

 32 

 
established pursuant to the Separation Agreement and the parties’ intent to qualify the Distribution as a tax-free reorganization under Code Sections
368(a)(1)(D) and 355. 
  

 33 

 ARTICLE X 
 EMPLOYMENT-RELATED MATTERS 
 10.1 Terms of Employment. All basic terms and conditions
of employment for Potlatch Employees and Clearwater Employees, in each case, who are not subject to a Labor Agreement including, without limitation, their pay and benefits in the aggregate, shall remain substantially the same as the terms and
conditions that were in place immediately prior to the Distribution Date for twelve (12) months from the Distribution Date, unless otherwise mutually agreed in writing by the Parties. Notwithstanding the foregoing or any other provision of the
Separation Agreement or this Agreement, the employees of the Potlatch Group or the Clearwater Group, in each case, who are not subject to a Labor Agreement or an employment agreement that specifically provides otherwise shall remain at-will
employees and the Potlatch Group and the Clearwater Group may terminate their respective employees at any time for any reason. 
 10.2
Non-Solicitation of Employees. Potlatch and Clearwater each agree not to directly solicit or recruit the other Party’s employees for a period of two (2) years following the Distribution Date, if such solicitation or recruitment
would be disruptive or damaging or would interfere with the operation or business of the other Party. Notwithstanding the foregoing, this prohibition on solicitation does not apply to actions taken by a Party either: (a) as a result of an
employee’s affirmative response to a general recruitment effort carried out through a public solicitation or general solicitation, or (b) as a result of an employee’s initiative. 
 10.3 Confidentiality and Proprietary Information. No provision of the Separation Agreement or this Agreement shall be deemed to release any
Potlatch Employee or Clearwater Employee for any violation of any non-competition guideline or any agreement or policy pertaining to confidential or proprietary information of any member of the Potlatch Group or Clearwater Group, or otherwise
relieve any such individual of his or her obligations under such non-competition guideline, agreement, or policy. 
 10.4 Time Off
Policies. Effective as of the Distribution Date, Potlatch shall establish the Potlatch Time Off Policies that are identical in all Material Features to the Clearwater Time Off Policies. Effective as soon as reasonably practicable after the
Distribution Date (or such other date as Potlatch and Clearwater may mutually agree in writing), (a) Clearwater shall transfer to Potlatch all data and information relating to the Clearwater Time Off Policies; and (b) Potlatch shall assume
all Liabilities attributable to Potlatch Employees under the Clearwater Time Off Policies. In the event that a Potlatch Employee or Clearwater Employee transfers his or her employment to the other Party before the Distribution Date, such transfer of
employment shall not result in a payout or constitute a termination event for purposes of the Time Off Policies, and no duplication of benefits shall occur as a result of any such transfer of employment between Potlatch and Clearwater. Furthermore,
the Liability attributable to any Clearwater Employee or Potlatch Employee who transfers employment between Potlatch and Clearwater prior to the Distribution Date shall be assumed by the employer subsequent to the transfer. 
  

 34 

 10.5 Payroll Systems. 
 (a) Clearwater Payroll System. Effective on and after the Distribution Date, and subject to the Transition Services Agreement, Clearwater shall
perform payroll services for Potlatch. 
 (b) Income Reporting, Withholding. Commencing with service periods beginning after the
division of the payroll services, Clearwater shall perform or be responsible for performing the income reporting and withholding function under its own employer identification number for Clearwater Employees and its other service providers, and
Potlatch shall perform or be responsible for performing the income reporting and withholding function for Potlatch Employees and its other service providers. 
 (c) Delivery of, and Access to, Documents and Other Information. Potlatch and Clearwater each shall make reasonably available to the other Party all forms, documents or information, no matter in what format
stored, relating to compensation or payments made to any employee or service provider to extent reasonably necessary to facilitate an individual’s transfer to, or service or employment by, the other Party. Such information may include, but is
not limited to, information concerning employee payroll deductions, payroll adjustments, records of time worked, tax records (e.g., Forms W-2, W-4, 940 and 941), and information concerning garnishment of wages or other payments. 
 (d) Consistency of Payroll Taxes and Contributions. Potlatch and Clearwater shall individually and collectively use commercially reasonable
efforts to avoid unnecessarily duplicative federal, state or local payroll taxes, insurance or workers’ compensation contributions, or unemployment contributions arising on or after the Distribution Date. Potlatch and Clearwater shall take
consistent reporting and withholding positions with respect to any such taxes or contributions. 
 10.6 Personnel and Pay Records.
Subject to Section 12.1 of the Separation Agreement, for such period as Potlatch and Clearwater may mutually agree in writing, Potlatch and Clearwater shall make reasonably available to the other Party (including the ability to duplicate) to
the extent necessary to facilitate a transfer of employment or service to the other Party, subject to applicable laws on confidentiality and data protection, all current and historic forms, documents or information, no matter in what format stored,
relating to pre-Distribution Date personnel, medical records, and payroll information. Such forms, documents or information may include, but is not limited to: (a) information regarding an Employee’s ranking or promotions; (b) the
existence and nature of garnishment orders or other judicial or administrative actions or orders affecting an employee’s or service provider’s compensation; and (c) performance evaluations. 
 10.7 Unemployment Insurance Program. 
 (a) Coverage Through Distribution Date. All current Potlatch Employees and all current Clearwater Employees will be covered under the Clearwater Unemployment Insurance Program through the Distribution Date. Clearwater shall cooperate
with the 
  

 35 

 
unemployment insurance vendor(s) by providing information in its possession that is necessary for the development of the Potlatch Unemployment Insurance
Program. 
 (b) Coverage Post-Distribution Date. Before the Distribution Date, the Parties shall use their commercially reasonable
efforts to enable Potlatch to procure an agreement with its unemployment insurance vendor(s) with the Material Features of the Clearwater Unemployment Insurance Program. After the Distribution Date, Potlatch and Clearwater will maintain their
respective Unemployment Insurance Programs for their respective employees. 
 (c) Tax Experience Rating. Unless otherwise directed by
Potlatch, the Parties shall use their commercially reasonable efforts to enable Potlatch as well as all members of the Potlatch Group, to retain the existing experience rating on or after the Distribution Date. 
 10.8 Non-Termination of Employment. Neither the Distribution or Separation, nor the termination of the Participating Company status of Potlatch,
Clearwater or any member of the Potlatch Group or Clearwater Group shall cause any employee to be deemed to have incurred a termination of employment; and no transfer of employment between Potlatch and Clearwater before the Distribution Date shall
be deemed a termination of employment for any purpose hereunder. 
 10.9 Leave of Absence Programs and FMLA. 
 (a) Allocation of Responsibilities After Distribution Date. Subject to Section 12.1 of the Separation Agreement, effective as of the
Distribution Date: (i) each Party shall adopt (or continue to maintain) Leave of Absence Programs which are substantially identical in all Material Features to the existing Leave of Absence Programs as in effect on the Distribution Date;
(ii) each Party shall honor all terms and conditions of leaves of absence which have been granted to any Clearwater or Potlatch Employee under an existing Leave of Absence Program or FMLA before the Distribution Date, including such leaves that
are to commence after the Distribution Date; (iii) each Party shall be solely responsible for administering leaves of absence and complying with FMLA with respect to its hourly Employees; and (iv) each Party shall recognize all periods of
service of the other Party’s employees to the extent such service is recognized under the existing Leave of Absence Programs and FMLA; provided, however, that no duplication of benefits shall, to the extent permitted by law, be required by the
foregoing. 
 (b) Disclosure. Subject to Section 12.1 of the Separation Agreement, at such date as mutually agreed in writing by
the Parties, Clearwater shall provide to Potlatch copies of all records pertaining to the Clearwater Leave of Absence Programs and FMLA with respect to all Potlatch Employees to the extent such records have not been previously provided. 

10.10 Employment Litigation. Subject to the Separation Agreement, Potlatch shall have the sole responsibility for all employment-related claims
regarding Potlatch Employees, and Clearwater shall have the sole responsibility for all employment-related claims regarding Clearwater Employees, that exist, or come into existence, on or after the Distribution Date arising out of or relating to or
resulting from their employment in the Retained Business or Pulp-Based Business, respectively. 
  

 36 

 10.11 Workers’ Compensation. The ownership and administration of workers compensation
insurance shall be governed by Article VIII of the Separation Agreement. 
  

 37 

 ARTICLE XI 
 LABOR AGREEMENTS 
 The Parties agree that the Labor Agreements and the Liabilities thereunder
shall, in each case, as applicable, be retained by, or, as applicable, assumed by, and assigned to, Clearwater. 
  

 38 

 ARTICLE XII 
 GENERAL PROVISIONS 
 12.1 Relationship of Parties. Nothing in this Agreement shall be
deemed or construed by the Parties or any third party as creating the relationship of principal and agent, partnership or joint venture between the Parties, the understanding and agreement being that no provision contained herein, and no act of the
Parties, shall be deemed to create any relationship between the Parties other than the relationship set forth herein. 
 12.2
Incorporation of Separation Agreement Provisions. The following provisions of the Separation Agreement are hereby incorporated herein by reference, and unless otherwise expressly specified herein, such provisions shall apply as if fully set
forth herein (references in this Section to an “Article” shall mean Articles of the Separation Agreement, and, except as expressly set forth below, references in the material incorporated herein by reference shall be references to the
Separation Agreement): Article IX (Expenses); Article X (Indemnification); Article XI (Dispute Resolution); and Article XII (Access to Information and Services). 
 12.3 Conflict. In the event of any conflict between the provisions of this Agreement and the Separation Agreement, any other Agreement between the Parties, or any Plan, then the provisions of this Agreement
shall control. 
 12.4 Entire Agreement. This Agreement, the Separation Agreement, the Transition Services Agreement, and the
documents delivered pursuant hereto and thereto, constitute the entire agreement between the Parties with respect to the subject matter contained herein or therein, and supersede all prior agreements, negotiations, discussions, understandings,
writings and commitments between the Parties with respect to such subject matter. 
 12.5 Choice of Law and Forum. This Agreement
shall be governed by and construed and enforced in accordance with the substantive laws of the State of Delaware and the federal laws of the United States of America applicable therein, as though all acts and omissions related hereto occurred in
Delaware. 
 12.6 Amendment. This Agreement shall not be amended, modified or supplemented except by a written instrument signed by an
authorized representative of each of the Parties. 
 12.7 Waiver. Any term or provision of this Agreement may be waived, or the time
for its performance may be extended, by the Party or Parties entitled to the benefit thereof. Any such waiver shall be validly and sufficiently given for the purposes of this Agreement if, as to any Party, it is in writing signed by an authorized
representative of such Party. The failure of any Party to enforce at any time any provision of this Agreement shall not be construed to be a waiver of such provision, or in any way to affect the validity of this Agreement or any part hereof or the
right of any Party thereafter to enforce each and every such provision. No waiver of any breach of this Agreement shall be held to constitute a waiver of any other or subsequent breach. 
  

 39 

 12.8 Partial Invalidity. Wherever possible, each provision hereof shall be interpreted in such a
manner as to be effective and valid under applicable Law, but in case any one or more of the provisions contained herein shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such provision or provisions shall be
ineffective to the extent, but only to the extent, of such invalidity, illegality or unenforceability without invalidating the remainder of such provision or provisions or any other provisions hereof, unless such a construction would be
unreasonable. 
 12.9 Execution in Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be
deemed an original instrument, but all of which shall be considered one and the same agreement, and shall become binding when one or more counterparts have been signed by and delivered to each of the Parties. 
 12.10 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the Parties hereto and thereto, respectively, and
their successors and permitted assigns; provided, however, that the rights and obligations of either Party under this Agreement shall not be assignable by such Party without the prior written consent of the other Party. The successors and permitted
assigns hereunder shall include, without limitation, any permitted assignee as well as the successors in interest to such permitted assignee (whether by merger, liquidation (including successive mergers or liquidations) or otherwise). 
 12.11 No Third Party Beneficiaries. The provisions of this Agreement are solely for the benefit of the Parties and their respective Affiliates,
successors and permitted assigns and shall not confer upon any third Person any remedy, claim, liability, reimbursement or other right in excess of those existing without reference to this Agreement. No provision in this Agreement shall be construed
to create any right, or accelerate entitlement, to any compensation or benefit whatsoever on the part of any Potlatch Employee, Clearwater Employee or other future, present or former employee of Potlatch or Clearwater under any Potlatch Plan or
Clearwater Plan or otherwise. Furthermore, no provision in this Agreement is intended to, or shall, modify or amend any Potlatch Plan or Clearwater Plan. The foregoing shall not prevent the Parties entitled to enforce this Agreement from enforcing
any provision in this Agreement, but no other Person shall be entitled to enforce any provision in this Agreement on the grounds that it is an amendment to any Potlatch Plan or Clearwater Plan, unless the provision is explicitly designated as such
in this Agreement, and the Person is otherwise entitled to enforce the terms of such Potlatch Plan or Clearwater Plan. If a party who is not entitled to enforce this Agreement brings a lawsuit or other action to enforce any provision in this
Agreement as an amendment to any Potlatch Plan or Clearwater Plan and such provision is construed by a Governmental Entity to constitute an amendment of such Plan despite not being explicitly designated as such in this Agreement, that provision
shall retroactively lapse, thereby precluding it from having an amendatory effect. 
 12.12 Notices. All notices, requests, claims,
demands and other communications required or permitted hereunder shall be in writing and shall be deemed given or delivered (a) when delivered personally, (b) if transmitted by facsimile when confirmation of transmission is received,
(c) if sent by registered or certified mail, postage prepaid, return receipt requested, on the third business day after mailing, or (d) if sent by private courier when received; and shall be addressed as follows: 
  

 40 

 If to Potlatch, to: 
 Potlatch Corporation 
 601 W. First Avenue, Suite 1600 
 Spokane, WA 99201 
 Facsimile: (509) 835-1561

 Attention: General Counsel 
 If to Clearwater, to: 
 Clearwater Paper Corporation 
 601 West Riverside Avenue, Suite 1100 
 Spokane, WA 99201 
 Facsimile: (509) 342-2570 
 Attention: General
Counsel 
 or to such other address as such Party may indicate by a notice delivered to the other Party. 
 12.13 Performance. Each Party shall cause to be performed, and hereby guarantees the performance of, all actions, agreements and obligations set
forth herein to be performed by any Subsidiary or Affiliate of such Party. 
 12.14 Force Majeure. No Party shall be deemed in default
of this Agreement to the extent that any delay or failure in the performance of its obligations under this Agreement results from any cause beyond its reasonable control and without its fault or negligence, including, without limitation, acts of
God, acts of civil or military authority, embargoes, epidemics, war, riots, labor strikes, work stoppages as a result of labor unrest, insurrections, fires, explosions, earthquakes, floods, unusually severe weather conditions, or unavailability of
parts, or, in the case of computer systems, any failure in electrical or air conditioning equipment. In the event of any such excused delay, the time for performance shall be extended for a period equal to the time lost by reason of the delay.

 12.15 No Public Announcement. Neither Potlatch nor Clearwater shall, without the approval of the other, make any press release or
other public announcement concerning the actions (or inactions) contemplated by this Agreement, except as and to the extent that any such Party shall be so obligated by Law or the rules of any stock exchange or quotation system, in which case the
other Party shall be advised and the Parties shall use commercially reasonable efforts to cause a mutually agreeable release or announcement to be issued; provided, however, that; the foregoing shall not preclude communications or disclosures
necessary: (a) to implement the provisions of this Agreement; (b) to comply with the accounting and SEC disclosure obligations or the rules of any stock exchange; (c) to comply with a Labor Agreement and any requisite effects
bargaining; or (d) to promote a smooth transition for the employees, including FAQs and other employee communications. 
 12.16
Termination. Notwithstanding any provisions hereof, this Agreement may be terminated and the Distribution abandoned at any time prior to the Distribution Date by and in the sole discretion of the Board of Directors of Potlatch without the
prior approval of any Person. 
  

 41 

 In the event of such termination, this Agreement shall forthwith become void and no Party shall have any liability to any
Person by reason of this Agreement. 
 [signature page follows] 
  

 42 

 IN WITNESS WHEREOF, each Party has caused this Agreement to be executed by its authorized
representative as of the date first above written. 
  

			
	POTLATCH CORPORATION,
	a Delaware corporation
		
	By:	 	 /s/    Michael J. Covey

	Name:	 	Michael J. Covey
	
	 CLEARWATER PAPER CORPORATION,
 a
Delaware corporation

		
	By:	 	 /s/    Gordon L. Jones

	Name:	 	Gordon L. Jones

  

 43Tax Sharing Agreement

 Exhibit 10.4 
 TAX SHARING AGREEMENT 
 by and among 
 POTLATCH CORPORATION, 
 POTLATCH FOREST HOLDINGS, INC., 
 POTLATCH LAND & LUMBER, LLC, 
 and

 CLEARWATER PAPER CORPORATION 
 Dated as of December 15, 2008 

 TABLE OF CONTENTS 
  

					
	 	  	 	  	Page
	ARTICLE I DEFINITIONS	  	2
		
	ARTICLE II PREPARATION AND FILING OF TAX RETURNS	  	7
			
	 Section 2.1
	  	Potlatch Entities’ Responsibility	  	7
	 Section 2.2
	  	Clearwater’s Responsibility	  	7
	 Section 2.3
	  	Agent	  	7
	 Section 2.4
	  	Manner of Tax Return Preparation	  	7
	 Section 2.5
	  	Tax Services	  	8
		
	ARTICLE III LIABILITY FOR TAXES	  	8
			
	 Section 3.1
	  	Potlatch Entities’ Liability for Section 2.1 Taxes	  	8
	 Section 3.2
	  	Clearwater’s Liability for Section 2.2 Taxes	  	9
	 Section 3.3
	  	Subsequent Adjustments	  	9
		
	ARTICLE IV SPIN-OFF TAXES AND ALLOCATION	  	9
			
	 Section 4.1
	  	Spin-off Taxes	  	9
	 Section 4.2
	  	Private Letter Rulings; Tax Opinion	  	10
	 Section 4.3
	  	Carryback of Net Operating Losses	  	11
	 Section 4.4
	  	Continuing Covenants	  	12
	 Section 4.5
	  	Allocation of Tax Assets	  	13
		
	ARTICLE V INDEMNIFICATION	  	13
			
	 Section 5.1
	  	Generally	  	13
	 Section 5.2
	  	Inaccurate, Incomplete or Untimely Information	  	13
	 Section 5.3
	  	Adjustments to Payments	  	14
	 Section 5.4
	  	Reporting of Indemnifiable Loss	  	14
	 Section 5.5
	  	No Indemnification for Tax Items	  	15
	 Section 5.6
	  	REIT Status	  	15
	 Section 5.7
	  	Double Recovery	  	15
		
	ARTICLE VI PAYMENTS	  	15
			
	 Section 6.1
	  	In General	  	15
	 Section 6.2
	  	Treatment of Payments	  	15
	 Section 6.3
	  	Prompt Performance	  	15
	 Section 6.4
	  	After Tax Amounts	  	15
	 Section 6.5
	  	Interest	  	16

  

 i 

					
	 Section 6.6
	  	REIT Savings	  	16
		
	ARTICLE VII TAX PROCEEDINGS	  	17
			
	 Section 7.1
	  	Audits	  	17
	 Section 7.2
	  	Notice	  	17
	 Section 7.3
	  	Remedies	  	17
	 Section 7.4
	  	Control of Spin-off Tax Proceedings	  	18
		
	ARTICLE VIII MISCELLANEOUS PROVISIONS	  	18
			
	 Section 8.1
	  	Cooperation and Exchange of Information	  	18
	 Section 8.2
	  	Dispute Resolution	  	19
	 Section 8.3
	  	Notices	  	19
	 Section 8.4
	  	Changes in Law	  	20
	 Section 8.5
	  	Confidentiality	  	20
	 Section 8.6
	  	Assignment	  	21
	 Section 8.7
	  	Affiliates	  	21
	 Section 8.8
	  	Authority	  	21
	 Section 8.9
	  	Entire Agreement	  	21
	 Section 8.10
	  	Governing Law and Jurisdiction	  	21
	 Section 8.11
	  	Counterparts	  	22
	 Section 8.12
	  	Severability	  	22
	 Section 8.13
	  	Parties in Interest	  	22
	 Section 8.14
	  	Failure or Indulgence Not Waiver	  	22
	 Section 8.15
	  	Setoff	  	22
	 Section 8.16
	  	Amendments	  	22
	 Section 8.17
	  	Interpretation	  	22

  

 ii 

 TAX SHARING AGREEMENT 
 This Tax Sharing Agreement (this “Agreement”) is dated as of December 15, 2008, by and among Potlatch Corporation, a Delaware
corporation (“Potlatch”), Potlatch Forest Holdings, Inc., a Delaware corporation and wholly owned subsidiary of Potlatch (“Holdings”), Clearwater Paper Corporation f/k/a Potlatch Forest Products Corporation, a
Delaware corporation and currently a direct, wholly owned subsidiary of Potlatch (“Clearwater”), and Potlatch Land & Lumber, LLC, a Delaware limited liability company and currently a direct, wholly owned subsidiary of
Clearwater (“RetainCo,” and together with Potlatch, Holdings, and Clearwater, the “Parties,” with each sometimes referred to herein as a “Party”). 
 RECITALS 
 WHEREAS, the Boards of Directors of the Parties have each determined
that it is appropriate and desirable to separate the Pulp-Based Business from the Retained Business and accordingly have caused the Parties to enter into the Separation and Distribution Agreement dated as of December 15, 2008 (the
“Separation Agreement”); 
 WHEREAS, as set forth in the Separation Agreement, and subject to the terms and conditions
thereof, the Parties currently contemplate that Clearwater will contribute and transfer to RetainCo, and RetainCo will receive and assume, assets and liabilities currently held by Clearwater and associated with the Retained Business and Clearwater
will distribute all of the stock of RetainCo to Holdings in a transaction intended to qualify as a tax-free reorganization and distribution under sections 368(a)(1)(D) and 355 of the Code (the “Internal Spin-off”); 
 WHEREAS, as set forth in the Separation Agreement, and subject to the terms and conditions thereof, the Parties currently contemplate that, following the
Internal Spin-off, Holdings will distribute all of its shares of Clearwater common stock to Potlatch and Potlatch will distribute all of its shares of Clearwater common stock received from Holdings to Potlatch shareholders in a transaction intended
to qualify as a tax-free distribution of the shares of a controlled corporation under section 355 of the Code (the “Public Spin-off”); 
 WHEREAS, in contemplation of the Internal Spin-off and the Public Spin-off (collectively, the “Spin-offs”) pursuant to which RetainCo and its subsidiaries will become direct and indirect subsidiaries
of Potlatch and Holdings (each of Potlatch, Holdings, RetainCo, and the subsidiaries of RetainCo, a “Potlatch Entity”) and will cease to be direct and indirect subsidiaries of Clearwater, and Clearwater will become an independent
corporation whose shares are listed on the New York Stock Exchange, the Parties have determined to enter into this Agreement, setting forth their agreement with respect to certain Tax matters; and 
 WHEREAS, the Parties desire to set forth their agreement on the rights and obligations of the Potlatch Entities, on the one hand, and Clearwater, on the
other hand, with 

 
respect to handling and allocating federal, state and local and foreign Taxes, in periods beginning prior to the Closing Date, Taxes resulting from
transactions effectuated in connection with the Spin-offs and various other Tax matters. 
 NOW, THEREFORE, in consideration of the foregoing
and the terms, conditions, covenants and provisions of this Agreement, the Parties mutually covenant and agree as follows: 
 ARTICLE I

 DEFINITIONS 
 “After Tax Amount” means any additional amount necessary to reflect (through a gross-up mechanism) the hypothetical Tax consequences of the receipt or accrual of any payment required to be made under this Agreement
(including payment of an additional amount or amounts hereunder and the effect of the deductions available for interest paid or accrued and for Taxes such as state and local Income Taxes), determined by using the highest marginal corporate Tax rate
(or rates, in the case of an item that affects more than one Tax) for the relevant taxable period (or portion thereof). 
 “Audit” includes any audit, assessment of Taxes, or other examination by any Taxing Authority, proceeding, or appeal of such a proceeding relating to Taxes, whether administrative or judicial, including proceedings relating
to competent authority determinations. 
 “Clearwater Representation Letter” means an officer’s certificate in which
certain representations, warranties and covenants are made on behalf of Clearwater in connection with the issuance of a Tax Opinion. 
 “Closing Date” means the date on which the Public Spin-off is effected. 
 “Code” means the
Internal Revenue Code of 1986, as amended, and any successor thereto. 
 “Combined Return” means any Tax Return, other than
with respect to United States federal Income Taxes, filed on a consolidated, combined (including nexus combination, worldwide combination, domestic combination, line of business combination or any other form of combination) or unitary basis wherein
Clearwater joins in the filing of such Tax Return (for any taxable period or portion thereof) with one or more Potlatch Entities. 
 “Control” means the ownership of stock possessing at least 50 percent of the total combined voting power of all classes of stock entitled to vote. 
 “Dispute Resolution Commencement Date” has the meaning set forth in Section 8.3. 
 “Dispute” has the meaning set forth in Section 8.3. 
  

 2 

 “Escrow Agreement” has the meaning set forth in Section 6.3. 
 “Estimated Tax Installment Date” means the estimated Tax installment due dates prescribed in section 6655(c) of the Code and any other
date on which an installment of Taxes is required to be made. 
 “Filing Party” has the meaning set forth in
Section 7.1. 
 “Final Determination” means the final resolution of liability for any Tax for any taxable period, by or
as a result of: (i) a final and unappealable decision, judgment, decree or other order by any court of competent jurisdiction; (ii) a final settlement with the IRS, a closing agreement or accepted offer in compromise under Code sections
7121 or 7122, or a comparable agreement under the laws of other jurisdictions, which resolves the entire liability for such Tax for any taxable period; (iii) any allowance of a refund or credit in respect of an overpayment of Tax, but only
after the expiration of all periods during which such refund may be recovered by the jurisdiction imposing the Tax; or (iv) any other final disposition, including by reason of the expiration of the applicable statute of limitations. 

“Income Tax” means any federal, state, local or foreign Tax determined by reference to income, net worth, gross receipts or capital,
or any such Taxes imposed in lieu of such Tax. 
 “Indemnifiable Loss Deduction” has the meaning set forth in
Section 5.3. 
 “Indemnified Loss” has the meaning set forth in Section 5.3. 
 “Indemnifying Party” has the meaning set forth in Section 5.3. 
 “Indemnitee” has the meaning set forth in Section 5.3. 
 “Independent Firm” means an accounting firm which has not, except pursuant to Section 8.3, performed any services since
January 1, 2006 for any Party. 
 “Internal Spin-off” has the meaning given in the recitals to this Agreement.

 “Initial Ruling” means any private letter ruling issued by the IRS in connection with the Spin-offs in response to
Potlatch’s initial request for such a letter ruling. 
 “IRS” means the United States Internal Revenue Service or any
successor thereto, including, but not limited to its agents, representatives, and attorneys. 
 “Non-Income Spin-off Taxes”
means any Taxes other than Income Taxes imposed on any Party as a result of or in connection with the Spin-offs that would not have been imposed but for the Spin-offs. 
 “Option” means an option to acquire common stock, or other equity-based incentives the economic value of which is designed to mirror that of an option, including non-qualified stock options,
discounted non-qualified stock options, cliff options to the extent stock is 

  

 3 

 
issued or issuable (as opposed to cash compensation), and tandem stock options to the extent stock is issued or issuable (as opposed to cash compensation).

 “Owed Party” has the meaning set forth in Section 6.3. 
 “Owing Party” has the meaning set forth in Section 6.3. 
 “Payment Period” has the meaning set forth in Section 6.3(e). 
 “Person” means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust,
a joint venture, an unincorporated organization or a governmental entity or any department, agency or political subdivision thereof. 
 “Post-Spin Period” means a taxable period beginning after the Closing Date. 
 “Potlatch Entity”
has the meaning set forth in the recitals to this Agreement. 
 “Potlatch Representation Letter” means an officer’s
certificate in which certain representations, warranties and covenants are made on behalf of any Potlatch Entity in connection with the issuance of a Tax Opinion. 
 “Pre-Spin Period” means a taxable period beginning before the Closing Date, including, for the avoidance of doubt, any taxable period that begins before the Closing Date and ends following the Closing
Date. 
 “Pre-Spin Refinancing” means the series of transactions to be undertaken by Clearwater immediately preceding the
Spin-offs whereby Clearwater will issue notes and contribute a portion of the proceeds of such notes to RetainCo in consideration of the assumption by RetainCo of a portion of Clearwater’s indebtedness. 
 “Prohibited Act” has the meaning set forth in Section 4.4. 
 “Public Spin-off” has the meaning set forth in the recitals to this Agreement. 
 “Pulp-Based Business” has the meaning set forth in the Separation Agreement. 
 “Qualifying Income” has the meaning set forth in Section 6.3. 
 “REIT” has the meaning set forth in Section 5.7. 
 “REIT Failure Taxes” means any Taxes that are imposed upon Potlatch as a result of Potlatch’s failure to satisfy the REIT income test requirements of section 856(c)(2) and 856(c)(3) of Code,
which failure would not have occurred but for gain recognized by Potlatch from: (i) the failure of the Spin-offs to qualify as tax-free under sections 368(a)(1)(D) or 355 of the Code; or (ii) the application of section 355(d) or section
355(e) of the Code. REIT Failure Taxes include, but shall not be limited to: (i) corporate-level Taxes imposed on Potlatch during such years as Potlatch is ineligible to reelect REIT status as a result of the application of section 856(g) of
the Code; and (ii) Taxes imposed under sections 856(c)(7), 856(g)(5), 857(b)(5), or 

  

 4 

 
4981 of the Code, or any section of the Code imposing interest, penalties, or additions to tax on such Taxes, as a result of the failure described in the
immediately preceding sentence. 
 “REIT Savings Escrow Notice” has the meaning set forth in Section 6.3. 

“Restated Tax Saving Amount” has the meaning set forth in Section 5.4. 
 “Restricted Period” has the meaning set forth in Section 4.4. 
 “Retained Business” has the meaning set forth in the Separation Agreement. 
 “Ruling Documents” means (1) the initial request for a private letter ruling under section 355 and various other sections of the
Code, filed with the IRS in connection with the Spin-offs, together with any supplemental filings or ruling requests or other materials subsequently submitted in connection with such request on behalf of Potlatch, its subsidiaries and shareholders
to the IRS, the appendices and exhibits thereto, and any rulings issued by the IRS to any Potlatch Entity in response to such request or (2) any similar filings submitted to, or rulings issued by, any other Tax Authority in connection with the
Spin-offs. 
 “Separation Agreement” has the meaning set forth in the recitals to this Agreement. 
 “Separation Date” means the effective date and time of the transfers of property, assumption of liability, license, undertaking or
agreement in connection with the separation of the Retained Business and the Pulp-Based Business, as set forth in the Separation Agreement. 
 “Spin-off Taxes” means any Taxes imposed on Clearwater or any Potlatch Entity resulting from, or arising in connection with, the failure of the Internal Spin-off or the Public Spin-off to be tax-free to such party under
section 355 and section 368(a)(1)(D) of the Code, as the case may be (including, without limitation, any Tax resulting from the application of section 355(d) or section 355(e) of the Code) or corresponding provisions of the laws of any other
jurisdictions, including any REIT Failure Taxes. Each Tax referred to in the immediately preceding sentence shall be determined using the highest marginal federal and state corporate Income Tax rate for the relevant taxable period (or portion
thereof). 
 “Spin-offs” has the meaning set forth in the recitals to this Agreement. 
 “Supplemental Ruling Documents” means (1) any request for a Supplemental Ruling and any materials, appendices and exhibits
submitted or filed therewith and any Supplemental Rulings issued by the IRS to any Potlatch Entity in response to any such request and (2) any similar filings submitted to, or rulings issued by, any other Taxing Authority in connection with the
Spin-offs. 
 “Supplemental Ruling” means (1) any ruling issued by the IRS in connection with the Spin-offs other than
a ruling in response to Potlatch’s initial request for a private letter ruling, and (2) any similar ruling issued by any other Taxing Authority addressing the application of a provision of the laws of another jurisdiction to the Spin-offs.

  

 5 

 “Tax” and “Taxes” include all taxes, charges, fees, duties, levies,
imposts, rates or other assessments imposed by any federal, state, local or foreign Taxing Authority, including, but not limited to, income, gross receipts, excise, property, sales, use, license, capital stock, transfer, franchise, payroll,
withholding, social security, value added and other taxes, and any interest, penalties or additions attributable thereto. 
 “Tax
Asset” means any Tax Item that has accrued for Tax purposes, but has not been used during a taxable period, and that could reduce a Tax in another taxable period, including, but not limited to, a net operating loss, net capital loss,
investment tax credit, foreign tax credit, charitable deduction, credit related to alternative minimum tax and any other Tax credit. 
 “Tax Benefit” means a reduction in the Tax liability of a taxpayer for any taxable period. A Tax Benefit shall be deemed to have been realized or received from a Tax Item in a taxable period only if and to the extent that
the Tax liability of the taxpayer for such period, after taking into account the effect of the Tax Item on the Tax liability of such taxpayer in the current period and all prior periods, is less than it would have been if such Tax liability were
determined without regard to such Tax Item. 
 “Tax Detriment” means an increase in the Tax liability of a taxpayer for any
taxable period. A Tax Detriment shall be deemed to have been realized or received from a Tax Item in a taxable period only if and to the extent that the Tax liability of the taxpayer for such period, after taking into account the effect of the Tax
Item on the Tax liability of such taxpayer in the current period and all prior periods, is more than it would have been if such Tax liability were determined without regard to such Tax Item. 
 “Tax Item” means any item of income, gain, loss, deduction or credit, or other attribute that may have the effect of increasing or
decreasing any Tax. 
 “Tax Opinion” means an opinion issued to Potlatch by Skadden, Arps, Slate, Meagher & Flom
LLP with respect to the qualification of the Spin-offs for tax-free treatment under sections 368(a)(1)(D) and 355 of the Code. 
 “Tax Return” means any return, report, certificate, form or similar statement or document (including any related or supporting information or schedule attached thereto and any information return, amended tax return, claim
for refund or declaration of estimated tax) required to be supplied to, or filed with, a Taxing Authority in connection with the determination, assessment or collection of any Tax or the administration of any laws, regulations or administrative
requirements relating to any Tax. 
 “Tax Saving Amount” has the meaning set forth in Section 5.3. 
 “Tax Services” has the meaning set forth in Section 2.5(a). 
 “Taxing Authority” means any governmental authority or any subdivision, agency, commission or authority thereof or any
quasi-governmental or private body having jurisdiction over the assessment, determination, collection or imposition of any Tax (including the IRS). 
  

 6 

 “Transition Services Agreement” means the Transition Services Agreement between
Potlatch, Holdings, Clearwater, and RetainCo dated as of December 15, 2008. 
 “Treasury Regulations” means the final
and temporary (but not proposed) income tax regulations promulgated under the Code, as such regulations may be amended from time to time (including corresponding provisions of succeeding regulations). 
 ARTICLE II 
 PREPARATION AND
FILING OF TAX RETURNS 
 Section 2.1 Potlatch Entities’ Responsibility. The Potlatch Entities shall have sole and
exclusive responsibility for the preparation and filing of: 
 (a) all Tax Returns with respect to the Potlatch Entities and Clearwater for
Pre-Spin Periods (including, for the avoidance of any doubt, any Pre-Spin Period with respect to which RetainCo files any Tax Return on a consolidated, combined, unitary or similar basis with Clearwater); 
 (b) all Tax Returns with respect to the Potlatch Entities for Post-Spin Periods. 
 Section 2.2 Clearwater’s Responsibility. Clearwater shall have sole and exclusive responsibility for the preparation and filing of all
Tax Returns with respect to Clearwater for Post-Spin Periods. 
 Section 2.3 Agent. Subject to the other applicable provisions of
this Agreement, Clearwater hereby irrevocably designates Potlatch as its sole and exclusive agent and attorney-in-fact to take such action (including execution of documents) as Potlatch, in its reasonable discretion, may deem appropriate in any and
all matters (including Audits) relating to any Tax Return described in Section 2.1(a). 
 Section 2.4 Manner of Tax Return
Preparation. 
 (a) Unless otherwise required by a Taxing Authority, the Parties shall prepare and file all Tax Returns, and take all
other actions, in a manner consistent with this Agreement and the Separation Agreement, and, to the extent not inconsistent with this Agreement, the Separation Agreement or applicable law, any Ruling Documents and any Supplemental Ruling Documents.
All Tax Returns shall be filed on a timely basis (taking into account applicable extensions) by the party responsible for filing such Tax Returns under this Agreement. 
 (b) Subject to Section 2.4(a), Potlatch shall have the exclusive right, in its reasonable discretion, with respect to any Tax Return described in Section 2.1 to determine (1) the manner in which such
Tax Return shall be prepared and filed, including the elections, methods of accounting, positions, conventions and principles of taxation to be used and the manner in which any Tax Item shall be reported, (2) whether any extensions may be
requested, (3) the elections that will be made on such Tax Return, (4) whether any amended Tax Return(s) 

  

 7 

 
shall be filed, (5) whether any claim(s) for refund shall be made, (6) whether any refund shall be paid by way of refund or credited against any
liability for the related Tax, and (7) whether to retain outside firms to prepare or review such Tax Returns; provided, that Potlatch shall prepare all Tax Returns described in Section 2.1(a) in a manner consistent with its past Tax
reporting practices. 
 (c) Within sixty (60) days after filing the Tax Return for the tax year that includes the Closing Date,
Potlatch shall notify Clearwater of the Tax attributes associated with Clearwater and with RetainCo, and the Tax bases of the assets and liabilities, transferred to RetainCo pursuant to the Separation Agreement. Potlatch shall provide Clearwater
with preliminary estimates of such information on or before January 20, 2009. 
 Section 2.5 Tax Services. 
 (a) In General. It is the intention of the Parties that except as specifically provided herein, the Transition Services Agreement shall govern the
provision of tax services by the Potlatch Entities to Clearwater (the “Tax Services”). 
 (b) Right to Review.
Potlatch shall provide or cause to be provided any Tax Return (or portion or excerpt thereof relating exclusively to Clearwater) to be filed by Potlatch on behalf of Clearwater pursuant to the Potlatch Entities’ provision of Tax Services at
least ten (10) business days prior to the due date of such Tax Return, including extensions. Clearwater shall have the right to comment on any such Tax Return (or portion or excerpt thereof, as applicable), and Potlatch shall reasonably
consider Clearwater’s comments. 
 (c) Information. Potlatch shall provide or cause to be provided to Clearwater copies of all
Tax Returns (or portions or excerpts thereof relating exclusively to Clearwater) filed on behalf of Clearwater, in each case within fifteen (15) days of filing, pursuant to the Potlatch Entities’ provision of Tax Services and promptly
provide any notices or communications from any Taxing Authority relating to any Tax or Tax Return of Clearwater covered by the Tax Services. 
 (d) List of Tax Returns. As soon as practicable after the Closing Date, Potlatch shall provide to Clearwater an updated list of all Tax Returns to be filed by Potlatch on behalf of Clearwater pursuant to Section 2.1(a).

 ARTICLE III 
 LIABILITY FOR TAXES 
 Section 3.1 Potlatch Entities’ Liability for Section 2.1 Taxes. The
Potlatch Entities shall be liable for all Taxes due with respect to all Tax Returns described in Section 2.1, and shall be liable for any Tax deficiency assessed with respect to such Tax Returns. The Potlatch Entities shall be entitled to
receive and retain all refunds of Taxes previously paid by any Potlatch Entities with respect to such Taxes. 
  

 8 

 Section 3.2 Clearwater’s Liability for Section 2.2 Taxes. Clearwater shall be
liable for all Taxes due with respect to Tax Returns described in Section 2.2, and shall be liable for any Tax deficiency assessed with respect to such Tax Returns. Clearwater shall be entitled to receive and retain all refunds of Taxes
previously paid by Clearwater with respect to such Taxes. 
 Section 3.3 Subsequent Adjustments. If, as a result of any payment
by a Potlatch Entity of a Tax in connection with an audit, adjustment, or amended Tax Return described in Section 2.1, Clearwater receives a reciprocal (i.e., arising directly from such adjustment) Tax Benefit, Clearwater shall pay the amount
of such Tax Benefit to RetainCo. If, as a result of any payment by Clearwater of a Tax in connection with an audit, adjustment, or amended Tax Return described in Section 2.2, the Potlatch Entities receive a reciprocal net Tax Benefit on an
aggregate basis, the Potlatch Entities shall pay the amount of such Tax Benefit to Clearwater. 
 ARTICLE IV 
 SPIN-OFF TAXES AND ALLOCATION 
 Section 4.1 Spin-off Taxes. 
 (a) Potlatch Entities’ Liability for Spin-off Taxes. Notwithstanding Article
III, the Potlatch Entities shall be liable for one hundred percent (100%) of any Spin-off Taxes that are attributable to, or result from, one or more of the following: 
 (i) any action or omission by any Potlatch Entity that is materially inconsistent with any material or information, or that constitutes a
material breach of any material covenant or material representation, pertaining to the Potlatch Entities in the Ruling Documents, Supplemental Ruling Documents, Initial Ruling, or Supplemental Ruling, or the Potlatch Representation Letter, if any;

 (ii) any action or omission by any Potlatch Entity after the Closing Date, including, without limitation, a cessation,
transfer to affiliates, or disposition of its active trades or businesses, or an issuance of stock, stock buyback or payment of an extraordinary dividend by any Potlatch Entity following the Spin-offs; 
 (iii) any acquisition of any stock or assets of any Potlatch Entity by one or more other Persons occurring prior to or following the
Spin-offs; or 
 (iv) any issuance of stock by any Potlatch Entity, or change in ownership of stock in any Potlatch Entity,
that causes section 355(d) or section 355(e) of the Code to apply to the Spin-offs. 
  

 9 

 (b) Clearwater’s Liability for Spin-off Taxes. Notwithstanding Article III, Clearwater shall
be liable for one hundred percent (100%) of any Spin-off Taxes that are attributable to, or result from, one or more of the following: 
 (i) any action or omission by Clearwater that is materially inconsistent with any material or information, or that constitutes a material breach of any material covenant or material representation, pertaining to
Clearwater in the Ruling Documents, Supplemental Ruling Documents, Initial Ruling, or Supplemental Ruling, or the Clearwater Representation Letter, if any; 
 (ii) any action or omission by Clearwater after the Closing Date, including without limitation, a cessation, transfer to affiliates or
disposition of its active trades or businesses, or an issuance of stock, stock buyback or payment of an extraordinary dividend by Clearwater following the Spin-offs; 
 (iii) any acquisition of any stock or assets of Clearwater by one or more other Persons following the Spin-offs; or 
 (iv) any issuance of stock by Clearwater, or change in ownership of stock in Clearwater, that causes section 355(d) or section 355(e) of
the Code to apply to the Spin-offs. 
 (c) First Party Responsible. The first party to act or fail to act in a manner that results in
the imposition of Spin-off Taxes shall be liable for one hundred percent (100%) of such Spin-off Taxes pursuant to Section 4.1(a) or 4.1(b), as applicable; provided, that if such first party is able to act, and does act, in a manner that
results in Spin-off Taxes not being imposed, then such first party shall not be liable for any Spin-off Taxes imposed as a result of any act or omission by the other party subsequent to the first party’s action or omission. 
 (d) No Party Responsible. If Spin-off Taxes are imposed and no Party bears responsibility for the imposition of such taxes under
Section 4.1(c), then Clearwater shall be liable for twenty percent (20%) of such Spin-off Taxes pursuant to Section 4.1(a) or 4.1(b), and the Potlatch Entities shall be liable for eighty percent (80%), of such Spin-off Taxes pursuant
to Section 4.1(a) or 4.1(b). 
 (e) Liability for Non-Income Spin-off Taxes. The liability for any Non-Income Spin-off Taxes
shall be borne by Clearwater only if such liability arises with respect to the Pre-Spin Refinancing. The liability for all other Non-Income Spin-off Taxes shall be borne by the Potlatch Entities. 
 Section 4.2 Private Letter Rulings; Tax Opinion. 
 (a) Information. Potlatch has provided Clearwater with copies of the Ruling Documents, if any, submitted on or prior to the date specified in the preamble to this Agreement, and shall provide Clearwater with
copies of any Ruling Documents or Supplemental Ruling Documents prepared after such date prior to the submission of such Ruling Documents or Supplemental Ruling Documents, as applicable, to a Taxing Authority. Potlatch shall provide 

  

 10 

 
Clearwater with a copy of the Potlatch Representation Letter and a copy of the Tax Opinion, if any. Clearwater shall provide Potlatch with a copy of the
Clearwater Representation Letter. 
 (b) Cooperation by Clearwater. Clearwater shall cooperate with Potlatch, and shall take any and
all actions reasonably requested by Potlatch, in connection with (i) Potlatch’s submission of any Ruling Documents prepared after the date specified in the preamble to this Agreement and (ii) Potlatch’s request for a Tax Opinion.

 (c) Supplemental Rulings. 
 (i) In General. At the reasonable request of Clearwater, Potlatch shall cooperate with Clearwater and use its reasonable best efforts to seek to obtain, as expeditiously as possible, a Supplemental Ruling or
other guidance from the IRS or any other Taxing Authority for the purpose of confirming the continuing validity of any ruling issued by any Taxing Authority addressing the application of the law to the Spin-offs; provided that Potlatch shall
not be obligated to seek a Supplemental Ruling if it reasonably believes that seeking such Supplemental Ruling would adversely affect Potlatch, its shareholders or any Potlatch Affiliate. Further, in no event shall Potlatch be required to file any
Supplemental Ruling Documents unless Clearwater represents that (A) it has read the Supplemental Ruling Documents and (B) all information and representations, if any, relating to Clearwater contained in the Supplemental Ruling Documents
are true, correct and complete in all material respects. Clearwater shall reimburse the Potlatch Entities for all costs and expenses incurred by any Potlatch Entity in obtaining a Supplemental Ruling requested by Clearwater. Clearwater shall not
seek any guidance (whether written or oral) from the IRS or any other Taxing Authority concerning the Spin-offs except as set forth in this Section 4.2(c). 
 (ii) Participation Rights. If Potlatch requests a Supplemental Ruling or other guidance after the date specified in the preamble
to this Agreement: (A) Potlatch shall keep Clearwater informed in a timely manner of all material actions taken or proposed to be taken by Potlatch in connection therewith; (B) Potlatch shall (1) reasonably in advance of the
submission of any such Supplemental Ruling Documents provide Clearwater with a draft copy thereof, (2) reasonably consider Clearwater’s comments on such draft copy, (3) provide Clearwater with a final copy of the Supplemental Ruling
Documents, and (4) provide Clearwater with notice reasonably in advance of, and Clearwater shall have the right to attend, any meetings with the Taxing Authority (subject to the approval of the Taxing Authority) that relate to such Supplemental
Ruling. 
 Section 4.3 Carryback of Net Operating Losses. Clearwater shall not elect under section 172(b)(3) of the Code or any
similar provision of any state, local or foreign Tax law to relinquish any right to carry back net operating losses. Clearwater shall use commercially reasonable efforts to file an amended Tax Return to carry back such losses to the extent permitted
by law, and Clearwater shall pay to RetainCo the amount of any refund of Taxes so obtained, net of Clearwater’s reasonable expenses in obtaining such refund. 
  

 11 

 Section 4.4 Continuing Covenants. 
 (a) In General. Clearwater and the Potlatch Entities (1) shall not take any action reasonably expected to result in an increased Tax
liability to the other, a reduction in a Tax Asset of the other or an increased liability to the other under this Agreement and (2) shall take any action reasonably requested by the other that would reasonably be expected to result in a Tax
Benefit or avoid a Tax Detriment to the other, provided that such action does not result in any additional cost not fully compensated for by the requesting party. The Parties hereby acknowledge that the preceding sentence is not intended to limit,
and therefore shall not apply to, the rights of the parties with respect to matters otherwise covered by this Agreement. 
 (b) Spin-off
Tax Liabilities. 
 (i) For 24 months following the Closing Date (the “Restricted Period”), Clearwater
shall not (A) redeem or otherwise repurchase any capital stock other than pursuant to open market stock repurchase programs meeting the requirements of Section 4.05(1)(b) of Rev. Proc. 96-30, 1996-1 C.B. 696, or (B) enter into any
agreements or arrangements with respect to transactions or events (including, but not limited to, capital contributions or acquisitions, entering into any partnership or joint venture arrangements, stock issuances, stock acquisitions, option grants,
or a series of such transactions or events (but excluding the Spin-offs)), in the case of each of clauses (A) and (B) above that, if considered part of a plan that includes the Internal Spin-off or the Public Spin-off would result in one
or more persons acquiring, directly or indirectly, stock of Clearwater representing a “50-percent or greater interest” therein within the meaning of section 355(d)(4) of the Code (any act inconsistent with the intended tax-free treatment
of the Spin-offs described in the Tax Opinion and any act described in clauses (A) and (B) above, collectively, a “Prohibited Act”). Notwithstanding the foregoing, the following shall not be considered a Prohibited Act:
(x) the issuance of any compensatory stock or compensatory stock options, the issuance of any stock pursuant to any equity award, compensatory option, or restricted stock unit, or the repurchase of any restricted stock, if such issuance or
repurchase satisfies the conditions of Treasury Regulation § 1.355-7(d)(8)(i); or (y) the issuance of stock to a retirement plan qualified under section 401(a) or 403(a) of the Code in a transaction that satisfies the requirements of
Treasury Regulation § 1.355-7(d)(9). 
 (ii) Notwithstanding the foregoing, Clearwater may take any of the Prohibited
Acts, subject to Section 4.1, if Clearwater (A) first obtains (at its expense) an opinion in form and substance reasonably acceptable to the Potlatch Entities of a nationally recognized law firm or accounting firm reasonably acceptable to
the Potlatch Entities, which opinion may be based on usual and customary factual representations, or (B) obtains a supplemental ruling from the IRS, in each case that such Prohibited Act(s), and any transaction related thereto, will not affect
(x) the qualification of the Spin-offs under section 355 and section 368(a)(1)(D) of the Code and (y) the nonrecognition of gain to Potlatch or to Clearwater in the Spin-offs. Clearwater may also take any of the Prohibited 

  

 12 

 
Acts, subject to Section 4.1, with the written consent of Potlatch in Potlatch’s sole and absolute discretion. During the Restricted Period,
Clearwater shall provide, and shall cause its Affiliates to provide, all information reasonably requested by Potlatch relating to any transaction involving an acquisition (directly or indirectly) of Clearwater’s stock within the meaning of
section 355(e) of the Code. The Parties acknowledge that the payment of monetary compensation would not be an adequate remedy for a breach of the obligations described in the Prohibited Acts, and Clearwater consents to the issuance and entry of an
injunction to prevent a breach of the obligations contained in the Prohibited Acts, subject to the waiver and consent described in the preceding sentence. 
 (iii) Notwithstanding anything in this Agreement to the contrary, Clearwater shall be responsible for, and shall indemnify and hold the Potlatch Entities harmless from, any Spin-off Taxes resulting from any Prohibited
Act taken by Clearwater or any of its Affiliates, regardless of whether the exception contained in Section 4.4(b)(ii) is satisfied with respect to such act. 
 Section 4.5 Allocation of Tax Assets. Potlatch and Clearwater shall cooperate in determining the allocation of any Tax Assets or Tax liabilities among the Parties. In the absence of controlling legal
authority or unless otherwise provided under this Agreement, Tax Assets or Tax liabilities shall be allocated to the legal entity that incurred the cost or burden associated with the creation of such Tax Assets or Tax liabilities. 
 ARTICLE V 
 INDEMNIFICATION

 Section 5.1 Generally. The Potlatch Entities shall jointly and severally indemnify Clearwater and its directors, officers
and employees, and hold them harmless from and against any and all Taxes or Tax deficiencies for which any Potlatch Entity is liable under this Agreement and any loss, cost, damage or expense, including reasonable attorneys’ fees and costs,
that are attributable to, or result from the failure of any Potlatch Entity or any director, officer or employee to make any payment required to be made under this Agreement. Clearwater shall indemnify the Potlatch Entities and their respective
directors, officers and employees, and hold them harmless from and against any and all Taxes or Tax deficiencies for which Clearwater is liable under this Agreement and any loss, cost, damage or expense, including reasonable attorneys’ fees and
costs, that are attributable to, or result from, the failure of Clearwater or any director, officer or employee to make any payment required to be made under this Agreement. 
 Section 5.2 Inaccurate, Incomplete or Untimely Information. The Potlatch Entities shall jointly and severally indemnify Clearwater and its
directors, officers and employees, and hold them harmless from and against any loss, cost, damage, fine, penalty, or other expense of any kind attributable to the negligence of the Potlatch Entities in supplying Clearwater with inaccurate,
incomplete or untimely information, in connection with the preparation of any Tax Return. Clearwater shall indemnify the Potlatch Entities and their respective directors, officers and employees, and hold them harmless from and against any loss,

  

 13 

 
cost, damage, fine, penalty, or other expense of any kind attributable to the negligence of Clearwater in supplying any Potlatch Entity with inaccurate,
incomplete or untimely information, in connection with the preparation of any Tax Return. 
 Section 5.3 Adjustments to Payments.
Any party that is entitled to receive a payment (the “Indemnitee”) under this Agreement from another party (the “Indemnifying Party”) with respect to any Taxes, losses, costs, damages or expenses suffered or
incurred by the Indemnitee (an “Indemnified Loss”) shall pay to such Indemnifying Party, or the Indemnifying Party shall pay to the Indemnitee, as applicable, an amount equal to the difference between any “Tax Saving
Amount” actually realized by the Indemnitee in the year of the payment and the amount of the Indemnified Loss. For purposes of this Section 5.3, the Tax Saving Amount shall equal the amount by which the Income Taxes of the Indemnitee or
any of its affiliates are reduced (including, without limitation, through the receipt of a refund, credit or otherwise), plus any related interest received by the Indemnitee (net of Tax) from a Taxing Authority, as a result of claiming as a
deduction or offset on any relevant Tax Return amounts attributable to an Indemnified Loss (the “Indemnifiable Loss Deduction”). 
 Section 5.4 Reporting of Indemnifiable Loss. In the event that an Indemnitee incurs an Indemnified Loss, such Indemnitee shall claim as a deduction or offset on any relevant Tax Return (including, without limitation, any claim
for refund) such Indemnified Loss to the extent such position is supported by “substantial authority” (within the meaning of Section 1.6662-4(d) of the Treasury Regulations) with respect to United States federal, state and local Tax
Returns or has similar appropriate authoritative support with respect to any Tax Return other than a United States federal, state or local Tax Return. Except as otherwise provided in this Agreement, the Indemnitee shall have primary responsibility
for the preparation of its Tax Returns and reporting thereon such Indemnifiable Loss Deduction; provided, that the Indemnitee shall consult with, and provide the Indemnifying Party with a reasonable opportunity to review and comment on the
portion of the Indemnitee’s Tax Return relating to the Indemnified Loss. If a Dispute arises between the Indemnitee and the Indemnifying Party as to whether there is “substantial authority” (with respect to United States federal,
state and local Tax Returns) or similar appropriate authoritative support (with respect to any Tax Return other than a United States federal, state or local Tax Return) for the claiming of an Indemnifiable Loss Deduction, such Dispute shall be
resolved in accordance with the principles and procedures set forth in Section 8.3. Potlatch and Clearwater shall act in good faith to coordinate their Tax Return filing positions with respect to the taxable periods that include an
Indemnifiable Loss Deduction. There shall be an adjustment to any Tax Saving Amount calculated under Section 5.3 hereof in the event of an Audit which results in a Final Determination that increases or decreases the amount of the Indemnifiable
Loss Deduction reported on any relevant Tax Return of the Indemnitee. The Indemnitee shall promptly inform the Indemnifying Party of any such Audit and shall attempt in good faith to sustain the Indemnifiable Loss Deduction at issue in the Audit.
Upon receiving a written notice of a Final Determination in respect of an Indemnifiable Loss Deduction, the Indemnitee shall redetermine the Tax Saving Amount attributable to the Indemnifiable Loss Deduction under Section 5.3 hereof, taking
into account the Final Determination (the “Restated Tax Saving Amount”). If the Restated Tax Saving Amount is greater than the Tax Saving Amount, the Indemnitee shall promptly pay the Indemnifying Party an amount equal to the
difference between such amounts. If the Restated Tax Saving Amount is less than the Tax Saving Amount, then the Indemnifying Party shall pay to the Indemnitee an 
  

 14 

 
amount equal to the difference between such amounts promptly after receipt of written notice setting forth the amount due and the computation thereof.

 Section 5.5 No Indemnification for Tax Items. Except as otherwise provided in Section 5.6, nothing in this Agreement
shall be construed as a guarantee of the existence or amount of any loss, credit, carryforward, basis or other Tax Item, whether past, present or future, of any Party. 
 Section 5.6 REIT Status. The Parties acknowledge that Potlatch intends to continue to qualify as a real estate investment trust within the meaning of section 856 of the Code (a “REIT”).
Notwithstanding anything to the contrary in this Agreement Clearwater shall use its best efforts to avoid taking any action that could reasonably be expected to cause Potlatch to fail to qualify as a REIT for any taxable year. 
 Section 5.7 Double Recovery. Notwithstanding anything herein to the contrary, no party shall be entitled to indemnification hereunder for any
amount to the extent such party has otherwise been reimbursed for such amount. 
 ARTICLE VI 
 PAYMENTS 
 Section 6.1
In General. Except as provided in Section 6.6, in the event that one party (the “Owing Party”) is required to make a payment to another party (the “Owed Party”) pursuant to this Agreement, then such
payments shall be made according to this Article VI. All payments shall be made to the Owed Party or to the appropriate Taxing Authority as specified by the Owed Party within the time prescribed for payment in this Agreement, or if no period is
prescribed, within twenty (20) days after delivery of written notice of payment owing together with a computation of the amounts due. 
 Section 6.2 Treatment of Payments. Unless otherwise required by any Final Determination, the parties agree that any payments made by one party to another party (other than payments of interest pursuant to Section 6.5 and
payments of After Tax Amounts pursuant to Section 6.4) pursuant to this Agreement shall be treated for all Tax and financial accounting purposes as nontaxable payments (dividend distributions or capital contributions, as the case may be) made
immediately prior to the Spin-offs and, accordingly not includible in the taxable income of the recipient. 
 Section 6.3 Prompt
Performance. All actions required to be taken by any party under this Agreement shall be performed within the time prescribed for performance in this Agreement, or if no period is prescribed, such actions shall be performed promptly. 

Section 6.4 After Tax Amounts. If pursuant to a Final Determination it is determined that the receipt or accrual of any payment made under
this Agreement (other than payments of interest pursuant to Section 6.5) is subject to any Tax, the party making such payment shall be liable for (a) the After Tax Amount with respect to such payment and (b) interest at the rate
described in Section 6.5 on the amount of such Tax from the date such Tax 
  

 15 

 
accrues through the date of payment of such After Tax Amount. A party making a demand for a payment pursuant to this Agreement and for a payment of an After
Tax Amount with respect to such payment shall separately specify and compute such After Tax Amount. However, a party may choose not to specify an After Tax Amount in a demand for payment pursuant to this Agreement without thereby being deemed to
have waived its right subsequently to demand an After Tax Amount with respect to such payment. 
 Section 6.5 Interest. Payments
pursuant to this Agreement that are not made within the period prescribed in this Agreement (the “Payment Period”) shall bear interest for the period from and including the date immediately following the last date of the Payment
Period through and including the date of payment at a per annum rate equal to the prime rate as published in The Wall Street Journal on the last day of such Payment Period, plus two percent (2%). Such interest shall be payable at the same
time as the payment to which it relates and shall be calculated on the basis of a year of 365 days and the actual number of days for which due. 
 Section 6.6 REIT Savings. 
 (a) REIT Savings Escrow. In the event that Potlatch shall determine that any payment
provided for under this Agreement could reasonably be expected to give rise to a successful challenge to Potlatch’s status as a REIT, Potlatch may provide notice to Clearwater no less than fifteen (15) business days before the date on
which such payment is to be made that Potlatch intends to apply this Section 6.6 to the payment (a “REIT Savings Escrow Notice”). Upon receipt of a valid REIT Savings Escrow Notice and at such time as the payment is required
under this Agreement, Clearwater shall deposit such payment into escrow with an escrow agent approved by Potlatch, which approval shall not be unreasonably withheld, and pursuant to a written escrow agreement (the “Escrow
Agreement”) reflecting the terms set forth in this Section 6.6 and otherwise reasonably acceptable to each of Potlatch and the escrow agent. 
 (b) Escrow Agreement. The Escrow Agreement shall provide that the payment in escrow or the applicable portion thereof shall be released to Potlatch on an annual basis based upon the delivery by Potlatch to the
escrow agent of any one or a combination of the following: (i) a letter from Potlatch’s independent tax advisors indicating the maximum amount that can be paid by the escrow agent to Potlatch without causing Potlatch to fail to meet the
requirements of Sections 856(c)(2) and (3) of the Code for the applicable taxable year of Potlatch determined as if the payment of such amount did not constitute income described in sections 856(c)(2)(A)-(H) or 856(c)(3)(A)-(I) of the
Code (such income, “Qualifying Income”), in which case the escrow agent shall release to Potlatch such maximum amount stated in the advisor’s letter, or (ii) a letter from Potlatch’s counsel indicating that Potlatch
received a ruling from the IRS holding that the receipt by Potlatch of such payment would either constitute Qualifying Income or would be excluded from gross income within the meaning of sections 856(c)(2) and (3) of the Code (or alternatively,
Potlatch’s outside counsel or accountant has rendered a legal opinion or a tax opinion, respectively, to the effect that the receipt by Potlatch of such payment would either constitute Qualifying Income or would be excluded from gross income
within the meaning of sections 856(c)(2) and (3) of the Code), in which case the escrow agent shall release to Potlatch the remainder of such payment. The Escrow Agreement shall also provide that Potlatch shall bear all costs and expenses under
the Escrow Agreement and that any portion of any payment held in escrow for ten (10) years shall be released by the escrow agent to 

  

 16 

 
Clearwater. Clearwater shall not be a party to the Escrow Agreement and shall not bear any liability, cost or expense resulting directly or indirectly from
the Escrow Agreement (other than any Taxes associated with the release of funds to Clearwater from the escrow). Potlatch shall fully indemnify Clearwater and hold Clearwater harmless from and against any such liability, cost or expense (other than
any Taxes associated with the release of funds to Clearwater from the escrow). 
 (c) Cooperation. Clearwater shall cooperate in good
faith to amend this Section 6.6 at the reasonable request of Potlatch in order to (x) maximize the portion of such payment that may be distributed to Potlatch hereunder without causing Potlatch to fail to meet the requirements of sections
856(c)(2) and (3) of the Code, (y) improve Potlatch’s chances of securing a favorable ruling described in this Section 6.6 or (z) assist Potlatch in obtaining a favorable legal opinion from its outside counsel or accountant
as described in this Section 6.6. Potlatch shall reimburse Clearwater for the reasonable costs and expenses of such cooperation. 
 ARTICLE VII 
 TAX PROCEEDINGS 
 Section 7.1 Audits. The party responsible for preparing and filing a Tax Return pursuant to Article I (the “Filing Party”) shall have the exclusive right to control, contest, and represent
the interests of any Party in any Audit relating to such Tax Return and, in its reasonable discretion, to resolve, settle or agree to any deficiency, claim or adjustment proposed, asserted or assessed in connection with or as a result of any such
Audit. The Filing Party’s rights shall extend to any matter pertaining to the management and control of an Audit, including execution of waivers, choice of forum, scheduling of conferences and the resolution of any Tax Item. Any costs incurred
in handling, settling, or contesting an Audit shall be borne by the Filing Party. The Filing Party shall, to the extent such information is available, advise the non-Filing Party of any significant Tax issue subject to an Audit by any Taxing
Authority, and shall keep the non-Filing Party informed with respect to any contest, compromise or settlement thereof. 
 Section 7.2
Notice. Within twenty (20) business days after a party receives a written notice or other information from a Taxing Authority of the existence of a Tax issue that may give rise to an indemnification obligation under this Agreement, such
party shall notify the other party of such issue, and thereafter shall promptly forward to the other party copies of notices and material communications with any Taxing Authority relating to such issue. The failure of one party to notify the other
party of any matter relating to a particular Tax for a taxable period or to take any action specified in this Agreement shall not relieve such other party of any liability and/or obligation which it may have under this Agreement with respect to such
Tax for such taxable period, except to the extent that such other party’s rights under this Agreement are materially prejudiced by such failure. 
 Section 7.3 Remedies. Clearwater agrees that no claim against any Potlatch Entity and no defense to Clearwater’s liabilities or obligations to any Potlatch Entity under this Agreement shall arise from
the resolution by Potlatch of any deficiency, claim or adjustment relating to the redetermination of any Tax Item of any Potlatch Entity. 
  

 17 

 Section 7.4 Control of Spin-off Tax Proceedings. Potlatch shall have the exclusive right and
sole discretion to control, contest, and represent the interests of any Party in any Audits relating to Spin-off Taxes and to resolve, settle or agree to any deficiency, claim or adjustment proposed, asserted or assessed in connection with or as a
result of any such Audit. Potlatch’s rights shall extend to any matter pertaining to the management and control of such Audit, including execution of waivers, choice of forum, scheduling of conferences and the resolution of any Tax Item.
Clearwater shall be entitled through counsel of its choosing and reasonably acceptable to Potlatch to monitor the conduct or settlement of any such Audit by Potlatch, and Potlatch shall provide Clearwater and such counsel with such information as
either of them may reasonably request (which request may be general or specific), but all costs and expenses incurred in such monitoring shall be borne by Clearwater. Clearwater may assume sole control of any Audits relating to Spin-off Taxes if it
acknowledges in writing that it has sole liability for any Spin-off Taxes that might arise in such Audit. 
 ARTICLE VIII 

MISCELLANEOUS PROVISIONS 
 Section 8.1 Cooperation and Exchange of Information. 
 (a) Cooperation. Potlatch and Clearwater shall each
cooperate fully (and each shall cause its respective Affiliates to cooperate fully) with all reasonable requests from another Party hereto, or from an agent, representative or advisor to such party, in connection with the preparation and filing of
Tax Returns, claims for refund, and Audits concerning issues or other matters covered by this Agreement. Such cooperation shall include, without limitation: 
 (i) the retention until the expiration of the applicable statute of limitations, and the provision upon request, of Tax Returns, books,
records (including information regarding ownership and Tax basis of property), documentation and other information relating to the Tax Returns, including accompanying schedules, related work papers, and documents relating to rulings or other
determinations by Taxing Authorities; 
 (ii) the execution of any document that may be reasonable in connection with any Tax
Proceeding, or the filing of a Tax Return or refund claim by Clearwater or a Potlatch Entity, including certification, to the best of a Party’s knowledge, of the accuracy and completeness of the information it has supplied or any power of
attorney required by the applicable Taxing Authority to be provided by one Party to another Party for the performance by such other Party of acts required or permitted under this Agreement; and 
 (iii) the use of the Party’s reasonable best efforts to obtain any documentation that may be necessary or reasonably helpful in
connection with any of the foregoing. 
  

 18 

 Each party shall use commercially reasonable efforts to comply in connection with the foregoing matters within ten
(10) business days or such shorter period as may be required by the applicable Taxing Authority or otherwise in connection with the Tax Proceeding. Each party shall make its employees and facilities available on a reasonable and mutually
convenient basis in connection with the foregoing matters. 
 (b) Failure to Perform. If a party materially fails to comply with any
of its obligations set forth in Section 8.1(a) upon reasonable request and notice by the other party, and such failure results in the imposition of additional Taxes, the non-performing party shall be liable in full for such additional Taxes
notwithstanding anything to the contrary in this Agreement. 
 Section 8.2 Dispute Resolution. Any dispute, controversy or claim
arising out of or relating to this Agreement or the breach, termination or validity hereof (“Dispute”) which arises between Clearwater and any Potlatch Entity shall first be negotiated between the appropriate senior executives of Potlatch
and Clearwater who shall have the authority to resolve the matter. Such executives shall meet to attempt in good faith to negotiate a resolution of the Dispute prior to pursuing other available remedies, within ten (10) days of receipt by
Potlatch or Clearwater, as applicable, of notice of a Dispute, which date of receipt shall be referred to herein as the “Dispute Resolution Commencement Date.” If the senior executives are unable to resolve the Dispute within thirty
(30) days from the Dispute Resolution Commencement Date, then Potlatch and Clearwater shall jointly retain a nationally recognized Independent Firm to resolve the Dispute. If Potlatch and Clearwater cannot mutually agree upon an Independent
Firm, then any Dispute which Potlatch and Clearwater cannot resolve within thirty (30) days from the Dispute Resolution Commencement Date shall be resolved by a nationally recognized accounting firm selected by the American Arbitration
Association; provided, that the American Arbitration Association shall not select any accounting firm that is then providing auditing or tax services to any of the Parties. The accounting firm selected by the American Arbitration Association
shall act as an arbitrator to resolve all points of disagreement, and its decision shall be final and binding upon all parties involved. Any such arbitration shall be conducted in Spokane, Washington. Following the decision of such firm, Potlatch
and Clearwater shall each take or cause to be taken any action necessary to implement the decision of such firm. Potlatch and Clearwater shall share equally the administrative costs of the arbitration and such firm’s fees and expenses, and
shall each bear their respective other costs and expenses related to the arbitration. 
 Section 8.3 Notices. Notices, offers,
requests or other communications required or permitted to be given by any party pursuant to the terms of this Agreement shall be given in writing to Potlatch or Clearwater, as applicable, to the following addresses or facsimile numbers: 

If to any Potlatch Entity, at: 
 c/o
Potlatch Corporation 
 601 W. First Avenue, Ste. 1600 
 Spokane, Washington 99201 
  

 19 

 Attention: General Counsel 
 with a copy to Potlatch’s tax department at the same address. 
 If to Clearwater, at: 
 601 West Riverside Avenue 
 Suite 1100 
 Spokane, Washington 99201

 Attention: General Counsel 
 or to such other
address or facsimile number as the party to whom notice is given may have previously furnished to the other in writing as provided herein. Any notice involving non-performance, termination, or renewal shall be sent by hand delivery, recognized
overnight courier or, within the United States, may also be sent via certified mail, return receipt requested. All other notices may also be sent by facsimile, confirmed by first class mail. All notices shall be deemed to have been given when
received, if hand-delivered; when receipt is confirmed, if transmitted by facsimile or similar electronic transmission method; one (1) working day after it is sent, if sent by recognized overnight courier; and three (3) days after it is
postmarked, if mailed by first class mail or certified mail, return receipt requested, with postage prepaid. 
 Section 8.4 Changes
in Law. 
 (a) Any reference to a provision of the Code, Treasury Regulations, or a law of another jurisdiction shall include a reference
to any applicable successor provision or law. 
 (b) If, due to any change in applicable law or regulations or their interpretation by any
court of law or other governing body having jurisdiction subsequent to the date specified in the preamble to this Agreement, performance of any provision of this Agreement or any transaction contemplated hereby shall become impracticable or
impossible, the parties hereto shall use their commercially reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such provision. 
 Section 8.5 Confidentiality. Each of the parties hereto shall hold and cause its directors, officers, employees, advisors and consultants to
hold in strict confidence, unless compelled to disclose by judicial or administrative process or, in the opinion of its counsel, by other requirements of law, all information (other than any such information relating solely to the business or
affairs of such party) concerning the other parties hereto furnished it by such other party or its representatives pursuant to this Agreement (except to the extent that such information can be shown to have been (1) in the public domain through
no fault of such party or (2) later lawfully acquired from other sources not under a duty of confidentiality by the party to which it was furnished), and no party shall release or disclose such information to any other person, except its
directors, officers, employees, auditors, attorneys, financial advisors, bankers or other consultants who shall be advised of and agree to be bound by the provisions of this Section 8.5. Each of the parties hereto shall be deemed to have
satisfied its obligation to hold confidential 
  

 20 

 
information concerning or supplied by the other parties if it exercises the same care as it takes to preserve confidentiality for its own similar
information. 
 Section 8.6 Assignment. This Agreement shall inure to the benefit of and be binding upon the parties hereto and
their respective legal representatives and successors, and nothing in this Agreement, express or implied, is intended to confer upon any other Person any rights or remedies of any nature whatsoever under or by reason of this Agreement. This
Agreement may be enforced separately by Clearwater and each Potlatch Entity. No party may assign this Agreement or any rights or obligations hereunder, without the prior written consent of the other parties hereto, and any such assignment shall be
void; provided, that Clearwater and each Potlatch Entity may assign this Agreement to a successor entity in conjunction with such party’s reincorporation. 
 Section 8.7 Affiliates. Potlatch shall cause to be performed, and hereby guarantees the performance of, all actions, agreements and obligations set forth herein to be performed by any Potlatch Entity;
provided, that if it is contemplated that a Potlatch Entity may cease to be a controlled, directly or indirectly, by Potlatch as a result of a transfer of its stock or other ownership interests to a third party in exchange for consideration
in an amount approximately equal to the fair market value of the stock or other ownership interests transferred and such consideration is not distributed outside of the group of Potlatch Entities to the shareholders of Potlatch, then Potlatch shall
request in writing no later than thirty (30) days prior to such cessation that Clearwater execute a release of such Potlatch Entity from its obligations under this Agreement effective as of such transfer, provided that Potlatch shall succeed to
the rights of such Potlatch Entity under this Agreement and shall have confirmed in writing the obligations of Potlatch and the remaining Potlatch Entities with respect to their own obligations and the obligations of the departing Potlatch Entity,
and that such departing Potlatch Entity shall have executed a release of any rights it may have against Clearwater by reason of this Agreement. 
 Section 8.8 Authority. Each of the parties hereto represents, on behalf of itself and its affiliates, to the other that (a) it has the corporate power and authority to execute, deliver and perform this Agreement,
(b) the execution, delivery and performance of this Agreement by it have been duly authorized by all necessary corporate or other action, (c) it has duly and validly executed and delivered this Agreement and (d) this Agreement is a
legal, valid and binding obligation, enforceable against it in accordance with its terms subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generally and general equity
principles. 
 Section 8.9 Entire Agreement. This Agreement, the Separation Agreement, the other Ancillary Agreements and the
Exhibits and Schedules attached hereto and thereto, constitute the entire agreement between the parties with respect to the subject matter hereof and shall supersede all prior written and oral and all contemporaneous oral agreements and
understandings with respect to the subject matter hereof. 
 Section 8.10 Governing Law and Jurisdiction. This Agreement shall be
construed in accordance with, and all Disputes hereunder shall be governed by, the laws of the State of Washington, excluding its conflict of law rules. 
  

 21 

 Section 8.11 Counterparts. This Agreement, including the Schedules and Exhibits hereto, and
the other documents referred to herein, may be executed in counterparts, each of which shall be deemed to be an original but all of which shall constitute one and the same agreement. 
 Section 8.12 Severability. If any term or other provision of this Agreement or the Schedules or Exhibits attached hereto is determined by a
non-appealable decision by a court, administrative agency or arbitrator to be invalid, illegal or incapable of being enforced by any rule of law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in
full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such determination that any term or other provision is invalid, illegal or
incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner to the end that transactions contemplated hereby
are fulfilled to the fullest extent possible. 
 Section 8.13 Parties in Interest. This Agreement, including the Schedules and
Exhibits hereto, and the other documents referred to herein, shall be binding upon the Parties, inure solely to the benefit of Clearwater and the Potlatch Entities and their respective permitted assigns, and nothing in this Agreement, express or
implied, is intended to confer upon any other Person any rights or remedies of any nature whatsoever under or by reason of this Agreement. 
 Section 8.14 Failure or Indulgence Not Waiver. No failure or delay on the part of any party hereto in the exercise of any right hereunder shall impair such right or be construed to be a waiver of, or acquiescence in, any breach
of any representation, warranty or agreement herein, nor shall any failure to exercise, or any single or partial exercise, of any such right preclude other or further exercise thereof or of any other right. 
 Section 8.15 Setoff. All payments to be made by any party under this Agreement may be netted against payments due to such party under this
Agreement, but otherwise shall be made without setoff, counterclaim or withholding, all of which are hereby expressly waived. 
 Section 8.16 Amendments. No change or amendment will be made to this Agreement except by an instrument in writing signed on behalf of each of the parties to this Agreement. 
 Section 8.17 Interpretation. When a reference is made in this Agreement to an Article or a Section, or to an Exhibit or a Schedule, such
reference shall be to an Article or Section of, or an Exhibit or Schedule to, this Agreement unless otherwise indicated. The headings contained in this Agreement, in any Exhibit or Schedule, and in the table of contents to this Agreement are for
reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Any capitalized term used in any Schedule or Exhibit but not otherwise defined therein, shall have the meaning assigned to such term in this
Agreement. 
 [SIGNATURE PAGE FOLLOWS] 
  

 22 

 WHEREFORE, the parties have signed this Tax Sharing Agreement effective as of the date first set forth
above. 
  

			
	POTLATCH CORPORATION
		
	By:	 	 /s/    Michael J. Covey

	Name:	 	Michael J. Covey
	
	POTLATCH FOREST HOLDINGS, INC.
		
	By:	 	 /s/    Michael J. Covey

	Name:	 	Michael J. Covey
	
	POTLATCH LAND & LUMBER, LLC
		
	By:	 	 /s/    Michael J. Covey

	Name:	 	Michael J. Covey
	
	CLEARWATER PAPER CORPORATION
		
	By:	 	 /s/    Gordon L. Jones

	Name:	 	Gordon L. Jones

 Signature Page to Tax Sharing Agreement

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00150-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00150-of-00352.parquet"}]]