EXHIBIT 10.1.6
 
 
                                February 10, 1998
 
 
 
[Name]
c/o   Pope & Talbot, Inc.
      P.O. Box 8171
      Portland, Oregon 97207
 
Dear Name:
 
We are pleased to inform you that the Human Resources and Nominating Committee
of Pope & Talbot, Inc. (the "Company") has recently authorized and approved a
special severance benefit program for you and other key executives. The purpose
of this letter agreement is to set forth the terms and conditions of your
benefit package and to explain the limitations which will govern the overall
value of your benefits.
 
Your severance benefits will become payable in the event your employment
terminates within a specified time period following certain changes in ownership
or control of the Company. To understand the full scope of your severance
benefits, you should familiarize yourself with the definitional provisions of
Part One of this letter agreement. The benefits comprising your severance
package are detailed in Part Two, and the dollar limitations on the overall
value of your benefit package are specified in Part Three. Part Four deals with
ancillary matters affecting your severance arrangement.
 
                             PART ONE -- DEFINITIONS
 
For purposes of this letter agreement, the following definitions will be in
effect:
 
      AVERAGE COMPENSATION means the average of your W-2 wages from the Company
      for the five (5) calendar years (or such fewer number of calendar years of
      employment with the Company) completed immediately prior to the calendar
      year in which the Change of Control is effected. Any W-2 wages for a
      partial year of employment will be annualized, in accordance with the
      frequency which such wages are paid during such partial year, before
      inclusion in your Average Compensation. If any of your compensation from
      the Company during such five (5)-year or shorter period was not included
      in your W-2 wages for U.S. income tax purposes, either because you were
      not a U.S. citizen or resident or because such compensation was excludable
      from income as foreign earned income under Code Section 911, then such
      compensation will nevertheless be included in your Average Compensation to
      the same extent as if it were part of your W-2 wages.
 
      BASE SALARY means the annual rate of base salary in effect for you
      immediately prior to the Change in Control or (if greater) the annual rate
      of base salary in effect at the time of your Involuntary Termination.
 
 
 
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Name
February 10, 1998
Page 2
 
 
 
      BOARD means the Company's Board of Directors.
 
      CHANGE IN CONTROL means:
 
      (i)   the successful acquisition by a person or a group of related
            persons, other than the Company or a person controlling, controlled
            by or under common control with the Company, of beneficial ownership
            (as determined pursuant to the provisions of Rule 13d-3 under the
            Securities Exchange Act of 1934, as amended) of securities
            possessing more than twenty-five percent (25%) of the total combined
            voting power of the Company's outstanding securities pursuant to a
            transaction or series of related transactions which the Board does
            not at any time recommend the Company's shareholders to accept or
            approve, or
 
      (ii)  a change in the composition of the Board over a period of thirty-six
            (36) consecutive months or less such that a majority of the Board
            ceases, by reason of one or more contested elections for Board
            membership, to be comprised of individuals who either (A) have been
            members of the Board continuously since the beginning of such period
            or (B) have been elected or nominated for election as Board members
            during such period by at least a majority of the Board members
            described in clause (A) who were still in office at the time such
            election or nomination was approved by the Board.
 
      (iii) the sale, transfer or other disposition of all or substantially all
            of the assets of the Company in complete liquidation or dissolution
            of the Company, or
 
      (iv)  any merger or consolidation in which securities possessing more than
            fifty percent (50%) of the total combined voting power of the
            Company's outstanding securities are transferred to person or
            persons different from the persons holding those securities
            immediately prior to such transaction.
 
      CODE means the Internal Revenue Code of 1986, as amended.
 
      COMMON STOCK means the Company's common stock.
 
      FAIR MARKET VALUE means, with respect to any shares of Common Stock
      subject to any of your Options, the closing selling price per share of
      Common Stock on the date in question, as reported on the New York Stock
      Exchange. If there is no reported sale of Common Stock on such date, then
      the closing selling price on the New York Stock Exchange on the next
      preceding day for which there does exists such quotation will be
      determinative of Fair Market Value.
 
 
 
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Name
February 10, 1998
Page 3
 
 
 
      HEALTH CARE COVERAGE means the continued health care coverage to which you
      and your eligible dependents may become entitled under Part Two of this
      letter agreement upon the Involuntary Termination of your employment.
 
      INVOLUNTARY TERMINATION means the termination of your employment with the
      Company:
 
        o    involuntarily  upon your discharge or dismissal (other than a
             Termination for Cause), or
 
        o    voluntarily upon your resignation following (I) a change in your
             position with the Company which materially reduces your duties or
             level of responsibility or which otherwise changes the level of
             management to which you report, (II) a 20% or more reduction in
             your level of compensation (including base salary, fringe benefits
             and target bonus under any incentive performance plan) or (III) a
             change in your place of employment which is more than fifty (50)
             miles from your place of employment prior to the Change in Control,
             provided and only if such change or reduction is effected without
             your written concurrence.
 
      In no event shall an Involuntary Termination be deemed to occur should
      your employment terminate by reason of your death or disability.
 
      OPTION means any option granted to you under the Plan which is outstanding
      at the time of the Change in Control or upon your subsequent Involuntary
      Termination. Your Options will be divided into two (2) separate categories
      as follows:
 
         Acquisition-Accelerated Options: any outstanding Option (or installment
         thereof) which automatically accelerates, pursuant to the acceleration
         provisions of the agreement evidencing that Option, upon a change in
         control or ownership of the Company under certain specified
         circumstances.
 
         Severance-Accelerated Options: any outstanding Option (or installment
         thereof) which accelerates upon your Involuntary Termination pursuant
         to Part Two of this letter agreement.
 
      OPTION PARACHUTE PAYMENT means, with respect to any
      Acquisition-Accelerated Option or any Severance-Accelerated Option, the
      portion of that Option deemed to be a parachute payment under Code Section
      280G and the Treasury Regulations issued thereunder. The portion of such
      Option which is categorized as an Option Parachute Payment will be
      calculated in accordance with the valuation provisions established under
      Code Section 280G and the applicable Treasury Regulations and will include
      an appropriate dollar adjustment to reflect the lapse of your obligation
      to remain in the Company's employ as a condition to the vesting of the
      accelerated 
 
 
 
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Name
February 10, 1998
Page 4
 
 
 
      installment. In no event, however, will the Option Parachute Payment
      attributable to any Acquisition-Accelerated Option or
      Severance-Accelerated Option (or accelerated installment) exceed the
      spread (the excess of the Fair Market Value of the accelerated option
      shares over the option exercise price payable for those shares) existing
      at the time of acceleration.
 
      OTHER PARACHUTE PAYMENT means any payment in the nature of compensation
      (other than the benefits to which you become entitled under Part Two of
      this letter agreement) which are made to you in connection with the Change
      in Control and which accordingly qualify as parachute payments within the
      meaning of Code Section 280G(b)(2) and the Treasury Regulations issued
      thereunder. Your Other Parachute Payment will include (without limitation)
      the Present Value, measured as of the Change in Control, of the aggregate
      Option Parachute Payment attributable to your Acquisition-Accelerated
      Options (if any).
 
      PLAN means (i) the Company's Stock Option and Appreciation Plan, as
      amended or restated from time to time, and (ii) any successor stock
      incentive plan subsequently implemented by the Company.
 
      PRESENT VALUE means the value, determined as of the date of the Change in
      Control, of any payment in the nature of compensation to which you become
      entitled in connection with the Change in Control or the subsequent
      Involuntary Termination of your employment, including (without limitation)
      the Option Parachute Payment attributable to your Severance-Acceleration
      Options, your Severance Payment under Part Two of this letter agreement
      and the Option Parachute Payment attributable to your
      Acquisition-Accelerated Options. The Present Value of each such payment
      shall be determined in accordance with the provisions of Code Section
      280G(d)(4), utilizing a discount rate equal to one hundred twenty percent
      (120%) of the applicable Federal rate in effect at the time of such
      determination, compounded semi-annually to the effective date of the
      Change in Control.
 
      SEVERANCE PAYMENT means the severance payment to which you may become
      entitled under Part Two in the event of your Involuntary Termination
      following a Change in Control, subject, however, to the dollar limitations
      of Part Three.
 
      TERMINATION FOR CAUSE means an Involuntary Termination of your employment
      occasion by reason of your having engaged in fraud or in any other
      intentional misconduct adversely affecting the business reputation of the
      Company in a material manner.
 
 
 
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Name
February 10, 1998
Page 5
 
 
 
                     PART TWO -- CHANGE IN CONTROL BENEFITS
 
Upon the Involuntary Termination of your employment within eighteen (18) months
following a Change in Control, you will become entitled to receive the special
severance benefits provided in this Part Two.
 
      1. SEVERANCE PAYMENT.
 
         If your Involuntary Termination occurs within the first eighteen (18)
         months after the Change in Control, then you will be entitled to a
         Severance Payment in an aggregate amount equal to (i) two (2) times
         your Base Salary plus (ii) your target bonus for the fiscal year of the
         Company in which such Involuntary Termination occurs. The Severance
         Payment will be made to you in a lump sum payment within ninety (90)
         days after your Involuntary Termination.
 
         The Severance Payment will be subject to the Company's collection of
         applicable federal and state income and employment withholding taxes.
 
         In the event your employment terminates by reason of your death or
         disability or your Termination for Cause, you will not be entitled to
         receive any Severance Payment or other benefits under this letter
         agreement.
 
      2. OPTION ACCELERATION.
 
         Each of your outstanding Options will (to the extent not then otherwise
         fully exercisable) automatically accelerate so that each such Option
         will become fully vested and immediately exercisable for the total
         number of shares of Common Stock at the time subject to that Option.
         Each such accelerated Option, together with all your other vested
         Options, will remain exercisable for fully-vested shares until the
         earlier of (i) the expiration date of the ten (10) year option term or
         (ii) the end of the one (1) year period measured from the date of your
         Involuntary Termination.
 
      3. ADDITIONAL BENEFITS.
 
         (a) HEALTH CARE COVERAGE.
 
             The Company will, at its expense, provide you and your eligible
             dependents with continued health care coverage under the Company's
             medical/dental plan until the earlier of (i) eighteen (18) months
             after the date of your Involuntary Termination or (ii) the first
             date that the you are covered under another employer's health
             benefit program which provides substantially the same level of
             benefits without exclusion for pre-existing medical conditions. The
             coverage so provided you and your eligible dependents will be
 
 
 
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Name
February 10, 1998
Page 6
 
 
 
             in full and complete satisfaction of the continued health care
             coverage to which you or your eligible dependents would otherwise,
             at your own expense, be entitled under Code Section 4980B by reason
             of your termination of employment, and neither you nor your
             eligible dependents will accordingly be entitled to any additional
             period of health care coverage under Code Section 4980B as a result
             of your termination of employment.
 
         (b) UNPAID BENEFITS
 
             You will receive an immediate lump sum payment of all unpaid
             vacation days which you have accrued through the date of your
             Involuntary Termination.
 
 
                      PART THREE -- LIMITATION ON BENEFITS
 
      1. PARACHUTE LIMIT.
 
         Except to the limited extent (if any) provided under Paragraph 4(a)
         below, the aggregate Present Value (measured as of the Change in
         Control) of the benefits to which you become entitled under Part Two at
         the time of your Involuntary Termination (namely the Severance Payment,
         the Option Parachute Payment attributable to your Severance-Accelerated
         Options and your Health Care Continuation) will in no event exceed in
         amount the difference between (i) 2.99 times your Average Compensation
         and (ii) the Present Value, measured as of the Change in Control, of
         all Other Parachute Payments to which you are entitled.
 
         Accordingly, except as otherwise provided under Paragraph 4(a) below,
         your Options will not accelerate and no Severance Payment will be made
         to you pursuant to this letter agreement, to the extent the Present
         Value as of the Change in Control of (I) the aggregate Option Parachute
         Payment attributable to your Severance-Accelerated Options plus (II)
         your Severance Payment plus (III) your Health Care Continuation would,
         when added to the Present Value of your Other Parachute Payments,
         exceed 2.99 times your Average Compensation (the "Parachute Limit").
 
      2. RESOLUTION PROCEDURE.
 
         For purposes of the foregoing Parachute Limit, the following provisions
         will be in effect:
 
         (a) In the event there is any disagreement between you and the Company
             as to whether one or more payments to which you become entitled in
             connection with either the Change in Control or your subsequent
             Involuntary Termination constitute Option Parachute Payments or
             Other Parachute Payments or as to the determination of the Present
             Value thereof, such dispute will be resolved as follows:
 
 
 
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Name
February 10, 1998
Page 7
 
 
 
             (i)   In the event temporary, proposed or final Treasury
                   Regulations in effect at the time under Code Section 280G (or
                   applicable judicial decisions) specifically address the
                   status of any such payment or the method of valuation
                   therefor, the characterization afforded to such payment by
                   the Regulations (or such decisions) will, together with the
                   applicable valuation methodology, be controlling.
 
             (ii)  In the event Treasury Regulations (or applicable judicial
                   decisions) do not address the status of any payment in
                   dispute, the matter will be submitted for resolution to
                   independent counsel mutually acceptable to you and the
                   Company ("Independent Counsel"). The resolution reached by
                   Independent Counsel will be final and controlling; provided,
                   however, that if in the judgment of Independent Counsel the
                   status of the payment in dispute can be resolved through the
                   obtainment of a private letter ruling from the Internal
                   Revenue Service, a formal and proper request for such ruling
                   will be prepared and submitted by Independent Counsel, and
                   the determination made by the Internal Revenue Service in the
                   issued ruling will be controlling. All expenses incurred in
                   connection with the retention of Independent Counsel and (if
                   applicable) the preparation and submission of the ruling
                   request shall be shared equally by you and the Company.
 
             (iii) In the event Treasury Regulations (or applicable judicial
                   decisions) do not address the appropriate valuation
                   methodology for any payment in dispute, the Present Value
                   thereof will, at the Independent Counsel's election, be
                   determined through an independent third-party appraisal, and
                   the expenses incurred in obtaining such appraisal shall be
                   shared equally by you and the Company.
 
      3. STATUS OF BENEFITS.
 
         (a) No Severance Payment will be made to you under Part Two of this
             letter agreement until the Present Value of the Option Parachute
             Payment attributable to both your Severance-Accelerated Options and
             your Acquisition-Accelerated Options has been determined and the
             status of any payments in dispute under Paragraph 2 above has been
             resolved in accordance therewith. However, you will be permitted to
             exercise your Severance-Accelerated Options at any time during the
             one (1) year (or shorter) period immediately following your
             Involuntary Termination.
 
         (b) Once the requisite determinations under Paragraph 2 have been made,
             then to the extent the aggregate Present Value, measured as of the
             Change in Control, of (1) the Option Parachute Payment attributable
             to your Severance-Accelerated Options (or installments
 
 
 
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Name
February 10, 1998
Page 8
 
 
 
             thereof) plus (2) your Severance Payment would, when added to the
             Present Value of all your Other Parachute Payments (including the
             Option Parachute Payment attributable to your
             Acquisition-Accelerated Options), exceed the Parachute Limit, your
             Severance Payment will be accordingly reduced.
 
      4. OVERRIDING LIMITATIONS.
 
         (a)   Notwithstanding any provision to the contrary set forth in the
               preceding provisions of this Part Three, the aggregate Present
               Value of your Severance Payment and the Option Parachute Payment
               attributable to your Severance-Accelerated Options will not be
               reduced below that amount (if any) which, when added to the
               Present Value of all the Other Parachute Payment to which you are
               entitled, would nevertheless qualify as reasonable compensation
               for past services within the standards established under Code
               Section 280G(b)(4)(B).
 
         (b)   The limitations of this Part Three will in all events be
               interpreted in such manner as to avoid the imposition of excise
               taxes under Code Section 4999, and the disallowance of deductions
               under Code Section 280G(a), with respect to any of the benefits
               paid pursuant to Part Two of this letter agreement.
 
 
                      PART FOUR -- MISCELLANEOUS PROVISION
 
      1. TERMINATION FOR CAUSE.
 
         Should your Involuntary Termination constitute a Termination for Cause,
         then the Company will only be required to pay you (i) any unpaid
         compensation earned for services previously rendered through the date
         of such termination and (ii) any accrued but unpaid vacation benefits
         or sick days, and no benefits will be payable to you under Part Two of
         this letter agreement.
 
      2. DEATH.
 
         Should you die before receipt of one or more Severance Payment to which
         you become entitled under Part Two of this letter agreement, then those
         payment or payments will be made to the executors or administrators of
         your estate. Should you die before you exercise all your outstanding
         Options, then such Options may be exercised, within twelve (12) months
         after your death, by the executors or administrators of your estate or
         by persons to whom the Options are transferred pursuant to your will or
         in accordance with the laws of inheritance. In no event, however, may
         any such Option be exercised after the specified expiration date of the
         option term.
 
 
 
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Name
February 10, 1998
Page 9
 
 
 
      3. GENERAL CREDITOR STATUS.
 
         The payments and benefits to which you become entitled hereunder will
         be paid, when due, from the general assets of the Company, and no trust
         fund, escrow arrangement or other segregated account will be
         established as a funding vehicle for such payment. Accordingly, your
         right (or the right of the personal representatives or beneficiaries of
         your estate) to receive any payments or benefits hereunder will at all
         times be that of a general creditor of the Company and will have no
         priority over the claims of other general creditors.
 
      4. INDEMNIFICATION.
 
         The indemnification provisions for Officers and Directors under the
         Company By-Laws will (to the maximum extent permitted by law) be
         extended to you, during the period following your Involuntary
         Termination, with respect to any and all matters, events or
         transactions occurring or effected during your employment with the
         Company.
 
      5. MISCELLANEOUS.
 
         This letter agreement will be binding upon the Company, its successors
         and assigns (including, without limitation, the surviving entity in any
         Change in Control) and is to be construed and interpreted under the
         laws of the State of Oregon. This letter agreement supersedes all prior
         agreements between you and the Company relating to the subject of
         severance benefits payable upon a change in control or ownership of the
         Company, and you will not be entitled to any other severance benefits
         upon your termination of employment. This letter may only be amended by
         written instrument signed by you and an authorized officer of the
         Company. If any provision of this letter agreement as applied to you or
         the Company or to any circumstance should be adjudged by a court of
         competent jurisdiction to be void or unenforceable for any reason, the
         invalidity of that provision will in no way affect (to the maximum
         extent permissible by law) the application of such provision under
         circumstances different from those adjudicated by the court, the
         application of any other provision of this letter agreement, or the
         enforceability or invalidity of this letter agreement as a whole.
         Should any provision of this letter agreement become or be deemed
         invalid, illegal or unenforceable in any jurisdiction by reason of the
         scope, extent or duration of its coverage, then such provision will be
         deemed amended to the extent necessary to conform to applicable law so
         as to be valid and enforceable or, if such provision cannot be so
         amended without materially altering the intention of the parties, then
         such provision will be stricken and the remainder of this letter
         agreement will continue in full force and effect. You will not be
         eligible for any other benefits.
 
 
 
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Name
February 10, 1998
Page 10
 
 
 
      6. NO EMPLOYMENT OR SERVICE CONTRACT.
 
         Nothing in this letter agreement is intended to provide you with any
         right to continue in the employ of the Company (or any subsidiary) for
         any period of specific duration or interfere with or otherwise restrict
         in any way your rights or the rights of the Company (or any
         subsidiary), which rights are hereby expressly reserved by each, to
         terminate your employment at any time for any reason whatsoever, with
         or without cause.
 
      7. ATTORNEY FEES.
 
         In the event legal proceeding should be initiated by you or by the
         Company with respect to any controversy, claim or dispute relating to
         the interpretation or application of the provisions of this letter
         agreement or any benefits payable hereunder, the prevailing party in
         such proceedings will be entitled to recover from the losing party
         reasonable attorney fees and costs incurred in connection with such
         proceedings or in the enforcement or collection of any judgment or
         award rendered in such proceedings. For purposes of this provision, the
         prevailing party means the party determined by the court to have most
         nearly prevailed in the proceedings, even if that party does not
         prevail in all matters, and does not necessarily mean the party in
         whose favor the judgment is actually rendered.
 
Please indicate your acceptance of the foregoing provisions of this employment
agreement by signing the enclosed copy of this agreement and returning it to the
Company.
 
 
 
                                       BY:   ___________________________________
 
                                       TITLE:___________________________________
 
 
 
                                   ACCEPTANCE
 
 
 
I hereby agree to all the terms and provisions of the foregoing letter agreement
governing the special benefits to which I may become entitled in connection with
certain changes in control or ownership of ___________________.
 
 
 
                                       Signature: ______________________________
 
                                       Dated:     _______________________ , 1998