<PAGE>
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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [_]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Weyerhaeuser Company
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed: 3/9/98
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Notes:
<PAGE>
Notice of
1998 Annual Meeting
of Shareholders
and Proxy Statement
[LOGO OF WEYERHAEUSER CO.]
<PAGE>
Dear Shareholder:
You are cordially invited to attend your Company's annual meeting of
shareholders at 9:00 a.m., Tuesday, April 21, 1998, at the Corporate
Headquarters Building, Federal Way, Washington. A map showing the
access route to the Building from Interstate Highway No. 5 is on the
back cover.
The 1998 shareholders meeting marks the retirement of John W.
Creighton, Jr. from the Board of Directors. I join all our employees in
thanking Jack for his 28 years of dedicated service to this Company,
particularly his leadership as President the past 9 years. Jack both
challenged and inspired Weyerhaeuser Company to be the best, and under
his leadership the Company made very significant progress toward that
goal.
A notice of the annual meeting and the proxy statement follow. You
will also find enclosed a proxy card and an envelope in which to return
it. If you cannot attend or if you plan to be present but want the
proxy holders, Steven R. Rogel, President and Chief Executive Officer,
William D. Ruckelshaus, Director, and George H. Weyerhaeuser, Chairman
of the Board, to vote your shares, please sign, date and return the
proxy card at your earliest convenience.
Sincerely,
/s/ Steven R. Rogel
Steven R. Rogel
President
- --------------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
- --------------------------------------------------------------------------------
The annual meeting of the shareholders of Weyerhaeuser Company will
be held at the Corporate Headquarters Building, Federal Way, Washington
on Tuesday, April 21, 1998, at 9:00 a.m. for the following purposes:
1. To elect one director for a term expiring in 2000 and four
directors for terms expiring in 2001, presented on page 1.
2. To consider and act upon a proposal by the Board of Directors to
approve the Weyerhaeuser Company 1998 Long-Term Incentive
Compensation Plan, presented on page 16.
3. To transact such other business as may properly come before the
meeting.
All shareholders are cordially invited to attend the meeting,
although only those holders of common shares of record at the close of
business on February 27, 1998, will be entitled to vote at the meeting.
Those of you who are hearing impaired or require other assistance
should write the Secretary of the Company regarding your requirements
in order to participate in the meeting.
SANDY D. McDADE
Secretary
Federal Way, Washington
March 9, 1998
<PAGE>
PROXY STATEMENT
WEYERHAEUSER COMPANY
Tacoma, Washington 98477
(253) 924-5273
(First Mailed March 9, 1998)
The enclosed proxy is solicited by the Board of Directors of
Weyerhaeuser Company (the "Company") for use at the annual meeting of
shareholders to be held on Tuesday, April 21, 1998. A proxy may be
revoked by notice in writing to the Secretary at any time before it is
voted, and, if not revoked, will be voted as directed by the
shareholder. As of February 27, 1998, the record date for the
determination of shareholders entitled to vote at the annual meeting,
there were outstanding 198,568,139 common shares, par value $1.25 per
share ("common shares"), each of which entitles the holder to one vote.
Each share outstanding on the record date is entitled to one vote per
share at the 1998 annual meeting of shareholders. Under Washington law
and the Company's Articles of Incorporation, if a quorum is present at
the meeting: (i) the five nominees for election as directors who
receive the greatest number of votes cast for the election of directors
at the meeting by the shares in person or represented by proxy and
entitled to vote shall be elected directors and (ii) the proposal by
the Board of Directors set forth in this proxy statement will be
approved if the number of votes cast in favor of the matter exceeds the
number of votes cast against it. In the election of directors, any
action other than a vote for a nominee will have the practical effect
of voting against the nominee. Abstention from voting or nonvoting by
brokers will have no effect on the approval of the proposal by the
Board of Directors because abstentions and "broker non-votes" do not
represent votes cast by shareholders.
The Company's annual report to shareholders for 1997 is being mailed
with this proxy statement to shareholders entitled to vote at the 1998
annual meeting.
ELECTION OF DIRECTORS
The Articles of Incorporation provide that the directors of the
Company be classified, with respect to the term for which they
severally hold office, into three classes, each class to be as nearly
equal in number as possible; and that at each annual meeting of the
shareholders of the Company the successors to the class of directors
whose terms expire at that meeting shall be elected to hold office for
terms expiring at the third annual meeting of shareholders after their
election by the shareholders. The Board of Directors is authorized to
fix the number of directors within the range of 9 to 13 members, and
has fixed the number at 10. Four nominees identified below are the
nominees comprising the class to be elected at the 1998 annual meeting
for three-year terms expiring at the 2001 annual meeting and one
nominee is for the term expiring at the 2000 annual meeting. All of the
nominees are currently directors of the Company elected by the
shareholders, except Messrs. Rogel and Sullivan.
Unless otherwise instructed, it is intended that the shares
represented by properly executed proxies in the accompanying form will
be voted for the individuals nominated by the Board of Directors.
Although the Board of Directors anticipates that the listed nominees
will be able to serve, if at the time of the meeting any such nominee
is unable or unwilling to serve, such shares may be voted at the
discretion of the proxy holders for a substitute nominee.
1
<PAGE>
NOMINEES FOR ELECTION--TERM TO EXPIRE IN 2001
Steven R. Rogel--Mr. Rogel, 55, a director of the Company since 1997,
has been the Company's president and chief executive officer since
December, 1997. Prior to that he served as the president and chief
executive officer of Willamette Industries, Inc. from 1995-1997 and as
president and chief operating officer from 1991-1995. He is also a
director of Fred Meyer, Inc., the Cascade Pacific Council Boy Scouts of
America and a trustee of Pacific University.
William D. Ruckelshaus--Mr. Ruckelshaus, 65, a director of the Company
since 1989, is chairman of Browning-Ferris Industries, Inc. (waste
services) and from October, 1988 to October, 1995 was chairman and
chief executive officer. He was Administrator, Environmental Protection
Agency in the period 1983-1985 and a senior vice president of the
Company in the period 1976-1983. He is a Principal in Madrona
Investment Group, L.L.C. He is also a director of Cummins Engine
Company, Inc., Coinstar, Inc., Monsanto Company, Nordstrom, Inc.,
Solutia, Inc. and Gargoyles, Inc.
Richard H. Sinkfield--Mr. Sinkfield, 55, a director of the Company
since 1993, is an executive vice president of United Auto Group, Inc.
(automobile retailing), is a senior partner in the law firm of Rogers
and Hardin in Atlanta and has been a partner in the firm since 1976. He
is also a director of the United Auto Group, Inc., Metropolitan Atlanta
Community Foundation, Inc. and the Atlanta College of Art. He is a
member of the Board of Trust of Vanderbilt University and of the Board
of Governors of the State Bar of Georgia. He is a former chairman of
the board of Atlanta Urban League, Inc.
James N. Sullivan--Mr. Sullivan, 60, a director of the Company since
1998, is vice-chairman of the board of Chevron Corporation
(international oil company) where he has been a director since 1988. He
joined Chevron in 1961 as a Process Engineer, was elected a vice-
president in 1983 and assumed his present position in 1989. He is a
member of the Board of Trustees of the University of San Francisco, the
California Academy of Sciences, and the Committee for Economic
Development. He is a director of the American Petroleum Institute and
the United Way of the Bay Area.
NOMINEE FOR ELECTION--TERM TO EXPIRE IN 2000
Philip M. Hawley--Mr. Hawley, 72, a director of the Company since 1989,
is chairman and chief executive officer of Krause Furniture, Inc.
(retailing). He was chairman and chief executive officer of Broadway
Stores, Inc. (formerly Carter Hawley Hale Stores, Inc.) until his
retirement in 1993. He was chairman of the California Retailers
Association from 1993-1995. He is a director of Aeromovel USA, Inc.,
Johnson & Johnson and a trustee of the Haynes Foundation.
CONTINUING DIRECTORS--TERM EXPIRES IN 2000
W. John Driscoll--Mr. Driscoll, 68, a director of the Company since
1979, was chairman of Rock Island Company (private investment company)
until his retirement in 1994. Prior to his becoming chairman, he was
president. He is also a director of Comshare Incorporated, Northern
States Power Company, John Nuveen & Company and The St. Paul Companies,
Inc.
Rt. Hon. Donald F. Mazankowski--Mr. Mazankowski, 62, was a Member of
Parliament, Government of Canada, from 1968-1993, served as Deputy
Prime Minister from 1986-1993 and Minister of Finance from 1991-1993.
He is also a director of the Power Group of Companies, Canadian
Utilities Ltd., Shaw Communications Inc., IMC Global Inc., Gulf
2
<PAGE>
Canada Resources Ltd., Gulf Indonesia Resources Ltd., Golden Star
Resources Ltd. and Weyerhaeuser Canada Ltd., a wholly owned subsidiary
of the Company. He is also a member of the Board of Governors of the
University of Alberta.
CONTINUING DIRECTORS--TERM EXPIRES IN 1999
Martha R. Ingram--Mrs. Ingram, 62, a director of the Company since
1995, has been chairman of Ingram Industries Inc. (book and video
distribution, and inland barging and insurance) since 1995 and a member
of the board since 1981. She was Director of Public Affairs in the
period 1979-95. She is also a director of Ingram Micro, Inc., Baxter
International Inc. and First American Corporation. Mrs. Ingram serves
on the Boards of Vassar College, Ashley Hall and Vanderbilt University.
She was chairman of the 1997 Tennessee Bicentennial Commission.
John I. Kieckhefer--Mr. Kieckhefer, 53, a director of the Company since
1990, has been president of Kieckhefer Associates, Inc. (investment and
trust management) since 1989 and was senior vice president prior to
that time. He has been engaged in commercial cattle operations since
1967 and is a trustee of J. W. Kieckhefer Foundation, an Arizona
charitable trust.
George H. Weyerhaeuser--Mr. Weyerhaeuser, 71, has been the Company's
chairman since 1988. He joined the Company in 1949, became its
president in 1966 and was chief executive officer from 1966 to 1991. He
has been a director since 1960. He is also a director of The Boeing
Company, Chevron Corporation and SAFECO Corporation and a member of The
Business Council.
Messrs. Rogel, Ruckelshaus and Weyerhaeuser are members of the
Executive Committee of which Mr. Weyerhaeuser is chairman. The
Executive Committee, which met on two occasions and acted by consent in
lieu of meeting on two occasions in 1997, has the powers and authority
of the Board of Directors in the interval between Board of Directors
meetings except to the extent limited by law.
Mrs. Ingram and Messrs. Mazankowski, Ruckelshaus and Sinkfield are
members of the Accounting and Reporting Standards Committee of which
Mr. Ruckelshaus is chairman. The Accounting and Reporting Standards
Committee, which met on three occasions in 1997, has responsibility for
recommending to the Board of Directors the firm of independent auditors
to be retained by the Company; discussing with the independent and
internal auditors the scope and results of their respective audits and
management's efforts concerning the Company's accounting, financial and
operating controls; with the independent auditors and management the
Company's accounting and reporting policies and practices, and business
risks that may affect the financial reporting process; with management
and the independent and internal auditors the risk of fraudulent
financial reporting and management's efforts to minimize losses due to
fraud or theft; and with the Company's chief legal officer compliance
with the Company's business conduct policies and procedures.
Messrs. Driscoll, Hawley and Kieckhefer are members of the
Compensation Committee of which Mr. Hawley is chairman. The
Compensation Committee, which met on four occasions in 1997, has
responsibility for reviewing the compensation of the Company's
directors and chief executive officer; reviewing and approving salaries
and incentive compensation of Company officers and certain other
position levels; and administering the Company's stock option and
incentive compensation plans.
Messrs. Driscoll, Hawley, Ruckelshaus and Weyerhaeuser are members of
the Nominating and Management Organization Committee of which Mr.
Driscoll is chairman. The Nominating and Management Organization
Committee, which met on six occasions in 1997,
3
<PAGE>
has responsibility for reviewing, advising and recommending candidates
for election to the Board of Directors and for senior management
succession planning. The Committee will consider nominees for the Board
of Directors recommended by shareholders. If a shareholder wishes to
recommend a nominee, he or she should write to the Secretary of the
Company specifying the name of the nominee and the nominee's
qualifications for membership on the Board of Directors. All such
recommendations will be brought to the attention of the Nominating and
Management Organization Committee.
The Board of Directors of the Company met on seven occasions in 1997.
All of the directors attended at least 75% of the total meetings of the
Board and the committees on which they served in 1997.
DIRECTORS' COMPENSATION
Each non-employee director receives for service as a director an
annual fee of $35,000, fees of $1,500 for attending Board of Directors
meetings and $1,000 for attending board committee meetings. Committee
chairmen receive an additional annual fee of $5,000. Mr. Weyerhaeuser
receives as Chairman of the Board of Directors an additional annual fee
of $100,000. In 1997 Mr. Mazankowski received fees of Cdn. $16,750 as a
non-employee director of Weyerhaeuser Canada, a wholly owned subsidiary
of the Company. Directors are also reimbursed for travel expenses in
connection with meetings.
The Board of Directors has designated that $10,000 of the $35,000
annual fee paid to non-employee directors is automatically placed into
a common share equivalents account under the Fee Deferral Plan for
Directors. The value of the common share equivalents account is
measured from time to time by the value of the Company's common shares
and is payable to the director in cash at a time selected in advance by
the director which must be on or after the director's termination of
board service. The share equivalents account is credited on each
dividend payment date for common shares with the number of share
equivalents which are equal in value to the amount of the quarterly
dividend on common shares. The Fee Deferral Plan for Directors provides
that the nonemployee directors may defer receipt of all or a portion of
the remaining fees for services as a director and elect between
interest bearing and common share equivalent accounts as the investment
vehicle for the deferred fees. The Fee Deferral Plan for Directors is
administered by the Compensation Committee.
4
<PAGE>
BENEFICIAL OWNERSHIP OF COMMON SHARES
Directors and Executive Officers
<TABLE>
<CAPTION>
Voting and/or Common
Name of Individual or Dispositive Powers Percent of Class Share
Identity of Group (number of common shares) (common shares) Equivalents
---------------------------------------------------------------------------
<S> <C> <C> <C>
William R. Corbin....... 94,091 * 10,033
John W. Creighton, Jr... 454,043 * 25,813
W. John Driscoll........ 4,303,632 2.2 1,030
Richard C. Gozon........ 102,473 * 13,461
Philip M. Hawley........ 2,000 * 2,747
Martha R. Ingram........ 263,888 * 445
Norman E. Johnson....... 34,920 * --
John I. Kieckhefer...... 3,313,809 2.3 6,360
Donald F. Mazankowski... 400 * 211
Steven R. Rogel......... -- * 10,896
William D. Ruckelshaus.. 1,600 * 1,030
Richard H. Sinkfield.... 500 * 1,030
William C. Stivers...... 113,419 * 10,825
James N. Sullivan....... 1,000 * --
George H. Weyerhaeuser.. 2,483,951 1.3 4,385
Directors and executive
officers as a group
(19 individuals)....... 11,362,916 5.7 90,843
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</TABLE>
*Denotes amount is less than 1%
The foregoing table shows as of January 21, 1998 for each of the
directors, nominees and executive officers and, as a group, for the
directors, nominees and incumbent executive officers of the Company,
the amounts of common shares of the Company with respect to which the
respective directors, executive officers and the members of the group
in the aggregate, have, within the meaning of Rule 13d-3 adopted by
the Securities and Exchange Commission, the power to vote or cause
disposition of the shares and, in the case of Mr. Corbin with respect
to 92,500 common shares, in the case of Mr. Creighton with respect to
397,250 common shares, in the case of Mr. Gozon with respect to 75,000
common shares, in the case of Mr. Johnson with respect to 32,750
common shares, in the case of Mr. Stivers with respect to 105,000
common shares, and of the group with respect to 878,800 common shares,
the number of shares that could be acquired within 60 days after
January 21, 1998, pursuant to outstanding stock options. With respect
to the following numbers of common shares, which are reflected in the
table above, the indicated directors and nominees share voting and
dispositive powers with one or more other persons: Mr. Driscoll,
3,382,584 shares (including 182,595 shares as to which he shares
fiduciary powers with Mr. Weyerhaeuser); Mrs. Ingram, 3,007 shares;
Mr. Kieckhefer, 3,312,551 shares; and Mr. Weyerhaeuser, 2,360,828
shares (including 182,595 shares as to which he shares fiduciary
powers with Mr. Driscoll). Beneficial ownership of shares included in
the foregoing table is disclaimed by certain of the individuals listed
as follows: Mr. Driscoll, 4,208,745 shares; Mrs. Ingram, 3,007 shares;
Mr. Kieckhefer, 2,983,394 shares.
5
<PAGE>
Owners Of More Than 5%
The following table sets forth holdings of the only persons known to
the Company to beneficially own more than five percent of common
shares.
<TABLE>
<CAPTION>
Name and Address of Amount and Nature Percent of Class
Beneficial Owner of Beneficial Ownership (common shares)
----------------------------------------------------------------
<S> <C> <C>
Putnam Investments, Inc.... 13,945,255(1) 7
One Post Office Square
Boston, MA 02109
The Capital Group Compa-
nies, Inc................. 13,440,100(2) 6.7
333 South Hope Street
Los Angeles, CA 90071
----------------------------------------------------------------
</TABLE>
(1) Based on a Schedule 13G dated January 27, 1998 in which
Putnam Investments, Inc. reported that, as of December 31,
1997, it or its subsidiaries had shared voting power over
52,200 of such shares and shared dispositive power over all
13,945,255 of such shares. Putnam Investments, Inc. disclaims
beneficial ownership of all such shares.
(2) Based on a Schedule 13G dated February 11, 1998 in which The
Capital Group Companies, Inc. reported that, as of December
31, 1997, it or its subsidiaries had voting power over none
of such shares and sole dispositive power over all 13,440,100
of such shares. The Capital Group Companies, Inc. disclaims
beneficial ownership of all such shares.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE MANAGEMENT COMPENSATION
The Compensation Committee of the Board of Directors is composed
entirely of directors who are not employees of the Company. The
Committee is responsible for establishing and overseeing the Company's
executive compensation programs.
Compensation Philosophy
The Committee bases compensation for executive officers on the same
guiding principles used for all Weyerhaeuser employees:
. Pay that allows the Company to (1) attract and retain people with
the skills critical to long-term success of the Company, and (2)
maintain compensation costs that are competitive.
. Pay for performance to motivate and reward individual and team
performance in attaining business objectives and maximizing
shareholder value.
Executive Officer Compensation Practices
Compensation for executive officers includes three components: Base
salary, annual incentive and long-term incentive. Base salaries, for
the executives as a group, are set at competitive levels. The cash-
based annual incentive and the long-term incentive (stock options) are
based on Company performance.
The Committee primarily uses an industry group for compensation
comparison purposes. The comparison group consists of companies with
similar characteristics that compete with Weyerhaeuser for executive
talent. All companies in the S&P Paper and Forest Products Group used
for the performance graph on page 11 are in this comparison group along
with other forest product companies. In addition, the Committee reviews
general industry compensation data from other surveys to ensure that
the Company's compensation levels are sufficient to attract and retain
executives.
6
<PAGE>
Annual Cash Compensation
Base Salary. The Company assigns a salary range for each executive
officer position. The salary range midpoints are targeted at the 50th
percentile using all the competitive data discussed above.
The Committee reviews and approves all salary ranges and salary
changes for executive officers. In determining individual salary
changes, the Committee uses its discretion after considering these
factors: (1) individual performance of the executive (using a variety
of measures), (2) position of the executive in the assigned pay range,
(3) experience, and (4) the salary budget for the Company. Salaries of
the executive officers on average are currently at the median of the
competitive data.
Annual Incentive. The Company uses an annual incentive plan to
focus management on leading the industry in financial performance and
returns to shareholders. Each executive position is assigned a target
bonus amount based on the competitive data. The targets vary by
position, and range from 40 to 60 percent of base pay.
The measures of performance used for annual incentives are total
return to shareholders (compared to selected industry competitors and
the Standard & Poor's 500) and return on net assets compared to
selected competitors.
At the end of each year, the Committee determines a preliminary
bonus pool for the executive group based on Company results against the
performance measures. The Committee then uses its discretion to
determine the final bonus pool and each individual executive officer's
bonus. For 1997, the Committee established a funding pool of 17.5 % of
target based on results compared to the performance measures.
Executives may defer all or a portion of their 1997 bonus into
Weyerhaeuser share equivalents, with a 15 percent premium applied if
they delay payment for at least 5 years. The deferred account grows or
declines based on the performance of Weyerhaeuser stock (plus
dividends). The purpose of the program is to further align executive
interests with those of shareholders by providing an incentive linked
to the performance of Weyerhaeuser stock.
Long-Term Incentive
Stock Options. The primary purpose of the long-term incentive plan
is to link management pay with the long-term interests of shareholders.
The Committee is currently using stock options to achieve that link.
The issuance of options at 100 percent of the fair market value assures
that executives will receive a benefit only when the stock price
increases.
The Committee establishes a target level of stock options for each
executive position. The target level is based on competitive data
indicating the estimated median value of long-term compensation. In
determining annual stock option grants, the Committee makes an award
above or below target based on subjective evaluation of the
individual's performance, the individual's potential to improve
shareholder value and the number of shares granted to the individual in
the previous three years. Due to technical requirements of the rules
under Section 16 of the Securities Exchange Act, Mr. Kieckhefer has not
participated in any Committee action relating to stock options since
the new rules were finalized in 1996.
7
<PAGE>
Stock Ownership Requirements
During 1996, the Company and the Committee established guidelines
for executive stock ownership. The guidelines require executive
officers to acquire, over a five-year period, a multiple of their base
salary in shares of Weyerhaeuser stock. Minimum ownership levels are
based on the executive's salary level, and range from one to three
times base salary. Ownership is based on common shares held, stock
equivalents (through the bonus deferral program described under "Annual
Incentive" above) and shares held via the company's qualified benefit
plans.
Deductibility of Compensation
The Committee has considered the provisions of Section 162(m) of
the Internal Revenue Code which limit the deductibility of compensation
paid to each named executive to $1 million. To the extent possible, the
Committee intends to preserve deductibility but may choose to provide
compensation that is not deductible in order to maximize shareholder
return and to attract, retain and reward high-performing executives.
CEO Compensation
The chief executive officer's compensation is determined based on
the principles described above. Mr. Creighton's base salary was
increased to $900,000 in 1997. This level is 97 percent of the median
salary for CEOs of companies in the industry comparison group.
The target annual bonus award for the chief executive officer
position is 60% of base salary. Mr. Creighton received an annual cash
incentive award for 1997 of $94,500, which represents 17.5% of his
target award under the annual incentive plan. This award was based on
the same factors used to determine the annual incentive compensation of
other executives. Due to Mr. Creighton's pending retirement, a stock
option award was not made.
Effective December 1, 1997, Steven R. Rogel became president and
chief executive officer of Weyerhaeuser Company. His compensation and
benefits were negotiated prior to his joining the Company and reflect
his 32 years of experience in the forest products industry, including
his service as chief executive officer of a large diversified forest
products concern. His annual base salary is $925,000 and he received an
initial stock option grant of 150,000 shares. The terms of the
agreement with Mr. Rogel concerning his employment are described on
pages 15-16.
Philip M. Hawley W. John Driscoll John I. Kieckhefer
Chairman
8
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
In 1995 two partnerships in which trusts for the benefit of John I.
Kieckhefer, a director, and members of his family have ownership
interests (the "Family Partnerships") purchased limited partnership
interests in WRI Galena Wineville Business Park Investors, L.P. (the
"Galena Partnership"), for a total of $875,000. The Galena Partnership
is a real estate investment partnership in which Weyerhaeuser Realty
Investors, a wholly owned subsidiary of the Company, is the general
partner. Those purchases were on terms comparable to the terms
concurrently offered to other purchasers of limited partnership
interests.
In 1997, in connection with a change in investment objectives for the
Galena Partnership, Weyerhaeuser Venture Company ("WVC"), a wholly
owned subsidiary of the Company, purchased the Galena Partnership units
held by the Family Partnerships for a total of $1,175,000. WVC's
investment committee, composed of Philip E. Ferrari, Daniel S. Fulton,
Donald E. Lange, Stephen M. Margolin and Robert J. Plavchak, determined
the purchase price. The price was based on the appraised value of the
Galena Partnership's real property and a discount negotiated based on
the anticipated date the property could be sold and the appropriate
discount rate. The Galena Partnership's real property was subsequently
sold in its entirety and WVC received distributions in excess of the
$1,175,000 purchase price and a return on investment greater than that
anticipated when it purchased the Family Partnership interests.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
---------------------------- ---------------------------
Awards Payouts
------------------- -------
Other Restricted All Other
Annual Stock Options/ LTIP Compen-
Name and Salary Bonus Compensation Award(s) SARs Payouts sation
Principal Position Year ($) ($) ($)(1) ($) (#) ($) ($)(2)
---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
S.R. Rogel 1997(/3/) 35,577 -- -- -- 150,000 None 579,536
President/CEO
J.W. Creighton, Jr. 1997 894,232 94,500 -- None -- None 54,770
President/CEO 1996 862,055 388,500 -- None 97,824 None 57,770
1995 806,480 750,000 -- None 80,000 None 111,093
R.C. Gozon 1997 412,615 36,400 -- None 30,000 None 30,350
Executive VP 1996 390,849 148,000 1,028 None 30,000 None 33,350
1995 358,580 365,000 -- None 30,000 None 61,218
W.R. Corbin 1997 412,615 36,400 92 None 30,000 None 30,350
Executive VP 1996 390,849 148,000 -- None 30,000 None 33,350
1995 356,845 365,000 -- None 30,000 None 45,431
W.C. Stivers 1997 371,732 29,610 -- None 25,000 None 26,150
Sr. VP/CFO 1996 349,041 120,000 -- None 25,000 None 29,150
1995 317,606 292,600 -- None 25,000 None 53,733
N.E. Johnson 1997 310,096 24,570 -- None 8,000 None 8,150
Sr. VP 1996 299,178 100,000 -- None 13,000 None 11,150
1995 285,303 232,000 -- None 15,000 None 9,843
---------------------------------------------------------------------------------------------
</TABLE>
9
<PAGE>
(1) Amounts in this column reflect reimbursements for the
payment of taxes.
(2) Amounts in this column are: (a) the Company contribution
to qualified 401(k) and profit sharing plan accounts;
(b) the premium amount credited to the executive's
deferred compensation account based on the bonus amount
deferred as common share equivalents for at least five
years; and (c) the one-time amount provided to Mr. Rogel
upon hire, plus a premium related to the deferral of
that payment into common share equivalents for at least
five years. The amount is linked to losses Mr. Rogel
incurred upon leaving his former employer.
(3) Mr. Rogel became President and Chief Executive Officer
on December 1, 1997.
10
<PAGE>
COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN
AMONG WEYERHAEUSER COMPANY, S&P 500, AND S&P PAPER & FOREST PRODUCTS GROUP
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
S&P
Measurement Period S&P PAPER AND FOREST
(Fiscal Year Covered) WEYERHAEUSER 500 INDEX PRODUCTS GROUP
- --------------------- --------------- --------- ----------------
<S> <C> <C> <C>
Measurement Pt-12/1992 $100.00 $100.00 $100.00
FYE 12/1993 $124.49 $110.23 $110.03
FYE 12/1994 $107.70 $111.53 $114.82
FYE 12/1995 $128.52 $153.30 $126.42
FYE 12/1996 $145.79 $188.40 $139.80
FYE 12/1997 $155.80 $251.17 $143.93
</TABLE>
Assumes $100 invested on December 31, 1992 in Weyerhaeuser common stock, S&P
500, and S&P's Paper and Forms; Products Group
- -Total return assumes reinvestment of dividends
- -Measurement dates are the last trading day of the calendar year shown
- -S&P's Paper and Forest Products Group: Boise Cascade, Champion International,
Georgia-Pacific, International Paper, Louisiana-Pacific, Mead, Potlatch,
Westvaco, Weyerhaeuser and Willamette
11
<PAGE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Individual Grants
---------------------------------------------------------------------
% OF TOTAL
NO. OF OPTIONS/SARS
SECURITIES GRANTED TO
UNDERLYING EMPLOYEES IN EXERCISE OR GRANT DATE
NAME OPTIONS/SARS FISCAL YEAR BASE PRICE EXPIRATION PRESENT VALUE(2)
(A) GRANTED(1)(#)(B) (%)(C) ($)(D) DATE (E) ($)(F)
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
S. R. Rogel............. 150,000 9.6 53.0625 12/01/07 2,604,000
J.W. Creighton, Jr...... 0 0 NA NA 0
R.C. Gozon.............. 30,000 1.9 45.7500 02/06/07 391,800
W.R. Corbin............. 30,000 1.9 45.7500 02/06/07 391,800
W.C. Stivers............ 25,000 1.6 45.7500 02/06/07 326,500
N.E. Johnson............ 8,000 .5 45.7500 02/06/07 104,480
------------------------------------------------------------------------------------------
</TABLE>
(1) Options granted in 1997 are exercisable starting 12 months
after the grant date, with 25 percent of the shares covered
thereby becoming exercisable at that time and with an
additional 25 percent of the option shares becoming
exercisable on each successive anniversary date, with full
vesting occurring on the fourth anniversary date. The options
were granted for a term of 10 years, subject to earlier
termination in certain events related to termination of
employment.
(2) The estimated grant date present value reflected in the above
table is determined using the Black-Scholes model. The
material assumptions and adjustments incorporated in the
Black-Scholes model in estimating the value of the options
reflected in the above table include the following:
. An exercise price on the option of $45.7500 for grants with a
February 6, 2007 expiration date, and $53.0625 for the grant
with a December 1, 2007 expiration date, equal to the fair
market value of the underlying stock on the grant date.
. An option term of ten years.
. An interest rate of 6.42 percent for grants with a February 6,
2007 expiration date, and 5.88 percent for the grant with a
December 1, 2007 expiration date, that represents the interest
rate on a U.S. Treasury security with a maturity date
corresponding to that of the option term.
. Volatility of 24.11 percent for grants with a February 6, 2007
expiration date, and 28.31 percent for the grant with a
December 1, 2007 expiration date, calculated using daily stock
prices for the one-year period prior to the grant date.
. Dividends at the rate of $1.60 per share representing the
annualized dividends paid with respect to a share of common
stock at the date of grant.
The ultimate values of the options will depend on the future market
price of the Company's stock, which cannot be forecast with reasonable
accuracy. The actual value, if any, an optionee will realize upon
exercise of an option will depend on the excess of the market value of
the Company's common stock over the exercise price on the date the
option is exercised.
12
<PAGE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised in-the-Money Options/SARs
Options/SARs at FY-End at FY-End(2)
------------------------- -------------------------
Shares Acquired Value
on Exercise(1) Realized Exercisable Unexercisable Exercisable Unexercisable
Name (#) ($) (#) (#) ($) ($)
--------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
S. R. Rogel............. -- -- -- 150,000 -- --
J. W. Creighton, Jr..... 74,909 2,376,844 332,251 134,998 3,344,792 547,022
R. C. Gozon............. -- -- 45,000 75,000 297,657 317,345
W. R. Corbin............ 28,850 597,589 60,000 77,500 207,657 291,641
W. C. Stivers........... 47,500 1,262,387 77,500 65,000 434,843 246,484
N. E. Johnson........... 45,500 930,885 18,250 30,750 99,429 133,664
--------------------------------------------------------------------------------------------------
</TABLE>
(1) Number of securities underlying options/SARs exercised.
(2) Based on a fair market value at fiscal year end of
$48.40625.
13
<PAGE>
PENSION PLAN TABLE
<TABLE>
<CAPTION>
Estimated Annual Retirement Benefit(1)
---------------------------------------------------------------------
Average Annual Years of Service
Compensation during -----------------------------------------------
Highest 5 Years 15 20 25 30 35 40
-----------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 350,000 76,415 101,887 127,359 152,831 178,303 195,803
400,000 87,665 116,887 146,109 175,331 204,553 224,553
450,000 98,915 131,887 164,859 197,831 230,803 253,303
500,000 110,165 146,887 183,609 220,331 257,053 282,053
550,000 121,415 161,887 202,359 242,831 283,303 310,803
600,000 132,665 176,887 221,109 265,331 309,553 339,553
650,000 143,915 191,887 239,859 287,831 335,803 368,303
700,000 155,165 206,887 258,609 310,331 362,053 397,053
750,000 166,415 221,887 277,359 332,831 388,303 425,803
800,000 177,665 236,887 296,109 355,331 414,553 454,553
850,000 188,915 251,887 314,859 377,831 440,803 483,303
900,000 200,165 266,887 333,609 400,331 467,053 512,053
950,000 211,415 281,887 352,359 422,831 493,303 540,803
1,000,000 222,665 296,887 371,109 445,331 519,553 569,553
1,050,000 233,915 311,887 389,859 467,831 545,803 598,303
1,100,000 245,165 326,887 408,609 490,331 572,053 627,053
1,150,000 256,415 341,887 427,359 512,831 598,303 655,803
1,200,000 267,665 356,887 446,109 535,331 624,553 684,553
1,250,000 278,915 371,887 464,859 557,831 650,803 713,303
1,300,000 290,165 386,887 483,609 580,331 677,053 742,053
1,350,000 301,415 401,887 502,359 602,831 703,303 770,803
-----------------------------------------------------------------
</TABLE>
(1) Estimated annual benefits payable upon retirement at age
65 (before giving effect to applicable Social Security
benefits) under the Retirement Plan and Supplemental
Retirement Plan to individuals having the specified
years of credited service and the indicated average
annual salaries.
The Company's Retirement Plan for Salaried Employees (the "Retirement
Plan") is a noncontributory, defined benefit pension plan for salaried
employees under which normal retirement is at age 65 and early
retirement can be elected by any participant who has reached age 55 and
has at least 10 years of vesting service. The annual retirement benefit
payable upon normal retirement is equal to (i) 1% of the participant's
average annual salary for the highest five consecutive years during the
ten calendar years before retirement, plus (ii) .5% of such highest
average annual salary in excess of the participant's Social Security
wage base (as such term is defined in the Retirement Plan), multiplied
by the number of years of credited service. The benefit payable upon
early retirement is a percentage of the benefit that would be payable
upon normal retirement and ranges from 72% at age 55 with less than 30
years of vesting service, to 100% at age 62. The benefit in part (ii)
of the formula described above, for benefit accruals after 1988, is
subject to greater reduction for early retirement and the number of
years of credited service is limited to 35. Joint and survivor
elections may be made under the Retirement Plan. A participant in a
defined benefit pension plan is generally limited under the Internal
Revenue Code to an annual benefit at Social Security normal retirement
age of the lesser of (i) $130,000 (subject to adjustment) or (ii) 100%
of the participant's average compensation during the consecutive three-
year period in which he received the highest compensation. Further
reduction may be required for retirement prior to the Social Security
normal retirement age. Salary used in calculating retirement benefits
is average annual salary for the highest five consecutive years during
the ten calendar years before retirement.
14
<PAGE>
Employees nominated by the Chief Executive Officer and approved by
the Compensation Committee are eligible to participate in the
Supplemental Retirement Plan (the "Supplemental Plan"). Supplemental
Plan benefits, which are paid outside the Retirement Plan from the
general funds of the Company, are determined by applying to incentive
compensation paid in the five highest consecutive calendar years during
the ten calendar years before retirement of total compensation (base
salary plus any award under the Company's incentive compensation plans)
the formula for determining Retirement Plan benefits. The Supplemental
Plan also includes benefits which exceed the Internal Revenue Code
limitations described above.
If each of the executive officers named in the Summary Compensation
table had retired in 1997, the five-year average compensation used to
calculate retirement benefits would average 160% of total compensation
set forth in such table and the final average compensation used to
calculate retirement benefits for the named individuals in the table
would have been, respectively, S.R. Rogel, $ 925,000, J.W. Creighton,
Jr., $1,292,910, W.R. Corbin, $564,089, R.C. Gozon, $555,352, W.C.
Stivers, $492,137, and N.E. Johnson, $426,978. The credited years of
service for those individuals in the table are, respectively, 25.6,
27.3, 10.5, 3.6, 27.2 and 38.8 years.
Pursuant to an agreement with Mr. Johnson, the Company's Senior Vice
President, Technology, the years of credited service include service he
is entitled to under a non-qualified supplemental retirement benefit
calculated based on the terms of the retirement plan with respect to
his service with the Company prior to 1967.
Pursuant to an agreement with Mr. Corbin, the Company's Executive
Vice President, Timberlands & Distribution, who joined the Company in
1992, he will be paid a non-qualified supplemental retirement benefit
calculated under the terms of the Retirement Plan but providing that
during the first five (5) years of service with the Company, he will
receive two (2) years of service credit for vesting and benefit
calculation for each year of service with the Company. In the event Mr.
Corbin is terminated by the Company he will be entitled to a severance
payment equal to 12 months of base pay. Prior to joining the Company,
Mr. Corbin had been employed with International Paper Company as vice
president and general manager of land and timber and president of IP
Timberlands, Ltd.
Pursuant to an agreement with Mr. Gozon, who became the Company's
Executive Vice President, Pulp, Paper & Packaging in 1994, his pension
and post-retirement health benefits will be calculated based on at
least ten years of service if he leaves the Company after age 65. In
the event Mr. Gozon is terminated by the Company, he will be entitled
to a severance payment the value of which initially equaled 36 months
of base pay and decreases with each month of his employment to 12
months of his base salary when he has 36 months or more of service.
Prior to joining the Company, Mr. Gozon had been employed by Alco
Standard Corporation, most recently in the position of president and
chief operating officer.
Pursuant to an agreement with Mr. Rogel, who became the Company's
President and Chief Executive Officer on December 1, 1997, his initial
annual salary will be $925,000 and he will be a participant in the
incentive compensation plan for the Company's senior executives. His
bonus will be determined in three components, each to be given equal
weight. The first component is a short-term incentive calculated based
on the Company's annual return on net assets compared to industry
competitors. The second is an intermediate-term incentive
15
<PAGE>
calculated based on total shareholder return compared to industry
competitors and the S&P 500. The third component is based on the
Board's evaluation of his performance as chief executive officer in
relation to annual goals agreed to in advance with the Compensation
Committee. His bonus for 1998 will be calculated as described above,
but will not be less than $550,000. He received $503,944 to compensate
for stock options and restricted stock forfeited upon leaving his prior
employment, the entire amount of which was deferred into common share
equivalents under the Company's deferred compensation plan. As he chose
to defer payment for at least five years, he was entitled to a 15%
premium on the amount deferred into common share equivalents. He
received a stock option grant of 150,000 shares on his first day of
employment with the Company and will be a participant in the Company's
Long-Term Incentive Compensation Plan. He will be entitled to other
benefits generally available to the Company's top management team and
be subject to the share ownership guidelines for those employees. In
the event his employment is terminated, he is entitled to a severance
benefit of 36 months of base pay during his first 24 months of
employment. After 24 months of employment, the severance benefit
decreases by one month for each additional month he is employed until
it reaches 24 months of severance after 36 months of employment.
Thereafter, the severance benefit is 24 months of base pay. The
severance benefit will not be paid if he resigns, retires, dies or is
terminated for gross or willful misconduct, deliberate refusal or
failure to perform his duties, conviction of a felony or gross
negligence in job performance.
Pursuant to the agreement with Mr. Rogel, he will be paid a non-
qualified supplemental retirement benefit calculated under the terms of
the Company's Salaried and Supplemental Retirement Plans using his
original hire date with his prior employer in 1972, less benefits paid
to him under the Company's Retirement Plans and his prior employer's
retirement plan. He will receive relocation benefits under the
company's employee relocation programs. Prior to joining the Company,
Mr. Rogel was President and Chief Executive Officer of Willamette
Industries, Inc.
ITEM 2. PROPOSAL TO APPROVE THE WEYERHAEUSER COMPANY 1998 LONG-TERM INCENTIVE
COMPENSATION PLAN
Introduction
The Board of Directors has approved and recommends to the
shareholders the adoption of the Weyerhaeuser Company 1998 Long-Term
Incentive Compensation Plan (the "1998 Plan"). The 1998 Plan provides
for the award of stock options, stock appreciation rights, restricted
stock and performance shares. The purposes of the 1998 Plan are to
enhance the long-term profitability and shareholder value of the
Company by offering stock-based incentives to attract and retain
executives with experience and ability on a basis competitive with
industry practices and to motivate them to focus on strategies that
will increase the stock price over time. The 1998 Plan will replace and
supersede the Company's current Long-Term Incentive Compensation Plan
(the "1992 Plan"). No further grants will be made under the 1992 Plan
after the effective date of the 1998 Plan.
The full text of the 1998 Plan appears as Exhibit A to this Proxy
Statement, to which reference is made for a full statement of its terms
and provisions. The following is a summary of the principal features of
the 1998 Plan and should be read together with the full 1998 Plan text.
16
<PAGE>
Description of the Plan
Administration. The 1998 Plan is administered by the Compensation
Committee of the Board of Directors (the "Committee") which has the
exclusive authority to make awards under the 1998 Plan and all
interpretations and determinations affecting the 1998 Plan. Committee
members are independent, non-employee directors of the Company. The
Committee may delegate its authority with respect to designated classes
of employees to a committee of two or more members of the Board.
Participation. Participation in the 1998 Plan is limited to key
officers and other employees of the Company and its subsidiaries who
are selected from time to time by the Committee. Participants in the
1998 Plan are also eligible to participate in other incentive plans of
the Company. Approximately 800 employees are eligible to participate in
the 1998 Plan, including the executive officers shown on the Summary
Compensation Table on page 9.
Types of Awards. Awards under the 1998 Plan may be in the form of
stock options (including incentive stock options which meet the
requirements of Section 422 of the Internal Revenue Code ("ISOs")),
stock appreciation rights ("SARs"), restricted stock and performance
shares. Awards will be granted for no cash consideration or for such
minimal cash consideration as may be required by applicable law.
Shares Available for Awards. No more than 9,800,000 shares may be
issued under the 1998 Plan (subject to adjustment as described below
for a stock split, stock dividend, recapitalization, merger and the
like). As of February 23, 1998, options with respect to 5,839,649
shares were outstanding under the 1992 Plan and prior plans, and
1,367,830 shares remained available for awards under the 1992 Plan.
Stock Options. The term of options granted under the 1998 Plan will
be fixed by the Committee; however, such term may not exceed ten years
from the grant date. The per share purchase price for any shares
purchasable under any option will be determined by the Committee but
will not be less than 100% of the fair market value of the shares on
the date the option is granted. Each option will become exercisable
only after one year of continuous employment from the date the option
is granted by the Company or subsidiary or the death of the option
holder prior to one year of continuous employment after the option is
granted. Each option shall be exercisable in full or in part by payment
of the option price in cash or shares for the number of shares to be
purchased.
Exercise-Sell Election. Holders of stock options who do not have the
appreciation rights election shall have the right to exercise each
option by causing a cash payment to be made for the shares as to which
the option is exercised and simultaneously having such number of shares
sold through a broker in an open-market transaction without cost of
sale to the option holder. At the election of the holder, the number of
shares sold shall be all of the shares as to which the option is
exercised or the number of shares which approximate 50% of the value of
the option exercised. Following exercise the option holder shall
receive the proceeds of the sale of shares and, if the option holder
elected to have shares representing 50% of the value sold, the number
of shares remaining after such sale.
Stock Appreciation Rights. SARs may be granted in tandem with options
or on a standalone basis. Upon exercise of a Stock Appreciation Right,
the holder will be entitled to receive the excess of the fair market
value of the shares over the total option price for the shares, payable
50% in cash and 50% in shares (unless otherwise determined by the
Committee). The option price per share of any SAR will not be less than
the fair market value of the common shares on the date of grant.
17
<PAGE>
Maximum Number of Stock Options and Stock Appreciation Rights. The
maximum number of shares that may be awarded to any participant in any
year as stock options or stock appreciation rights is 200,000, except
that in one year up to 400,000 shares may be awarded to a participant
after such participant becomes the Company's chief executive officer.
Restricted Shares. The Committee is authorized to make awards of
common shares subject to Performance Measures (as defined below)
established by the Committee, in writing, no later than the first 90
days of the period in which the Performance Measure shall apply.
Performance Measures shall not be for periods shorter than one year.
Other terms and conditions the Committee may approve include the manner
in which such shares are held, the extent to which the holder of such
shares has the rights of a shareholder and the circumstances under
which such shares will be forfeited by reason of termination of
employment. None of the shares subject to a restricted share award may
be assigned, transferred, pledged or sold until they are delivered to
the holder of the share award. The maximum number of common shares that
may be awarded to any participant each year as a restricted share award
is 50,000, except that in one year up to 100,000 shares may be awarded
to a participant after such participant becomes the Company's chief
executive officer.
Performance Measures. A "Performance Measure" means objective
criteria specifically defined by the Committee on a Company-specific
basis, business-unit basis or in comparison with peer group
performance, which may include or exclude specified items of an unusual
or nonrecurring nature, and are based on one or more of the following:
earnings before interest and taxes, net earnings, earnings per share,
return on equity, return on assets, return on capital employed, cash
flow, cost reduction, stock price appreciation, total shareholder
return, economic value added, cash flow return on investment, and cash
value added.
Performance Share Awards. The Committee is authorized to grant
performance shares to participants using Performance Measures
established by the Committee, in writing, no later than the first 90
days of the period in which the Performance Measure shall apply. The
Committee is authorized to determine the length of performance periods,
except that no performance period may be shorter than one year. The
Committee may not adjust performance goals and performance periods
established for any award if such adjustment would increase the amount
of the award. If the holder of a performance share award resigns,
elects early retirement before age 62 or is terminated for cause during
a performance period, the award is forfeited. Performance awards may be
paid in cash or shares or any combination thereof. The maximum amount
that may be paid to any participant in any year with respect to
performance share awards is $2,000,000.
Adjustments. If any stock dividend, stock split, recapitalization,
merger, consolidation, or other change in the capitalization of the
Company or similar corporate transaction or event affecting the
Company's common shares results in (a) the outstanding shares being
exchanged for a different number of class of securities of the Company
or any other corporation; or new, different or additional securities of
the Company or any other corporation being received by the holders of
shares of the Company, then the Committee shall, in such manner as it
deems equitable, adjust (i) the limitation of 9,800,000 shares that may
be issued under the Plan.
Term. The 1998 Plan will become effective on the date it is approved
by the shareholders of the Company. The 1998 Plan has no fixed
expiration date.
18
<PAGE>
Federal Income Tax Consequences
Non-Qualified Options. Under the applicable provisions of the
Internal Revenue Code, no tax will be payable by the recipient of an
option at the time of grant. Upon exercise of a non-qualified option,
the excess, if any, of the fair market value of the shares with respect
to which the option is exercised over the total option price of such
shares will be treated for Federal tax purposes as ordinary income. Any
profit or loss realized on the sale or exchange of any share actually
received will be treated as a capital gain or loss. The Company will be
entitled to deduct the amount, if any, by which the fair market value
on the date of exercise of the shares with respect to which the option
was exercised exceeds the exercise price.
Incentive Stock Options. With respect to an Incentive Stock Option
(ISO), generally, no taxable gain or loss will be recognized when the
option is exercised (if the appreciation rights or exercise-sell
election is not made). ISOs exercised more than three months after
termination of employment will be taxed in the same manner as non-
qualified options described above. Generally, upon exercise of an ISO,
the spread between the fair market value and the exercise price will be
an item of tax preference for purposes of the alternative minimum tax.
If the shares acquired upon the exercise of an ISO are held for at
least one year, any gain or loss realized upon their sale will be
treated as capital gain or loss. The Company will not be entitled to a
deduction. If the shares are not held for the one-year period, ordinary
income will be recognized in an amount equal to the difference between
the amount realized on the sale and the price paid for the shares to
the extent the exercise price exceeded the grant price. Remaining gain,
if any, would be capital gain. The Company will be entitled to a
deduction equal to the amount of any ordinary income so recognized. If
the shares are not held for the one-year period and the amount realized
upon sale is less than the grant price, such difference will be a
capital loss.
Stock Appreciation Rights. Upon the grant of an option which has a
SAR election, no taxable income is realized by the holder and no
deduction is available to the Company. Upon exercise of an option
through a stock appreciation rights election, the tax consequences to
the holder and the company are the same as for exercise of a non-
qualified stock option.
Exercise-Sell Election. The Federal income tax consequences resulting
from an exercise-sell election are the same as those resulting from
making a stock appreciation rights election.
New Plan Benefits
Since awards under the 1998 Plan are discretionary, total awards
that may be granted for the current fiscal year are not determinable
until completion of the year. During 1997, options to purchase an
aggregate of 300,000 common shares were granted under the 1992 Plan to
all executive officers of the Company as a group at an average exercise
price of $49.41, and options to purchase an aggregate of 1,262,725
common shares were granted under the 1992 Plan to all other employees
of the Company as a group (including officers who are not executive
officers) at an average exercise price of $45.85. Options granted under
the 1992 Plan during 1997 to the named executive officers are set forth
under "Options/SAR Grants in Last Fiscal Year." No options were granted
under the 1992 Plan during 1997 to directors or nominees who are not
also executive officers of the Company. On February 12, 1998, the
closing price for common shares in consolidated trading on the New York
Stock Exchange was $51.4375.
The Board recommends a vote FOR this proposal.
19
<PAGE>
POLICY ON CONFIDENTIAL PROXY VOTING AND INDEPENDENT TABULATION AND INSPECTION
OF ELECTIONS
The Board of Directors, on February 12, 1991, adopted a Confidential
Voting Policy the text of which is as follows:
It is the policy of this corporation that all shareholder proxies,
ballots and voting materials that identify the votes of specific
shareholders shall be kept permanently confidential and shall not be
disclosed to this corporation, its affiliates, directors, officers
and employees or to any third parties except (i) where disclosure is
required by applicable law, (ii) where a shareholder expressly
requests disclosure, (iii) where the corporation concludes in good
faith that a bona fide dispute exists as to the authenticity of one
or more proxies, ballots or votes, or as to the accuracy of any
tabulation of such proxies, ballots or votes and (iv) that aggregate
vote totals may be disclosed to the corporation from time to time
and publicly announced at the meeting of shareholders at which they
are relevant.
Proxy cards and other voting materials that identify shareholders
shall be returned to the bank or other financial services entity
with which this corporation has contractual arrangements to provide
stock transfer services in respect to its common shares or any other
independent business entity of which this corporation is not an
affiliate.
The tabulation process and results of shareholder votes shall be
inspected by the bank or other financial services entity with which
this corporation has contractual arrangements to provide stock
transfer services in respect to its common shares or any other
independent business entity of which this corporation is not an
affiliate. Such inspectors shall certify in writing to this
corporation's Board of Directors (and in the circumstances described
in the fifth paragraph of this policy, the proponent) that the
election and tabulation was, to the best of the inspectors'
knowledge after diligent inquiry, carried out in compliance with
this policy.
The tabulators and inspectors of election and any authorized
agents or other persons engaged in the receipt, count and tabulation
of proxies shall be advised of this policy and instructed to comply
therewith, and shall sign a statement certifying such compliance.
In the event of any solicitation of a proxy (a "proxy contest")
with respect to any of the securities of this corporation by a
person (the "proponent") other than this corporation of which
solicitation this corporation has actual notice, this corporation
shall request in writing that the proponent and all agents and other
persons engaged by the proponent agree to the procedures for return
of proxies, tabulation, inspection and certification set forth in
the second, third and fourth paragraphs of this policy; and this
corporation shall not be bound to comply with this policy during the
course of such proxy contest in the event that the proponent is not
willing so to agree.
This policy shall not operate to prohibit shareholders from
disclosing the nature of their votes to this corporation or the
Board of Directors if any shareholder so chooses or to impair free
and voluntary communication between this corporation and its
shareholders.
TRANSACTIONS AND RELATIONSHIPS
In 1997 William C. Stivers, an executive officer of the Company,
purchased two residential lots from a general partnership owned and
managed by Weyerhaeuser Venture Company
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(WVC), a wholly owned subsidiary of the Company. The lots are in a
residential development project currently being advertised and sold.
The sale was in the ordinary course of WVC's and the partnership's
business and was on terms comparable to those offered to other
purchasers of two lots in the residential development.
In 1995 two partnerships in which trusts for the benefit of John I.
Kieckhefer, a director, and members of his family have ownership
interests (the "Family Partnerships") purchased limited partnership
interests in WRI Galena Wineville Business Park Investors, L.P. (the
"Galena Partnership"), for a total of $875,000. The Galena Partnership
is a real estate investment partnership in which Weyerhaeuser Realty
Investors, a wholly owned subsidiary of the Company, is the general
partner. Those purchases were on terms comparable to the terms
concurrently offered to other purchasers of limited partnership
interests.
In 1997, in connection with a change in investment objectives for the
Galena Partnership, Weyerhaeuser Venture Company ("WVC") purchased the
Galena Partnership units held by the Family Partnerships for a total of
$1,175,000. WVC's investment committee, composed of Philip E. Ferrari,
Daniel S. Fulton, Donald E. Lange, Stephen M. Margolin and Robert J.
Plavchak, determined the purchase price. The price was based on the
appraised value of the Galena Partnership's real property and a
discount negotiated based on the anticipated date the property could be
sold and the appropriate discount rate. The Galena Partnership's real
property was subsequently sold in its entirety and WVC received
distributions in excess of the $1,175,000 purchase price and a return
on investment greater than that anticipated when it purchased the
Family Partnership interests.
RELATIONSHIPS WITH INDEPENDENT PUBLIC ACCOUNTANTS
The firm of Arthur Andersen LLP, independent public accountants, has
audited the accounts of the Company and subsidiaries for a number of
years and has been selected to do so for 1998. Representatives of
Arthur Andersen LLP are expected to be present at the annual
shareholder meeting with the opportunity to make a statement if they
desire to do so and to be available to respond to appropriate
questions.
EXPENSES OF SOLICITATION
All expenses of soliciting proxies, including clerical work, printing
and postage, will be paid by the Company. Proxies may be solicited
personally, or by telephone, by employees of the Company, but the
Company will not pay any compensation for such solicitations. The
Company expects to pay fees of approximately $12,500 for assistance by
Georgeson & Company Inc. in the solicitation of proxies. In addition,
the Company will reimburse brokers, banks and other persons holding
shares in their names or in the names of nominees for their expenses
for sending material to principals and obtaining their proxies.
OTHER BUSINESS
The Board of Directors of the Company is not aware of any matter
which is to be presented for action at the meeting other than the
matters described in this proxy statement. Should any other matters
requiring a vote of the shareholders arise, the proxies in the enclosed
form confer upon the person or persons entitled to vote the shares
represented by such proxies discretionary authority to vote the same in
respect to any such other matter in accordance with their best
judgment.
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FUTURE SHAREHOLDER PROPOSALS AND NOMINATIONS
Shareholder proposals intended to be presented at the Company's 1999
annual meeting of shareholders pursuant to Rule 14a-8 promulgated by
the Securities and Exchange Commission must be received by the Company
at its executive offices, P.O. Box 2999, Tacoma, WA 98477-2999,
attention of the Secretary, on or before November 9, 1998.
The bylaws of the Company establish procedures for shareholder
nominations for elections of directors of the Company and bringing
business before any annual meeting of shareholders of the Company. Any
shareholder entitled to vote generally in the election of directors may
nominate one or more persons for election as directors at a meeting
only if written notice of such shareholder's intent to make such
nomination or nominations has been given, either by personal delivery
or by United States mail, postage prepaid, to the Secretary of the
Company, not less than 50 days nor more than 75 days prior to the
meeting; provided, however, that in the event that less than 60 days'
notice or prior public disclosure of the date of the meeting is given
or made to shareholders, notice by the shareholder to be timely must be
so received no later than the close of business on the 10th day
following the day on which such notice of date of meeting was mailed or
such public disclosure was made, whichever first occurs. Each such
notice to the Secretary shall set forth: (i) the name and address of
record of the shareholder who intends to make the nomination; (ii) a
representation that the shareholder is a holder of record of shares of
the Company entitled to vote at such meeting and intends to appear in
person or by proxy at the meeting to nominate the person or persons
specified in the notice; (iii) the name, age, business and residence
addresses, and principal occupation or employment of each nominee; (iv)
a description of all arrangements or understandings between the
shareholder and each nominee and any other person or persons (naming
such person or persons) pursuant to which the nomination or nominations
are to be made by the shareholder; (v) such other information regarding
each nominee proposed by such shareholder as would be required to be
included in a proxy statement filed pursuant to the proxy rules of the
Securities and Exchange Commission; and (vi) the consent of each
nominee to serve as a director of the Company if so elected. The
Company may require any proposed nominee to furnish such other
information as may reasonably be required by the Company to determine
the eligibility of such proposed nominee to serve as a director of the
Company. The presiding officer of the meeting may, if the facts
warrant, determine that a nomination was not made in accordance with
the foregoing procedure, and if he should so determine, he shall so
declare to the meeting and the defective nomination shall be
disregarded. To be brought before an annual meeting by a shareholder,
business must be of a nature that is appropriate for consideration at
an annual meeting and must be properly brought before the meeting. In
addition to any other applicable requirements, for business to be
properly brought before the annual meeting by a shareholder, the
shareholder must have given timely notice thereof in writing to the
Secretary of the Company. To be timely, each such notice must be given,
either by personal delivery or by United States mail, postage prepaid,
to the Secretary of the Company, not less than 50 days nor more than 75
days prior to the meeting; provided, however, that in the event that
less than 60 days' notice or prior public disclosure of the date of the
meeting is given or made to shareholders, notice by the shareholder to
be timely must be so received no later than the close of business on
the 10th day following the day on which such notice of the date of the
annual meeting was mailed or such public disclosure was made, whichever
first occurs. Each such notice to the Secretary shall set forth as to
each matter the shareholder proposes to bring before the annual meeting
(w) a brief description of the business desired to be brought before
the annual meeting and the reasons for conducting such business at the
annual meeting, (x) the
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name and address of record of the shareholder proposing such business,
(y) the name, class or series and number of shares of the Company which
are owned by the shareholder, and (z) any material interest of the
shareholder in such business. Public disclosure of the date of the 1998
annual meeting of shareholders was made in the enclosure with the
dividend which was mailed to shareholders in December, 1997. The date
of the next annual meeting of shareholders of Weyerhaeuser Company
after the 1998 annual meeting is April 20, 1999.
For the Board of Directors
SANDY D. McDADE
Secretary
Federal Way, Washington,
March 9, 1998
A copy of the Company's Annual Report on Form 10-K for the fiscal
year ended December 28, 1997, as filed with the Securities and Exchange
Commission, excluding certain exhibits thereto, may be obtained without
charge, by writing to Investor Relations, Weyerhaeuser Company, CH
1K35C, P.O. Box 2999, Tacoma, Washington 98477-2999.
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EXHIBIT A
WEYERHAEUSER
COMPANY
1998 LONG-TERM
INCENTIVE COMPENSATION PLAN
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TABLE OF CONTENTS
<TABLE>
<S> <C>
ARTICLE I. GENERAL......................................................... A-4
1.1Name of Plan.......................................................... A-4
1.2Purposes.............................................................. A-4
1.3Effective Date........................................................ A-4
1.4Number of Shares...................................................... A-4
1.4.1 Authorized Number of Shares...................................... A-4
1.4.2 Reuse of Shares.................................................. A-4
1.4.3 Adjustment of Shares............................................. A-4
1.5Administration........................................................ A-5
1.5.1 Administration and Interpretation by the Committee............... A-5
1.5.2 Delegation....................................................... A-5
1.5.3 Interpretation; Change of Control Adjustments.................... A-5
1.5.4 Jurisdictions Outside the United States.......................... A-5
ARTICLE II. DEFINITIONS.................................................... A-6
ARTICLE III. STOCK OPTIONS; STOCK APPRECIATION RIGHTS...................... A-7
3.1Types of Stock Options................................................ A-7
3.1.1 Types of Options................................................. A-7
3.1.2 Stock Appreciation Rights........................................ A-7
3.1.3 Exercise/Sell Election........................................... A-8
3.2Option Price.......................................................... A-8
3.3Maximum Annual Award of Shares........................................ A-8
3.4Vesting; Exercise Upon Termination of Employment...................... A-8
3.4.1 Initial Vesting Period........................................... A-8
3.4.2 Term of Options and Stock Appreciation Rights.................... A-8
3.4.3 Exercise by Personal Representative.............................. A-9
3.4.4 Exercises of Options and Rights.................................. A-9
3.4.5 Post-Termination Exercises....................................... A-9
3.5Payment for Shares.................................................... A-9
3.5.1 Form of Payment.................................................. A-9
3.6Acquired Company Awards............................................... A-9
ARTICLE IV. STOCK AWARDS................................................... A-10
4.1Committee Authority................................................... A-10
4.2Issuance of Shares.................................................... A-10
4.3Waiver of Restrictions................................................ A-10
4.4Maximum Annual Stock Awards........................................... A-10
ARTICLE V. PERFORMANCE SHARE AWARDS........................................ A-10
5.1Performance Share Awards Authority.................................... A-10
5.2Payout Upon Termination............................................... A-11
5.3Maximum Amount of Performance Share Awards............................ A-11
ARTICLE VI. GENERAL........................................................ A-11
6.1Amendment and Termination of Plan..................................... A-11
6.2Continued Employment; Rights in Options and Awards.................... A-11
6.3Other Compensation Plans.............................................. A-11
6.4Certificates for Shares; Registration................................. A-11
6.5No Rights as Shareholder.............................................. A-11
6.6No Assignment or Transfer of Interests................................ A-11
</TABLE>
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<TABLE>
<S> <C>
6.7Compliance with Laws and Regulations.................................. A-12
6.8Withholding of Taxes.................................................. A-12
6.9No Trust or Fund...................................................... A-12
6.10Governing Law........................................................ A-12
6.11Severability......................................................... A-12
</TABLE>
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WEYERHAEUSER COMPANY
1998 LONG-TERM INCENTIVE COMPENSATION PLAN
ARTICLE I. GENERAL
1.1 Name of Plan. The name of the plan set forth herein is the
"Weyerhaeuser Company 1998 Long-Term Incentive Compensation Plan,"
herein called the "Plan."
1.2 Purposes. The purposes of the Plan are to enhance the long-term
profitability and shareholder value of Weyerhaeuser Company by offering
stock-based incentives to those employees of the Company and
Subsidiaries who are key to the growth and success of Weyerhaeuser, to
attract and retain executives with experience and ability on a basis
competitive with industry practices, and to motivate executives to
focus on strategies that will increase stock price over time.
1.3 Effective Date. The effective date of the Plan is the date on
which it is approved by the shareholders of the Company at the annual
meeting of shareholders on April 21, 1998 or any adjournment thereof.
The Plan shall have no fixed expiration date.
1.4 Number of Shares
1.4.1 Authorized Number of Shares. The number of Shares that may be
issued under the Plan shall not exceed nine million eight hundred
thousand (9,800,000). Shares issued pursuant to the Plan will be
authorized and unissued Shares which may include Shares which from time
to time have been reacquired by the Company.
1.4.2 Reuse of Shares. To the extent that (a) any Stock Option or
Stock Appreciation Right expires, or is terminated, canceled or
surrendered, without being exercised; (b) Shares are not issued upon
exercise of any Stock Appreciation Right; (c) the underlying Shares are
not issued because the Award is forfeited, terminated, surrendered or
canceled; or (d) Shares are not issued pursuant to any Performance
Share Award, then Shares underlying or subject to such Stock Option,
Stock Appreciation Right or Award shall again be available for issuance
in connection with future grants of Stock Options, Stock Appreciation
Rights and Awards under the Plan.
1.4.3 Adjustment of Shares. In the event that at any time or from
time to time a stock dividend, stock split, recapitalization, merger,
consolidation, or other change in capitalization of the Company, or a
sale by the Company of all or part of its assets, or any distribution
to shareholders other than a cash dividend, results in (a) the
outstanding Shares, or any securities exchanged therefor or received in
their place being exchanged for a different number or class of
securities of the Company or of any other corporation, or (b) new,
different or additional securities of the Company or of any other
corporation being received by the holders of Shares of the Company,
then:
(i)the limitation to 9,800,000 Shares set forth in Section 1.4.1
of Article I;
(ii)the number and class of Shares that may be made subject to
Stock Options, Stock Appreciation Rights and Awards;
(iii)the Option Price of unexercised Stock Options and Stock
Appreciation Rights; and
(iv)Share values or prices used for calculation purposes
shall in each case be equitably adjusted as determined by the Committee
in its sole discretion.
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1.5 Administration
1.5.1 Administration and Interpretation by the Committee. The Plan
shall be administered by the Committee. The Board shall consider in
selecting members of the Committee, the provisions regarding (a)
"outside directors" as contemplated by Section 162(m) of the Code and
(b) "nonemployee directors" as contemplated by Rule 16b-3 under the
Exchange Act. The Committee shall have exclusive authority to designate
the employees of the Company and Subsidiaries who are eligible to
participate in the Plan as Participants. The Committee shall also have
exclusive authority to interpret the Plan and may from time to time
adopt, and change, rules and regulations of general application for the
administration of the Plan, including rules and regulations relating to
the manner of exercise and settlement of Stock Options and Stock
Appreciation Rights, issuance and custody of Restricted Stock and the
manner of settlement of Performance Share Awards. The Committee's
interpretation of the Plan and its rules and regulations, and all
actions taken and determinations made by the Committee pursuant to the
Plan, shall be conclusive and binding on all parties involved or
affected.
1.5.2 Delegation. The Board or the Committee may delegate the
responsibility for administering the Plan with respect to designated
classes of eligible Participants to a different committee or committees
appointed by the Board consisting of two or more members of the Board,
subject to such limitations as the Board or the Committee deems
appropriate. The Committee may delegate administrative duties to such
of the officers of the Company as it so determines.
1.5.3 Interpretation; Change of Control Adjustments. Without
limiting the preceding Section 1.5.1, and notwithstanding any other
provisions of the Plan, the Committee is authorized to take such action
as it determines to be necessary or advisable, and fair and equitable
to Participants, with respect to Stock Options, Stock Appreciation
Rights and Awards in the event of: (a) a merger of the Company with,
consolidation of the Company into, or the acquisition of the Company
by, another corporation, (b) a sale or transfer of all or substantially
all of the assets of the Company to another corporation or any other
person or entity, (c) a tender or exchange offer for Shares made by any
corporation, person or entity (other than the Company), or (d) other
reorganization as a result of which the Company is not likely to
continue as an independent, publicly-owned corporation. Such authorized
action may include (but shall not be limited to) establishing, amending
or waiving the type, terms, conditions, or duration of, or restrictions
on, Stock Options, Stock Appreciation Rights and Awards so as to
provide for earlier, later, extended or additional times for exercise,
payments or settlement or lifting of restrictions, differing methods
for calculating payments or settlements and other modifications, and
the Committee may take such actions by adopting rules and regulations
applicable to all Participants, to certain categories of Participants
or only to individual Participants. The Committee may take such actions
before or after making the grants of Stock Options, Stock Appreciation
Rights or Stock Awards to which the action relates and before or after
any public announcement with respect to such merger, consolidation,
acquisition, sale or transfer of assets, tender or exchange offer or
other reorganization that is the reason for such action.
1.5.4 Jurisdictions Outside the United States. The Committee shall
have the authority and discretion to establish terms and conditions of
awards as the Committee determines to be necessary or appropriate to
conform to applicable requirements or practices of jurisdictions
outside of the United States.
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ARTICLE II. DEFINITIONS
For purposes of the Plan, the following terms shall be defined as set
forth below:
2.1 "Award" means any award or grant of Shares under Section 4 of
Article IV and any award or grant of Performance Shares under Section 5
of Article V.
2.2 "Board" means the Board of Directors of the Company.
2.3 "Code" means the Internal Revenue Code as amended from time to
time.
2.4 "Committee" means the Compensation Committee of the Board of
Directors of the Company.
2.5 "Company" means Weyerhaeuser Company, a Washington corporation.
2.6 "Disability" means "disability" as that term is defined for
purposes of the Company's Retirement Plan for Salaried Employees.
2.7 "Early Retirement" means retirement pursuant to the Company's
Retirement Plan for Salaried Employees on a date prior to the
individual's normal retirement date.
2.8 "Exchange Act" means the Securities Act of 1934 as amended from
time to time.
2.9 "Exercise/Sell Election" means the election set forth in Section
3.1.3 of Article III.
2.10 "Fair Market Value" means the arithmetic average of the highest
and lowest sales prices per Share on a day as reported on the
consolidated transaction reporting system for New York Stock Exchange
issues for the day.
2.11 "Grant Date" means the date designated in a resolution of the
Committee as the date the Stock Option, Stock Appreciation Right or
Award is granted, which date shall not be earlier than the date the
Committee completed the act of adoption of the resolution. If the
Committee does not designate a Grant Date in the resolution, the Grant
Date shall be the date the Committee completed the act of adoption of
the resolution.
2.12 "Holder" means the Participant to whom is granted a Stock
Option, Stock Appreciation Right or Award, or the personal
representative of the Holder who has died.
2.13 "Incentive Stock Option" means an option to purchase Shares
granted under Article III of the Plan with the intention that it
qualify as an "incentive stock option" as that term is defined in
Section 422 of the Code.
2.14 "Non-Qualified Stock Option" means an option to purchase Shares
granted under Article III of the Plan other than an Incentive Stock
Option.
2.15 "Option Price" means the purchase price of Shares, as prescribed
by the Committee, in respect to any Stock Option or Stock Appreciation
Right.
2.16 "Participant" means an individual who is a Holder of Stock
Options, Stock Appreciation Rights and/or Awards or, as the context may
require, any employee of the Company or a Subsidiary who has been
designated by the Committee as eligible to participate in the Plan.
2.17 "Performance Measures" means objective criteria specifically
defined by the Committee on a Company-specific basis, business-unit
basis or in comparison with peer group performance, which may include
or exclude specified items of an unusual or nonrecurring nature, and
are based on one or more of the following: earnings before interest and
taxes, net earnings, earnings per share, return on equity, return on
assets, return on capital employed,
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cash flow, cost reduction, stock price appreciation, total shareholder
return, economic value added, cash flow return on investment, and cash
value added.
2.18 "Performance Share" means a unit of value, equal on the Grant
Date to the Fair Market Value of a Share on such Date or such greater
value as the Committee shall prescribe, used to calculate the total
value of a Performance Share Award.
2.19 "Performance Share Award" means an award granted under Article V
of the Plan the payout of which is subject to achievement through a
performance period of performance goals prescribed by the Committee.
2.20 "Restricted Stock Award" means an Award of Shares granted under
Article IV of the Plan the rights of ownership of which are subject to
restrictions prescribed by the Committee.
2.21 "Retirement" means retirement as of the individual's normal
retirement date under the Company's Retirement Plan for Salaried
Employees.
2.22 "Shares" means the common shares (par value $1.25 per share) of
the Company.
2.23 "Stock Appreciation Right" means a right, granted under Section
3.1.2 of Article III, to surrender to the Company all or a portion of
the related Stock Option, if any, and to receive an amount (in Shares
or cash or any combination of Shares and cash, as the Committee shall
determine) equal to the excess of the Fair Market Value per Share for
the date the Stock Appreciation Right is exercised over the Option
Price per Share.
2.24 "Stock Option" or "Option" means the right to purchase Shares
granted under Section 3.1.1 of Article III of the Plan.
2.25 "Subsidiary" means a corporation the voting share ownership of
which, by the Company or another Subsidiary, is sufficient for the
election of a majority of the directors of the corporation.
ARTICLE III. STOCK OPTIONS; STOCK APPRECIATION RIGHTS
3.1 Types of Stock Options
3.1.1 Types of Options. The Committee is authorized to grant Stock
Options to Participants either alone or wholly or partially in
connection with Stock Appreciation Rights, for such number of Shares
and at such Option Price, and exercisable in such installments over
such periods of time and subject to such vesting provisions, as the
Committee shall determine. The Committee shall designate each Option
issued hereunder as an "Incentive Stock Option" or a "Non-Qualified
Stock Option." To the extent the aggregate Fair Market Value
(determined as of the Grant Date) of Common Stock with respect to which
Incentive Stock Options are exercisable for the first time during any
calendar year (under the Plan and all other stock option plans of the
Company) exceeds $100,000, such portion in excess of $100,000 shall be
treated as a Nonqualified Stock Option. In the event the participant
holds two or more such Options that become exercisable for the first
time in the same calendar year, such limitation shall be applied on the
basis of the order in which such Options are granted.
3.1.2 Stock Appreciation Rights. The Committee is authorized to
grant Stock Appreciation Rights, either alone or wholly or partly in
conjunction with Stock Options, for such numbers of Shares and at such
Option Prices as the Committee shall determine. Upon exercise of a
Stock Appreciation Right, the Holder shall be entitled to receive
Shares having value equivalent to 50% of the difference per Share
between the Fair Market Value and the
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Option Price, multiplied by the number of Shares as to which the Stock
Appreciation Right is exercised, and cash equivalent to 50% of the
difference per Share between the Fair Market Value and the Option
Price, multiplied by the number of Shares as to which the Stock
Appreciation Right is exercised, provided that the Committee shall have
the sole discretion to determine in any case or cases such other form
in which payment will be made, i.e. all cash, all Shares, or any
combination thereof. If the Holder is to receive Shares upon exercise
of a Stock Appreciation Right, the number of Shares so determined is
not a whole number, such number shall be reduced to the next lower
number and there shall be paid to the Holder in cash an amount equal to
the product of multiplying the remaining fractional share by the Fair
Market Value of one share on the exercise date.
3.1.3 Exercise/Sell Election. Holders of Stock Options not granted
in conjunction with Stock Appreciation Rights shall have, at each time
of exercise of such an Option, the right to elect to exercise such
Option by causing a cash payment of the Option Price to be made to the
Company and simultaneously having such number of such Shares, as is
determined by the Secretary of the Company, sold through a Company-
designated registered broker in an open market transaction without cost
of sale to the Holder, such "exercise/sell election" to be effected in
accordance with procedures and documentation established by the
Secretary of the Company. The Holder of such Exercise/Sell election
shall have the right to elect either to: (A) have the number of Shares
to be sold approximate the number of Shares that upon sale on the
exercise date would be required to yield cash proceeds equivalent to
the sum of (i) the total Option Price for the Shares as to which the
option is exercised and (ii) 50% of the difference between (x) the
total Fair Market Value on the exercise date of the Shares as to which
the option is exercised; and (y) the total Option Price for the Shares
as to which the option is exercised; or (B) have the number of Shares
sold be the number of shares as to which the option is exercised. The
Holder of the Stock Option with the Exercise/Sell Election electing
under (A) above shall be entitled to receive (i) the proceeds of sale
of the Shares to be sold remaining after payment to the Company of the
Option Price and the applicable tax withholding; and (ii) the number of
Shares remaining after the sale of Shares as provided above. The Holder
of the Stock Option with the Exercise/Sell Election electing under (B)
above shall be entitled to receive the proceeds of the sale of the
Shares to be sold remaining after payment to the Company of the Option
Price and the applicable tax withholding.
3.2 Option Price. The Option Price of the Shares subject to any
Stock Option or Stock Appreciation Right shall be determined by the
Committee, but shall in no instance be less than the Fair Market Value
on the Grant Date.
3.3 Maximum Annual Award of Shares. The maximum number of shares
that may be awarded to any Participant in any year as Stock Options or
Stock Appreciation Rights is 200,000, except that in one year up to
400,000 shares may be awarded to a Participant after such Participant
becomes Chief Executive Officer of the Company.
3.4 Vesting; Exercise Upon Termination of Employment
3.4.1 Initial Vesting Period. Each Stock Option and Stock
Appreciation Right shall become initially exercisable only after one
year (or such longer period as may be determined by the Committee) of
continuous employment of the Holder by the Company and/or one or more
Subsidiaries after the Grant Date, provided, that if the Holder shall
die prior to completion of such year of continuous employment, each
Stock Option and Stock Appreciation Right held by such Holder may
nevertheless be exercised in accordance with this Section 3.
3.4.2 Term of Options and Stock Appreciation Rights. Except as
otherwise provided in this Section 3, each Stock Option and Stock
Appreciation Right shall by its terms expire at
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such time as the Committee may determine in granting it, but not later
than ten years from the date the Option or Right is granted.
3.4.3 Exercise by Personal Representative. Any Stock Option or
Stock Appreciation Right exercisable at the time of death of the Holder
may be exercised by the personal representative of the Holder entitled
thereto at any time or from time to time within two years after the
date of death, but in no event later than ten years (or such shorter
period as determined under Section 3.4.2) from the Grant Date.
3.4.4 Exercises of Options and Rights. Each Stock Option and Stock
Appreciation Right shall be exercisable by the Holder from time to time
for the full amount or for any part thereof, but no such Option or
Right shall be exercised in part more frequently than once in any
period of ten business days.
3.4.5 Post-Termination Exercises. In case of termination of
employment of the Holder other than by reason of death, any Stock
Option or Stock Appreciation Right of the Holder shall be exercisable
only: (i) within three years if the termination of the Holder's
employment is coincident with Retirement or Early Retirement or is as a
result of position elimination, or (ii) within three months after the
date the Holder ceases to be an employee of the Company or a Subsidiary
if termination of the Holder's employment is for any reason other than
Retirement, Early Retirement or position elimination, but in no event
later than ten years (or such shorter period determined under Section
3.4.2) from the Grant Date. Neither transfer of employment between or
among the Company and Subsidiaries, or a leave of absence approved in
accordance with Company procedures, shall be considered termination of
employment.
3.5 Payment for Shares
3.5.1 Form of Payment. Upon exercise of a Stock Option not
involving exercise of a related Stock Appreciation Right, in whole or
in part, the Option Price for Shares to which the exercise relates
shall be paid in cash (including payment in accordance with Section
3.1.3) or, unless otherwise designated by the Committee at the time the
Stock Option is granted, paid for with Shares already owned by the
Holder for at least six months (or any shorter period necessary to
avoid a charge to the Company's earnings for financial reporting
purposes) in the manner designated by the Secretary of the Company,
valued at their Fair Market Value on the exercise date, and no Shares
shall be issued until such payment in full has been made. The Holder
shall have none of the rights of a shareholder with respect to Shares
subject to a Stock Option or Stock Appreciation Right unless and until
the Shares are issued to the Holder.
3.6 Acquired Company Awards. Notwithstanding anything in the Plan to
the contrary, the Committee may grant Stock Options, Stock Appreciation
Rights and/or Awards under this Plan in substitution for equity or
equity-based awards issued under other plans, or assume under this Plan
equity or equity-based awards issued under other plans, if the other
plans are or were plans of other corporations ("acquired corporations")
(or the parent of the acquired corporation) and the new Option, Right
or Award is substituted, or the old award is assumed, by reason of a
corporate merger, consolidation, acquisition of property or of stock,
reorganization or liquidation (the "Acquisition Transaction") within
the meaning of Section 424(a) of the Code and provided that the
requirements of Code Sections 424(a)(1) and (2) are complied with. In
the event that a written agreement pursuant to which the Acquisition
Transaction is completed is approved by the Board of Directors and said
Agreement sets forth the terms and conditions of the substitution for
or assumption of outstanding equity or equity-based awards of the
acquired corporation, said terms and conditions shall be deemed to be
the action of the Committee hereunder without any further action by the
Committee and the
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<PAGE>
persons holding such awards shall be deemed to be Participants and
Holders; provided that the Committee may take any further action with
respect to such awards as may be necessary in connection with Section
162(m) of the Code or Rule 16b-3 under the Exchange Act.
ARTICLE IV. STOCK AWARDS
4.1 Committee Authority. The Committee is authorized to make awards
of Shares of the Company subject to Performance Measures established by
the Committee, in writing, no later than the first 90 days of the
period in which the Performance Measure shall apply. Performance
periods shall not be shorter than one year. Other terms, conditions and
restrictions of such awards shall be set forth in an agreement or
agreements between the Company and the recipient of the Award. The
terms, conditions and restrictions which the Committee shall have the
power to determine shall include the manner in which Shares subject to
Restricted Stock Awards are held during the periods they are subject to
restrictions and the circumstances under which forfeiture of Restricted
Stock Share Awards and Shares subject to Restricted Stock Awards shall
occur by reason of termination of employment of the Holder.
4.2 Issuance of Shares. Upon the satisfaction of the terms,
conditions and restrictions prescribed in respect to a Restricted Stock
Award, or upon the Holder's release from the terms, conditions and
restrictions of a Restricted Stock Award, as determined by the
Committee, the Company shall deliver, as soon as practicable, to the
Holder, or in the case of the Holder's death, to the personal
representative of the Holder or as the appropriate court directs, a
stock certificate for the appropriate number of Shares.
4.3 Waiver of Restrictions. Notwithstanding any other provisions of
the Plan, the Committee may, in its sole discretion, waive the
forfeiture period and any other terms, conditions or restrictions of
any Stock Award under circumstances (including the death, Disability,
Retirement or Early Retirement of the Holder, or material change in the
Holder's circumstances arising after the date of the Award), and
subject to such terms and conditions (including forfeiture of the
Shares) as the Committee shall deem appropriate.
4.4 Maximum Annual Stock Awards. The maximum number of shares that
may be awarded to any participant each year as Stock Awards is 50,000,
except that one award of up to 100,000 shares may be made to a
Participant after such Participant becomes the Chief Executive Officer
of the Company.
ARTICLE V. PERFORMANCE SHARE AWARDS
5.1 Performance Share Awards Authority. The Committee is authorized
to grant Performance Share Awards to Participants using Performance
Measures established by the Committee, in writing, no later than the
first 90 days of the period in which the Performance Measure shall
apply. In addition, the Committee is authorized to determine: (a) the
length of performance periods except that no performance period may be
shorter than one year, (b) the amount and frequency of grants of
Performance Share Awards, both independently and in relation to grants
of Stock Options and other Awards, and (c) the form of payment of
Awards, which may be in cash, shares, Options, Rights or Awards or any
combination of cash, Shares, Options, Rights and Awards. The Committee
may not adjust performance goals and performance periods established
for any Award if such adjustment would increase the amount of the
Award.
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5.2 Payout Upon Termination. In the event a Holder's employment by
the Company or a Subsidiary terminates during the performance period of
a Performance Share Award, payout shall be as follows:
(a) If the termination of employment is the result of discharge
for cause or resignation, or Early Retirement prior to age 62 at the
request of the Holder, the Award shall be forfeited in full.
(b) If the termination is the result of Retirement, death,
Disability, position elimination, or Early Retirement at the request
of the Company, payout shall be made at the end of the applicable
performance period and prorated for service during the performance
period.
5.3 Maximum Amount of Performance Share Awards. The maximum amount
that may be paid to any Participant in any year with respect to
Performance Share Awards is $2,000,000.
ARTICLE VI. GENERAL
6.1 Amendment and Termination of Plan. The Board or the Committee may
from time to time amend, modify, or otherwise alter the Plan or any
provision thereof, or discontinue or terminate the Plan; but no
amendment or discontinuance of the Plan shall, without the written
consent of the Holder, adversely affect the Holder's Stock Option,
Stock Appreciation Right or Award.
6.2 Continued Employment; Rights in Options and Awards. Neither the
Plan, participation in the Plan as a Participant, or any action of the
Committee taken under the Plan shall be construed as giving any
Participant or employee of the Company or a Subsidiary any right to be
retained in the employ of the Company or a Subsidiary or limit the
right of the Company or a Subsidiary to terminate the employment of the
Participant or employee.
6.3 Other Compensation Plans. Neither the adoption of the Plan nor
anything contained in the Plan shall prevent the Company or any
Subsidiary from adopting or continuing other or additional compensation
arrangements, or discontinuing or terminating such arrangements, and
such other arrangements may be either generally applicable or
applicable only in specific cases.
6.4 Certificates for Shares; Registration. The Company shall be under
no obligation to any Participant to register for offering or resale
under the Securities Act of 1933, or register or qualify under state
securities laws, any Shares, security or interest in a security paid or
issued under, or created by the Plan. The Company may issue
certificates for Shares with such legends and subject to such
restrictions on transfer and stop transfer instructions as counsel for
the Company deem necessary or desirable for compliance by the Company
with federal and state securities laws.
6.5 No Rights as Shareholder. No Stock Option, Stock Appreciation
Right or Award shall entitle the Holder to any dividend, voting or
other right of a shareholder unless and until the date of issuance
under the Plan of the Shares that are the subject of the Option, Right
or Award, free of all applicable restrictions.
6.6 No Assignment or Transfer of Interests. No Stock Option, Stock
Appreciation Right or Award shall be assignable or otherwise
transferable by the Holder except as provided for herein in the case of
death of the Holder. If a Holder makes an assignment or transfer in
violation of this Section, any obligation of the Company with respect
to such Option, Right or Award shall thereupon terminate.
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<PAGE>
6.7 Compliance with Laws and Regulations. In interpreting and
applying the provisions of the Plan, any Stock Option granted as an
Incentive Stock Option pursuant to the Plan shall to the extent
permitted by law, be construed as an "incentive stock option" within
the meaning of Section 422 of the Code.
6.8 Withholding of Taxes. The Company may require the Holder to pay
to the Company the amount of any withholding taxes which the Company is
required to withhold with respect to the grant, exercise, payment or
settlement of any Stock Option, Stock Appreciation Right or Award. In
such instances, the Committee may, in its discretion and subject to the
Plan and applicable law, permit the Holder to satisfy withholding
obligations, in whole or in part, by paying cash or by electing to have
the Company withhold Shares, or to transfer Shares to the Company, in
such amounts as are equivalent to the Fair Market Value of the
withholding obligation.
6.9 No Trust or Fund. The Plan is intended to constitute an
"unfunded" plan. Nothing contained herein shall require the Company to
segregate any monies or other property, or Shares, or to create any
trusts, or to make any special deposits for any immediate or deferred
amounts payable to any Participant, and no Participant shall have any
rights that are greater than those of a general unsecured creditor of
the Company.
6.10 Governing Law. The Plan and all interpretations of its
provisions shall be governed by the laws of the State of Washington and
applicable Federal laws.
6.11 Severability. If any provision of the Plan or any Stock Option,
Stock Appreciation Right or Award is determined to be invalid, illegal
or unenforceable in any jurisdiction, or as to any person, or would
disqualify the Plan or any Option, Right or Award under any law deemed
applicable by the Committee, such provision shall be construed or
deemed amended to conform to applicable laws, or, if it cannot be so
construed or deemed amended without, in the determination of the
Committee, materially altering the intent of the Plan or the Option,
Right or Award, such provision shall be stricken as to such
jurisdiction, person or Option, Right or Award, and the remainder of
the Plan and any such Option, Right or award shall remain in full force
and effect.
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This proxy statement was printed on Weyerhaeuser
Cougar Opaque 40-pound. The entire report can be
recycled. Thank you for recycling.
[RECYCLE LOGO]
<PAGE>
[MAP OF DIRECTIONS TO MEETING]
TO REACH CORPORATE HEADQUARTERS
FROM SEATTLE: Drive south on
Interstate 5, approximately 24 miles
from city center, following
"Tacoma/Portland" signs. Go 1/10
mile past Exit 142-B to Exit 142-A.
Turn right onto exit ramp and
continue to S. 348th. Follow the
right-hand lane to Weyerhaeuser Way
South. Turn left (north), cross the
overpass, and follow the directional
signs to the parking area entrance.
FROM SEATTLE: Approximately 24 miles
south from city center on Interstate
5, following Tacoma/ Portland signs,
exit at Exit 143 (Federal Way--
S. 320th St.). Drive left across the
overpass and turn right onto
Weyerhaeuser Way South. Continue to
the "Y" in the road, following the
road to the left, and follow
directional signs to the east entry
parking area.
FROM TACOMA: Drive north on
Interstate 5, approximately 8 miles
from city center to exit marked
"Auburn-North Bend." Stay in the
far-right lane. This is the freeway
exit to Weyerhaeuser Way South.
Follow the right-hand lane to
Weyerhaeuser Way South, turn left
(north), cross the overpass, and
follow the directional signs to the
parking entrance.
<PAGE>
[LOGO OF WEYERHAEUSER COMPANY]
ANNUAL MEETING OF SHAREHOLDERS
APRIL 21, 1998
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints Steven R. Rogel, William D. Ruckelshaus and
George H. Weyerhaeuser, and each of them, with full power to act without the
other and with full power of substitution, as proxies to represent and to vote,
as directed herein, all shares the undersigned is entitled to vote at the annual
meeting of the shareholders of Weyerhaeuser Company to be held at the Corporate
Headquarters Building, Federal Way, Washington, on Tuesday, April 21, 1998 at
9:00 a.m., and all adjournments thereof. Shares not held in Plan accounts will
be voted as directed on the reverse side of this Proxy card. If the card is
signed and returned without specific instructions for voting, the shares will be
voted in accordance with the recommendation of the Board of Directors.
If there are shares allocated to the undersigned in the Weyerhaeuser Company
401(k), Weyerhaeuser Canada Ltd. Investment Growth, or Performance Share Plans,
the undersigned hereby directs the Trustee to vote all full and fractional
shares as indicated on the reverse side of this card. If the card is signed and
returned without specific instructions for voting, the shares will be voted in
accordance with the recommendations of the Board of Directors. Shares for which
no voting instructions are received will be voted as provided by the Plans.
TO BE SIGNED AND DATED ON REVERSE SIDE
- --------------------------------------------------------------------------------
. FOLD AND DETACH HERE .
<PAGE>
Please mark
your votes as [X]
indicated in
this example
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ALL NOMINEES IN ITEM 1 AND "FOR"
ITEM 2
ITEM 1 - Election as Directors of the following nominees identified in the Proxy
Statement:
Philip M. Hawley
Steven R. Rogel
William D. Ruckelshaus
Richard H. Sinkfield
James N. Sullivan
FOR WITHHOLD AUTHORITY TO VOTE
[_] [_]
(INSTRUCTION: To withhold authority to vote for any of the foregoing
individuals, write the name(s) on the following line.)
- --------------------------------------------------------------------------------
ITEM 2 - Approve the Weyerhaeuser Company 1998 Long-Term Incentive Compensation
Plan.
FOR AGAINST ABSTAIN
[_] [_] [_]
In their discretion to vote upon other
matters that may properly come before the
meeting.
Dated: , 1998
----------------------------
-----------------------------------------
Signature
-----------------------------------------
Signature
When signing as attorney, executor,
administrator, trustee or guardian,
please give your full title. If shares
are held jointly, each holder should
sign.
- --------------------------------------------------------------------------------
. FOLD AND DETACH HERE .
[LOGO OF WEYERHAEUSER COMPANY]
YOUR VOTE IS IMPORTANT TO US. PLEASE COMPLETE, DATE AND SIGN THE ABOVE PROXY
CARD AND RETURN IT PROMPTLY IN THE ACCOMPANYING ENVELOPE.
