<PAGE>
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED MAY 3, 1994
$200,000,000
Willamette Industries, Inc.
Medium-Term Notes, Series B
Due From Nine Months to Thirty Years From Date of Issue
Willamette Industries, Inc. (the "Company"), may offer from time to time
up to $200,000,000 aggregate principal amount of its Medium-Term Notes,
Series B (the "Notes"), maturing on any day from nine months to thirty years
from date of issue, as selected by the purchaser and agreed to by the Company
and which may be subject to redemption at the option of the Company prior to
maturity as set forth in a pricing supplement (the "Pricing Supplement") to
this Prospectus Supplement. The interest rate or manner of determining the
interest rate, initial interest rate, as applicable, and redemption
provisions, if any, for each Note will be established by the Company at the
date of issuance and will be set forth therein and specified in the Pricing
Supplement. Interest rates and the manner of determining interest rates are
subject to change by the Company, but no such change will affect any Note
theretofore issued or as to which an offer to purchase has been accepted by
the Company. Unless otherwise specified in the applicable Pricing
Supplement, each Note will bear interest at a fixed rate (a "Fixed Rate
Note") or at a floating rate (a "Floating Rate Note") determined by reference
to the CD Rate, Commercial Paper Rate, Federal Funds Rate, LIBOR, Prime Rate
or Treasury Rate, as adjusted by the Spread or Spread Multiplier, if any,
applicable to such Note. Unless otherwise specified in the applicable
Pricing Supplement, the Notes will be issued in fully registered form in
denominations of $1,000 or in any greater amount that is an integral multiple
of $1,000. See "Description of Notes."
Notes will be issued in book-entry form and represented by a global Note
(a "Book-Entry Note") registered in the name of a nominee of The Depository
Trust Company, as depositary (the "Depositary"). Beneficial interests in
Book-Entry Notes will be shown on, and transfers thereof will be effected
only through, records maintained by the Depositary (with respect to
participants' interests) and its participants or persons that may hold
interests through participants (with respect to beneficial owners'
interests). Notes will not be issuable in certificated form except under the
limited circumstances described in the accompanying Prospectus dated May 3,
1994 (the "Basic Prospectus"). See "Description of Notes--Book-Entry System"
herein and "Description of Securities--Global Securities" in the Basic
Prospectus.
Unless otherwise specified in the applicable Pricing Supplement,
interest on each Fixed Rate Note will accrue from its date of issue and will
be payable semiannually on each May 15 and November 15 and at maturity.
Interest on each Floating Rate Note will accrue from its date of issue and
will be payable monthly, quarterly, semiannually, annually or otherwise as
specified in the applicable Pricing Supplement, and at maturity. The Notes,
when issued, will be unsecured obligations of the Company and will rank
equally and ratably with other unsecured and unsubordinated indebtedness of
the Company.
<TABLE>
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT,
ANY PRICING SUPPLEMENT OR THE PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
<CAPTION>
Price to Agents' Discount Proceeds to
Public (1) and Commission (2) the Company (2)(3)
---------- ------------------ ------------------
<S> <C> <C> <C>
Per Note . . . . . . . 100% .125%-.750% 99.875%-99.250%
Total. . . . . . . . . $200,000,000 $250,000- $199,750,000-
$1,500,000 $198,500,000
(1) Unless otherwise specified in the applicable Pricing Supplement, the
Price to Public will be 100% of the principal amount.
(2) The Company will pay a commission to Goldman, Sachs & Co. and Salomon
Brothers Inc (each an "Agent"; collectively, the "Agents"), ranging from
.125% to .750% of the principal amount, depending upon maturity, of any
Note sold through any such Agent. The Company may also sell the Notes
to any Agent at a discount from the principal amount for resale to one
or more investors or other purchasers at varying prices related to
prevailing market prices at the time of resale or at a fixed public
offering price, as determined by the Agent. Unless otherwise specified
in the applicable Pricing Supplement, any Note sold to an Agent as
principal will be purchased by such Agent at a price equal to 100%
thereof less a percentage equal to the commission applicable to an
agency sale of a Note of identical maturity. The Company has agreed to
indemnify each Agent against certain liabilities, including liabilities
under the Securities Act of 1933.
(3) Before deducting other expenses payable by the Company, estimated at
$330,000, including reimbursement of certain of the Agents' expenses.
(4) Maximum amount of the Notes issuable pursuant to this Prospectus
Supplement. To the extent the Company issues Notes pursuant to a
different prospectus supplement, the total Price to Public, Agents'
Discount and Commission and Proceeds to the Company of the Notes offered
hereby will be reduced.
The Notes are being offered by the Company on a continuous basis through
the Agents, which have agreed to use reasonable efforts to solicit purchases
of the Notes. The Company may also sell Notes to the Agents on their own
behalf at negotiated discounts or to or through other agents. The Notes will
not be listed on any securities exchange, and there can be no assurance that
the Notes offered hereby will be sold or that there will be a secondary
market for the Notes. The Company reserves the right to withdraw, cancel or
modify the offer made hereby without notice. No termination date for the
offering of the Notes has been established. The Company or the Agents may
reject any offer in whole or in part. See "Plan of Distribution."
Goldman, Sachs & Co. Salomon Brothers Inc
The date of this Prospectus Supplement is November 16, 1994.
<PAGE>
IN CONNECTION WITH THE DISTRIBUTION OF THE NOTES, IF THE AGENTS PURCHASE
NOTES AS PRINCIPALS, THE AGENTS MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH
STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NOTES AT A LEVEL ABOVE THAT
WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF
COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
SELECTED CONSOLIDATED FINANCIAL DATA
The following selected consolidated financial data have been derived
from and are qualified in their entirety by reference to the financial
statements and other information incorporated herein by reference as
described in the Basic Prospectus under "Incorporation of Certain Documents
by Reference." The following data except for the ratio of earnings to fixed
charges have been derived from financial statements audited by KPMG Peat
Marwick LLP, independent auditors, whose report on the Company's consolidated
financial statements at December 31, 1993 and 1992, and for the three years
ended December 31, 1993, is incorporated herein by reference.
<PAGE>
</TABLE>
<TABLE>
<CAPTION>
Year Ended December 31,
----------------------------------------------------------
1993 1992 1991 1990 1989
---------- ---------- ---------- ---------- ---------
(Dollars in thousands, except per share)
<S> <C> <C> <C> <C> <C>
Summary of Earnings:
Net sales $2,622,237 $2,372,396 $2,004,501 $1,904,853 $1,891,824
Cost of sales 2,191,448 2,007,703 1,715,197 1,528,895 1,442,942
--------- --------- --------- --------- ---------
Gross profit 430,789 364,693 289,304 375,958 448,882
Selling and administrative
expenses 174,413 167,094 145,329 136,624 114,029
--------- --------- --------- --------- ---------
Operating earnings 256,376 197,599 143,975 239,334 334,853
Interest expense, net 63,290 66,422 63,263 29,899 28,836
Other income (expense), net (3,918) (1,725) (7,103) (764) 2,039
--------- --------- --------- --------- ---------
Earnings before taxes 189,168 129,452 73,609 208,671 308,056
Provision for income taxes 78,500 47,900 27,800 79,100 117,000
--------- --------- --------- --------- ---------
Earnings before accounting
changes 110,668 81,552 45,809 129,571 191,056
Accounting changes 26,364 -- -- -- --
--------- --------- --------- --------- ---------
Net earnings $ 137,032 $ 81,552 $ 45,809 $ 129,571 $ 191,056
========= ========= ========= ========= =========
Per Share Data(a):
Earnings before accounting
changes $ 2.02 $ 1.52 $ 0.90 $ 2.55 $ 3.76
Accounting changes 0.48 -- -- -- --
--------- --------- --------- --------- ---------
Net earnings 2.50 1.52 0.90 2.55 3.76
Cash dividends paid 0.88 0.84 0.80 0.80 0.72
Balance Sheet Data (period end):
Working capital $ 157,576 $ 157,822 $ 147,194 $ 156,677 $ 181,297
Total assets 2,804,553 2,527,416 2,219,067 1,965,186 1,632,431
Long-term debt (noncurrent
portion) 941,710 843,618 746,622 565,224 387,646
Stockholders' equity 1,257,870 1,164,828 994,460 987,439 901,042
Ratio of Earnings to Fixed
Charges(b): 3.06 2.56 2.08 4.39 7.60
- --------------
(a) Adjusted for all stock splits.
(b) For the purposes of computing the ratio, "earnings" consist of income before income
taxes plus fixed charges. "Fixed charges" consist of interest expense plus one-third
of rent expense (which is deemed to be representative of an interest factor).
</TABLE>
<PAGE>
DESCRIPTION OF NOTES
The following description of the particular terms of the Notes (referred
to in the Basic Prospectus as the "Offered Securities") supplements, and to
the extent inconsistent therewith replaces, the description of the general
terms and provisions of the Securities set forth in the Basic Prospectus,to
which description reference is hereby made. The terms and conditions set
forth herein will apply to each Note unless otherwise specified in the
applicable Pricing Supplement and the related Note. Capitalized terms used
below that are not defined herein have the meaning specified in the Basic
Prospectus or in the Indenture.
General
The Notes constitute a single series to be issued under an indenture
dated as of January 30, 1993 (the "Indenture"), between the Company and The
Chase Manhattan Bank (National Association), as trustee (the "Trustee"), and
may be issued in an aggregate principal amount of up to $200,000,000, none of
which has been issued at the date of this Prospectus Supplement. The Notes
will be denominated in U.S. dollars and issued in fully registered form only,
in denominations of $1,000 or any amount in excess thereof which is an
integral multiple of $1,000. The Notes are unsecured unsubordinated
obligations of the Company and will not be subject to any sinking fund.
The Notes are being offered on a continuous basis. Unless previously
redeemed, Notes will mature on any day from nine months to thirty years from
the date of issue, as selected by the purchaser and agreed to by the Company.
Unless otherwise specified in the applicable Pricing Supplement, Floating
Rate Notes will mature on an Interest Payment Date (as defined below).
The Notes may be subject to redemption at the option of the Company
prior to maturity as set forth in the applicable Pricing Supplement.
The Indenture provision respecting defeasance and covenant defeasance
described under "Description of Securities--Defeasance and Covenant
Defeasance" in the Basic Prospectus is applicable to the Notes.
Except as set forth under "Book-Entry System" below and under
"Description of Securities--Global Securities" in the Basic Prospectus, Notes
will be issued only as Book-Entry Notes and will not be registrable in the
name of any person other than the Depositary or its nominee.
Payments of principal, premium (if any) and interest on Notes registered
in the name of the Depositary or its nominee will be made in immediately
available funds to the Depositary, or its nominee, as the case may be, as the
registered holder of the Book-Entry Notes representing such Notes.
As used in this Prospectus Supplement, "Business Day" means (a) with
respect to any Notes other than LIBOR Notes, any day that is not a Saturday
or Sunday and that is not a day on which banking institutions or trust
companies in New York City are authorized or obligated by law or executive
order to close and (b) with respect to any LIBOR Notes, any such day which is
also a day on which dealings in deposits in U.S. dollars are transacted in
the London interbank market.
Interest and Interest Rate
Each Note will bear interest from its date of issue or from the last
date to which interest has been paid or duly provided for at the fixed rate
per annum stated, or at the rate per annum calculated pursuant to the
interest rate formula set forth, therein and in the applicable Pricing
Supplement, until the principal thereof is paid or made available for
payment.
Each Note will bear interest at either (a) the fixed rate specified in
the applicable Pricing Supplement or (b) a variable rate determined by
reference to the interest rate basis specified in the applicable Pricing
Supplement (i) plus or minus the Spread, if any, or (ii) multiplied by the
Spread Multiplier, if any (in either case as specified in the applicable
Pricing Supplement). The "Spread" is the number of basis points specified in
the applicable Pricing Supplement as being applicable to the interest rate
for such Floating Rate Note, and the "Spread Multiplier" is the percentage
specified in the applicable Pricing Supplement as being applicable to the
interest rate for such Floating Rate Note. If specified in the applicable
Pricing Supplement, any Floating Rate Note also may have either or both of
the following: (a) a maximum numerical interest rate limitation, or ceiling,
on the rate of interest which may accrue during any interest period; and
(b) a minimum numerical interest rate limitation, or floor, on the rate of
interest which may accrue during any interest period.
The applicable Pricing Supplement will designate one of the following
interest rate bases as applicable to each Floating Rate Note: (a) the
CD Rate (a "CD Rate Note"); (b) the Commercial Paper Rate (a "Commercial
Paper Rate Note"); (c) the Federal Funds Rate (a "Federal Funds Rate Note");
(d) LIBOR (a "LIBOR Note"); (e) the Prime Rate (a "Prime Rate Note"); (f) the
Treasury Rate (a "Treasury Rate Note"); or (g) such other interest rate basis
as is set forth in such Pricing Supplement. The "Index Maturity" for any
Floating Rate Note is the period of maturity of the instrument or obligation
from which the interest rate basis is calculated. The interest rate on the
Notes will in no event be higher than the maximum rate permitted by New York
law as the same may be modified by United States law of general application.
Interest on Notes will be payable on the applicable Interest Payment
Dates, upon redemption and at maturity. Unless otherwise specified in the
applicable Pricing Supplement, the "Interest Payment Dates" for Fixed Rate
Notes will be May 15 and November 15 of each year. If any Interest Payment
Date for any Fixed Rate Note falls on a day that is not a Business Day, the
payment of principal or interest shall be postponed to the next day that is a
Business Day, and no interest on such payment shall accrue for the period
from and after the Interest Payment Date. Unless otherwise specified in the
applicable Pricing Supplement and except as provided below, the "Interest
Payment Dates" for Floating Rate Notes will be, in the case of Floating Rate
Notes with a weekly or monthly Interest Reset Date, the third Wednesday of
each month or the third Wednesday of March, June, September and December, as
specified in the applicable Pricing Supplement; in the case of Floating Rate
Notes with a quarterly Interest Reset Date, the third Wednesday of March,
June, September and December; in the case of Floating Rate Notes with a
semi-annual Interest Reset Date, the third Wednesday of the two months
specified in the applicable Pricing Supplement; and in the case of Floating
Rate Notes with an annual Interest Reset Date, the third Wednesday of the
month specified in the applicable Pricing Supplement. If any Interest
Payment Date for any Floating Rate Note would otherwise be a day that is not
a Business Day with respect to such Floating Rate Note, such Interest Payment
Date shall be postponed to the next day that is a Business Day, except that
in the case of a LIBOR Note, if such Business Day is in the next succeeding
calendar month, such Interest Payment Date shall be the immediately preceding
Business Day.
Interest payable on any Interest Payment Date will be payable to the
person in whose name such Note is registered at the close of business
(a) unless otherwise specified in the applicable Pricing Supplement, on the
May 1 or November 1 (whether or not a Business Day), as the case may be, next
preceding such Interest Payment Date in the case of a Fixed Rate Note, or
(b) on the 15th calendar day (whether or not a Business Day) next preceding
such Interest Payment Date in the case of a Floating Rate Note (in each case,
the "Record Date"); provided, however, that interest payable at Maturity will
be payable to the person to whom principal shall be payable. Notwithstanding
the foregoing, the first interest payment on a Note originally issued between
a Record Date and the Interest Payment Date relating to such Record Date or
on an Interest Payment Date will be made on the Interest Payment Date
following the next succeeding Record Date to the registered owner on such
next Record Date.
Interest payments on Notes will include accrued interest from the date
of issue or from the last date in respect of which interest has been paid or
made available for payment, as the case may be, to, but excluding, the
Interest Payment Date. With respect to any Floating Rate Note, accrued
interest will be calculated by multiplying the principal amount of such
Floating Rate Note by an accrued interest factor. The accrued interest
factor will be computed by adding the interest factors calculated for each
day in the period for which accrued interest is being calculated. The
interest factor for each such day will be computed by dividing the interest
rate applicable to such day by the actual number of days in the year in the
case of Treasury Rate Notes and by 360 in the case of CD Rate Notes,
Commercial Paper Rate Notes, Federal Funds Rate Notes, LIBOR Notes and Prime
Rate Notes.
With respect to any Floating Rate Note, the interest rate in effect on
each day will be, (a) if such day is an Interest Reset Date, the interest
rate with respect to the Interest Determination Date (as defined below)
pertaining to such Interest Reset Date or, (b) if such day is not an Interest
Reset Date, the interest rate with respect to the Interest Determination Date
pertaining to the next preceding Interest Reset Date, subject in either case
to any maximum or minimum interest rate limitation referred to above and to
any adjustment by a Spread or a Spread Multiplier referred to above;
provided, however, that the interest rate in effect for the period from the
date of issue to the first Interest Reset Date with respect to a Floating
Rate Note (the "Initial Interest Rate") will be specified in the applicable
Pricing Supplement.
<PAGE>
Fixed Rate Notes
Fixed Rate Notes will bear interest from the date of issue at the annual
interest rate or rates specified on the face thereof and in the applicable
Pricing Supplement. Interest on Fixed Rate Notes will be computed on the
basis of a 360-day year of twelve 30-day months.
Floating Rate Notes
The rate of interest on each Floating Rate Note will be reset weekly,
monthly, quarterly, semi-annually or annually (each an "Interest Reset
Date"), as specified in the applicable Pricing Supplement. The Interest or
Reset Date will be as follows: in the case of Floating Rate Notes (other
than Treasury Rate Notes) which reset weekly, Wednesday of each week; in the
case of Treasury Rate Notes which reset weekly, Tuesday of each week; in the
case of Floating Rate Notes which reset monthly, the third Wednesday of each
month; in the case of Floating Rate Notes which reset quarterly, the third
Wednesday of March, June, September and December; in the case of Floating
Rate Notes which reset semi-annually, the third Wednesday of the two months
specified in the applicable Pricing Supplement; and in the case of Floating
Rate Notes which reset annually, the third Wednesday of the month specified
in the applicable Pricing Supplement. If any Interest Reset Date for any
Floating Rate Note would otherwise be a day that is not a Business Day with
respect to such Floating Rate Note, such Interest Reset Date shall be
postponed to the next day that is a Business Day, except, in the case of a
LIBOR Note, if such Business Day is in the next succeeding calendar month,
such Interest Reset Date shall be the immediately preceding Business Day. If
any Interest Reset Date for a Treasury Rate Note would otherwise be a day on
which Treasury bills (as defined below) are auctioned, then such Interest
Reset Date shall be the first Business Day immediately following such auction
date.
The interest rate pertaining to each Interest Reset Date will be the
rate determined on or as of the "Interest Determination Date." The Interest
Determination Date pertaining to an Interest Reset Date for CD Rate Notes,
Commercial Paper Rate Notes, Federal Funds Rate Notes, LIBOR Notes and Prime
Rate Notes will be the second Business Day next preceding such Interest Reset
Date.
The Interest Determination Date pertaining to an Interest Reset Date for
a Treasury Rate Note will be the day of the week in which such Interest Reset
Date falls on which Treasury bills are normally sold at auction. Treasury
bills are normally sold at auction on Monday of each week, unless that day is
a legal holiday, in which case the auction is normally held on the following
Tuesday, except that the auction may be held on the preceding Friday. If, as
a result of a legal holiday, an auction is so held on the preceding Friday,
such Friday will be the Interest Determination Date pertaining to the
Interest Reset Date for Treasury Rate Notes occurring in the next succeeding
week.
Unless otherwise specified in the applicable Pricing Supplement, the
"Calculation Date" pertaining to an Interest Determination Date is the tenth
calendar day after such Interest Determination Date or, if any such day is
not a Business Day, the next succeeding Business Day.
All percentages resulting from any calculation with respect to Floating
Rate Notes will be rounded to the nearest one hundred-thousandth of a
percent, with five one-millionths of a percent rounded upward; and all dollar
amounts used in or resulting from any such calculation will be rounded to the
nearest cent, with one-half cent rounded upward.
Unless otherwise provided in the applicable Pricing Supplement, The
Chase Manhattan Bank (National Association) will be the calculation agent
(the "Calculation Agent") with respect to the Floating Rate Notes. Upon the
request of the holder of any Floating Rate Note, the Calculation Agent will
provide the interest rate then in effect and, if determined, the interest
rate which will become effective on the next Interest Reset Date with respect
to such Note. The Calculation Agent's determination of any interest rate
will be final and binding in the absence of manifest error.
The applicable Pricing Supplement will specify the interest rate basis
and the Spread, if any, or Spread Multiplier, if any, and the maximum or
minimum interest rate limitation, if any, applicable to each Floating Rate
Note. In addition, such Pricing Supplement will define or particularize for
each Floating Rate Note the following terms, if applicable: Index Maturity,
Initial Interest Rate, Interest Payment Dates, and Interest Reset Dates.
CD Rate Notes
CD Rate Notes will bear interest at the CD Rate plus or minus the
Spread, if any, or multiplied by the Spread Multiplier, if any, as specified
in the CD Rate Notes and in the applicable Pricing Supplement. The CD Rate
for each Interest Reset Date will be calculated as of the Interest
Determination Date pertaining to such Interest Reset Date.
Unless otherwise specified in the applicable Pricing Supplement,
"CD Rate" means, with respect to an Interest Determination Date, the rate on
that date for negotiable certificates of deposit having the Index Maturity
designated in the applicable Pricing Supplement as published by the Board of
Governors of the Federal Reserve System in "Statistical Release H.15(519),
Selected Interest Rates," or any successor publication of the Board of
Governors of the Federal Reserve System ("H.15(519)") under the heading "CDs
(secondary market)." In the event that such rate is not published prior to
9:00 a.m., New York City time, on the Calculation Date pertaining to such
Interest Determination Date, then the CD Rate will be the rate on such
Interest Determination Date for negotiable certificates of deposit having the
Index Maturity designated in the applicable Pricing Supplement as published
by the Federal Reserve Bank of New York in its daily statistical release
"Composite 3:30 p.m. Quotations for U. S. Government Securities" or any
successor publication of the Federal Reserve Bank of New York ("Composite
Quotations") under the heading "Certificates of Deposit." In the event that
such rate is not yet published by 3:00 p.m., New York City time, on such
Calculation Date, then the CD Rate on such Interest Determination Date shall
be calculated by the Calculation Agent and shall be the arithmetic mean of
the secondary market offered rates as of 10:00 a.m., New York City time, on
such Interest Determination Date, of three leading nonbank dealers in
negotiable U.S. dollar certificates of deposit in New York City selected by
the Calculation Agent for negotiable certificates of deposit of major United
States money market banks of the highest credit standing (in the market for
negotiable certificates of deposit) with a remaining maturity closest to the
Index Maturity designated in the applicable Pricing Supplement in a
denomination of $5 million; provided, however, that if the dealers selected
as aforesaid by the Calculation Agent are not quoting as mentioned in this
sentence, the CD Rate will be the CD Rate in effect on such Interest
Determination Date.
Commercial Paper Rate Notes
Commercial Paper Rate Notes will bear interest at the Commercial Paper
Rate plus or minus the Spread, if any, or multiplied by the Spread
Multiplier, if any, as specified in the Commercial Paper Rate Notes and in
the applicable Pricing Supplement. The Commercial Paper Rate for each
Interest Reset Date will be calculated as of the Interest Determination Date
pertaining to such Interest Reset Date.
Unless otherwise specified in the applicable Pricing Supplement,
"Commercial Paper Rate" means, with respect to an Interest Determination
Date, the Money Market Yield (as defined below) of the rate on that date for
commercial paper having the Index Maturity designated in the applicable
Pricing Supplement as published in H.15(519) under the heading "Commercial
paper." In the event that such rate is not published by 9:00 a.m.,
New York City time, on the Calculation Date pertaining to such Interest
Determination Date, then the Commercial Paper Rate shall be the Money Market
Yield of the rate on that Interest Determination Date for commercial paper
having the Index Maturity designated in the applicable Pricing Supplement as
published in Composite Quotations under the heading "Commercial Paper." If
by 3:00 p.m., New York City time, on such Calculation Date such rate is not
yet published in either H.15(519) or Composite Quotations, the Commercial
Paper Rate for that Interest Determination Date shall be calculated by the
Calculation Agent and shall be the Money Market Yield of the arithmetic mean
of the offered per annum rates quoted on a bank discount basis of three
leading dealers in commercial paper in New York City selected by the
Calculation Agent as of 11:00 a.m., New York City time, on that Interest
Determination Date, for commercial paper of the Index Maturity designated in
the applicable Pricing Supplement placed for an industrial issuer whose bond
rating is "AA," or the equivalent, from a nationally recognized rating
agency; provided, however, that if the dealers selected as aforesaid by the
Calculation Agent are not quoting as mentioned in this sentence, the
Commercial Paper Rate will be the Commercial Paper Rate in effect on such
Interest Determination Date.
"Money Market Yield" shall be a yield (expressed as a percentage)
calculated in accordance with the following formula:
D x 360
Money Market Yield ------------- x 100
360 - (D x M)
where "D" refers to the applicable per annum rate for commercial paper,
quoted on a bank discount basis and expressed as a decimal; and "M" refers to
the actual number of days in the interest period for which interest is being
calculated.
Federal Funds Rate Notes
Federal Funds Rate Notes will bear interest at the Federal Funds Rate
plus or minus the Spread, if any, or multiplied by the Spread Multiplier, if
any, as specified in the Federal Funds Rate Notes and in the applicable
Pricing Supplement. The Federal Funds Rate for each Interest Reset Date will
be calculated as of the Interest Determination Date pertaining to such
Interest Reset Date.
Unless otherwise specified in the applicable Pricing Supplement,
"Federal Funds Rate" means, with respect to an Interest Determination Date,
the rate on that day for Federal Funds as published in H.15(519) under the
heading "Federal funds (effective)." In the event that such rate is not
published prior to 9:00 a.m., New York City time, on the Calculation Date
pertaining to such Interest Determination Date, then the Federal Funds Rate
shall be the rate on such Interest Determination Date as published in
Composite Quotations under the heading "Federal Funds/Effective Rate." In
the event that such rate is not yet published by 3:00 p.m., New York City
time, on such Calculation Date, the Federal Funds Rate shall be calculated by
the Calculation Agent and shall be the arithmetic mean of the rates for the
last transaction in overnight U.S. dollar Federal Funds arranged by three
leading brokers of Federal Funds transactions in New York City selected by
the Calculation Agent as of 11:00 a.m., New York City time, on such Interest
Determination Date; provided, however, that if the brokers selected as
aforesaid by the Calculation Agent are not quoting as mentioned in this
sentence, the Federal Funds Rate will be the Federal Funds Rate in effect on
such Interest Determination Date.
LIBOR Notes
LIBOR Notes will bear interest at LIBOR plus or minus the Spread, if
any, or multiplied by the Spread Multiplier, if any, as specified in the
LIBOR Notes and in the applicable Pricing Supplement. LIBOR for each
Interest Reset Date will be calculated on the Interest Determination Date
pertaining to such Interest Reset Date.
Unless otherwise specified in the applicable Pricing Supplement, "LIBOR"
will be determined by the Calculation Agent in accordance with the following
provisions:
(i) With respect to an Interest Determination Date, LIBOR will be
determined as specified in the applicable Pricing Supplement as either
(a) the arithmetic mean of the offered rates for deposits in U.S.
dollars having the Index Maturity specified in the applicable Pricing
Supplement, commencing on the second Business Day immediately following
that Interest Determination Date, which appear on the Reuters Screen
LIBO Page as of 11:00 a.m., London time, on that Interest Determination
Date, if at least two such offered rates appear on the Reuters Screen
LIBO Page ("LIBOR Reuters"), or (b) the rate for deposits in U.S.
dollars having the Index Maturity specified in the applicable Pricing
Supplement, commencing on the second Business Day immediately following
that Interest Determination Date, which appears on the Telerate
Page 3750 as of 11:00 a.m., London time, on that Interest Determination
Date ("LIBOR Telerate"). Unless otherwise indicated in the applicable
Pricing Supplement, "Reuters Screen LIBO Page" means the display
designated as Page "LIBO" on the Reuters Monitor Money Rate Service (or
such other page as may replace the LIBO page on that service for the
purpose of displaying London interbank offered rates of major banks),
and "Telerate Page 3750" means the display designated as page "3750" on
the Telerate Service (or such other page as may replace the 3750 page on
that service or such other service or services as may be nominated by
the British Bankers' Association for the purpose of displaying London
interbank offered rates for U.S. dollar deposits). If neither LIBOR
Reuters nor LIBOR Telerate is specified in the applicable Pricing
Supplement, LIBOR will be determined as if LIBOR Telerate had been
specified. In the case where (a) above applies, if fewer than two
offered rates appear on the Reuters Screen LIBO Page, or, in the case
where (b) above applies, if no rate appears on the Telerate Page 3750,
as applicable, LIBOR in respect to that Interest Determination Date will
be determined as if the parties had specified the rate described in (ii)
below.
(ii) With respect to an Interest Determination Date to which this
provision applies, LIBOR will be determined on the basis of the rates at
approximately 11:00 a.m., London time, on that Interest Determination
Date at which deposits in U.S. dollars having the Index Maturity
designated in the applicable Pricing Supplement are offered to prime
banks in the London interbank market by four major banks in the London
interbank market selected by the Calculation Agent commencing on the
second Business Day immediately following that Interest Determination
Date and in a principal amount of not less than $1 million that in the
Calculation Agent's judgment is representative for a single transaction
in such market at such time. The Calculation Agent will request the
principal London office of each such bank to provide a quotation of its
rate. If at least two such quotations are provided, LIBOR in respect of
that Interest Determination Date will be the arithmetic mean of such
quotations. If fewer than two quotations are provided, LIBOR in respect
of that Interest Determination Date will be the arithmetic mean of the
rates quoted by three major banks in New York City selected by the
Calculation Agent at approximately 11:00 a.m., New York City time, on
that Interest Determination Date for loans in U.S. dollars to leading
European banks, having the Index Maturity designated in the applicable
Pricing Supplement, commencing on the second Business Day immediately
following that Interest Determination Date and in a principal amount of
not less than $1 million that, in the Calculation Agent's judgment, is
representative for a single transaction in such market at such time;
provided, however, that if the banks selected as aforesaid by the
Calculation Agent are not quoting as mentioned in this sentence, LIBOR
will be LIBOR in effect on such Interest Determination Date.
<PAGE>
Prime Rate Notes
Prime Rate Notes will bear interest at the Prime Rate plus or minus the
Spread, if any, or multiplied by the Spread Multiplier, if any, as specified
in the Prime Rate Notes and in the applicable Pricing Supplement. The Prime
Rate for each Interest Reset Date will be calculated as of the Interest
Determination Date pertaining to such Interest Reset Date.
Unless otherwise specified in the applicable Pricing Supplement, "Prime
Rate" means, with respect to an Interest Determination Date, the rate set
forth in H.15(519) for such date under the heading "Bank prime loan." In the
event that such rate is not published prior to 9:00 a.m., New York City time,
on the Calculation Date pertaining to such Interest Determination Date, then
the Prime Rate shall be calculated by the Calculation Agent and shall be the
arithmetic mean of the rates of interest publicly announced by each bank that
appears on the Reuters Screen NYMF Page as such bank's prime rate or base
lending rate as in effect for such Interest Determination Date. If fewer
than four such rates appear on the Reuters Screen NYMF Page for such Interest
Determination Date, the Prime Rate shall be calculated by the Calculation
Agent and shall be the arithmetic mean of the prime rates or base lending
rates (quoted on the basis of the actual number of days in the year divided
by a 360-day year) as of the close of business on such Interest Determination
Date by three major banks in New York City selected by the Calculation Agent;
provided, however, that if the banks selected as aforesaid by the Calculation
Agent are not quoting as mentioned in this sentence, the Prime Rate will be
the Prime Rate in effect on such Interest Determination Date. "Reuters
Screen NYMF Page" means the display designated as page "NYMF" on the Reuters
Monitor Money Rates Service (or such other page as may replace the NYMF page
on that service for the purpose of displaying the prime rate or base lending
rate of major United States banks).
Treasury Rate Notes
Treasury Rate Notes will bear interest at the Treasury Rate plus or
minus the Spread, if any, or multiplied by the Spread Multiplier, if any, as
specified in the Treasury Rate Notes and in the applicable Pricing
Supplement. The Treasury Rate for each Interest Reset Date will be
calculated as of the Interest Determination Date pertaining to such Interest
Reset Date.
Unless otherwise specified in the applicable Pricing Supplement,
"Treasury Rate" means, with respect to an Interest Determination Date, the
rate on that date for the most recent auction of direct obligations of the
United States ("Treasury bills") having the Index Maturity designated in the
applicable Pricing Supplement as published in H.15(519) under the heading
"U.S. government securities/Treasury bills/Auction average (investment)" or,
if not so published by 9:00 a.m., New York City time, on the Calculation Date
pertaining to such Interest Determination Date, the auction average rate
(expressed as a bond equivalent on the basis of a year of 365 or 366 days, as
applicable, and applied on a daily basis) for such auction as otherwise
announced by the United States Department of the Treasury. In the event that
the results of the auction of Treasury bills having the Index Maturity
designated in the applicable Pricing Supplement are not published or reported
as provided above by 3:00 p.m., New York City time, on such Calculation Date
or no such auction is held during such week, then the Treasury Rate shall be
the rate set forth in H.15(519) for that Interest Determination Date for the
specified Index Maturity under the heading "U.S. Government
securities/Treasury bills/Secondary market." In the event such rate is not
so published by 3:00 p.m., New York City time, on such Calculation Date, the
Treasury Rate shall be calculated by the Calculation Agent and shall be a
yield to maturity (expressed as a bond equivalent on the basis of a year of
365 or 366 days, as applicable, and applied on a daily basis) of the
arithmetic mean of the secondary market bid rates as of 3:30 p.m.,
New York City time, on that Interest Determination Date of three leading
primary United States government securities dealers in New York City selected
by the Calculation Agent for the issue of Treasury bills with a remaining
maturity closest to the Index Maturity designated in the applicable Pricing
Supplement; provided, however, that if the dealers selected as aforesaid by
the Calculation Agent are not quoting as mentioned in this sentence, the
Treasury Rate will be the Treasury Rate in effect on such Interest
Determination Date.
Book-Entry System
Upon issuance, all Book-Entry Notes having the same date of issuance,
maturity, redemption provisions, if any, Interest Payment Dates and, in the
case of Fixed Rate Notes, interest rate, or, in the case of Floating Rate
Notes, interest rate basis, Initial Interest Rate, Index Maturity, Interest
Reset Period and Dates, Spread or Spread Multiplier, if any, and maximum or
minimum interest rate limitation, if any, will be represented by a single
Global Note ("Global Note"). Each Global Note will be deposited with, or on
behalf of, The Depository Trust Company, New York, New York (the
"Depositary") or such other depositary as is specified in the applicable
Pricing Supplement, and registered in the name of the Depositary or a nominee
of the Depositary. Book-Entry Notes will not be transferable or exchangeable
for Notes in certificated form except under the limited circumstances
described in the Basic Prospectus under "Description of Securities--Global
Securities."
The Depositary has advised the Company as follows: The Depositary is a
limited-purpose trust company organized under the laws of the State of
New York, a member of the Federal Reserve System, a "clearing corporation"
within the meaning of the New York Uniform Commercial Code, and a "clearing
agency" registered pursuant to the provisions of Section 17A of the
Securities Exchange Act of 1934. The Depositary was created to hold
securities of its participants and to facilitate the clearance and settlement
of securities transactions among its participants in such securities through
electronic book-entry changes in accounts of the participants, thereby
eliminating the need for physical movement of securities certificates. The
Depositary's participants include securities brokers and dealers (including
the Agents), banks, trust companies, clearing corporations, and certain other
organizations, some of whom (and/or their representatives) own the
Depositary. Access to the Depositary's book-entry system is also available
to others, such as banks, brokers, dealers and trust companies that clear
through or maintain a custodial relationship with a participant, either
directly or indirectly.
A further description of the Depositary's procedures with respect to
Global Notes is set forth in the Basic Prospectus under "Description of
Securities--Global Securities." The Depositary has confirmed to the Company
that it intends to follow such procedures.
Original Issue Discount
If the Company issues any Notes which will be required to be treated as
having been issued at an original issue discount for federal income tax
purposes (a "Discount Note"), the special federal income tax consequences
applicable thereto will be described in the applicable Pricing Supplement.
Discount Notes will bear such legend as may be required by any applicable law
or regulations (including proposed regulations), as set forth in such Pricing
Supplement.
PLAN OF DISTRIBUTION
The Notes are being offered by the Company on a continuous basis through
the Agents, which have severally agreed to use reasonable efforts to solicit
purchases of the Notes. The Company will pay each Agent a commission of from
.125% to .750% of the principal amount, depending upon maturity, of the Notes
sold through such firm as agent. The Company may also sell Notes to any of
the Agents, as principal, at a discount for resale to investors or other
purchasers at varying prices related to prevailing market prices at the time
of resale or, if set forth in the applicable Pricing Supplement, at a fixed
public offering price, as determined by such Agent. After any initial public
offering of Notes to be resold to purchasers at a fixed public offering
price, the public offering price and any concession or discount may be
changed. In addition, each Agent may offer Notes purchased as principal to
other dealers. Notes sold by an Agent to a dealer may be sold at a discount
and unless otherwise specified in the applicable Pricing Supplement, such
discount allowed will not be in excess of the discount received by the Agent
from the Company. Unless otherwise specified in the applicable Pricing
Supplement, any Note sold to an Agent as principal will be purchased by such
Agent at a price equal to 100% of the principal amount thereof less a
percentage equal to the commission applicable to an agency sale of a Note of
identical maturity, and may be resold by such Agent. The Company reserves
the right to sell Notes through one or more additional agents or directly to
investors on its own behalf or to one or more underwriters for resale to the
public. No commission will be payable to the Agents on any Notes sold
through other agents or directly by the Company to investors or to
underwriters.
The Company will have the sole right to accept offers to purchase the
Notes and may reject any proposed offer in whole or in part. Each Agent will
have the right, in its discretion reasonably exercised, to reject any
proposed offer to purchase the Notes through it in whole or in part.
Each Agent, whether acting as agent or principal, may be deemed to be an
"underwriter" within the meaning of the Securities Act of 1933. The Company
has agreed to indemnify each Agent against certain liabilities, including
liabilities under the Securities Act of 1933. The Company has also agreed to
reimburse the Agents for certain expenses. Each of the Agents engages in
transactions with and performs financing services for the Company in the
ordinary course of business.
The Notes are a new issue of securities with no established trading
market and will not be listed on any securities exchange. Each of the Agents
may from time to time purchase and sell Notes in the secondary market, but is
not obligated to do so, and there can be no assurance that there will be a
secondary market for the Notes or liquidity in the secondary market if one
develops.
VALIDITY OF NOTES
The validity of the Notes offered hereby has been passed upon for the
Company by Miller, Nash, Wiener, Hager & Carlsen, Portland, Oregon, and for
the Agents by Sullivan & Cromwell, New York, New York. Sullivan & Cromwell
will rely on Miller, Nash, Wiener, Hager & Carlsen as to all matters governed
by Oregon law. The opinions of Miller, Nash, Wiener, Hager & Carlsen and
Sullivan & Cromwell are conditioned upon, and subject to certain assumptions
regarding, future action required to be taken by the Company and the Trustee
in connection with the issuance and sale of any particular Note, the specific
terms of the Notes and other matters that may affect the validity of the
Notes but that were not ascertainable on the date of such opinions.
<PAGE>
No person has been authorized to give any information or to make any
representations other than those contained in this Prospectus Supplement, any
Pricing Supplement or the Basic Prospectus and, if given or made, such
information or representations must not be relied upon as having been
authorized. This Prospectus Supplement, any Pricing Supplement and the Basic
Prospectus do not constitute an offer to sell or a solicitation of an offer
to buy any securities other than the securities described herein or therein
or an offer to sell or a solicitation of an offer to buy such securities in
any circumstances in which such offer or solicitation is unlawful. Neither
the delivery of this Prospectus Supplement, any Pricing Supplement or the
Basic Prospectus nor any sale made hereunder or thereunder shall, under any
circumstances, create any implication that there has been no change in the
affairs of the Company since the date hereof or thereof or that the
information contained herein or therein is correct as of any time subsequent
to the date of such information.
------------------------
TABLE OF CONTENTS
Prospectus Supplement
Page
Selected Consolidated Financial Data . . . . . . . . . . . . . . . . . . S-2
Description of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . S-3
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . S-11
Validity of Notes. . . . . . . . . . . . . . . . . . . . . . . . . . . . S-11
Prospectus
Available Information. . . . . . . . . . . . . . . . . . . . . . . . . 2
Incorporation of Certain Documents by
Reference. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
The Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Ratio of Earnings to Fixed Charges . . . . . . . . . . . . . . . . . . 3
Description of Securities. . . . . . . . . . . . . . . . . . . . . . . 4
Validity of Offered Securities . . . . . . . . . . . . . . . . . . . . . 11
Experts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . 11
<PAGE>
$200,000,000
Willamette Industries, Inc.
Medium-Term Notes, Series B
Due From Nine Months to
Thirty Years From Date of Issue
Goldman, Sachs & Co.
Salomon Brothers Inc
