<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] Annual Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
For the fiscal year ended December 31, 1993 Commission file number 0-3730
WILLAMETTE INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Oregon 93-0312940
(State of incorporation) (I.R.S. Employer
Identification No.)
3800 First Interstate Tower
1300 S.W. Fifth Avenue
Portland, Oregon 97201
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (503) 227-5581
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.50 par value
(Title of class)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.
Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [ ]
State the aggregate market value of the voting stock held by
non-affiliates of the registrant.
$2,885,116,000 at January 31, 1994
Indicate the number of shares outstanding of each of the
registrant's classes of common stock as of the latest practicable date.
Class Outstanding at March 2, 1994
Common Stock, $.50 par value 55,019,378 shares
DOCUMENTS INCORPORATED BY REFERENCE.
Portions of the registrant's definitive proxy statement for its
1994 annual meeting of shareholders are incorporated by reference into
Part III hereof.
<PAGE>
CROSS REFERENCE SHEET
Showing Location in Definitive Proxy Statement of Items Required
By Form 10-K
Definitive Proxy Statement
Item No Form 10-K Caption Caption Page No.
Item 10 Directors and Executive Election of Directors 3-4
Officers of the Registrant
Item 11 Executive Compensation Executive Compensation 5-8
Compensation Committee
Interlocks and Insider
Participation 8
Compensation of Directors 11
Employment Agreements 12
Item 12 Security Ownership of Holders of Common Stock 1-2
Certain Beneficial
Owners and Management
Item 13 Certain Relationships and Compensation Committee
Related Transactions Interlocks and Insider
Participation 8
<PAGE>
INDEX
Page
Part I
Item 1. Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
General. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Business Segment Information . . . . . . . . . . . . . . . . . . . . . 1
Pulp and Paper . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Converted Paper Products . . . . . . . . . . . . . . . . . . . . . . . 2
Building Materials . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Timberlands. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Employees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Environmental Matters. . . . . . . . . . . . . . . . . . . . . . . . . 3
Item 2. Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Item 3. Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . . . 7
Item 4. Submission of Matters to a Vote of Security Holders. . . . . . . 7
Executive Officers of the Registrant. . . . . . . . . . . . . . . . . . . 7
Part II
Item 5. Market for Registrant's Common Equity
and Related Stockholder Matters . . . . . . . . . . . . . . . . 8
Item 6. Selected Financial Data. . . . . . . . . . . . . . . . . . . . . 9
Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations . . . . . . . . .10
Item 8. Financial Statements and Supplementary Data. . . . . . . . . . .13
Item 9. Changes in and Disagreements with
Accountants on Accounting and Financial
Disclosure. . . . . . . . . . . . . . . . . . . . . . . . . . .13
Part III
Item 10. Directors and Executive Officers of the Registrant. . . . . . .14
(See Part I for Executive Officers of the Registrant)
Item 11. Executive Compensation. . . . . . . . . . . . . . . . . . . . .14
Item 12. Security Ownership of Certain Beneficial
Owners and Management. . . . . . . . . . . . . . . . . . . . .14
Item 13. Certain Relationships and Related
Transactions . . . . . . . . . . . . . . . . . . . . . . . . .14
Part IV
Item 14. Exhibits, Financial Statement Schedules
and Reports on Form 8-K. . . . . . . . . . . . . . . . . . . .14
Signatures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15
Index to Consolidated Financial Statements. . . . . . . . . . . . . . . .17
Index to Exhibits . . . . . . . . . . . . . . . . . . . . . . . . . . . .38
<PAGE>
PART I
Item 1. Business
General
Willamette Industries, Inc. ("Willamette" or the "Company"), was founded
in 1906 as the Willamette Valley Lumber Co. in Dallas, Oregon. In 1967,
Willamette Valley Lumber Co. and several related firms merged to form
Willamette. The Company's stock has been publicly traded since 1968.
Willamette is a diversified, integrated forest products company with 89
plants and mills manufacturing containerboard, bag paper, fine paper,
bleached hardwood market pulp, specialty printing papers, corrugated
containers, business forms, cut sheet paper, paper bags, inks, lumber,
plywood, particleboard, medium density fiberboard, laminated beams and
other value-added wood products. It owns or controls 1,206,000 acres of
forests.
Willamette is a medium-sized firm in a very competitive industry
consisting of thousands of companies, some larger and more diversified;
others much smaller, producing only one or two products. Very competitive
conditions exist in every industry segment in which Willamette operates.
The Company competes in its markets primarily through price, quality and
service.
The Company believes its strengths are its vertical integration; its
geographically diverse, modern, fiber- and energy-efficient facilities; its
concentration on a focused, related product range; its balance among
building materials, white paper and brown paper manufacturing and an
organizational structure that encourages teamwork as well as individual
initiative.
Business Segment Information
The Company has two business segments. The Paper Group segment
manufactures and sells pulp and paper products. The Building Materials
Group segment manufactures and sells wood products. Sales and operating
data for the Paper Group and Building Materials Group segments for the past
five years is set forth in the five year comparison captioned
"Supplementary Business Segment Information" below. The Company has no
foreign operations and is not dependent on any one significant customer or
group of customers. Approximately 96% of the Company's total output is
sold domestically.
Pulp and Paper
Bleached pulp and fine paper.
The Company manufactures bleached hardwood market pulp, which is sold to
outside customers, at Hawesville, Kentucky; and fine paper at Hawesville;
Marlboro County, South Carolina; and Johnsonburg, Pennsylvania. In 1993,
the Company made 4.9% of the nation's bleached hardwood market pulp and
accounted for 4.9% of the nation's fine paper production.
Chips from nearby sawmills and plywood plants serve as the primary fiber
source for the bleached pulp manufacturing facility. Willamette's
timberlands in Tennessee and the Carolinas also serve as a source of fiber
for the facility.
- 1 -<PAGE>
Containerboard and bag paper.
The Company's four paper mills manufactured 4.2% of the nation's 1993
production of linerboard, corrugating medium and bag paper. All of the
production was used or traded for the needs of Willamette's box and bag
manufacturing plants.
In Louisiana, the Company's sawmills, plywood plants and timberlands can
provide 100% of the chips needed by its linerboard mill; in Oregon,
approximately 80% of the Company's chip requirements could be provided from
those sources.
Recycled fiber, in the form of used corrugated containers, provided
53.5% of the Company's 1993 fiber needs.
Converted Paper Products
Office papers.
The Company's six business forms plants manufactured 4.4% of the
nation's 1993 production of forms. These forms, mostly long-run continuous
computer forms, along with Willcopy(R), Willamette's photocopy and cut
sheet printer paper produced at its three cut sheet facilities, are
marketed by 47 Willamette sales and distribution centers. The Company's
cut sheets represented 5.2% of the nation's 1993 production.
Corrugated containers.
Corrugated containers manufactured by the Company's 31 corrugated
container plants accounted for 5.5% of the nation's 1993 corrugated box
production. Products range from colorful store displays to eye-catching
preprinted boxes; from sturdy wax coated shipping containers to the plain
brown box. Corrugated containers are marketed by Willamette's own sales
force to a variety of industrial and agricultural customers.
Bags.
In 1993, the Company's five bag plants made 12.0% of the nation's paper
bags. Bags are marketed to grocery, department, drug and hardware stores in
the West and South by the Company's sales force.
Building Materials
Plywood and lumber.
Plywood products, totaling 7.3% of the nation's 1993 production, are
manufactured at the Company's 11 plants in Arkansas, the Carolinas,
Louisiana and Oregon.
Six Company sawmills manufactured 1.3% of the nation's 1993 lumber
production.
Lumber and plywood products are marketed through independent wholesalers
and distributors throughout the U.S.
Composite board.
Five Company particleboard plants in Louisiana and Oregon manufactured
14.4% of the nation's particleboard production in 1993. The Company's two
medium density fiberboard plants in Arkansas and South Carolina made 18.9%
of the nation's MDF in 1993. These plants produce value-added products
including color-coated, woodgrain-printed, fire-rated and moisture-
resistant boards.
- 2 -<PAGE>
Composite board products are sold nationwide through distributors, as
well as directly to cabinet and furniture manufacturers.
Laminated beams.
The Company's two laminated beam plants in Oregon accounted for 26.4% of
the nation's 1993 production. Laminated beams, both stock and custom made,
are sold nationwide and internationally.
Timberlands
Willamette's 1,206,000 acres of timberland enable the Company to supply
approximately 40% of its long-term log needs. The remainder is purchased
through government and private timber sales and open market purchases.
In Oregon, the Company is able to provide approximately 60% of its
current log needs from its own timberlands. The Company's Oregon plywood
plant and sawmills have operated at reduced levels because of the scarcity
of logs resulting from preservationist pressures that virtually halted
federal timber sales in the state. Unless the federal timber supply crisis
is resolved in a meaningful way, further curtailment of Oregon operations
will be necessary to improve the Company's self sufficiency.
The Company now owns or controls cutting rights on 564,000 acres in
Louisiana, Arkansas and Texas; 328,000 acres in Oregon; 188,000 acres in
Tennessee; and 126,000 acres in the Carolinas. Willamette continually
looks for opportunities to expand its fee timber base and make purchases
when it is profitable to do so.
Energy
Through cogeneration, the burning of waste materials and the recycling
of spent pulping liquors, Willamette's manufacturing facilities are able to
generate 62% of their total energy needs.
Employees
The Company employed approximately 12,040 people on December 31, 1993, of
whom about 52% are represented by unions with which the Company has
collective bargaining agreements. Contracts covering approximately
2,000 hourly employees were negotiated in 1993. Contracts involving about
1,335 hourly employees are subject to renewal in 1994. In excess of 45% of
all salaried employees have been with the Company for more than 12 years.
Environmental Matters
See "Management's Discussion and Analysis of Financial Conditions and
Results of Operations--Other Matters" for a discussion of the effect on the
Company of laws relating to environmental matters.
Item 2. Properties
Manufacturing Facilities
The following table sets forth information respecting the Company's
89 manufacturing facilities at December 31, 1993:
- 3 -<PAGE>
<TABLE>
<CAPTION>
Facility Annual Production
M Square Ft.
(3/8" Basis)
<S> <C>
Western Plywood (4 Plants)
Dallas, Oregon 163,000
Foster, Oregon 135,000
Springfield, Oregon 121,000
Sweet Home, Oregon 126,000
Total Western Plants 545,000
Southern Plywood (5 Plants)
Dodson, Louisiana 219,000
Emerson, Arkansas 235,000
Ruston, Louisiana 153,000
Taylor, Louisiana 212,000
Zwolle, Louisiana 226,000
Total Southern Plants 1,045,000
Atlantic Plywood (2 Plants)
Chester, South Carolina 258,000
Moncure, North Carolina 114,000
Total Atlantic Plants 372,000
(1993 Production-
Total Plywood 1,962,000 1,944,000 M)
Western Lumber (4 Mills) M Board Ft
Coburg, Oregon 107,000
Dallas, Oregon 93,000
Lebanon, Oregon-2 mills 117,000
Total Western Mills 317,000
Southern Lumber (2 Mills)
Dodson, Louisiana 59,000
Zwolle, Louisiana 79,000
Total Southern Mills 138,000
(1993 Production-
Total Lumber 455,000 445,000 M)
M Square Ft
Particleboard (5 Plants) (3/4" Basis)
Albany, Oregon 212,000
Bend, Oregon 161,000
Eugene, Oregon 80,000
Lillie, Louisiana 108,000
Simsboro, Louisiana 96,000
(1993 Production-
Total Particleboard 657,000 600,000 M)
Medium Density Fiberboard M Square Ft
(2 Plants) (3/4" Basis)
Bennettsville, South Carolina 122,000
Malvern, Arkansas 119,000
(1993 Production-
Total MDF 241,000 216,000 M)
- 4 -<PAGE>
Engineered Products (4 Plants)
Laminated Beams M Board Ft
Saginaw, Oregon 30,000
Vaughn, Oregon 60,000
(1993 Production-
Total Laminated Beams 90,000 78,000 M)
Laminated Veneer Lumber M Cubic Ft.
Winston, Oregon 1,200 (1993 Production-
1,200 M)
Structural Wood Products M Lineal Ft.
Woodburn, Oregon 24,000 (1993 Production-
21,000 M)
Other Divisions (4 Facilities)
Custom Products Albany, Oregon
Custom Services Sweet Home, Oregon
Lebanon Machine Lebanon, Oregon
Coburg Veneer Coburg, Oregon
Pulp and Paper (8 Mills) Tons
Unbleached:
Albany, Oregon 428,000
Campti, Louisiana 485,000
Hawesville, Kentucky 174,000
Oxnard, California 170,000
1,257,000
Bleached
Marlboro County, South Carolina 271,000
Hawesville, Kentucky
Bleached Market Pulp 158,000
Fine Paper 197,000
Johnsonburg, Pennsylvania 237,000
863,000 (1993 Production-
Total Pulp and Paper 2,120,000 1,999,000 Tons)
Corrugated Containers (31 Plants) M Square Ft
Aurora, Illinois 987,000
Beaverton, Oregon 762,000
Bellevue, Washington 523,000
Bellmawr, New Jersey 701,000
Bowling Green, Kentucky 741,000
Cerritos, California 728,000
Compton, California 662,000
Dallas, Texas 952,000
Delaware, Ohio 688,000
Elk Grove, Illinois 466,000
Fort Smith, Arkansas 781,000
Fridley, Minnesota 836,000
Golden, Colorado 595,000
Griffin, Georgia 907,000
Huntsville, Alabama 756,000
Indianapolis, Indiana 572,000
Kansas City, Kansas 773,000
Lincoln, Illinois 401,000
Louisville, Kentucky 396,000
- 5 -<PAGE>
Lumberton, North Carolina 536,000
Maryland Heights, Missouri 690,000
Matthews, North Carolina 385,000
Memphis, Tennessee 52,000
Moses Lake, Washington 753,000
Newton, North Carolina 455,000
Sacramento, California 621,000
San Leandro, California 1,125,000
Sanger, California 755,000
Sealy, Texas 721,000
St. Paul, Minnesota 524,000
West Memphis, Arkansas 763,000
(1993 Production-
Total Corrugated Containers 20,607,000 19,510,000 M)
Business Forms (6 Plants) Tons
Cerritos, California 59,000
Dallas, Texas 45,000
Indianapolis, Indiana 63,000
Langhorne, Pennsylvania 59,000
Rock Hill, South Carolina 40,000
West Chicago, Illinois 46,000
(1993 Production-
Total Business Forms 312,000 295,000 Tons)
Cut Sheets and Other Converting (3 Plants) Tons
DuBois, Pennsylvania 79,000
Owensboro, Kentucky 63,000
Tatum, South Carolina 89,000
(1993 Production-
Total Cut Sheets 231,000 178,000 Tons)
Kraft Bags and Sacks (5 Plants) Tons
Beaverton Oregon 41,000
Buena Park, California 32,000
Dallas, Texas 29,000
N. Kansas City, Missouri 23,000
Tacoma, Washington 16,000
(1993 Production-
Total Kraft Bags and Sacks 141,000 134,000 Tons)
Preprinted Linerboard (2 Plants) M Square Ft
Tigard, Oregon 379,000
Richwood, Kentucky 427,000
(1993 Production-
Total Preprinted Linerboard 806,000 545,000 M)
Inks (2 Plants) Tons
Beaverton, Oregon 3,000
Delaware, Ohio 2,000
(1993 Production-
Total Inks 5,000 5,000 Tons)
</TABLE>
- 6 -<PAGE>
Timberlands
For information respecting the Company's timberlands, see "Business--
Timberlands."
Item 3. Legal proceedings
In August 1993, the Environmental Protection Agency (the "EPA") issued
a notice of violation to the Company, claiming that the particulate
emissions from the Company's hog fuel boiler at its Marlboro County, South
Carolina, pulp and paper mill were excessive. The EPA has initially
proposed that the Company pay a civil penalty of $1,231,000 for the alleged
violations and requested the Company to respond to this proposal. The
Company's capital expenditure budget includes funds for upgraded pollution
control equipment designed to reduce the emissions from the boiler to the
permitted level. The EPA has agreed that the Company may continue
operating the boiler with existing controls until the new equipment is
installed.
Item 4. Submission of Matters to a Vote of Security Holders
There were no matters submitted to a vote of security holders during
the fourth quarter of the year ended December 31, 1993.
Executive Officers of the Registrant
The executive officers of the Company are elected annually by the
board of directors. At February 10, 1994, the executive officers of the
Company, their ages at December 31, 1993, and their positions with the
Company were as follows:
<TABLE>
<CAPTION>
Name Age Position
<S> <C> <C>
William Swindells 63 Chairman of the board and
chief executive officer,
director
Steven R. Rogel 51 President and chief operating
officer
Marvin W. Coats 64 Executive vice president-
building materials group
William P. Kinnune 54 Executive vice president-
corrugated containers and bags
Michael R. Onustock 54 Executive vice president-pulp
and fine paper marketing
J. A. Parson 58 Executive vice president and
chief financial officer,
secretary and treasurer
Floyd Vike 58 Executive vice president-
building materials marketing
</TABLE>
Each executive officer has been employed by the Company in his present
or in another managerial capacity for more than the past five years.
- 7 -<PAGE>
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder
Matters
The Company's common stock is traded on the over-the-counter market
under the symbol WMTT, and is quoted on the NASDAQ National Market System.
At December 31, 1993, there were approximately 6,300 holders of record of
the Company's common stock. The following table shows for the periods
indicated the high and low closing sales prices of, and the per share
dividends paid on, the Company's common stock in each case as adjusted for
stock splits.
<TABLE>
<CAPTION>
1993 1992
Closing Closing
Dividends Price Dividends Price
Paid High-Low Paid High-Low
<S> <C> <C> <C> <C>
1st Quarter.... $0.22 44-35 7/8 $0.21 42 1/4-29 3/8
2nd Quarter.... 0.22 43 1/4-36 3/4 0.21 39 1/8-35
3rd Quarter.... 0.22 42-35 3/4 0.21 38-32
4th Quarter.... 0.22 49 1/2-37 1/2 0.21 41 1/4-31 1/8
</TABLE>
A dividend of $.24 per share was declared on the common stock for the
first quarter of 1994, representing an indicated annual dividend rate of
$.96 per share. The Company expects to continue paying regular cash
dividends, although there is no assurance as to future dividends as they
are dependent on earnings, capital requirements and financial condition.
- 8 -<PAGE>
Item 6. Selected Financial Data
The following table shows selected financial data for the Company for
the periods indicated:
----------------------------------------------------------------------------
<TABLE>
<CAPTION>
Financial Results 1993 1992 1991 1990 1989
(dollar amounts, except per share amounts, in thousands)
<S> <C> <C> <C> <C> <C>
Net sales.....................................$ 2,622,237 2,372,396 2,004,501 1,904,853 1,891,824
===============================================================================================================
Cost and expenses:
Depreciation, amortization, and cost
of fee timber harvested..................... 194,202 173,784 151,258 107,654 104,250
Materials, labor, and other operating expenses. 1,997,246 1,833,919 1,563,939 1,421,241 1,338,692
----------------------------------------------------------------
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
----------------------------------------------------------------
Earnings from operations................... 256,376 197,599 143,975 239,334 334,853
Interest expense............................... 63,290 66,422 63,263 29,899 28,836
Other income (expense)......................... (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
Cash dividends paid............................ 48,213 45,200 40,715 40,676 36,853
Earnings retained in the business.............. 88,819 36,352 5,094 88,895 154,203
Capital expenditures........................... 386,864 367,173 244,373 346,617 279,958
===============================================================================================================
Financial Condition
Working capital...............................$ 157,576 157,822 147,194 156,677 181,297
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
Total assets................................... 2,804,553 2,527,416 2,219,067 1,965,186 1,632,431
===============================================================================================================
Common Stock
Number of stockholders (beneficial)............ 14,000 11,500 10,500 10,000 9,600
Shares outstanding (in thousands) <F1>......... 54,897 54,770 50,962 50,848 50,844
===============================================================================================================
Per Share
Earnings before accounting changes............$ 2.02 1.52 0.90 2.55 3.76
Accounting changes ............................ 0.48 - - - -
----------------------------------------------------------------
Net earnings <F1>............................ 2.50 1.52 0.90 2.55 3.76
Cash dividends paid ........................... 0.88 0.84 0.80 0.80 0.72
Stockholders' equity <F1>...................... 22.91 21.27 19.51 19.42 17.72
===============================================================================================================
Financial Returns
Percent return on equity before accounting
changes <F2>................................. 9.50% 8.20% 4.64% 14.38% 25.59%
Percent return on net sales before accounting
changes ..................................... 4.22% 3.44% 2.29% 6.80% 10.10%
===============================================================================================================
Employment
Number of employees............................ 12,040 12,000 11,350 10,275 9,370
Wages, salaries, and cost of employee benefits$ 551,172 507,469 451,770 400,440 374,983
===============================================================================================================
<FN>
<F1> All share and per share amounts have been adjusted for stock splits.
<F2> Calculated on stockholders' equity at the beginning of the year.
</TABLE>
- 9 -
<PAGE>
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Paper products markets tend to follow general economic conditions. The
sales and earnings of the building materials business are closely related to
new housing starts, remodeling activity and to the availability and terms of
financing for construction. The cost of wood fiber, the basic raw material for
both industry segments, is sensitive to various supply and demand factors,
including environmental issues affecting log supply.
Results of Operations 1993 vs. 1992
Net sales increased 10.5% in 1993 compared to 1992. Paper product sales
increased 7.6%. Volume increases were experienced in all paper product lines
with the exception of bleached market pulp. The acquisition of eleven
corrugated container facilities in June 1992 and the resulting full year's
sales in 1993 accounted for nearly all of the increase in paper product sales.
Excess industry production capacity and weak foreign markets more than offset
improvements in the domestic economy resulting in continued price declines in
all paper product lines with the exception of small increases for fine paper
and cut sheets.
Building materials sales increased 15.4% compared with 1992 as average sales
price realizations increased for all building materials product lines and, most
significantly, for lumber products whose average sales price realizations
increased approximately 34.0%. Sales volumes increased in composite board
panels but decreased in lumber and plywood products 7.0% and 3.5%,
respectively, because of reduced operating levels resulting from the lack of
logs. As the federal government owns nearly 60% of the commercial timberland
in Oregon, preservationist pressures that have stopped federal timber sales
have caused a significant reduction in available timber supply. State and
private timber supply is inadequate to fill the shortfall. This in turn has
resulted in many mill closures at a time when product demand is increasing,
creating supply-related pressures on lumber and plywood prices.
Currently the Company is able to provide about 60% of its Oregon log needs
from its own timberlands. Further curtailment of Oregon operations will be
necessary to improve Willamette's self-sufficiency if there is no meaningful
resolution to the federal timber supply crisis.
Gross profit margins increased to 16.4% in 1993 from 15.4% of sales in 1992.
Gross profit margins for paper have decreased to 11.6% from 14.8% in 1992
reflecting continued poor pricing for paper products. Building materials gross
profit margins increased to 23.9% from 16.3% in 1992 primarily due to increased
average sales price realizations in all building materials product lines. At
the same time, however, costs for open market logs continue to increase due to
supply factors.
Selling and administrative expenses declined to 6.7% of sales in 1993
compared to 7.0% in 1992. The decrease is primarily due to additional sales
volume.
Interest expense has declined 4.7% to $63.3 million in 1993 from $66.4
million in 1992. Gross interest expense increased $5.4 million in 1993 over
the comparable amount in 1992 as the Company's average outstanding debt
increased $129.5 million. However, capitalized interest increased to $15.9
million in 1993 compared to $7.4 million in 1992 which more than offset the
increase in gross interest expense. In addition, the impact of increased debt
- 10 -
<PAGE>
has been minimized by an overall reduction of effective interest rates. The
weighted average interest rate was 7.31% at December 31, 1993 compared with
8.56% at December 31, 1992.
Results of Operations 1992 vs. 1991
Net sales increased 18.4% in 1992 compared to 1991. Paper product sales
increased 9.5% from 1991 as unit volume shipped increased for all paper product
lines with the exception of grocery bags and specialty papers. Eleven
corrugated facilities acquired on June 30, 1992 accounted for 61.5% of the
increase in paper product sales. A slowly recovering national economy and
excess industry capacity resulted in low price levels for all paper product
lines throughout 1992.
Building materials sales increased 36.6% from 1991 with a number of factors
accounting for the significant increase. The acquisition of Bohemia Inc. in
September, 1991 contributed a full year's sales in 1992 versus only three
months' in 1991. In addition, lumber and plywood markets were relatively
strong throughout 1992 with significant price increases occurring in the last
half of the year. Overall average sales price realizations for lumber and
plywood increased 23.4% in 1992 over 1991.
Gross profit margins increased to 15.4% of sales in 1992 as compared with
14.4% in 1991. Gross profit margins for paper products have decreased to 14.8%
from 16.7% in 1991, reflecting poor pricing conditions for paper products,
especially bleached paper products. Poor market conditions resulted in a
nearly two-week closure of the uncoated free sheet specialty mill in
Johnsonburg, Pennsylvania ending January 4, 1993. Building materials gross
profit margins increased to 16.3% from 9.6% in 1991, primarily due to strong
markets for lumber and plywood in 1992. Costs for open market logs in Oregon
increased significantly in 1992 due to the reduced supply of federal timber
available.
Selling and administrative costs were 7.0% of net sales in 1992 compared
with 7.2% in 1991, primarily due to increased sales volume. Overall selling
and administrative costs have increased 15.0% largely as a result of new
facilities added in 1992.
Other income (expense) declined to an expense of $1.7 million in 1992 versus
$7.1 million in 1991, primarily because 1991 included a charge of $3.0 million
for the closure of an Oregon plywood plant.
Interest expense increased 5.0% to $66.4 million in 1992 from $63.3 million
in 1991. The increase was primarily due to the issuance of $150 million, 9.0%
thirty-year debentures in October 1991 and $100 million, 7.75% ten-year notes
in July 1992. Partially offsetting this increase, capitalized interest
increased to $7.4 million in 1992 as compared with $.7 million in 1991.
Liquidity and Capital Resources
Willamette generates funds internally via net earnings and non-cash charges
against earnings such as depreciation, cost of fee timber harvested and
deferred income taxes. Funds generated externally have generally been through
debt financing.
In 1993, cash flow from operating activities was $298.6 million and
represents an increase of 14.6% over comparable cash flows in 1992 primarily
due to additional net earnings, depreciation and deferred income taxes.
- 11 -
<PAGE>
A number of long-term debt financings occurred in 1993. In January 1993,
the Company issued $100 million of 7% five-year notes. The net proceeds were
used to prepay, without penalty, $75 million of 9 7/8% notes due in 1996. The
remaining net proceeds were utilized for capital expenditures. Beginning in
April 1993, the Company issued $150 million of medium-term notes with interest
rates ranging from 5.66% to 7.3% and maturities ranging from 5 to 20 years.
The proceeds were used to pay a $100 million 9.3% note that matured on June 30,
1993 and for capital expenditures. In October of 1993, the Company obtained a
$75 million term loan at market interest rates from a bank. The proceeds were
used to prepay, without penalty, a $75 million, 8.5% note due in 1996. As a
result of the above investing and financing activities, the long-term debt-to-
capital ratio is 42.8% at December 31, 1993 compared with 42.0% at December 31,
1992. Working capital was nearly unchanged at $157.6 million.
The Company is continually making capital expenditures at its manufacturing
facilities to improve fiber utilization, labor efficiency and to expand
operations. In 1993, the Company made such capital expenditures of $361.5
million.
During 1993, the following major capital projects were completed:
- Installation and construction of a boiler and cogeneration facility and a
new lime kiln and recausticizing plant at Johnsonburg, Pennsylvania.
- Expansion of the secondary fiber facilities at the Albany, Oregon paper
mill.
- Construction of a new preprinted linerboard facility at Richwood,
Kentucky.
Major capital projects underway at December 31, 1993 include the following:
- The construction of a second linerboard machine at the paper mill in
Campti, Louisiana.
- Construction of a new fiberline and paper machine in Johnsonburg,
Pennsylvania.
- Modernization of the plywood plant at Moncure, North Carolina.
- The addition of pulp drying capacity and the expansion of the fiberline at
the Marlboro County, South Carolina papermill.
The total cost of all capital projects in progress at December 31, 1993 is
estimated to be approximately $521 million of which $309 million has already
been spent. These projects will be funded with internally generated cash flows
and with external borrowings as needed. The Company believes it has the
resources available to meet its liquidity requirements through internally
generated cash flows, short-term borrowings and revolving credit agreements
which could be arranged with a number of banks.
Other Matters
The Company believes it is in substantial compliance with federal, state and
local laws regarding environmental quality. The Environmental Protection
- 12 -
<PAGE>
Agency (EPA) has issued proposed rules regarding air and water quality referred
to as the "cluster rules". These rules are currently undergoing public review
and are extremely restrictive with a potential financial impact to the paper
industry estimated at $10 billion in capital spending to comply with the
proposed rules. This level of regulation does not appear to be justified on
either an environmental impact or cost benefit basis and it is hoped compromise
can be reached lessening the severity of the rules. In addition to the cluster
rules, the EPA is scheduled to issue revised rules for all boilers in the fall
of 1994 which may impact the Company's operations. Even if the above proposed
rules go into effect, the Company estimates that over the next five years
required pollution control capital expenditures will be less than $125 million.
Although future pollution control expenditures cannot be predicted with any
certainty because of continuing changes in laws, we believe that compliance
with pollution control requirements will not have a material effect upon
capital expenditures, earnings or competitive position.
Much attention has been given to the controversy concerning
preservationists' efforts to stop the harvest of timber from Federal
timberlands in the Northwest. Concurrent with these efforts have come
increased regulations, limitations, and restrictions on the harvest of timber
from privately owned timberlands. Current rules and regulations do not
significantly impact the Company's ability to manage its Oregon timberland on a
sustained yield basis. If restrictions similar to regulations on Federal
timberlands were imposed on private timberland ownership, it could have a
significant impact on the sustainable harvest level of the Company's 328,000
acres of Oregon timberlands.
Effective January 1, 1993, the Company adopted the provisions of Statement
of Financial Accounting Standards (SFAS) #106 "Employers' Accounting for
Postretirement Benefits Other Than Pensions" and SFAS #109 "Accounting for
Income Taxes." The total cumulative impact of these two changes was a credit
to net earnings in the first quarter of 1993 of $26.4 million or $.48 per
share. In August 1993, the federal corporate tax rate increased to 35%
retroactive to January 1, 1993 impacting both the current year's provision for
income taxes and the deferred tax liability. Accounting standards required
that the cumulative impact of the increase in the rate ($5.9 million or $.11
per share) be charged to income in the third quarter of 1993 with a
corresponding increase in the deferred tax liability.
Over the years, inflation has resulted in replacement costs higher than
those originally needed to purchase existing plants and equipment. Advancing
technology and environmental concerns also contribute to higher costs.
Productivity gains, because of technological improvements, may partially offset
these increased costs. Our use of LIFO to value inventories allows us to
include inflationary costs in the cost of sales.
Item 8. Financial Statements and Supplementary Data
The financial statements and supplementary data filed as part of this report
follow the signature pages of this report.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosures
None.
- 13 -
PART III
Item 10. Directors and Executive Officers of the Registrant
Information regarding (i) directors of the Company is set forth on pages 3
and 4 of the Company's definitive proxy statement (the "Proxy Statement") for
its 1994 annual meeting of shareholders, under the heading "Election of
Directors" and (ii) the failure by an executive officer of the Company to file,
on a timely basis, a report required by Section 16(a) of the Securities
Exchange Act of 1934, is set forth in the last paragraph on page 2 of the Proxy
Statement, which information is incorporated herein by reference. Information
regarding the executive officers of the Company is set forth under the heading
"Executive Officers of the Registrant" in Part I of this report.
Item 11. Executive Compensation
Information regarding compensation of directors and executive officers of
the Company is set forth on pages 5-8, 11 and 12 of the Proxy Statement under
the headings "Executive Compensation," "Compensation Committee Interlocks and
Insider Participation," "Compensation of Directors" and "Employment
Agreements," which information is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management
Information regarding security ownership of management and certain other
beneficial owners is set forth on pages 1 and 2 of the Proxy Statement under
the heading "Holders of Common Stock," which information is incorporated herein
by reference.
Item 13. Certain Relationships and Related Transactions
Information regarding certain relationships and related transactions is set
forth on page 8 of the Proxy Statement under the heading "Compensation
Interlocks and Insider Participation," which information is incorporated herein
by reference.
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.
(a) 1. and 2. For a list of the financial statements and financial statement
schedules filed herewith, see the index to consolidated
financial statements and supplementary data following the
signature pages of this report.
(a) 3. For a list of the exhibits filed herewith, see the index to
exhibits following the financial statements and financial
statement schedules filed with this report. Each management
contract or compensatory plan or arrangement required to be
filed as an exhibit to this report is identified in the list.
(b) Reports on Form 8-K.
No reports on Form 8-K were filed for the quarter ended
December 31, 1993.
- 14 -
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
WILLAMETTE INDUSTRIES, INC.
(Registrant)
By/s/ J. A. PARSONS
Dated: February 10, 1994 (J. A. Parsons)
Executive Vice President
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below on February 10, 1994, by the following persons on
behalf of the registrant in the capacities indicated.
Signature Title
Principal Executive Officer
and Director
/s/ WILLIAM SWINDELLS Chairman and Chief Executive Officer and
(William Swindells) Director
Principal Financial Officer
/s/ J. A. PARSONS Executive Vice President and
(J. A. Parsons) Chief Financial Officer, Secretary and
Treasurer
Principal Accounting Officer
/s/ DUANE C. MCDOUGALL Vice President-Controller
(Duane C. McDougall)
/s/ C. M. BISHOP Director
(C. M. Bishop)
/s/ GERARD K. DRUMMOND Director
(Gerard K. Drummond)
/s/ E. B. HART Director
(E. B. Hart)
/s/ C. W. KNODELL Director
(C.W. Knodell)
- 15 -
<PAGE>
/s/ PAUL N. MCCRACKEN Director
(Paul N. McCracken)
/s/ STUART J. SHELK, JR. Director
(Stuart J. Shelk, Jr.)
/s/ ROBERT M. SMELICK Director
(Robert M. Smelick)
/s/ SAMUEL C. WHEELER Director
(Samuel C. Wheeler)
/s/ BENJAMIN R., WHITELEY Director
(Benjamin R. Whiteley)
- 16 -
Index to Consolidated Financial Statements and Supplementary Data
Page No.
Independent Auditors' Report 18
Consolidated Balance Sheets as of December 31, 1993 and 1992 19
Consolidated Statements of Earnings for the Years ended
December 31, 1993, 1992 and 1991 20
Consolidated Statements of Stockholders' Equity for the Years ended
December 31, 1993, 1992 and 1991 21
Consolidated Statements of Cash Flows for the Years ended
December 31, 1993, 1992 and 1991 22
Supplementary Business Segment Information 23
Selected Quarterly Financial Data 24
Notes to Consolidated Financial Statements 25
Financial Statement Schedules:
Schedule V - Property, Plant and Equipment 34
Schedule VI - Accumulated Depreciation and
Amortization of Property, Plant and Equipment 36
Schedule X - Supplementary Income Statement Information 37
- 17 -
Independent Auditors' Report
The Board of Directors
and Stockholders
Willamette Industries, Inc.:
We have audited the accompanying consolidated balance sheets of Willamette
Industries, Inc. and subsidiaries as of December 31, 1993 and 1992 and the
related consolidated statements of earnings, stockholders' equity, and cash
flows for each of the years in the three-year period ended December 31, 1993.
In connection with our audits of the consolidated financial statements, we also
have audited the financial statement schedules on pages 34, 35, 36 and 37.
These consolidated financial statements and financial statement schedules are
the responsibility of the Company's management. Our responsibility is to
express an opinion on these consolidated financial statements and financial
statement schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Willamette
Industries, Inc. and subsidiaries at December 31, 1993 and 1992, and the
results of their operations and their cash flows for each of the years in the
three-year period ended December 31, 1993, in conformity with generally
accepted accounting principles. Also, in our opinion, the related financial
statement schedules, when considered in relation to the basic consolidated
financial statements taken as a whole, present fairly, in all material
respects, the information set forth herein.
As discussed in the notes to the consolidated financial statements, the Company
adopted the provisions of the Financial Accounting Standards Board's Statement
of Financial Standards #106, "Employers' Accounting for Postretirement Benefits
Other Than Pensions," and Statement of Financial Accounting Standards #109,
"Accounting for Income Taxes," in 1993.
KPMG PEAT MARWICK
Portland, Oregon
February 10, 1994
- 18 -<PAGE>
CONSOLIDATED BALANCE SHEETS
December 31, 1993 and 1992
(dollar amounts, except per share amounts, in thousands)
<TABLE>
<CAPTION>
Assets 1993 1992
-------------- --------------
<S> <C> <C>
Current assets:
Cash, including time deposits $ 9,543 9,034
Notes and accounts receivable, less allowance
for doubtful accounts of $4,466 (1992 - $4,093) 207,161 182,796
Inventories (notes 1 and 2) 269,063 248,696
Deposits on timber cutting contracts 36,321 29,382
Prepaid expenses 11,124 11,045
-------------- --------------
Total current assets 533,212 480,953
-------------- --------------
Timber, timberlands and related facilities, net (note 1) 483,308 448,721
Property, plant and equipment, net (notes 1 and 8) 1,718,063 1,534,649
Other assets 69,970 63,093
-------------- --------------
2,804,553 2,527,416
============== ==============
Liabilities and Stockholders' Equity
Current liabilities:
Current installments on long-term debt $ 1,278 1,774
Notes payable 96,000 57,000
Accounts payable (includes book 139,572 135,524
overdrafts of $43,905 (1992 - $39,697)
Accrued payrolls and related expenses 56,498 55,248
Accrued interest 21,586 23,479
Other accrued expenses 47,912 41,590
Federal and state taxes on income (notes 1 and 3) 12,790 8,516
-------------- --------------
Total current liabilities 375,636 323,131
-------------- --------------
Deferred income taxes (notes 1 and 3) 198,295 183,015
Other liabilities 31,042 12,824
Long-term debt, net of current installments (note 4) 941,710 843,618
Stockholders' equity (note 6):
Preferred stock, cumulative, of $.50 par value.
Authorized 5,000,000 shares - -
Common stock of $.50 par value. Authorized
75,000,000 shares; issued 54,897,648
shares (1992 - 54,770,068 shares) 27,449 27,385
Capital surplus 288,646 284,487
Retained earnings 941,775 852,956
-------------- --------------
Total stockholders' equity 1,257,870 1,164,828
-------------- --------------
$ 2,804,553 2,527,416
============== ==============
See accompanying notes to consolidated financial statements.
- 19 -<PAGE>
CONSOLIDATED STATEMENTS OF EARNINGS
Years ended December 31, 1993, 1992 and 1991
(dollar amounts, except per share amounts, in thousands)
</TABLE>
<TABLE>
<CAPTION>
1993 1992 1991
---------- ---------- ----------
<S> <C> <C> <C>
Net sales $ 2,622,237 2,372,396 2,004,501
Cost of sales 2,191,448 2,007,703 1,715,197
---------- ---------- ----------
Gross profit 430,789 364,693 289,304
Selling and administrative expenses 174,413 167,094 145,329
---------- ---------- ----------
Operating earnings 256,376 197,599 143,975
Other income(expense), net (3,918) (1,725) (7,103)
---------- ---------- ----------
252,458 195,874 136,872
Interest expense, net 63,290 66,422 63,263
---------- ---------- ----------
Earnings before taxes and accounting changes 189,168 129,452 73,609
Provision for income taxes (notes 1 and 3) 78,500 47,900 27,800
---------- ---------- ----------
Earnings before accounting changes 110,668 81,552 45,809
Accounting changes (notes 3 and 5) 26,364 - -
---------- ---------- ----------
Net Earnings $ 137,032 81,552 45,809
======== ======== ========
Per Share Information
Earnings before accounting changes $ 2.02 1.52 0.90
Accounting changes 0.48 - -
---------- ---------- ----------
Net earnings $ 2.50 1.52 0.90
======== ======== ========
Weighted average number of shares outstanding 54,810 53,788 50,962
======== ======== ========
</TABLE>
Per share earnings are based upon the weighted average number of shares
outstanding and have been adjusted for all stock splits.
- 20 -
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Years ended December 31, 1993, 1992 and 1991
(dollar amounts, except per share amounts, in thousands)
<TABLE>
<CAPTION>
1993 1992 1991
---------- ---------- ----------
<S> <C> <C> <C>
Common Stock:
Balance at beginning of year $ 27,385 12,741 12,712
2-for-1 stock split - 13,683 -
Shares issued for options exercised 64 86 29
Shares issued in stock offering - 875 -
---------- ---------- ----------
Balance at end of year $ 27,449 27,385 12,741
======== ======== ========
Capital Surplus:
Balance at beginning of year $ 284,487 165,115 163,217
2-for-1 stock split - (13,683) -
Shares issued for options exercised 4,159 6,875 1,898
Shares issued in stock offering - 126,180 -
---------- ---------- ----------
Balance at end of year $ 288,646 284,487 165,115
======== ======== ========
Retained Earnings:
Balance at beginning of year $ 852,956 816,604 811,510
Net earnings 137,032 81,552 45,809
Less cash dividends on common stock
($.88, $.84, $.80 per share in
1993, 1992 and 1991, respectively) (48,213) (45,200) (40,715)
---------- ---------- ----------
Balance at end of year $ 941,775 852,956 816,604
======== ======== ========
</TABLE>
See accompanying notes to consolidated financial statements.
- 21 -
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years ended December 31, 1993, 1992, and 1991
(dollar amounts in thousands)
<TABLE>
<CAPTION>
1993 1992 1991
--------- --------- ---------
<S> <C> <C> <C>
Cash flows from operating activities:
Net earnings $ 137,032 81,552 45,809
Adjustments to reconcile net earnings
to net cash provided by operating activities:
Net change in accounting standards (26,364) - -
Depreciation 166,088 146,032 128,027
Cost of fee timber harvested 21,611 22,650 17,722
Other amortization 6,503 5,102 5,509
Increase in deferred income taxes 32,810 11,697 7,120
Changes in working capital items (net of acquisitions):
Accounts receivable (24,365) (7,413) 14,425
Inventories (20,367) (8,929) (15,557)
Prepaid expenses and timber deposits (7,018) (4,959) 6,508
Accounts payable and accrued expenses 8,444 11,019 (13,673)
Federal and state taxes on income 4,274 3,804 (8,308)
--------- --------- ---------
Net cash provided by operating activities 298,648 260,555 187,582
--------- --------- ---------
Cash flows from investing activities:
Proceeds from sale of Bohemia's California assets - - 82,768
Proceeds from sale of equipment 6,988 7,002 1,837
Expenditures for property, plant and equipment (361,488) (337,032) (224,129)
Expenditures for timber and timberlands, net (18,295) (23,649) (14,074)
Expenditures for roads and reforestation (7,081) (6,492) (6,170)
Acquisitions, net of cash acquired - (89,292) (123,207)
Other (10,719) 3,166 (1,415)
--------- --------- ---------
Net cash used in investing activities (390,595) (446,297) (284,390)
--------- --------- ---------
Cash flows from financing activities:
Debt borrowing 388,929 190,259 230,900
Proceeds from sale of capital stock 4,073 134,016 1,927
Cash dividends paid (48,213) (45,200) (40,715)
Payment on debt (252,333) (86,509) (114,170)
--------- --------- ---------
Net cash provided by financing activities 92,456 192,566 77,942
--------- --------- ---------
Net increase (decrease) in cash 509 6,824 (18,866)
Cash at beginning of year 9,034 2,210 21,076
--------- --------- ---------
Cash at end of year $ 9,543 9,034 2,210
======= ======= =======
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest (net of amount capitalized) $ 65,183 62,998 58,592
======= ======= =======
Income taxes $ 41,416 32,399 28,568
======= ======= =======
</TABLE>
See accompanying notes to consolidated financial statements.
- 22 -
<PAGE>
SUPPLEMENTARY BUSINESS SEGMENT INFORMATION
(dollar amounts in thousands)
<TABLE>
<CAPTION>
1993 % 1992 % 1991 % 1990 % 1989 %
-------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Sales to outside customers:
Paper Group:
Fabricated paper products........... $ 1,232,311 47 1,098,777 46 958,615 48 916,618 48 923,544 49
Pulp and paper...................... 360,014 14 381,529 16 392,910 19 377,729 20 314,642 16
------------- ------------- ------------- ------------- -------------
Total Paper Group..................... 1,592,325 61 1,480,306 62 1,351,525 67 1,294,347 68 1,238,186 65
------------- ------------- ------------- ------------- -------------
Building Materials Group:
Lumber ............................. 184,287 7 147,886 6 112,423 6 81,938 4 91,360 5
Plywood ............................ 425,387 16 397,332 17 296,550 15 288,428 15 304,255 16
Particleboard and MDF .............. 234,123 9 186,973 8 148,749 7 156,665 8 162,725 9
Other wood products................. 186,115 7 159,899 7 95,254 5 83,475 5 95,298 5
------------- ------------- ------------- ------------- -------------
Total Building Materials Group........ 1,029,912 39 892,090 38 652,976 33 610,506 32 653,638 35
------------- ------------- ------------- ------------- -------------
Total net sales <F1>.....................$ 2,622,237 100 2,372,396 100 2,004,501 100 1,904,853 100 1,891,824 100
============= ============= ============= ============= =============
Intersegment sales at market value
Building Materials Group.............. $ 39,113 38,128 34,253 31,514 34,873
============= ============= ============= ============= ==============
Contribution to earnings <F2>:
Paper Group........................... $ 53,655 21 95,970 49 119,719 83 196,405 82 252,595 75
Building Materials Group.............. 202,721 79 101,629 51 24,256 17 42,929 18 82,258 25
------------- ------------- ------------- ------------- -------------
Contribution to earnings ........... 256,376 100 197,599 100 143,975 100 239,334 100 334,853 100
=== === === === ===
Other income(expense)................... (3,918) (1,725) (7,103) (764) 2,039
Interest expense........................ 63,290 66,422 63,263 29,899 28,836
--------- --------- --------- --------- ---------
Earnings before taxes and
accounting changes.................... $ 189,168 129,452 73,609 208,671 308,056
========= ========= ========= ========= =========
Identifiable assets:
Paper Group........................... $ 1,884,017 1,663,990 1,361,437 1,270,874 974,367
Building Materials Group.............. 362,184 346,882 354,322 263,342 233,851
Timber, timberlands and related
facilities........................... 483,308 448,721 443,075 357,373 352,341
Corporate............................. 75,044 67,823 60,233 73,597 71,872
--------- --------- --------- --------- ---------
$ 2,804,553 2,527,416 2,219,067 1,965,186 1,632,431
========= ========= ========= ========= =========
<F1> The Company has no foreign operations and is not dependent on any one significant customer or group
of customers. Approximately 96% of the Company's total output is sold domestically.
<F2> "Contribution to earnings" is defined to be that amount of earnings generated before (a) unallocable
income, such as interest; (b) interest expense; and (c) income taxes.
</TABLE>
See accompanying notes to consolidated financial statements.
- 23 -
<PAGE>
SELECTED QUARTERLY FINANCIAL DATA (Unaudited)
(Unaudited) (dollar amounts, except per share amounts, in thousands)
<TABLE>
<CAPTION>
Earnings Before
Accounting Changes Net Earnings
Net Gross --------------------- ------------------
1993 Sales Profit Amount Per Share Amount Per Share
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1st Quarter........ $ 633,022 109,237 30,896 0.56 57,260 1.04
2nd Quarter........ 654,064 103,622 26,571 0.49 26,571 0.49
3rd Quarter........ 677,101 106,219 21,105 0.38 21,105 0.38
4th Quarter........ 658,050 111,711 32,096 0.59 32,096 0.59
- ------------------------------------------------------------------------------------------
Total.............. $ 2,622,237 430,789 110,668 2.02 137,032 2.50
==========================================================================================
</TABLE>
<TABLE>
<CAPTION>
Earnings Before
Accounting Changes Net Earnings
Net Gross --------------------- ------------------
1992 Sales Profit Amount Per Share Amount Per Share
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1st Quarter........ $ 561,025 95,153 23,722 0.46 23,722 0.46
2nd Quarter........ 592,129 94,978 24,533 0.45 24,533 0.45
3rd Quarter........ 622,548 93,686 20,048 0.37 20,048 0.37
4th Quarter........ 596,694 80,876 13,249 0.24 13,249 0.24
- ------------------------------------------------------------------------------------------
Total.............. $ 2,372,396 364,693 81,552 1.52 81,552 1.52
==========================================================================================
</TABLE>
- 24 -
<PAGE>
Notes to Consolidated Financial Statements
December 31, 1993, 1992 and 1991 (dollar amounts, except per share amounts, in
thousands)
1. Summary of Significant Accounting Policies
(a) Principles of Consolidation
The consolidated financial statements include the accounts of all
majority owned subsidiaries. All material intercompany balances and
transactions have been eliminated upon consolidation.
(b) Inventories
Inventories are valued at the lower of cost or market. Cost is
determined on the last-in, first-out (LIFO) method for all major classes of
inventory. All other inventories are valued at average cost.
(c) Property, Plant and Equipment
Property, plant and equipment is carried at cost and includes
expenditures for new facilities and those which substantially increase the
useful lives of existing plants and equipment. Maintenance, repairs and minor
renewals are expensed as incurred. When properties are retired or otherwise
disposed of, the related cost and accumulated depreciation are removed from the
respective accounts and any profit or loss on disposition is credited or
charged to income. Depreciation is computed using the straight-line method
over the useful lives of the respective assets. Leasehold improvements are
amortized over the terms of the respective leases.
(d) Timber, Timberlands and Related Facilities
These accounts are stated at their cost less the cost of fee timber
harvested and the amortization of logging roads. Amortization of logging roads
is charged to expense as timber is harvested. Both the cost of fee timber
harvested and amortization rates are determined with reference to costs and the
related existing volume of timber estimated to be recoverable.
The Company obtains a portion of its timber requirements from various
public and private sources under timber harvesting contracts. The Company does
not incur a direct liability for, or ownership of, this timber until it has
been harvested; therefore, the timber is not recorded until cut.
(e) Income Taxes
Deferred income taxes are provided to reflect the tax effect of
temporary differences in reporting income and deductions for tax purposes.
Effective January 1, 1993, the Company adopted the provisions of SFAS
#109 "Accounting for Income Taxes" which requires deferred taxes payable in the
future to be reflected at current statutory tax rates. This change resulted in
a credit to net earnings and a reduction in the deferred tax liability by a
corresponding amount of $40,000 or $.73 per share.
(f) Capitalized Interest
Interest is capitalized on funds borrowed during the construction period
on certain assets. Capitalized interest in 1993, 1992 and 1991 was $15,904,
$7,354 and $723, respectively, and is netted against interest expense in the
consolidated statement of earnings. Such capitalized interest will be
amortized over the depreciable life of the related assets.
(g) Statement Reclassifications
Certain reclassifications have been made to prior years' data to conform
to the 1993 presentation.
- 25 -
<PAGE>
2. Inventories
The major components of inventories for the two years ended December 31,
1993 are as follows:
<TABLE>
<CAPTION>
December 31,
1993 1992
<S> <C> <C>
Finished product....................... $ 78,197 66,898
Work in progress....................... 6,205 5,583
Raw material........................... 128,312 124,788
Supplies............................... 56,349 51,427
$269,063 248,696
Valued at:
LIFO cost............................ $185,424 173,051
Average cost......................... 83,639 75,645
</TABLE>
If current cost rather than LIFO cost had been used by the Company, inven-
tories would have been approximately $59,910 and $56,551 higher in 1993 and
1992, respectively.
3. Income Taxes
The provision for income taxes includes the following:
<TABLE>
<CAPTION>
1993 1992 1991
<S> <C> <C> <C>
Payable from taxable earnings.......... $37,690 17,203 (3,320)
Payable due to AMT..................... 8,000 19,000 24,000
Currently payable...................... 45,690 36,203 20,680
Deferred taxes due to temporary
difference for:
Accelerated depreciation......... 24,824 10,143 11,550
Increase in Federal corporate
tax rate by 1%................ 5,864 - -
Other............................ 2,122 1,554 (4,430)
Total deferred................ 32,810 11,697 7,120
Total provision............... $78,500 47,900 27,800
Federal income taxes................... $67,000 40,400 23,600
State income taxes..................... 11,500 7,500 4,200
$78,500 47,900 27,800
</TABLE>
The Company has no foreign pretax income. The Company's deferred income tax
liability is mainly due to depreciation. Differences between the effective tax
rate and the Federal statutory rate are shown in the following table as a
percentage of pretax income:
- 26 -<PAGE>
<TABLE>
<CAPTION>
1993 1992 1991
<S> <C> <C> <C>
Federal statutory rate....................... 35.0% 34.0% 34.0%
State income taxes, net of
Federal tax effect......................... 4.0 3.8 3.8
Adjustment to deferred taxes due to increase
in Federal corporate tax rate by 1%........ 3.1 - -
Other........................................ (.6) (.8) -
41.5% 37.0% 37.8%
</TABLE>
The Company's consolidated Federal income tax returns for 1974 through 1989
have been examined by the Internal Revenue Service and while final settlement
has not been made, management believes that the Company has provided for all
deficiencies that ultimately might be assessed.
The Tax Reform Act of 1986 expanded the corporate alternative minimum tax
(AMT). Under this Act, the Company's tax liability is the greater of its
regular tax or the AMT. To the extent the Company's AMT liability exceeds its
regular tax liability, the AMT liability may be applied against future regular
tax liabilities. The Company expects to utilize future AMT credits as taxable
income increases and current temporary differences reverse. At December 31,
1993, the Company had AMT credits of $51,000 which have been offset against
deferred income taxes related to depreciation. No valuation allowance is
required for these credits.
In August 1993, the Federal corporate tax rate increased to 35% retroactive
to January 1, 1993 impacting both the current year's provision for income taxes
and the deferred tax liability. Accounting standards required that the
cumulative impact of the increase in rate ($5,864 or $.11 per share) be charged
to income in the third quarter of 1993 with a corresponding increase in the
deferred tax liability.
4. Long-term Debt
Long-term debt consists of the following:
<TABLE>
<CAPTION>
December 31,
1993 1992
<S> <C> <C>
Notes payable to public:
9.30%, due in 1993....................... $ - 100,000
9.55%, due in 1995....................... 100,000 100,000
9.875%, due in 1996...................... - 75,000
8.50%, due in 1996....................... - 75,000
7.00%, due in 1998....................... 100,000 -
9.625%, due in 2000...................... 150,000 150,000
7.75%, due in 2002....................... 100,000 100,000
9.125%, due in 2003...................... 50,000 50,000
9.00%, due in 2021....................... 150,000 150,000
Medium-term notes, with interest
rates ranging from 5.66% to 7.30%
due in varying amounts through 2013...... 150,000 -
(Table continued on next page)
- 27 -<PAGE>
Bank-term loan, with interest rates
averaging 3.59%, due in 1996............. 75,000 -
Revenue bonds, with interest
rates averaging 4.86% and 5.06%,
due in varying amounts
through 2023............................. 62,704 39,761
Other long-term debt, with
interest rates averaging
6.28% and 6.15% due in
varying amounts through 2006.............. 5,284 5,631
942,988 845,392
Less: Current installments.................. 1,278 1,774
$941,710 843,618
</TABLE>
Principal payment requirements on the above debt for the four years subse-
quent to 1994 are: 1995, $100,956; 1996, $78,543; 1997, $713; 1998, $152,733.
The Company utilized short-term borrowings with a number of banks at various
times during 1993 and 1992 with $96,000 being outstanding at December 31, 1993.
Such borrowings were backed by a line of credit which carried fees at market
rates. Other uncommitted lines of credit are available. At various times
throughout the year, a portion of the short-term borrowings were classified as
long-term as they were supported by long-term borrowing arrangements, although
none were classified as such at December 31, 1993. Interest is based upon
prevailing short-term rates in effect at the time of the transaction.
Information on short-term debt during 1993 and 1992 is as follows:
<TABLE>
<CAPTION>
1993 1992
<S> <C> <C>
Average daily short-term debt outstanding... $ 68,947 38,844
Maximum short-term debt outstanding at
month-end................................ 109,000 87,500
Weighted average interest rate.............. 3.29% 4.18%
</TABLE>
The fair value of the Corporation's long-term debt is estimated to be
approximately $1,040,000 based on the quoted market prices for the same or
similar issues or on the current rates offered to the Company for debt of the
same remaining maturities.
5. Pension and Retirement Plans
The Company contributes to multiemployer retirement plans at fixed payments
per hour for certain hourly employees.
DEFINED BENEFIT PLANS
Substantially all other employees of the Company are covered by
noncontributory defined benefit plans. Under the salaried plan, retirement
benefits are based on both years of service and the highest five consecutive
years of compensation prior to retirement. Plans covering hourly employees
provide benefits of stated amounts for each year of service. Total pension
expense in 1993, 1992, and 1991 for all such plans was $6,429, $6,227 and
$6,158, respectively.
The Company makes annual contributions to the plans that are between the
minimum amounts required by the Employee Retirement Income Security Act and the
maximum amounts deductible under current tax regulations. Such contributions
are intended to provide not only for benefits attributed to service to date,
but also for those expected to be earned in the future.
- 28 -
<PAGE>
The net periodic pension cost for 1993, 1992 and 1991 included the following
components:
<TABLE>
<CAPTION>
1993 1992 1991
<S> <C> <C> <C>
Service cost-benefits earned
during the period ................... $ 9,158 8,201 7,418
Interest cost on projected
benefit contribution ................ 16,026 14,689 12,919
Actual return on assets ............... (31,748) (23,611) (39,756)
Net amortization and deferral ......... 9,066 3,139 21,695
Net periodic pension cost ............. $ 2,502 2,418 2,276
</TABLE>
The following table sets forth the plans' funded status and amount
recognized in the Company's consolidated financial statements at December 31,
1993 and 1992:
<TABLE>
<CAPTION>
December 31
1993 1992
Assets Exceed Accumulated Assets Exceed Accumulated
Accumulated Benefits Accumulated Benefits
Benefits Exceed Assets Benefits Exceed Assets
<S> <C> <C> <C> <C>
Actuarial present
value of benefit
obligations:
Vested benefit
obligation $(177,147) ( 26,983) (155,069) (11,740)
Accumulated
benefit
obligation $(179,376) ( 27,787) (157,292) (11,746)
Projected
benefit
obligation $(217,459) (27,787) (190,996) (11,746)
Plan assets
at fair value 262,097 20,737 249,239 7,765
Plan assets
greater (less)
than projected
benefit
obligation 44,638 (7,050) 58,243 (3,981)
Unrecognized
net (gain) (36,432) 1,077 (48,458) (184)
Prior service
cost not yet
recognized in
net periodic
pension cost 6,088 1,465 6,974 -
Unrecognized
obligation,
net of
amortization (7,718) (306) (9,951) -
Prepaid
pension cost
(pension
liability)
recognized $ 6,576 (4,814) 6,808 (4,165)
</TABLE>
- 29 -
<PAGE>
The weighted average discount rate and rate of increase in future
compensation levels used in determining the actuarial present value of the
projected benefit obligation were 7% and 5% in 1993 and 8% and 6% in 1992,
respectively. The expected long-term rate of return on assets was 9%.
Substantially all plan assets are invested in stocks, bonds and cash
equivalents.
CONTRIBUTORY PLANS
The Company covers all salaried employees and some hourly employees under
stock purchase plans. The salaried stock purchase plan allows employees to
contribute up to 6% of their salary (which the Company matches). Total stock
purchase plan expense was $8,417, $7,268 and $6,578 in 1993, 1992 and 1991,
respectively.
POSTRETIREMENT BENEFIT PLANS
Effective January 1, 1993, the Company adopted the provisions of SFAS #106
"Employers Accounting for Postretirement Benefits Other Than Pensions" which
resulted in a change in accounting for such benefits from the "pay-as-you-go"
basis to the accrual basis.
The Company has a contributory postretirement health plan primarily covering
its salaried employees. Employees become eligible for these benefits if they
meet minimum age and service requirements. The accumulated postretirement
benefit obligation (APBO) as of January 1, 1993 was $21,995 and was recorded as
a charge, net of tax, against income on a cumulative basis in the amount of
$13,600 or $.25 per share. The APBO as of December 31, 1993 was:
<TABLE>
<CAPTION>
<S> <C>
Retirees....................................... $11,870
Other fully eligible participants.............. 4,627
Other active participants...................... 9,913
26,410
Unrecognized loss.............................. (2,925)
APBO recognized in balance sheet............... $23,485
</TABLE>
The components of net periodic postretirement expenses are as follows:
<TABLE>
<CAPTION>
1993
<S> <C>
Service cost benefits earned in period.......... $ 675
Interest cost on accumulated benefit obligation. 1,725
Net expense.................................. $ 2,400
</TABLE>
A weighted average discount rate of 7% was used in determining the APBO at
December 31, 1993 and 8% as the interest cost component of the 1993 net
periodic expense.
- 30 -
<PAGE>
For the year 1993, an 11% increase in the medical cost trend rate was
assumed. This rate decreases to an annual rate of 5% after 12 years. A 1%
increase in the medical trend rate would increase the APBO by $2,900 and
increase the net periodic postretirement expense by $314.
6. Stockholders' Equity
The Company has a Stock Option and Stock Appreciation Rights Plan (the
Plan). The Plan provides that options be granted at exercise prices equal to
market value on the date the option is granted. Options granted generally
become exercisable after one year in 33-1/3% increments per year and expire ten
years from the date of grant. The Company has reserved 3,000,000 shares for
distribution under the Plan. A summary of stock option activity related to the
Plan is as follows:
<TABLE>
<CAPTION>
Option Price
Shares Per Share
<S> <C> <C>
Outstanding December 31, 1990 1,008,300 16.75-28.875
Granted 302,100 23.625
Exercised 84,312 16.75-26.25
Canceled or surrendered 54,068 23.25-28.875
Outstanding December 31, 1991 1,172,020 16.75-28.875
Granted 182,400 38.875
Exercised 323,990 16.75-28.875
Canceled or surrendered 23,858 16.75-28.875
Outstanding December 31, 1992 1,006,572 16.75-38.875
Granted 259,150 39.25
Exercised 137,459 16.75-38.875
Canceled or surrendered 1,460 38.875-39.25
Outstanding December 31, 1993 1,126,803 $16.75-39.25
Shares exercisable 660,520 $16.75-39.25
</TABLE>
In addition, stock appreciation rights (SARs) which have been awarded and
are outstanding to officers of the Company amount to 126,470 shares: of these
8,190 with a basis of $16.75; 10,940 with a basis of $28.875; 23,260 with a
basis of $24.25; 38,160 with a basis of $23.25 and 45,920 with a basis of
$26.25 were available for exercise at December 31, 1993. SARs permit the
optionee to surrender an exercisable option for a cash amount equal to the
difference between the market price and option price of the common stock when
the right is exercised.
Under the Plan, a committee of the Board of Directors of the Company is
authorized to issue up to 500,000 restricted shares of common stock to eligible
employees. These shares are subject to certain transfer restrictions including
the passage of time, and vesting may be dependent upon continued employment,
the attainment of performance goals, or both. The Company has awarded 31,146
restricted shares of common stock to certain officers, without cost. These
- 31 -
<PAGE>
shares will vest in one-third annual increments beginning after three years of
continuous employment. At December 31, 1993, 4,372 restricted shares have
vested. Unearned compensation, representing the fair market value of the
shares at the date of issuance, is charged to income over the vesting period.
The Company has a shareholder rights plan providing for the distribution of
rights to shareholders ten days after a person or group (an "acquiring person")
becomes the owner of 20% or more of the Company's common stock or makes a
tender offer or exchange offer which would result in the ownership of 30% or
more of the common stock. Once the rights are distributed, each right becomes
exercisable to purchase, for $175, 1/100th of a share of new series of Company
preferred stock, which 1/100th share is intended to equal one common share in
market value. Ten days after an acquiring person becomes the owner of 20% or
more of the Company's common stock, each right (other than rights held by the
acquiring person) becomes exercisable to purchase for $175, common shares with
a market value of $350. The rights will expire in 2000 and may be redeemed at
$.01 per right any time prior to the tenth day after an acquiring person
becomes the owner of 20% or more of the common stock.
The Financial Accounting Standards Board has issued an exposure draft on
accounting for stock-based compensation. If implemented, the proposed standard
will require compensation expense to be recognized in the financial statements
for all stock based compensation plans. The Company anticipates that the
impact of the proposed accounting standard will not be material to its
financial statements if implemented as drafted.
7. Business Segments
The Company operates in two principal business segments: Paper Products and
Building Materials. Timber, timberlands and related facilities have not been
allocated to the two segments because they are managed to supply raw materials
to both segments. Information with respect to the sales, operating income and
identifiable assets of these segments is included in the five-year comparison
on page 23. Information with respect to depreciation, cost of fee timber
harvested and amortization and capital expenditures for the years ended
December 31, 1993, 1992 and 1991 is shown below:
<TABLE>
<CAPTION>
Depreciation,
Cost of Fee Timber Harvested
and Amortization
1993 1992 1991
<S> <C> <C> <C>
Paper Products............. $129,069 111,661 100,306
Building Materials......... 43,522 39,473 33,230
Timber, timberlands and
related facilities...... 21,611 22,650 17,722
$194,202 173,784 151,258
</TABLE>
- 32 -<PAGE>
<TABLE>
<CAPTION>
Capital Expenditures
1993 1992 1991
<S> <C> <C> <C>
Paper Products............. $323,952 300,505 165,850
Building Materials......... 37,536 36,527 58,279
Timber, timberlands and
related facilities...... 25,376 30,141 20,244
$386,864 367,173 244,373
</TABLE>
8. Property, Plant and Equipment
Property, plant and equipment accounts are summarized as follows:
<TABLE>
<CAPTION>
Principal
range of December 31
useful lives 1993 1992
<S> <C> <C> <C>
Land........................ - $ 26,593 24,854
Building materials
manufacturing facilities. 10 - 20 494,833 483,926
Paper products
manufacturing and
converting facilities.... 10 - 30 1,977,473 1,744,566
Furniture and fixtures...... 3 - 10 47,482 37,377
Leasehold improvements...... life of lease 6,036 5,468
Construction in progress.... 287,506 216,593
2,839,923 2,512,784
Accumulated depreciation.... 1,121,860 978,135
$1,718,063 1,534,649
</TABLE>
9. Acquisition of Corrugated Facilities
On June 30, 1992, the Company acquired eleven corrugated facilities from
Boise Cascade Corporation for cash, including inventories and certain other
assets and liabilities. The acquisition was accounted for as a purchase.
Supplemental information concerning the acquisition follows:
<TABLE>
<CAPTION>
<S> <C>
Cash purchase price.................... $ 89,292
Purchase was allocated to:
Non-cash working capital............ $ 10,578
Plant and equipment................. 78,714
$ 89,292
</TABLE>
- 33 -<PAGE>
<TABLE>
<CAPTION>
Willamette Industries, Inc.
---------------------------
Property, Plant and Equipment Schedule V
- -------------------------------------------------
(Dollars in Thousands) add (deduct)
Balance at -------------------------------------- Balance
beginning Additions Amortization at end
Year ended December 31, 1993 of period at cost Retirements & Depletion Transfers Other of period
- ------------------------------------ ----------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Timberlands $ 70,642 309 (4) - - - 70,947
Timber 365,856 22,698 (1,710) (21,611) - 37,222 402,455
Logging roads and mineral rights 12,223 2,369 - (4,686) - - 9,906
----------- ----------- ----------- ----------- ----------- ----------- -----------
$ 448,721 25,376 (1,714) (26,297) - 37,222 <FA> 483,308
=========== =========== =========== =========== =========== =========== ===========
Property, Plant and Equipment:
Land $ 24,854 1,493 (201) - 447 - 26,593
Building materials facilities 483,926 28,934 (12,350) - (566) (5,111) 494,833
Paper products facilities 1,744,566 247,879 (14,371) (42) (559) - 1,977,473
Furniture and fixtures 37,377 11,523 (2,096) - 678 - 47,482
Leasehold improvements 5,468 746 (178) - - - 6,036
Construction-in-progress 216,593 70,913 - - - - 287,506
----------- ----------- ----------- ----------- ----------- ----------- -----------
$ 2,512,784 361,488 (29,196) (42) - (5,111)<FA> 2,839,923
=========== =========== =========== =========== =========== =========== ===========
Year ended December 31, 1992
- ------------------------------------
Timberlands $ 67,024 4,447 (829) - - - 70,642
Timber 363,059 22,791 (5,057) (22,650) - 7,713 365,856
Logging roads and mineral rights 12,992 2,903 - (3,672) - - 12,223
----------- ----------- ----------- ----------- ----------- ----------- -----------
$ 443,075 30,141 (5,886) (26,322) - 7,713 <FB> 448,721
=========== =========== =========== =========== =========== =========== ===========
Property, Plant and Equipment:
Land $ 21,766 302 (249) - (539) 3,574 24,854
Building materials facilities 464,440 34,726 (15,350) - 110 - 483,926
Paper products facilities 1,505,737 170,427 (5,614) (109) (88) 74,213 1,744,566
Furniture and fixtures 29,611 7,446 (1,124) - 517 927 37,377
Leasehold improvements 5,393 75 - - - - 5,468
Construction-in-progress 92,537 124,056 - - - - 216,593
----------- ----------- ----------- ----------- ----------- ----------- -----------
$ 2,119,484 337,032 (22,337) (109) - 78,714 <FC> 2,512,784
=========== =========== =========== =========== =========== =========== ===========
(Schedule continued on next page)
- 34 -<PAGE>
Year ended December 31, 1991
- ------------------------------------
Timberlands $ 49,677 5,798 (11) - - 11,560 67,024
Timber 296,797 11,902 (1,224) (17,722) - 73,306 363,059
Logging roads and mineral rights 10,899 2,544 - (3,790) - 3,339 12,992
----------- ----------- ----------- ----------- ----------- ----------- -----------
$ 357,373 20,244 (1,235) (21,512) - 88,205 <FD> 443,075
=========== =========== =========== =========== =========== =========== ===========
Property, Plant and Equipment:
Land $ 17,762 926 (11) - - 3,089 21,766
Building materials facilities 370,804 83,233 (10,776) - - 21,179 464,440
Paper products facilities 1,398,947 114,614 (6,169) (202) (1,453) - 1,505,737
Furniture and fixtures 23,992 5,406 (1,240) - 1,453 - 29,611
Leasehold improvements 4,994 750 (351) - - - 5,393
Construction-in-progress 72,089 19,200 - - - 1,248 92,537
----------- ----------- ----------- ----------- ----------- ----------- -----------
$ 1,888,588 224,129 (18,547) (202) - 25,516 <FD> 2,119,484
=========== =========== =========== =========== =========== =========== ===========
<FN>
<FA> Reclassification required to conform with the implementation of SFAS 109.
<FB> Includes purchase price allocation adjustment from acquisition of Bohemia,
Inc.
<FC> Includes assets from acquisition of 11 Boise Cascade corrugated facilities
in June of 1992.
<FD> Includes assets from acquisition of Bohemia Inc. in September of 1991, net
of sale of Bohemia California assets.
Certain reclassifications have been made to prior years' data to conform to the
1993 presentation.
Depreciation is computed using the straight-line method over the following
useful lives:
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Building materials manufacturing facilities- 10-20 years
Paper products manufacturing facilities- 10-30 years
Furniture and fixtures- 3-10 years
</TABLE>
Leasehold improvements are amortized over the life of the lease.
Both cost of fee timber harvested and amortization rates for logging roads are
determined with reference
to costs and the related existing volume of timber estimated to be recoverable.
- 35 -
<PAGE>
Willamette Industries, Inc.
---------------------------
<TABLE>
<CAPTION>
Accumulated Depreciation and Amortization
of Property, Plant and Equipment Schedule VI
- -----------------------------------------
(Dollars in Thousands)
Additions Other
Balance at charged to changes Balance
beginning costs and add at end
Year Ended December 31, 1993 of period expense Retirements (deduct) of period
- ------------------------------------------ ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Building materials facilities $ 272,970 34,660 (9,460) - 298,170
Paper products facilities 681,505 125,094 (11,417) - 795,182
Furniture and fixtures 20,182 5,936 (1,321) - 24,797
Leasehold improvements 3,478 398 (165) - 3,711
----------- ----------- ----------- ----------- -----------
$ 978,135 166,088 (22,363) - 1,121,860
=========== =========== =========== =========== ===========
Year Ended December 31, 1992
- ------------------------------------------
Building materials facilities $ 249,977 32,848 (9,855) - 272,970
Paper products facilities 577,212 108,195 (3,902) - 681,505
Furniture and fixtures 15,958 4,588 (364) - 20,182
Leasehold improvements 3,077 401 - - 3,478
----------- ----------- ----------- ----------- -----------
$ 846,224 146,032 (14,121) - 978,135
=========== =========== =========== =========== ===========
Year Ended December 31, 1992
- ------------------------------------------
Building materials facilities $ 232,925 26,514 (9,462) - 249,977
Paper products facilities 485,467 97,549 (5,804) - 577,212
Furniture and fixtures 13,475 3,542 (1,059) - 15,958
Leasehold improvements 2,863 422 (208) - 3,077
----------- ----------- ----------- ----------- -----------
$ 734,730 128,027 (16,533) - 846,224
=========== =========== =========== =========== ===========
</TABLE>
Certain reclassifications have been made to prior years' data to conform to the
1993 presentation.
- 36 -
<PAGE>
Willamette Industries, Inc.
---------------------------
Supplementary Income Statement Information Schedule X
- ------------------------------------------
(Dollars in Thousands)
<TABLE>
<CAPTION>
Years ended December 31,
-------------------------------------
1993 1992 1991
----------- --------- ---------
<S> <C> <C> <C>
Maintenance and repairs $ 213,647 204,371 174,518
=========== ========= =========
Taxes, other than payroll and
income taxes:
Property taxes $ 21,199 20,953 18,999
Other 8,867 7,840 5,758
----------- --------- ---------
$ 30,066 28,793 24,757
=========== ========= =========
</TABLE>
- 37 -
<PAGE>
INDEX TO EXHIBITS
EXHIBIT
2. Not applicable.
3A. Third Restated Articles of Incorporation of the registrant. [16]
3B. Bylaws of the registrant as amended through November 11, 1993.
[15]
4A. Indenture dated as of March 15, 1983, between registrant and The
Chase Manhattan Bank. Incorporated by reference from Exhibit 4A
of the registration statement on Form S-3 effective December 13,
1985 (File No. 33-1876). [89]
4A1. Terms of the series of 9.55% Notes due 1995 and form of Note for
such series. Incorporated by reference from Exhibit 4A4 of the
registrant's annual report on Form 10-K for the year ended
December 31, 1990 ("1990 Form 10-K"). [5]
4A2. Terms of the series of 9.625% Notes due 2000 and form of Note for
such series. Incorporated by reference from Exhibit 4A5 of the
1990 Form 10-K. [5]
4A3. Terms of the series of 9.125% Notes due 2003 and form of Note for
such series. Incorporated by reference from Exhibit 4A6 of the
registrant's annual report on Form 10-K for the year ended
December 31, 1991 ("1991 Form 10-K"). [5]
4A4. Terms of the series of 9.0% Notes due 2021 and form of Note for
such series. Incorporated by reference from Exhibit 4A7 of the
1991 Form 10-K. [5]
4A5. Terms of the series of 7.75% Notes due 2002 and form of Note for
such series. Incorporated by reference from Exhibit 4A8 of the
registrant's annual report on Form 10-K for the year ended
December 31, 1992. [5]
4A6. Form of Note for the series of 7.0% Notes due 1998 in the
aggregate principal amount of $100,000,000. Incorporated by
reference from Exhibit 4D of the registrant's current report on
Form 8-K dated December 29, 1992. [5]
4B. Indenture dated as of January 30, 1993 between the registrant and
The Chase Manhattan Bank. Incorporated by reference from
Exhibit 1B of the registration statement on Form S-3 effective
March 1, 1993 (File No. 33-58044) ("1993 Form S-3). [82]
4B1. Form of Medium-Term Note (fixed rate) for the Medium-Term Notes,
Series A. Incorporated by reference from Exhibit 4D to the 1993
Form S-3. [2]
4B2. Terms of the Medium-Term Notes, Series A, due 1998-2013. [1]
- 38 -
<PAGE>
4C. Preferred Stock Purchase Rights of Willamette Industries, Inc.
Incorporated by reference from Exhibit 2 of the registrant's
Form 8-A filed February 26, 1990. [61]
9. Not applicable.
10A. Willamette Industries, Inc. Deferred Compensation Plan for
Directors. Incorporated by reference from Exhibit 10 of the
registrant's annual report on Form 10-K for the year ended
December 31, 1983.* [5]
10B. Willamette Industries, Inc. 1986 Stock Option and Stock
Appreciation Rights Plan, as amended. Incorporated by reference
from Exhibit 10B of the 1990 Form 10-K.* [6]
10C. Willamette Industries, Inc. Retirement Plan for Non-Employee
Directors. Incorporated by reference from Exhibit 10 of the 1989
Form 10-K.* [2]
10D. Willamette Industries Inc. Severance Agreement with Key Management
Group. Incorporated by reference from Exhibit 10 of the 1991
Form 10-K.* [13]
10E. Willamette Industries 1993 Deferred Compensation Plan.* [16]
11. Computation of per share earnings is obtainable from the financial
statements filed with this annual report on Form 10-K.
12. Computation of Ratio of Earnings to Fixed Charges. [1]
13. Not applicable.
16. Not applicable.
18. Not applicable.
21. Omitted because the registrant's subsidiaries considered in the
aggregate as a single subsidiary do not constitute a significant
subsidiary.
22. Not applicable.
23. Consent of Independent Accountants to the incorporation by
reference of their report dated February 10, 1994, in the
registrant's registration statements on Form S-8. [1]
24. Not applicable.
27.-99. Not applicable.
The registrant will furnish a copy of any exhibit to this annual
report on Form 10-K to any security holder for a fee of $0.30 per page to
cover the registrant's expenses in furnishing the copy. The number of
pages of each exhibit is indicated in brackets at the end of each exhibit
description.
_________________________
- 39 -<PAGE>
*Management contract or compensatory plan or arrangement.
Note: Certain instruments with respect to the long-term debt of the
registrant are not filed herewith where the total amount of
securities authorized thereunder does not exceed 10 percent of the
total assets of the registrant and its subsidiaries on a
consolidated basis. The registrant agrees to furnish copies of
such instruments to the Commission on request.
- 40 -<PAGE>
<PAGE>
EXHIBIT 3A
THIRD RESTATED ARTICLES OF INCORPORATION
OF
WILLAMETTE INDUSTRIES, INC.
Willamette Industries, Inc., pursuant to Oregon Revised
Statutes, Section 60.451, adopts the following Third Restated Articles of
Incorporation which shall supersede the heretofore existing restated
articles of incorporation and all amendments thereto.
ARTICLE I
The name of this corporation is Willamette Industries, Inc., and
its duration shall be perpetual.
ARTICLE II
The purpose or purposes for which the corporation is organized
are:
(a) To manufacture, buy, sell, and otherwise deal in and with
particleboard, plywood, lumber, timber, paper and forest products
of every nature and description.
(b) To erect, install and operate lumber mills, sawmills, paper
mills, planing mills, pulp and plywood mills, box plants, and any
other forms of manufacturing operations to convert forest products
into manufactured materials of any nature.
(c) To purchase, sell, lease, mortgage, develop and otherwise
deal in timbered lands and all other forms of real estate and to
engage in the business of importing and exporting timber and
timber products.
(d) To purchase, sell, manufacture, mine, exploit, refine,
distill, explore for, drill and in every way deal in and with
natural gas, petroleum products, other mineral products, plastics,
chemicals and chemical materials of every kind and combination
produced or manufactured therefrom and to erect, install and
operate plants, machinery, equipment and appliances of any nature
for the production or manufacture of chemical materials or
combinations.
(e) To manufacture, purchase or otherwise acquire, invest in,
own, mortgage, pledge, sell, assign and transfer or otherwise
dispose of, trade, deal in and deal with goods, wares and
merchandise and personal property of every class and description.
- 1 -<PAGE>
(f) To become a partner (either general or limited, or both) or
a joint venturer and to enter into agreements of partnership or
joint venture with one or more other persons or corporations for
the purpose of carrying on any business whatsoever which this
corporation may deem proper or convenient in connection with any
of the purposes herein set forth or authorized or which may be
calculated directly or indirectly to promote the interests of this
corporation or to enhance the value of its property or business.
(g) To engage in any lawful activity for which corporations may
be organized under the Oregon Business Corporation Act.
ARTICLE III
A. Authorized Shares. The aggregate number of shares which the
corporation shall have authority to issue is 80,000,000, which shall be
divided into classes as follows:
<TABLE>
<CAPTION>
Title of Class No. of Shares
<S> <C>
Preferred Stock, 5,000,000
$.50 par value
Common Stock, 75,000,000
$.50 par value
</TABLE>
B. Preferences, Limitations and Relative Rights. The
preferences, limitations and relative rights of the shares of each class
shall be as follows:
(1) Preferred Stock.
(a) Division into Series. The Board of Directors shall
have authority to divide the Preferred Stock into as many series
as the Board of Directors shall from time to time determine, and
to issue the Preferred Stock in such series. The Board of
Directors shall determine the number of shares comprising each
series which number may, unless otherwise provided by the Board of
Directors in creating such series, be increased or decreased from
time to time by action of the Board of Directors. Each series
shall be so designated as to distinguish the shares thereof from
the shares of all other series.
- 2 -<PAGE>
(b) Authority of Board of Directors to Determine
Preferences, Limitations and Relative Rights. The Board of
Directors shall have authority to determine, except as otherwise
prescribed in this Article III or by law, the preferences,
limitations and relative rights of the shares of Preferred Stock
before the issuance of any shares of such class or the
preferences, limitations and relative rights of the shares of any
series of Preferred Stock before the issuance of any shares of
such series. All shares of any such series shall have
preferences, limitations and relative rights identical with those
of other shares of the same series and, except to the extent
otherwise provided in the description of such series, of those of
other series of the Preferred Stock.
(2) Common Stock. Subject to the preferences, limitations and
relative rights of the Preferred Stock, or any series thereof, the holders
of Common Stock shall have all rights of shareholders, including, without
limitation, (i) unlimited voting rights on all corporate matters on the
basis of one vote per share, except as such voting rights may be limited
or required to be shared with another class or series as provided by law
or by any preferences, limitations and relative rights established in
respect of Preferred Stock or any series thereof and (ii) the right to
receive the net assets of the corporation upon dissolution, subject to any
prior right or right to receive such net assets together with Preferred
Stock pursuant to any preference, limitation or relative right established
in respect of Preferred Stock, or any series thereof.
C. Series A Junior Participating Preferred Stock. The
designation and amount of a series of the Preferred Stock created by the
Board of Directors and the preferences, limitations and relative rights
thereof shall be as follows:
(1) Designation and Amount. There shall be a series of
Preferred Stock of the corporation which shall be designated as "Series A
Junior Participating Preferred Stock, $.50 par value" (the "Series A
Preferred Stock"), and the number of shares constituting such series shall
be 500,000. Such number of shares may be increased or decreased by
Articles of Amendment adopted by the Board of Directors without
shareholder action; provided, however, that no decrease shall reduce the
number of shares of Series A Preferred Stock to a number less than the
shares outstanding plus the number of shares issuable upon exercise of
outstanding rights, options or warrants or upon conversion of outstanding
securities issued by the corporation.
(2) Dividends and Distributions.
(a) Amount. Subject to the prior and superior
rights of the holders of any shares of any series of
Preferred Stock ranking prior and superior to the Series A
Preferred Stock with respect to dividends, the holders of
shares of Series A Preferred Stock, in preference to the
holders of shares of Common Stock of the corporation and
of any other junior stock which may be outstanding, shall
- 3 -
<PAGE>
be entitled to receive, when, as and if declared by the Board of
Directors out of funds legally available for the purpose, (i)
quarterly dividends payable in cash on the last day of March,
June, September and December in each year (each such date being
referred to herein as a "Quarterly Dividend Payment Date"),
commencing on the first Quarterly Dividend Payment Date after the
first issuance of a share or fraction of a share of Series A
Preferred Stock, in an amount per share (rounded to the nearest
cent) equal to the greater of (a) $1.00 per share ($.01 per one
one-hundredth of a share), or (b) subject to the provision for
adjustment hereinafter set forth, 100 times the aggregate per
share amount of all cash dividends declared on the Common Stock
since the immediately preceding Quarterly Dividend Payment Date
or, with respect to the first Quarterly Dividend Payment Date,
since the first issuance of any share or fraction of a share of
Series A Preferred Stock, and (ii) subject to the provision for
adjustment hereinafter set forth, quarterly distributions (payable
in kind) on each Quarterly Dividend Payment Date in an amount per
share equal to 100 times the aggregate per share amount of all
noncash dividends or other distributions (other than a dividend
payable in shares of Common Stock or a subdivision of the
outstanding shares of Common Stock, by reclassification or
otherwise), declared on the Common Stock since the immediately
preceding Quarterly Dividend Payment Date, or with respect to the
first Quarterly Dividend Payment Date since the first issuance of
any share or fraction of a share of Series A Preferred Stock. In
the event the corporation shall at any time after February 26,
1990 (the "Rights Declaration Date"), declare or pay any dividend
on Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise) into a
greater or lesser number of shares of Common Stock, then in each
such case the amount to which holders of shares of Series A
Preferred Stock are entitled under clauses (i)(b) or (ii) of the
preceding sentence shall be adjusted by multiplying such amount by
a fraction the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
(b) Mandatory Declaration. The corporation shall
declare a dividend or distribution on the Series A
Preferred Stock as provided in Section 2(a) immediately
after it declares a dividend or distribution on the Common
Stock (other than a dividend payable in shares of Common
Stock); provided that, in the event no dividend or
distribution shall have been declared on the Common Stock
during the period between any Quarterly Dividend Payment
Date and the next subsequent Quarterly Dividend Payment
Date, a dividend of $1.00 per share ($.01 per one
one-hundredth of a share) on the Series A Preferred Stock
shall nevertheless be payable, out of funds legally
available for such purpose, on such subsequent Quarterly
Dividend Payment Date.
- 4 -
<PAGE>
(c) Accrual and Accumulation; Record Date.
Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Preferred Stock from the
Quarterly Dividend Payment Date next preceding the date of
issue of such shares of Series A Preferred Stock, unless
the date of issue of such shares is prior to the record
date for the first Quarterly Dividend Payment Date, in
which case dividends on such shares shall begin to accrue
and be cumulative from the date of issue of such shares,
or unless the date of issue is a Quarterly Dividend
Payment Date or is a date after the record date for the
determination of holders of shares of Series A Preferred
Stock entitled to receive a quarterly dividend and before
such Quarterly Dividend Payment Date, in either of which
events such dividends shall begin to accrue and be
cumulative from such Quarterly Dividend Payment Date.
Accrued but unpaid dividends shall cumulate but shall not
bear interest. Dividends paid on the shares of Series A
Preferred Stock in an amount less than the total amount of
such dividends at the time accrued and payable on such
shares shall be allocated pro rata on a share-by-share
basis among all such shares at the time outstanding. The
Board of Directors may fix a record date for the
determination of holders of shares of Series A Preferred
Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be
not more than 30 days prior to the date fixed for the
payment thereof.
(3) Voting Rights. The holders of shares of Series A Preferred
Stock shall have the following voting rights:
(a) Number of Votes Per Share; Adjustment.
Subject to the provision for adjustment hereinafter set
forth, each share of Series A Preferred Stock shall
entitle the holder thereof to 100 votes (and each one
one-hundredth of a share of Series A Preferred Stock shall
entitle the holder thereof to one vote) on all matters
submitted to a vote of the shareholders of the
corporation. In the event the corporation shall at any
time after the Rights Declaration Date declare or pay any
dividend on Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock
(by reclassification or otherwise) into a greater or
lesser number of shares of Common Stock, then in each such
case the number of votes per share to which holders of
shares of Series A Preferred Stock were entitled
immediately prior to such event shall be adjusted by
multiplying such number by a fraction, the numerator of
which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which
is the number of shares of Common Stock that were
outstanding immediately prior to such event.
- 5 -
<PAGE>
(b) Voting With Common Stock as One Class. Except
as otherwise provided in these articles of incorporation
or by law, the holders of shares of Series A Preferred
Stock and the holders of shares of Common Stock shall vote
together as one class on all matters submitted to a vote
of the shareholders of the corporation.
(c) No Special Voting Rights. Except as otherwise
provided in these articles of incorporation or by law,
holders of Series A Preferred Stock shall have no special
voting rights and their consent shall not be required for
taking any corporate action.
(4) Certain Restrictions.
(a) Dividend Arrearage. Whenever quarterly
dividends or other dividends or distributions payable on
the Series A Preferred Stock as provided in Section (2)
are in arrears, thereafter and until all accrued and
unpaid dividends and distributions, whether or not
declared, on shares of Series A Preferred Stock
outstanding shall have been paid in full, the corporation
shall not:
(i) declare or pay dividends on, make any
other distributions on any shares of stock ranking
junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Preferred
Stock;
(ii) declare or pay dividends on or make
any other distributions on any shares of stock ranking
on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the
Series A Preferred Stock, except dividends paid
ratably on the Series A Preferred Stock and all such
parity stock on which dividends are payable or in
arrears in proportion to the total amounts to which
the holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise
acquire for consideration shares of any stock ranking
junior (either as to dividends or upon liquidation,
dissolution or winding up) with the Series A Preferred
Stock, provided that the corporation may at any time
redeem, purchase or otherwise acquire shares of any
such junior stock in exchange for shares of any stock
of the corporation ranking junior (either as to
dividends or upon dissolution, liquidation or winding
up) to the Series A Preferred Stock; or
(iv) purchase or otherwise acquire for
consideration any shares of Series A Preferred Stock,
or any share of stock ranking on a parity with the
Series A Preferred Stock, except in accordance with a
- 6 -
<PAGE>
purchase offer made in writing or by publication (as determined by
the Board of Directors) to all holders of such shares upon such
terms as the Board of Directors, after consideration of the
respective annual dividend rates and other relative rights and
preferences of the respective series and classes, shall determine
in good faith will result in fair and equitable treatment among
the respective series or classes.
(b) Purchases of Corporation Stock by Subsidiary.
The corporation shall not permit any subsidiary of the
corporation to purchase or otherwise acquire for
consideration any shares of stock of the corporation
unless the corporation could, under Section 4(a), purchase
or otherwise acquire such shares at such time and in such
manner.
(5) Reacquired Shares. Any shares of Series A Preferred Stock
purchased or otherwise acquired by the corporation in any manner
whatsoever shall be retired and canceled promptly after the acquisition
thereof. The corporation shall take all such action as is necessary so
that all such shares shall after their cancellation become authorized but
unissued shares of Preferred Stock, without designation as to series, and
may be reissued as part of a new series of Preferred Stock to be created
by Articles of Amendment adopted by the Board of Directors without
shareholder action, subject to the conditions and restrictions on issuance
set forth herein.
(6) Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the corporation, no distribution
shall be made (A) to the holders of shares of stock ranking junior (either
as to dividends or upon liquidation, dissolution or winding up) to the
Series A Preferred Stock unless, prior thereto, the holders of shares of
Series A Preferred Stock shall have received the higher of (i) $1.00 per
share ($.01 per one one-hundredth of a share), plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not
declared, to the date of such payment, or (ii) an aggregate amount per
share, subject to the provision for adjustment hereinafter set forth,
equal to 100 times the aggregate amount to be distributed per share to
holders of Common Stock; nor shall any distribution be made (B) to the
holders of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Preferred Stock,
except distributions made ratably on the Series A Preferred Stock and all
other such parity stock in proportion to the total amounts to which the
holders of all such shares are entitled upon such liquidation, dissolution
or winding up. In the event the corporation shall at any time after the
Rights Declaration Date declare or pay any dividend on Common Stock
payable in shares of Common Stock, or effect a subdivision or combination
or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise) into a greater or lesser number of shares
of Common Stock, then in each such case the aggregate amount to which
holders of shares of Series A Preferred Stock are entitled under clause
(A)(ii) of the preceding sentence shall be adjusted by multiplying such
amount by a fraction the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the denominator
- 7 -
<PAGE>
of which is the number of shares of Common Stock that were outstanding
immediately prior to such event.
(7) Consolidation, Merger, etc. In case the corporation shall
enter into any consolidation, merger, combination or other transaction in
which the shares of Common Stock are exchanged for or changed into other
stock or securities, cash and/or any other property, or otherwise changed,
then in any such case the shares of Series A Preferred Stock shall at the
same time be similarly exchanged or changed in an amount per share
(subject to the provision for adjustment hereinafter set forth) equal to
100 times the aggregate amount of stock, securities, cash and/or any other
property (payable in kind), as the case may be, into which or for which
each share of Common Stock is changed or exchanged. In the event the
corporation shall at any time after the Rights Declaration Date declare or
pay any dividend on Common Stock payable in shares of Common Stock, or
effect a subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise) into a greater
or lesser number of shares of Common Stock, then in each such case the
amount set forth in the preceding sentence with respect to the exchange or
change of shares of Series A Preferred Stock shall be adjusted by
multiplying such amount by a fraction the numerator of which is the number
of shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(8) No Redemption. The shares of Series A Preferred Stock
shall not be redeemable. Notwithstanding the foregoing, the corporation
may acquire shares of Series A Preferred Stock in any other manner
permitted by law or the articles of incorporation.
(9) Rank. Unless otherwise provided in the articles of
incorporation or an amendment thereof relating to a subsequent series of
Preferred Stock of the corporation, the Series A Preferred Stock shall
rank junior to all other series of the corporation's Preferred Stock as to
the payment of dividends and the distribution of assets on liquidation,
dissolution, or winding up, and senior to the Common Stock of the
corporation.
(10) Amendment. The articles of incorporation shall not be
amended in any manner which would materially alter or change the powers,
preferences or special rights of the Series A Preferred Stock so as to
affect them adversely without the affirmative vote of the holders of at
least a majority of the outstanding shares of Series A Preferred Stock,
voting separately as a class.
(11) Fractional Shares. Series A Preferred Stock may be issued
in one-hundredths of a share or other fractions of a share which shall
entitle the holder, in proportion to such holder's fractional shares, to
exercise voting rights, receive dividends, participate in distributions
and to have the benefit of all other rights of holders of Series A
Preferred Stock.
- 8 -
<PAGE>
ARTICLE IV
A. Preemptive Rights. No shareholder of the corporation shall,
by reason of his holding shares of any class, have any preemptive or
preferential rights to purchase or subscribe to any shares of the
corporation now or hereafter to be authorized or any notes, debentures,
bonds or other securities convertible into or carrying options or warrants
to purchase shares of any class now or hereafter to be authorized (whether
or not the issuance of any such shares or such notes, debentures, bonds or
other securities would adversely affect the dividend or voting rights of
such shareholder) other than such rights, if any, as the Board of
Directors in its discretion from time to time may grant and at such price
as the Board of Directors may fix; and the Board of Directors may issue
shares of the corporation or any notes, debentures, bonds or other
securities convertible into or carrying options or warrants to purchase
shares without offering any such shares, either in whole or in part, to
the existing shareholders.
B. Purchase of Shares. The corporation may purchase its own
shares of Common Stock out of unreserved and unrestricted capital surplus
without a vote of the shareholders of the corporation upon such terms and
conditions as may be fixed by the Board of Directors.
ARTICLE V
A. Statutory Indemnification. Each person (an "Indemnified
Person") who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (a "Proceeding"), by
reason of the fact that he or she is or was a director or officer of the
corporation or, while serving as a director or officer of the corporation,
is or was serving at the request of the corporation as a director,
officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, shall, subject to Section F of this
Article, be indemnified by the corporation to the full extent authorized
under ORS 57.255 and ORS 57.260 as now in effect or as hereafter amended
against all expenses (including attorneys' fees), judgments, fines and
amounts paid in settlements actually and reasonably incurred by such
Indemnified Person, provided the Indemnified Person has met the applicable
standard of conduct required under ORS 57.255.
B. Standard of Conduct. The determination as to whether or not
an Indemnified Person has met the applicable standard of conduct required
under ORS 57.255 shall be made as promptly as practicable. Such
determination shall be made by the Board of Directors by a majority vote
of a quorum consisting of directors who were not parties to the Proceeding
or, in case either such a quorum is not obtainable or the Indemnified
Person so requests, such determination shall be made by independent legal
counsel (who may be the outside counsel regularly employed by the
corporation) in a written opinion. Such independent legal counsel shall
be selected jointly by the corporation and the Indemnified Person. In the
event the parties are unable to agree on such independent legal counsel,
such independent legal counsel shall be selected by lot by the outside
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<PAGE>
counsel regularly employed by the corporation from among the Portland,
Oregon, law firms (other than the outside counsel's firm or any other firm
regularly employed by the corporation or by the Indemnified Person) having
more than 50 attorneys and having a rating of "av" in the then current
Martindale-Hubbell Law Directory. The selection by lot shall be made in
the presence of the Indemnified Person or his counsel. The outside
counsel regularly employed by the corporation and the Indemnified Person
or his counsel shall contact, in the order of their selection by lot, such
law firms requesting each such firm to accept engagement to make the
determination hereunder until one of such firms accepts the engagement.
The fees and expenses of such independent legal counsel shall be paid by
the corporation and, if requested by such independent legal counsel, the
corporation shall give such counsel an appropriate written agreement with
respect to the payment of such counsel's fees and expenses and such other
matters as may be reasonably requested by such counsel. An Indemnified
Person shall be deemed to have met the applicable standard of conduct
unless the Board of Directors or independent legal counsel, as the case
may be, determines on the basis of clear and convincing evidence that the
Indemnified Person did not meet such standard. Nothing in this Article
shall limit or prejudice an Indemnified Person in applying to a court
pursuant to ORS 57.260(l)(d) for a determination that indemnification is
proper.
C. Expenses. The expenses incurred by the Indemnified Person in
defending a Proceeding shall be paid by the corporation in advance of the
final disposition of the Proceeding subject to the determination that the
Indemnified Person has met the applicable standard of conduct, if required
under ORS 57.260(2), made pursuant to Section B, and subject to the
delivery of the undertaking referred to in Section H, of this Article.
The determination of whether such expenses shall be paid in advance shall
be made promptly and in any event within 30 days after the Indemnified
Person submits to the corporation a written request to authorize such
advance payments and shall be made without regard to the Indemnified
Person's ability to repay such advance payments. The corporation shall
cooperate in the defense of any such Proceeding.
D. Nonstatutory Indemnification. Pursuant to ORS 57.260(3),
the corporation, in addition to its obligations under Section A of this
Article (but subject to Sections F and H of this Article), shall indemnify
an Indemnified Person against any and all claims, liability and expense
whatsoever by reason of or arising from the fact that the Indemnified
Person is or was a director or officer of the corporation, or is or was
serving at the request of the corporation as a director, officer, partner
or agent of another corporation, partnership, joint venture, trust or
other enterprise, or by reason of or arising from any action taken or not
taken in his or her capacity as such director, officer, partner, trustee,
employee or agent. Without limiting the generality of the foregoing, the
payments which the corporation shall be obligated to make under this
Section D shall include damages, judgments, fines, settlements and costs,
costs of investigation, legal fees and other costs of defense of legal
actions, claims or proceedings and appeals therefrom, and costs of
attachment or similar bonds.
E. Notice of Claim for Nonstatutory Indemnification. An
Indemnified Person, upon service upon him of a summons or other initial
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<PAGE>
legal process in any Proceeding in respect of which indemnity may be
sought under Section D of this Article, shall promptly give written notice
(herein called the "Notice") of such service to the corporation. No
indemnification provided for in Section D of this Article shall be
available if the Indemnified Person fails to give the Notice and if the
corporation was unaware of the Proceeding to which the Notice would have
related and was prejudiced by the failure to give the Notice. The
corporation shall be entitled, if it so elects within a reasonable time
after receipt of the Notice by giving written notice (herein called the
"Notice of a Defense") to the Indemnified Person, to assume the defense of
the Proceeding, in which event such defense shall be conducted, at the
expense of the corporation, by counsel chosen by the corporation and
satisfactory to the Indemnified Person; provided, however, that:
(1) If the Indemnified Person shall reasonably conclude
that there may be a conflict between the positions of the
Indemnified Person and of the corporation (or of any other party
to the Proceeding who is indemnified by the corporation) in
conducting the defense of such Proceeding, or that there may be
legal defenses available to the Indemnified Person different from
or in addition to those available to the corporation (or to any
other party to the Proceeding who is indemnified by the
corporation), then counsel chosen by the Indemnified Person shall
be entitled to conduct the defense of the Indemnified Person at
the expense of the corporation to the extent determined by such
counsel to be necessary or desirable to protect the interest of
the Indemnified Person, and
(2) In any event, the Indemnified Person shall be entitled
at his or her expense to have counsel chosen by him participate
in, but not conduct, the defense.
If, within a reasonable time after receipt of the Notice, the corporation
gives a Notice of Defense and the counsel chosen by it is satisfactory to
the Indemnified Person, the corporation will not be liable for any legal
or other expenses subsequently incurred by the Indemnified Person in
connection with the defense of the Proceeding except that (i) the
corporation shall bear the reasonable legal and other expenses incurred in
connection with the conduct of the defense referred to in clause (1) of
the proviso to the preceding sentence and (ii) the corporation shall bear
such other expenses as it has authorized the Indemnified Person to incur.
If, within a reasonable time after receipt of the Notice, no Notice of
Defense has been given, the corporation shall bear any reasonable legal or
other expenses incurred by the Indemnified Person in connection with the
defense of the Proceeding. The corporation shall pay the legal and other
expenses for which it is responsible hereunder currently upon receipt of a
statement therefor.
F. Limitations on Indemnification. An Indemnified Person shall
not be entitled to any indemnification under this Article:
(1) Certain Conduct. To the extent liability or expense is
incurred by the Indemnified Person which is attributable to:
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<PAGE>
(a) Willful Misconduct, Etc. Conduct of the Indemnified
Person which is finally adjudged to have constituted willful
misconduct of a culpable nature, deliberate dishonesty or
fraudulent conduct.
(b) Approval of Unlawful Distributions, Etc. The
Indemnified Person having voted for or assented to any of the
following in violation of ORS 57.231 (i) the declaration of a
dividend or other distribution to the shareholders of the
corporation contrary to the provisions of ORS Chapter 57 or these
articles of incorporation, (ii) the purchase by the corporation of
its own shares contrary to the provisions of ORS Chapter 57, (iii)
the distribution of assets of the corporation to its shareholders
during its liquidation without the payment and discharge of, or
making adequate provision for, all known debts, obligations and
liabilities of the corporation or (iv) the making of a loan to a
director of the corporation without first obtaining approval of
the shareholders if required by ORS 57.226.
(c) Liability for Short-Swing Profits. Any purchase and
sale of securities of the corporation giving rise to liability
under Section 16(b) of the Securities Exchange Act of 1934, as
amended.
(2) Final Adjudication of Unlawfulness. If a final decision by
a court having jurisdiction in the matter (including an appellate court)
shall determine that such indemnification is not lawful.
(3) Certain Settlements. For amounts paid in settlement of any
Proceeding effected without the corporation's written consent provided the
corporation does not unreasonably withhold such consent.
(4) Other Indemnification. For any liability or expense for
which the Indemnified Person is indemnified under any provision of law,
other article of these articles of incorporation, bylaw of the
corporation, policy of insurance, other agreement or otherwise, except to
the extent payment is not made thereunder.
(5) Proceedings Instituted by Indemnified Person. For any
liability or expense in connection with a Proceeding instituted by the
Indemnified Person whether attributable to a counterclaim or otherwise
unless the Board of Directors approved the institution of the Proceeding.
G. Contractual Right to Indemnification; Binding Effect. The
provisions of this Article are for the benefit of any person who serves as
a director or officer of the corporation, the rights to indemnification
provided in this Article shall be contract rights and such rights shall be
enforceable by or on behalf of any such person. Such rights shall inure
to the benefit of and be enforceable by the heirs and personal
representatives of any such person and the provisions of this Article
shall be binding upon the corporation and its successors and assigns. In
the event the corporation consolidates with or merges into any other
corporation or liquidates, dissolves or transfers substantially all its
properties and assets to any person, then, and in any such case, proper
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<PAGE>
provision shall be made so that the successors or assigns of the
corporation assume the obligations of the corporation under this Article
to the maximum extent permitted under applicable law.
H. Undertaking to Repay Expenses. The obligation of the
corporation to pay expenses of an Indemnified Person in advance of the
final disposition of a Proceeding shall be subject to the delivery to the
corporation of an undertaking by or on behalf of the Indemnified Person to
repay the corporation the amount of all expenses paid by the corporation
in defending the Proceeding in the event and only to the extent it shall
be ultimately determined that the Indemnified Person is not entitled to be
indemnified by the corporation for such expenses.
I. Limitation of Actions; Waiver. No legal action shall be
brought and no cause of action shall be asserted (other than legal actions
or causes of action with respect to matters described in Section F of this
Article) by or on behalf of the corporation or any of its affiliates (as
that term is defined in Rule 12b-2 under the Securities Exchange Act of
1934) against an officer or director of the corporation after the
expiration of two years from the date the officer or director ceases to
serve in such capacity or to serve at the corporation's request as a
director, officer, partner or agent of another corporation, partnership,
joint venture, trust or other enterprise; and any cause of action of the
corporation or any of its affiliates against an officer or director (other
than a cause of action with respect to a matter described in Section F of
this Article) shall be extinguished and deemed waived and released unless
asserted by the filing of a legal action within such two-year period.
J. Attorneys' Fees; Burden of Proof. In the event any action
is instituted to enforce any of the provisions of this Article, the party
prevailing in the action and any appeal therefrom shall be entitled to
recover from the other party reasonable attorneys' fees which shall be
fixed by the court in which the action shall be pending. The corporation
shall have the burden of proving by clear and convincing evidence that
indemnification (including advance payments) under this Article is
improper. Neither the failure of the corporation (including the Board of
Directors or independent legal counsel where applicable) to have made a
determination as to whether indemnification (including advance payments)
under this Article is proper nor an actual determination by the
corporation (by the Board of Directors or by independent legal counsel
where applicable) that such indemnification is not proper shall be a
defense to any action by an Indemnified Person to enforce the provisions
of this Article or create any presumption that such indemnification is not
proper.
K. Indemnification of Other Employees and Agents; Cooperation;
Severability. The corporation may, by action of the Board of Directors,
provide indemnification to employees and agents of the corporation who are
not directors or officers with the same scope and effect as the
indemnification provided in this Article to directors and officers. The
corporation shall cooperate in the defense of any Proceeding other than a
Proceeding by or in the right of the corporation to procure a judgment in
its favor. Each of the provisions of this Article is separate and
distinct and is independent of the other provisions, so that if any
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<PAGE>
provision hereof shall be held to be invalid or unenforceable for any
reason, such invalidity or unenforceability shall not affect the validity
or enforceability of the other provisions hereof.
L. Insurance; Other Indemnification. Nothing in this Article
shall limit the corporation's power to purchase and maintain insurance as
provided in ORS 57.260(4) or to otherwise indemnify its directors,
officers, employees and agents. This Article shall not be exclusive of
any other right of indemnification to which an Indemnified Person or any
other employee or agent of the corporation may be entitled under any
provision of law, other article of these articles of incorporation, bylaw
of the corporation, policy of insurance, other agreement or otherwise.
M. Statutory References. References in this Article to a
section of the Oregon Business Corporation Act shall include such section
as subsequently amended and, if such section is repealed and a successor
section with respect to the same subject matter is adopted, shall include
such successor section.
ARTICLE VI
A. Definitions. For purposes of this Article VI:
(1) The term "Beneficially Own," when used with respect to a
person's interest in shares of capital stock shall mean that said person
has or shares (or has the right to acquire under any option, warrant,
conversion right or other right), directly or indirectly, the power to
vote, the power to dispose of, the power to direct the voting or
disposition of, or the right to enjoy the economic benefits of such
shares.
(2) The term "Interested Person" shall mean any individual,
corporation, partnership, joint venture, company, trust, association or
entity (including any group of such persons acting together) which,
together with its affiliates, Beneficially Owns in the aggregate
20 percent or more of the outstanding shares of capital stock of the
corporation.
(3) The term "Substantial Assets" shall mean assets with a fair
market value in excess of 5 percent of the total assets of the corporation
as reported in the consolidated financial statements of the corporation as
of the end of its most recent fiscal year ending prior to the time the
determination is made.
(4) The term "Business Combination" shall mean (a) any merger
or consolidation of the corporation or a subsidiary of the corporation
with or into an Interested Person (or an affiliate of an Interested
Person), (b) any sale, lease, exchange, transfer, encumbrance or other
disposition of Substantial Assets either of the corporation (including
without limitation any securities of a subsidiary) or of a subsidiary of
the corporation, to an Interested Person (or an affiliate of an Interested
Person), (c) the issuance of any securities of the corporation or a
subsidiary of the corporation to an Interested Person (or an affiliate of
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<PAGE>
an Interested Person), but not securities distributed pro rata as a
dividend or distribution with respect to the common stock of the
corporation or securities issued in connection with any bona fide benefit
program for employees of the corporation or its subsidiaries, (d) any
reclassification, exchange of shares or other recapitalization that would
have the effect of increasing the proportion of shares of common stock or
other capital stock of the corporation or a subsidiary of the corporation
Beneficially Owned by an Interested Person (or an affiliate of an
Interested Person), and (e) any agreement, contract or other arrangement
providing for any of the foregoing transactions.
(5) The term "Continuing Director" shall mean a director who
was a member of the Board of Directors of the corporation immediately
prior to the time that the Interested Person involved in a Business
Combination became an Interested Person.
B. Approval Required for Certain Transactions. In addition to
any vote or approval required by law, any Business Combination shall
require the affirmative vote of the holders of not less than 80 percent of
the outstanding shares of capital stock of the corporation; provided,
however, that such 80 percent voting requirement shall not apply if:
(1) The Business Combination is a merger, consolidation or
exchange of shares involving the corporation which provides for the
conversion of the shares of common stock of the corporation into cash,
securities or other property with a fair market value per share of common
stock not less than the highest per share consideration (appropriately
adjusted for stock splits, stock dividends and other like changes) paid or
given by the Interested Person and any of its affiliates for any of their
shares of common stock of the corporation within one year prior to the
date of the taking of the vote with respect to such Business Combination;
or
(2) The Business Combination was approved by the Board of
Directors of the corporation; provided that a majority of the Board of
Directors consisted of Continuing Directors and at least two-thirds of the
Continuing Directors voted to approve the Business Combination.
C. Removal of Directors. All or any number of the directors of
the corporation may be removed, with or without cause, at a meeting called
expressly for that purpose, by the affirmative vote of the holders of not
less than 80 percent of the outstanding shares of capital stock of the
corporation. Notwithstanding the foregoing, whenever the holders of one
or more series of Cumulative Preferred Stock or any other preferred stock
of the corporation shall have the right, voting separately as a class, to
elect one or more directors, the provisions of this Section C shall not
apply with respect to the director or directors elected by such holders.
D. Amendment of Bylaws. The Board of Directors of the
corporation shall have the power to alter, amend or repeal the bylaws of
the corporation or adopt new bylaws subject to repeal or change by the
affirmative vote of the holders of not less than 80 percent of the
outstanding shares of capital stock of the corporation.
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<PAGE>
E. Repeal and Amendment. The provisions set forth in this
Article VI may not be repealed or amended in any manner at a time when any
person is an Interested Person unless such repeal or amendment is approved
by the affirmative vote of the holders of not less than 80 percent of the
outstanding shares of capital stock of the corporation.
ARTICLE VII
A director of the corporation shall have no personal liability
to the corporation or its shareholders for monetary damages for conduct as
a director, provided this Article VII shall not eliminate or limit the
liability of a director for (a) any breach of the director's duty of
loyalty to the corporation or its shareholders; (b) acts or omissions not
in good faith or which involve intentional misconduct or a knowing
violation of law; (c) any unlawful distribution under ORS 60.367; or (d)
any transaction from which the director derived an improper personal
benefit. This Article VII shall not affect the liability of a director
for any act or omission occurring prior to the date its provisions became
effective. No subsequent repeal of or amendment to this Article VII shall
adversely affect any right or protection of a director of the corporation
existing at the time of such repeal or amendment.
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<PAGE>
EXHIBIT 3B
INDEX TO
BYLAWS
OF
WILLAMETTE INDUSTRIES, INC.
November 11, 1993
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
<S> <C>
ARTICLE I Offices. . . . . . . . . . . . . . . . . . . . . . 1
Section 1. Principal Office . . . . . . . . . . . . . 1
Section 2. Registered Office. . . . . . . . . . . . . 1
ARTICLE II Shareholders. . . . . . . . . . . . . . . . . . . 1
Section 1. Annual Meeting . . . . . . . . . . . . . . 1
Section 2. Special Meetings . . . . . . . . . . . . . 1
Section 3. Place of Meeting . . . . . . . . . . . . . 1
Section 4. Notice of Meeting. . . . . . . . . . . . . 1
Section 5. Quorum; Manner of Acting . . . . . . . . . 2
Section 6. Proxies. . . . . . . . . . . . . . . . . . 2
Section 7. Voting of Shares . . . . . . . . . . . . . 2
Section 8. Acceptance of Votes. . . . . . . . . . . . 2
ARTICLE III Board of Directors . . . . . . . . . . . . . . . 3
Section 1. General Powers . . . . . . . . . . . . . . 3
Section 2. Number, Tenure and Classification. . . . . 3
Section 3. Regular Meetings . . . . . . . . . . . . . 3
Section 4. Special Meetings . . . . . . . . . . . . . 3
Section 5. Notice; Waiver . . . . . . . . . . . . . . 4
Section 6. Quorum . . . . . . . . . . . . . . . . . . 4
Section 7. Manner of Acting . . . . . . . . . . . . . 4
Section 8. Vacancies. . . . . . . . . . . . . . . . . 4
Section 9. Presumption of Assent. . . . . . . . . . . 4
Section 10. Removal of Directors . . . . . . . . . . . 5
Section 11. Compensation . . . . . . . . . . . . . . . 5
Section 12. Retirement . . . . . . . . . . . . . . . . 5
Section 13. Emeritus Director. . . . . . . . . . . . . 5
Section 14. Action Without a Meeting . . . . . . . . . 5
Section 15. Telephonic Meetings. . . . . . . . . . . . 5
Section 16. Notification of Nominations. . . . . . . . 5
ARTICLE IV Executive Committee and
Other Committees. . . . . . . . . . . . . . . . . 6
Section 1. Appointment. . . . . . . . . . . . . . . . 6
Section 2. Authority. . . . . . . . . . . . . . . . . 6
Section 3. Tenure and Qualifications. . . . . . . . . 7
Section 4. Meetings; Notice; Waiver . . . . . . . . . 7
Section 5. Quorum; Manner of Acting . . . . . . . . . 7
Section 6. Action Without a Meeting . . . . . . . . . 7
Section 7. Vacancies. . . . . . . . . . . . . . . . . 7
Section 8. Resignations and Removal . . . . . . . . . 7
Section 9. Procedure. . . . . . . . . . . . . . . . . 8
Section 10. Appointment of Other Committees
of the Board of Directors. . . . . . . . . 8
Section 11. Appointment of Other Committees. . . . . . 8
ARTICLE V Officers . . . . . . . . . . . . . . . . . . . . . 8
Section 1. Number . . . . . . . . . . . . . . . . . . 8
Section 2. Election and Term of Office. . . . . . . . 9
Section 3. Removal. . . . . . . . . . . . . . . . . . 9
Section 4. Vacancies. . . . . . . . . . . . . . . . . 9
Section 5. Chairman of the Board. . . . . . . . . . . 9
Section 6. President. . . . . . . . . . . . . . . . . 9
Section 7. Executive Vice-Presidents. . . . . . . . . 10
Section 8. Vice-Presidents. . . . . . . . . . . . . . 10
Section 9. Financial Vice-President . . . . . . . . . 10
Section 10. Secretary. . . . . . . . . . . . . . . . . 10
Section 11. Treasurer. . . . . . . . . . . . . . . . . 10
Section 12. Assistant Secretaries and
Assistant Treasurers . . . . . . . . . . . 11
Section 13. Salaries . . . . . . . . . . . . . . . . . 11
ARTICLE VI Contracts, Loans, Checks and Deposits . . . . . . 11
Section 1. Contracts. . . . . . . . . . . . . . . . . 11
Section 2. Loans. . . . . . . . . . . . . . . . . . . 11
Section 3. Checks, Drafts, etc. . . . . . . . . . . . 11
Section 4. Deposits . . . . . . . . . . . . . . . . . 11
ARTICLE VII Certificates For Shares and Their Transfer . . . 12
Section 1. Certificates for Shares. . . . . . . . . . 12
Section 2. Transfer of Shares . . . . . . . . . . . . 12
Section 3. Replacement of Certificates. . . . . . . . 12
Section 4. Transfer Agents and Registrars . . . . . . 12
ARTICLE VIII Seal. . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE IX Fiscal Year . . . . . . . . . . . . . . . . . . . 13
ARTICLE X Amendments . . . . . . . . . . . . . . . . . . . . 13
</TABLE>
<PAGE>
BYLAWS
OF
WILLAMETTE INDUSTRIES, INC.
AS AMENDED THROUGH
November 11, 1993
ARTICLE I
Offices
Section 1. Principal Office. The principal office of
the corporation in the State of Oregon shall be located in the
City of Portland, County of Multnomah. The corporation may have
such other offices, either within or without the State of
Oregon, as the board of directors may designate or as the
business of the corporation may require from time to time.
Section 2. Registered Office. The registered office
of the corporation required by the Oregon Business Corporation
Act ("Act") to be maintained in the State of Oregon may be, but
need not be, the same as any of its places of business in the
State of Oregon, and the location of the registered office may
be changed from time to time by the board of directors or the
registered agent of the corporation.
ARTICLE II
Shareholders
Section 1. Annual Meeting. The annual meeting of the
shareholders shall be held on the fourth Thursday in April at
10 a.m., for the purpose of electing directors and for the
transaction of such other business as may come before the
meeting.
Section 2. Special Meetings. Special meetings of the
shareholders, for any purpose or purposes, may be called by the
chairman of the board or by the board of directors, and shall be
called by the chairman of the board if one or more written
demands for a meeting describing the purpose or purposes for
which it is to be held are signed, dated and delivered to the
secretary of the corporation by the holders of at least
10 percent of all votes entitled to be cast on any issue
proposed to be considered at the meeting.
Section 3. Place of Meeting. The board of directors
shall determine the place of meeting for all annual and special
meetings of the shareholders. In the absence of any such
determination, all meetings of shareholders shall be held at the
principal office of the corporation in the State of Oregon.
Section 4. Notice of Meeting. Written or printed
notice stating the place, day and hour of the meeting and, in
case of a special meeting, the purpose or purposes for which the
meeting is called, shall be given not earlier than 60 nor less
than ten days before the date of the meeting, either personally
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<PAGE>
or by mail, by or at the direction of the chairman of the board,
or the secretary, or the persons calling the meeting, to each
shareholder of record entitled to vote at such meeting. If
mailed, such notice shall be effective when deposited in the
United States mail, addressed to the shareholder at his address
as shown in the corporation's current record of shareholders,
with postage thereon prepaid. If a meeting is adjourned to a
different date, time or place announced at the meeting before
adjournment, notice need not be given of the new date, time or
place unless a new record date is or must be fixed for the
adjourned meeting.
Section 5. Quorum; Manner of Acting. Shares entitled
to vote as a separate voting group may take action on a matter
only if a quorum of those shares exists with respect to the
matter. A majority of the votes entitled to be cast on the
matter by voting group, represented in person or by proxy, shall
constitute a quorum of that voting group for action on that
matter. If a quorum exists, action on a matter, other than the
election of directors, shall be approved by a voting group if
the votes cast within the voting group favoring the action
exceed the votes cast opposing the action unless the Act
requires a greater number of affirmative votes. Directors shall
be elected by a plurality of the votes cast by the shares
entitled to vote in the election at a meeting at which a quorum
is present. Once a share is represented for any purpose at a
meeting, it shall be deemed present for quorum purposes for the
remainder of the meeting and for any adjournment of the meeting
unless a new record date is or must be set for the adjourned
meeting.
Section 6. Proxies. At all meetings of shareholders,
a shareholder may vote by proxy executed in writing by the
shareholder or by his duly authorized attorney-in-fact. Such
proxy shall be filed with the secretary of the corporation
before or at the time of the meeting. No proxy shall be valid
after eleven months from the date of its execution, unless
otherwise provided in the proxy.
Section 7. Voting of Shares. Each outstanding share
of the corporation's common stock shall be entitled to one vote
upon each matter submitted to a vote at a meeting of the
shareholders except that shares owned, directly or indirectly,
by another corporation in which the corporation owns, directly
or indirectly, a majority of the shares entitled to vote for the
election of directors of such other corporation shall not be
voted at any meeting or counted in determining the total number
of outstanding shares at any given time.
Section 8. Acceptance of Votes. If the name signed
on a vote, consent, waiver or proxy appointment corresponds to
the name of a shareholder, the corporation shall be entitled to
accept the vote, consent, waiver or proxy appointment and give
it effect as the act of the shareholder.
If the name signed on a vote, consent, waiver or proxy
appointment does not correspond to the name of its shareholder,
the corporation shall nevertheless be entitled to accept the
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<PAGE>
vote, consent, waiver or proxy appointment and give it effect as
the act of the shareholder if:
a. The shareholder is an entity and the name
signed purports to be that of an officer or agent of
the entity.
b. The name signed purports to be that of an
administrator, executor, guardian or conservator
representing the shareholder.
c. The name signed purports to be that of a
receiver or trustee in bankruptcy of the shareholder.
d. The name signed purports to be that of a
pledgee, beneficial owner or attorney-in-fact of the
shareholder.
e. Two or more persons are the shareholder as
cotenants or fiduciaries, the name signed purports to
be the name of at least one of the co-owners, and the
person signing appears to be acting on behalf of all
co-owners.
The corporation shall be entitled to reject a vote,
consent, waiver or proxy if the secretary or other officer of
agent authorized to tabulate votes, acting in good faith, has
reasonable basis for doubt about the validity of the signature
on it or about the signatory's authority to sign for the
shareholder.
ARTICLE III
Board of Directors
Section 1. General Powers. The business and affairs
of the corporation shall be managed by its board of directors.
Section 2. Number, Tenure and Classification. The
number of directors shall be ten, divided into three classes,
three directors to be designated as Class A directors, three
directors to be designated as Class B directors and four
directors to be designated as Class C directors. At each annual
meeting, directors to replace those whose terms expire at such
annual meeting shall be elected, each such director to hold
office until the third annual meeting next succeeding his
election and until his successor is elected or until his death,
resignation, retirement or removal.
Section 3. Regular Meetings. A regular meeting of
the board of directors shall be held without other notice than
this bylaw immediately after, and at the same place as, the
annual meeting of shareholders. The board of directors may
provide by resolution the time and place, either within or
without the State of Oregon, for the holding of additional
regular meetings without other notice than such resolution.
Section 4. Special Meetings. Special meetings of the
board of directors may be called by or at the request of the
chairman of the board or any two directors. The person or
persons authorized to call special meetings of the board of
directors may fix any place, either within or without the State
of Oregon, as the place for holding any special meeting of the
board of directors called by them.
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<PAGE>
Section 5. Notice; Waiver. Notice of the time, date
and place of any special meeting shall be given at least ten
days previously thereto, orally or by written notice delivered
personally or given by telegraph, teletype or other form of wire
communication, or by mail or private carrier, to each director
at his business address. Oral notice shall be effective when
communicated if communicated in a comprehensible manner and
written notice shall be effective at the earliest of the
following: (a) when received, (b) five days after its deposit in
the United States mail, as evidenced by the postmark, if mailed
postpaid and correctly addressed, and (c) on the date shown on
the return receipt, if sent by registered or certified mail,
return receipt requested, and the receipt is signed by or on
behalf of the director. A director's attendance at, or
participation in, a meeting shall constitute a waiver of notice
of such meeting, except where a director at the beginning of the
meeting, or promptly upon the director's arrival, objects to
holding of the meeting or the transacting of business at the
meeting and does not thereafter vote for or assent to action
taken at the meeting. A written waiver of notice of a meeting
signed by the director or directors entitled to such notice,
whether before or after the time stated therein, which specifies
the meeting for which notice is waived and which is filed with
the minutes or corporate records shall be equivalent to the
giving of such notice. Neither the business to be transacted
at, nor the purpose of, any regular or special meeting of the
board of directors need be specified in the notice or waiver of
notice of such meeting.
Section 6. Quorum. A majority of the number of
directors fixed by Section 2 of this Article III shall
constitute a quorum for the transaction of business at any
meeting of the board of directors, but, if less than such
majority is present at a meeting, a majority of the directors
present may adjourn the meeting from time to time without
further notice.
Section 7. Manner of Acting. The affirmative vote of
a majority of the directors present at a meeting at which a
quorum is present shall be the act of the board of directors.
Section 8. Vacancies. Any vacancy occurring in the
board of directors, including a vacancy resulting from an
increase in the number of directors, may be filled by the board
of directors or, if the remaining directors constitute fewer
than a quorum, by the affirmative vote of a majority of all the
remaining directors. The term of a director elected to fill a
vacancy shall expire at the next shareholders' meeting at which
directors are elected.
Section 9. Presumption of Assent. A director who is
present at a meeting of the board of directors at which
corporate action is taken shall be deemed to have assented to
the action taken, unless (a) the director objects at the
beginning of the meeting, or promptly upon the director's
arrival, to holding the meeting or transacting business at the
meeting; (b) the director's dissent or abstention from the
action taken is entered in the minutes of the meeting; or
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<PAGE>
(c) the director delivers written notice of dissent or
abstention to the presiding officer of the meeting before its
adjournment or to the corporation immediately after adjournment
of the meeting. Such right to dissent or abstain shall not
apply to a director who voted in favor of such action.
Section 10. Removal of Directors. All or any number
of the directors of the corporation may be removed, with or
without cause, at a meeting called expressly for that purpose,
by the affirmative vote of the holders of not less than
80 percent of the outstanding shares of capital stock of the
corporation.
Section 11. Compensation. By resolution of the board
of directors, each director may be paid an annual fee as
director and, in addition thereto, a fixed sum for attendance at
each meeting of the board of directors and executive committee
or other committees and his expenses, if any, of attendance at
any such meeting. No such payment shall preclude any director
from serving the corporation in any other capacity and receiving
compensation therefor.
Section 12. Retirement. Each director shall retire
from the board of directors on the date of the regular quarterly
meeting of directors next following the date on which he attains
the age of 72 and shall not be eligible thereafter for
reelection.
Section 13. Emeritus Director. The board of
directors may elect one or more emeritus directors to serve at
the pleasure of the board of directors. Persons eligible to
serve as emeritus directors shall be former directors of this
corporation or of a predecessor corporation; an emeritus
director shall be entitled to attend meetings of the board of
directors but shall not be entitled to vote on any matter
submitted to the board of directors. The board of directors
shall fix the compensation to be paid each emeritus director.
Notice of any meeting of the board of directors need not be
given to an emeritus director, and he shall not be counted for a
quorum of the board of directors.
Section 14. Action Without a Meeting. Any action
that may be taken by the board of directors at a meeting may be
taken without a meeting if one or more consents in writing
describing the action so taken shall be signed by all the
directors and included in the minutes or filed with the
corporate records reflecting the action taken.
Section 15. Telephonic Meetings. Meetings of the
board of directors, or of any committee designated by the board
of directors, may be held by means of conference telephone or
any other means of communication by which all directors
participating in the meeting can hear each other simultaneously
during the meeting, and such participation shall constitute
presence in person at the meeting.
Section 16. Notification of Nominations. Nominations
for the election of directors may be made by the board of
directors or a proxy committee appointed by the board of
directors or by any shareholder entitled to vote in the election
of directors generally. However, any shareholder entitled to
vote in the election of directors generally may nominate one or
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<PAGE>
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 corporation not later than (i) with respect to
an election to be held at an annual meeting of shareholders,
90 days in advance of such meeting, and (ii) with respect to an
election to be held at a special meeting of shareholders for the
election of directors, the close of business on the seventh day
following the date on which notice of such meeting is first
given to shareholders. Each such notice shall set forth:
(a) the name and address of the shareholder who intends to make
the nomination and of the person or persons to be nominated;
(b) a representation that the shareholder is a holder of record
of stock of the corporation 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; (c) 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; (d) 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, had the nominee been nominated, or intended to be
nominated, by the board of directors; and (e) the consent of
each nominee to serve as a director of the corporation if so
elected. The chairman of the meeting may refuse to acknowledge
the nomination of any person not made in compliance with the
foregoing procedure.
ARTICLE IV
Executive Committee
and Other Committees
Section 1. Appointment. The board of directors by
resolution adopted by a majority of the full board may appoint
an executive committee to consist of a chairman and two or more
other directors. The chairman of the committee shall be a
director and shall be selected by the board of directors from
the members of the executive committee. The designation of such
committee and the delegation thereto of authority shall not
operate to relieve the board of directors, or any member
thereof, of any responsibility imposed by law.
Section 2. Authority. The executive committee, when
the board of directors is not in session, shall have and may
exercise all the authority of the board of directors except to
the extent, if any, that such authority shall be limited by the
resolution appointing the executive committee and except also
that neither the executive committee nor any other committee of
the board of directors appointed pursuant to Section 10 of this
Article IV shall have the authority to (a) authorize
distributions; (b) approve or propose to shareholders actions
required by the Act to be approved by shareholders; (c) fill
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<PAGE>
vacancies on the board of directors or any of its committees;
(d) amend articles of incorporation; (e) adopt, amend or repeal
bylaws; (f) approve a plan of merger not requiring shareholder
approval; (g) authorize or approve reacquisition of shares,
except according to a formula or method prescribed by the board
of directors; or (h) authorize or approve the issuance or sale
or contract for sale of shares, or determine the designation and
relative rights, preferences and limitations of a class or
series of shares, except that the board of directors may
authorize a committee or a senior executive officer of the
corporation to do so within limits specifically prescribed by
the board of directors.
Section 3. Tenure and Qualifications. Each member of
the executive committee shall hold office until the next regular
annual meeting of the board of directors following his
appointment and until his successor is appointed as a member of
the executive committee.
Section 4. Meetings; Notice; Waiver. Regular
meetings of the executive committee or any other committee of
the board of directors appointed pursuant to Section 10 of this
Article IV may be held without notice at such times and places
as the committee may fix from time to time by resolution.
Special meetings of the executive committee or any such other
committee may be called by any member thereof upon not less than
two days' notice stating the place, date and hour of the
meeting. The provisions of Section 5 of Article III shall apply
to the method for giving of notice of special meetings of the
executive committee or any such other committee and to the
waiver of notice of any such meetings. The notice of a meeting
of the executive committee or any such other committee need not
state the business proposed to be transacted at the meeting.
Section 5. Quorum; Manner of Acting. A majority of
the members of the executive committee or any such other
committee shall constitute a quorum for the transaction of
business at any meeting thereof, and the act of a majority of
the members present at a meeting at which a quorum is present
shall be the act of the committee.
Section 6. Action Without a Meeting. Any action that
may be taken by the executive committee or any such other
committee at a meeting may be taken without a meeting if one or
more consents in writing describing the action so taken shall be
signed by all the members of the committee and included in the
minutes of the committee or filed with the corporate records
reflecting the action so taken.
Section 7. Vacancies. Any vacancy in the executive
committee or any such other committee may be filled by a
resolution adopted by a majority of the full board of directors.
Section 8. Resignations and Removal. Any member of
the executive committee or any such other committee may be
removed at any time with or without cause by resolution adopted
by a majority of the full board of directors. Any member of the
executive committee or any such other committee may resign as a
member of the committee at any time by giving written notice to
the chairman of the board or secretary of the corporation, and,
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<PAGE>
unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective.
Section 9. Procedure. The chairman of the executive
committee shall be the presiding officer of the executive
committee. The executive committee and any such other committee
shall fix its own rules of procedure which shall not be
inconsistent with these bylaws. The committee shall keep
regular minutes of its proceedings and report the same to the
board of directors for its information at the meeting thereof
held next after the proceedings shall have been taken.
Section 10. Appointment of Other Committees of the
Board of Directors. The board of directors may from time to
time by resolution adopted by a majority of the full board,
create any other committee or committees of the board of
directors and appoint members of the board to serve thereon.
Each such committee shall have two or more members and, to the
extent specified by the board of directors, may exercise the
powers of the board subject to the limitations set forth in
Section 2 of this Article IV.
Section 11. Appointment of Other Committees. The
board of directors or the executive committee or, pursuant to
the authority of the board of directors or the executive
committee, the chairman of the board may from time to time
create and appoint any other committee or committees, or
subcommittee or subcommittees, whether composed of directors,
officers or employees, with such duties, responsibilities and
authority as may be prescribed by the board of directors or the
executive committee, or by the chairman of the board pursuant to
the authority of the board of directors or of the executive
committee.
Each such committee or subcommittee shall fix its own
rules of procedure. The board of directors, the executive
committee or the chairman of the board with respect to any such
committee or subcommittee created and appointed by him shall
have power to change the members of any such committee or
subcommittee at any time, to fill vacancies and to dissolve any
such committee or subcommittee at any time. Any committee may
appoint one or more subcommittees, of its own members, to advise
with such committee, or to apportion the work of such committee.
ARTICLE V
Officers
Section 1. Number. The officers of the corporation
shall be a chairman of the board, a president, one or more
vice-presidents (the number thereof to be determined by the
board of directors), a financial vice-president, a secretary and
a treasurer, each of whom shall be elected by the board of
directors. Two or more executive vice-presidents and such other
officers and assistant officers as may be deemed necessary may
be elected or appointed by the board of directors. Any two or
more offices may be held by the same person, except the offices
of chairman of the board and secretary, or president and
secretary.
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<PAGE>
Section 2. Election and Term of Office. The officers
of the corporation to be elected by the board of directors shall
be elected annually by the board of directors at the first
meeting of the board of directors held after each annual meeting
of the shareholders. If the election of officers shall not be
held at such meeting, such election shall be held as soon
thereafter as conveniently may be. Each officer shall hold
office until his successor shall have been duly elected or until
his death or until he shall resign or shall have been removed in
the manner hereinafter provided.
Section 3. Removal. The board of directors may
remove any officer at any time with or without cause. The
election or appointment of an officer shall not of itself create
contract rights; and the resignation or removal of an officer
shall not affect the contract rights, if any, of the corporation
or the officer.
Section 4. Vacancies. A vacancy in any office
because of death, resignation, removal, disqualification or
otherwise, may be filled by the board of directors for the
unexpired portion of the term.
Section 5. Chairman of the Board. The chairman of
the board shall be a member of the board of directors, shall
preside at meetings of the board and meetings of shareholders
and shall have authority to execute contracts and other
instruments for and on behalf of the corporation. He shall be
the chief executive officer of the corporation and, subject to
the control of the board of directors, shall in general
supervise and control all the business and affairs of the
corporation. He shall perform such additional duties and
exercise such authority as from time to time may be assigned or
delegated to him by the board of directors. He may sign, with
the secretary or any other proper officer of the corporation
thereunto authorized by the board of directors, certificates for
shares of the corporation, and any deeds, mortgages, bonds,
contracts or other instruments which the board of directors has
authorized to be executed, except in cases where the signing and
execution thereof shall be expressly delegated by the board of
directors or by these bylaws to some other officer or agent of
the corporation or shall be required by law to be otherwise
signed or executed.
Section 6. President. The president shall be a
member of the board of directors and shall be the chief
operations officer of the corporation. In the absence of the
chairman of the board he shall preside at meetings of the board
and meetings of the shareholders. He may sign, with the
secretary or any other proper officer of the corporation
thereunto authorized by the board of directors, certificates for
shares of the corporation, and any deeds, mortgages, bonds,
contracts or other instruments which the board of directors has
authorized to be executed, except in cases where the signing and
execution thereof shall be expressly delegated by the board of
directors or by these bylaws to some other officer or agent of
the corporation or shall be required by law to be otherwise
signed or executed; and in general he shall perform all duties
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<PAGE>
incident to the office of president and such other duties as may
be prescribed by the board of directors from time to time.
Section 7. Executive Vice-Presidents. The executive
vice-presidents shall perform such duties and exercise such
authority as from time to time may be assigned or delegated to
them by the chairman of the board or the board of directors. An
executive vice-president may sign, with the secretary,
certificates for shares of the corporation.
Section 8. Vice-Presidents. The vice-presidents
shall perform such duties and exercise such authority as from
time to time may be assigned or delegated to them by the
chairman of the board, the president, an executive
vice-president or the board of directors. One or more of the
vice-presidents may be designated senior vice-president. Any
vice-president may sign, with the secretary or an assistant
secretary, certificates for shares of the corporation.
Section 9. Financial Vice-President. The financial
vice-president shall be the principal financial officer of the
corporation. The financial vice-president may sign with the
secretary or assistant secretary certificates for shares of the
corporation, and shall perform such other duties as from time to
time may be assigned to him by the chairman of the board or the
board of directors.
Section 10. Secretary. The secretary shall:
(a) keep the minutes of the shareholders' and of the board of
directors' meetings in one or more books provided for that
purpose; (b) see that all notices are duly given in accordance
with the provisions of these bylaws or as required by law;
(c) be custodian of the corporate records and of the seal of the
corporation and see that the seal of the corporation is affixed
to all documents the execution of which on behalf of the
corporation under its seal is duly authorized; (d) keep a
register of the post office address of each shareholder which
shall be furnished to the secretary by such shareholder;
(e) sign with the chairman of the board, the president, an
executive vice-president, a vice-president or the financial
vice-president certificates for shares of the corporation the
issuance of which shall have been authorized by resolution of
the board of directors; (f) have general charge of the stock
transfer books of the corporation; and (g) in general perform
all duties incident to the office of secretary and such other
duties as from time to time may be assigned to him by the
chairman of the board, the president or the board of directors.
Section 11. Treasurer. The treasurer shall:
(a) have charge and custody of and be responsible for all funds
and securities of the corporation; receive and give receipts for
moneys due and payable to the corporation from any source
whatsoever, and deposit all such moneys in the name of the
corporation in such banks, trust companies or other depositaries
as shall be selected in accordance with the provisions of
Article VI of these bylaws; and (b) in general perform all the
duties incident to the office of treasurer and such other duties
as from time to time may be assigned to him by the chairman of
the board, the president, the financial vice-president or the
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<PAGE>
board of directors. If required by the board of directors, the
treasurer shall give a bond for the faithful discharge of his
duties in such sum and with such surety or sureties as the board
of directors shall determine.
Section 12. Assistant Secretaries and Assistant
Treasurers. The assistant secretaries, when authorized by the
board of directors, may sign with the chairman of the board, the
president, an executive vice-president, a vice-president or
financial vice-president certificates for shares of the
corporation the issuance of which shall have been authorized by
a resolution of the board of directors. The assistant
treasurers shall, respectively, if required by the board of
directors, give bonds for the faithful discharge of their duties
in such sums and with such sureties as the board of directors
shall determine. The assistant secretaries and assistant
treasurers, in general, shall perform such duties as shall be
assigned to them by the secretary or the treasurer,
respectively, or by the chairman of the board, the president,
the financial vice-president or the board of directors.
Section 13. Salaries. The salaries of the officers
shall be fixed from time to time by the board of directors and
no officer shall be prevented from receiving such salary by
reason of the fact that he is also a director of the
corporation.
ARTICLE VI
Contracts, Loans, Checks and Deposits
Section 1. Contracts. The board of directors may
authorize any officer or officers, agent or agents, to enter
into any contract or execute and deliver any instrument in the
name of and on behalf of the corporation, and such authority may
be general or confined to specific instances.
Section 2. Loans. No loans shall be contracted on
behalf of the corporation and no evidences of indebtedness shall
be issued in its name unless authorized by a resolution of the
board of directors. Such authority may be general or confined
to specific instances.
Section 3. Checks, Drafts, etc. All checks, drafts
or other orders for the payment of money, notes or other
evidences of indebtedness issued in the name of the corporation
shall be signed in such manner as shall from time to time be
determined by resolution of the board of directors.
Section 4. Deposits. All funds of the corporation
not otherwise employed shall be deposited from time to time to
the credit of the corporation in such banks, trust companies or
other depositaries as the chairman of the board, the president
or the financial vice-president of this corporation may select.
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<PAGE>
ARTICLE VII
Certificates For Shares and Their Transfer
Section 1. Certificates for Shares. Certificates
representing shares of the corporation shall be in such form as
shall be determined by the board of directors. Such
certificates shall be signed by the chairman of the board, the
president, an executive vice-president, a vice-president or
financial vice-president and by the secretary or an assistant
secretary and sealed with the corporate seal or a facsimile
thereof. The signatures of such officers upon a certificate may
be facsimiles if the certificate is countersigned by a transfer
agent, or registered by a registrar, other than the corporation
itself or one of its employees. All certificates for shares
shall be consecutively numbered or otherwise identified. The
name and address of the person to whom the shares represented
thereby are issued, with the number of shares and date of issue,
shall be entered on the stock transfer books of the corporation.
All certificates surrendered to the corporation for transfer
shall be canceled and no new certificate shall be issued until
the former certificate for a like number of shares shall have
been surrendered and canceled, except as provided in Section 3
of this Article VII.
Section 2. Transfer of Shares. Transfer of shares of
the corporation shall be made only on the stock transfer books
of the corporation by the holder of record thereof or by his
legal representative, who shall furnish proper evidence of
authority to transfer, or by his attorney thereunto authorized
by power of attorney duly executed and filed with the secretary
of the corporation, and on surrender for cancellation of the
certificate for such shares. The person in whose name shares
stand on the books of the corporation shall be deemed by the
corporation to be the owner thereof for all purposes.
Section 3. Replacement of Certificates. In the event
of the loss, theft, mutilation or destruction of any certificate
for shares, a duplicate thereof may be issued and delivered to
the owner thereof, provided he makes a sufficient affidavit
setting forth the material facts surrounding the loss, theft,
mutilation or destruction of the original certificate and gives
a bond with corporate surety to the corporation, its officers
and agents, in an open penalty amount indemnifying the
corporation, its officers and agents, against any losses, costs
and damages suffered or incurred by reason of such loss, theft,
mutilation or destruction of the original certificate and
replacement thereof.
Section 4. Transfer Agents and Registrars. The board
of directors or executive committee may provide for transfer and
registration of the stock of the corporation in Portland,
Oregon, and in such other place or places as may be deemed
advisable, and for such purpose may appoint and change from time
to time the necessary transfer agents and registrars. In case
there shall be more than one transfer agent and more than one
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<PAGE>
registrar, the board of directors or executive committee may
provide for the interchange of certificates countersigned by the
several transfer agents and registrars. A transfer agent of the
corporation may also be designated as the dividend disbursing
agent of the corporation. Resolutions of the board of directors
or executive committee appointing transfer agents and registrars
shall provide for such terms and conditions as may be deemed
advisable, including without limitation provisions for
indemnification of the transfer agents and registrars and
instructions to them by designated officers of the corporation.
ARTICLE VIII
Seal
The board of directors shall provide a corporate seal
which shall be circular in form and shall have inscribed thereon
the name of the corporation and the state of incorporation and
the words, "Corporate Seal."
ARTICLE IX
Fiscal Year
The fiscal year of the corporation shall begin on the
first day of January and end on the thirty-first day of
December in each year.
ARTICLE X
Amendments
These bylaws or any portion hereof may be amended by a
vote of a majority of the full board of directors at any meeting
of the directors.
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<PAGE>
<PAGE>
WILLAMETTE INDUSTRIES, INC. Exhibit 4B2
Term of Medium-Term Notes, Series A
Issue Due Interest
Principal Date Date Rate
$ 5,000,000 4/8/93 4/8/98 5.71%
3,000,000 4/15/93 4/15/03 6.61%
5,000,000 4/22/93 4/22/13 7.25%
5,000,000 4/23/93 4/23/05 6.60%
5,000,000 5/6/93 5/6/98 5.66%
7,000,000 5/10/93 5/12/03 6.51%
10,000,000 5/25/93 5/25/05 6.81%
3,000,000 5/25/93 5/26/03 6.68%
3,000,000 5/27/93 5/27/05 6.85%
4,500,000 5/27/93 5/27/98 5.81%
30,000,000 5/28/93 5/28/98 5.87%
7,500,000 6/22/93 6/25/13 7.30%
12,500,000 6/22/93 6/25/13 7.30%
10,300,000 7/6/93 7/8/13 7.18%
5,000,000 7/8/93 7/8/05 6.50%
3,000,000 7/14/93 7/15/13 7.17%
5,000,000 7/21/93 7/22/13 7.14%
26,200,000 7/21/93 7/22/13 7.125%
-----------
$150,000,000
===========<PAGE>
<PAGE>
Exhibit 10E
WILLAMETTE INDUSTRIES
1993 DEFERRED COMPENSATION PLAN
Effective January 1, 1994
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
ARTICLE I PURPOSE; EFFECTIVE DATE . . . . . . . . . . . 1
ARTICLE II DEFINITIONS . . . . . . . . . . . . . . . . . 1
2.1 Account. . . . . . . . . . . . . . . . . 1
2.2 Beneficiary. . . . . . . . . . . . . . . 1
2.3 Board. . . . . . . . . . . . . . . . . . 1
2.4 Committee. . . . . . . . . . . . . . . . 1
2.5 Company. . . . . . . . . . . . . . . . . 1
2.6 Compensation . . . . . . . . . . . . . . 1
2.7 Deferral Period. . . . . . . . . . . . . 1
2.8 Determination Date . . . . . . . . . . . 1
2.9 Earnings . . . . . . . . . . . . . . . . 2
2.10 Employer . . . . . . . . . . . . . . . . 2
2.11 Matching Contributions . . . . . . . . . 2
2.12 Mirror Investment Fund . . . . . . . . . 2
2.13 Participant. . . . . . . . . . . . . . . 3
2.14 Participation Agreement. . . . . . . . . 3
2.15 Plan . . . . . . . . . . . . . . . . . . 3
2.16 Stock Purchase Plan. . . . . . . . . . . 3
2.17 Subaccount . . . . . . . . . . . . . . . 3
ARTICLE III PARTICIPATION AND DEFERRALS . . . . . . . . . 3
3.1 Eligibility and Participation. . . . . . 3
3.2 Form of Deferral . . . . . . . . . . . . 4
3.3 Limitations on Deferrals . . . . . . . . 4
3.4 Selection of Mirror Investment Fund. . . 4
3.5 Termination of Employment. . . . . . . . 4
3.6 Continuation of Deferral Amount. . . . . 4
3.7 Change in Employment Status. . . . . . . 5
ARTICLE IV DEFERRED COMPENSATION ACCOUNT . . . . . . . . 5
4.1 Account. . . . . . . . . . . . . . . . . 5
4.2 Timing of Credits; Withholding . . . . . 5
4.3 Matching Contributions . . . . . . . . . 5
4.4 Determination of Accounts and
Subaccounts. . . . . . . . . . . . . . . 5
4.5 Vesting of Accounts. . . . . . . . . . . 6
4.6 Statement of Accounts. . . . . . . . . . 6
4.7 Pension Make-Up. . . . . . . . . . . . . .6
ARTICLE V PLAN BENEFITS . . . . . . . . . . . . . . . . 6
5.1 Early Withdrawals. . . . . . . . . . . . 6
5.2 Termination of Employment. . . . . . . . 6
5.3 Form of Benefits . . . . . . . . . . . . 7
5.4 Accelerated Distribution . . . . . . . . 7
5.5 Withholding; Payroll Taxes . . . . . . . 7
5.6 Valuation Date . . . . . . . . . . . . . 7
5.7 Covered Employee . . . . . . . . . . . . 8
5.8 Payment to Guardian. . . . . . . . . . . 8
ARTICLE VI BENEFICIARY DESIGNATION . . . . . . . . . . . 8
6.1 Beneficiary Designation. . . . . . . . . 8
6.2 Amendments . . . . . . . . . . . . . . . .8
6.3 Change in Marital Status . . . . . . . . 9
6.4 No Beneficiary Designation . . . . . . . 9
ARTICLE VII ADMINISTRATION. . . . . . . . . . . . . . . . 9
7.1 Committee; Duties. . . . . . . . . . . . 9
7.2 Agents . . . . . . . . . . . . . . . . . 10
7.3 Binding Effect of Decisions. . . . . . . 10
7.4 Indemnity of Committee . . . . . . . . . 10
ARTICLE VIII CLAIMS PROCEDURE. . . . . . . . . . . . . . . 10
8.1 Claim. . . . . . . . . . . . . . . . . . 10
8.2 Denial of Claim. . . . . . . . . . . . . 10
8.3 Review of Claim. . . . . . . . . . . . . 10
8.4 Final Decision . . . . . . . . . . . . . 10
ARTICLE IX AMENDMENT AND TERMINATION OF PLAN . . . . . . 11
9.1 Amendment. . . . . . . . . . . . . . . . 11
9.2 Employer's Right to Terminate. . . . . . 11
ARTICLE X MISCELLANEOUS . . . . . . . . . . . . . . . . 12
10.1 Unfunded Plan . . . . . . . . . . . . . 12
10.2 Unsecured General Creditor. . . . . . . 12
10.3 Trust Fund. . . . . . . . . . . . . . . 12
10.4 Nonassignability. . . . . . . . . . . . 12
10.5 Not a Contract of Employment. . . . . . 13
10.6 Protective Provisions . . . . . . . . . 13
10.7 Governing Law . . . . . . . . . . . . . 13
10.8 Validity. . . . . . . . . . . . . . . . 13
10.9 Notice. . . . . . . . . . . . . . . . . 13
10.10 Successors. . . . . . . . . . . . . . . 13
</TABLE>
<PAGE>
WILLAMETTE INDUSTRIES
1993 DEFERRED COMPENSATION PLAN
ARTICLE I
PURPOSE; EFFECTIVE DATE
The purpose of this Deferred Compensation Plan is to provide
current tax planning opportunities as well as supplemental funds for
retirement or death for certain employees of Employer. It is intended that
the Plan will aid in attracting and retaining employees of exceptional
ability by providing them with these benefits. The Plan shall be effective
as of January 1, 1994.
ARTICLE II
DEFINITIONS
Whenever used in this document, the following terms shall have
the meanings set forth in this Article unless a contrary or different
meaning is expressly provided:
2.1 Account. "Account" means the device used by Employer to
measure and determine the amounts to be paid to a Participant under the
Plan. Each Account shall consist of one (1) or more Subaccounts.
2.2 Beneficiary. "Beneficiary" means the person, persons, or
entity entitled under Article VI to receive any Plan benefits payable after
a Participant's death.
2.3 Board. "Board" means the Board of Directors of the Company.
2.4 Committee. "Committee" means the committee appointed by the
Board to administer the Plan pursuant to Article VII.
2.5 Company. "Company" means Willamette Industries, Inc., an
Oregon corporation.
2.6 Compensation. "Compensation" means base salary paid in
cash. Elective pre-tax contributions made to the Stock Purchase Plan and
salary reduction contributions to a cafeteria plan shall be included in
Compensation. Income from the exercise of stock options or the vesting of
restricted stock, the amount of "gross-up" of expense items, and other
items that the Committee determines should be excluded for administrative
convenience, shall be excluded from Compensation.
2.7 Deferral Period. "Deferral Period" means the 12-month
period ending December 31.
2.8 Determination Date. "Determination Date" means the last day
of each calendar month.
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2.9 Earnings. "Earnings" for each Subaccount means the rate of
growth credited or debited to the Subaccount on each Determination Date in
a calendar year, which shall be credited or debited at the rates described
in the definition of Mirror Investment Fund (Section 2.12). "Earnings" for
an Account shall mean the aggregate Earnings for each Subaccount making up
the Account.
2.10 Employer. "Employer" means the Company and any subsidiary
or affiliate of the Company designated by the Committee.
2.11 Matching Contributions. "Matching Contributions" means the
contributions made by the Employer to the Plan. The amount of Matching
Contributions to the Plan for each Participant for any calendar year shall
be whichever of the following amounts is the least:
(a) The amount deferred by the Participant under the Plan
for the calendar year;
(b) Six percent (6%) of the Participant's "statutory"
Compensation, reduced by the amount of matching contribution
actually made for the Participant to the Stock Purchase Plan for
the calendar year; for this purpose, "statutory" Compensation
means Compensation as defined in Section 2.6 but limited to
$235,840 plus cost of living adjustments that would have been
made to the $235,840 under Section 401(a)(17) of the Internal
Revenue Code as it existed prior to its amendment by The Revenue
Reconciliation Act of 1993; or
(c) Thirty thousand dollars ($30,000) (plus cost of living
adjustments allowed for qualified plan purposes), reduced by
(i) the amount of elective before-tax and
employee after-tax contributions that could have been
made by or for the Participant to the Stock Purchase
Plan for the calendar year if the Section 401(a)(17)
limit had been the higher "statutory" Compensation
described above, and assuming the amount of such
contributions would have been limited to an amount
which would allow the highest possible amount of
matching contribution, and
(ii) the amount of matching contribution actually
made for the Participant to the Stock Purchase Plan for
the calendar year.
2.12 Mirror Investment Fund. "Mirror Investment Fund" means
each fund selected by a Participant pursuant to Article III. Each Mirror
Investment Fund shall be a phantom investment fund, which shall be credited
with earnings (whether a gain or a loss) at the same rate as one (1) of the
investment funds offered by the Stock Purchase Plan. As of January 1,
1994, there are three (3) Mirror Investment Funds whose deemed earnings
will track the earnings of the following Stock Purchase Plan investment
funds:
- 2 -<PAGE>
(a) A fixed income fund;
(b) A balanced investment fund; and
(c) An equity investment fund.
2.13 Participant. "Participant" means any individual eligible
under Section 3.1 who has elected to defer Compensation under this Plan.
2.14 Participation Agreement. "Participation Agreement" means
the agreement submitted by a Participant to the Committee prior to the
beginning of a Deferral Period, specifying the amount to be deferred for
such Deferral Period.
2.15 Plan. "Plan" means this 1993 Deferred Compensation Plan as
amended from time to time.
2.16 Stock Purchase Plan. "Stock Purchase Plan" means the
Willamette Industries Stock Purchase Plan, or any successor defined
contribution plan maintained by the Employer that qualifies under
Sections 401(a) and 401(k) of the Internal Revenue Code, or any successor
provisions thereto.
2.17 Subaccount. "Subaccount" means the device used by Employer
to measure and determine the amount of deferrals and matching contributions
allocated to each Mirror Investment Fund selected by the participant, and
the Earnings allocated therein.
ARTICLE III
PARTICIPATION AND DEFERRALS
3.1 Eligibility and Participation.
(a) Eligibility. Eligibility to participate in the Plan
shall be limited to:
(i) Officers of Employer, and
(ii) Any other employee designated, from time to
time, by the Board.
(b) Participation. An eligible individual may elect to
participate in the Plan with respect to any Deferral Period by
submitting a Participation Agreement to the Committee by the
December 31 immediately preceding the beginning of the Deferral
Period.
(c) Part-Year Participation. When an individual first
becomes eligible to participate during a Deferral Period, a
Participation Agreement may be submitted to the Committee no
- 3 -
<PAGE>
later than thirty (30) days after the Committee notifies the
individual of eligibility to participate. Such Participation
Agreement will be effective only with regard to Compensation earned
following submission to the Committee.
3.2 Form of Deferral. A Participant may elect a deferral in the
Participation Agreement as follows: A deferral shall be a portion of the
Compensation payable by Employer to the Participant during the Deferral
Period. The amount to be deferred shall be stated as a flat percentage or
as a flat dollar amount not to exceed the maximums and not to be less than
the minimums described in Section 3.3.
3.3 Limitations on Deferrals. The following limitations shall
apply to deferrals:
(a) Maximum. The maximum percentage of Compensation
deferred shall be fifty percent (50%) for executive officers and
thirty percent (30%) for other officers or other employees.
(b) Minimum. The minimum deferral amount shall be two
hundred dollars ($200) for each month in the Deferral Period.
(c) Changes in Minimum or Maximum. The Committee may
change the minimum or maximum deferral amounts from time to time
by giving written notice to all Participants. No such change may
affect the amount of deferral specified in a Participation
Agreement made prior to the Committee's action.
3.4 Selection of Mirror Investment Fund.
(a) At the time a Participant elects a deferral for a
Deferral Period, the Participant shall also select the Mirror
Investment Fund(s) in which the Participant wishes to have the
combined amount of both deferrals and Matching Contributions
deemed invested. The Participant may select any combination of
one (1) or more of the Mirror Investment Funds as long as at
least 25% is credited to each of the Mirror Investment Funds
selected.
(b) At the time the Participant selects Mirror Investment
Fund(s) for new deferrals and Matching Contributions, a different
allocation may be selected among Mirror Investment Funds for
current account balances, which may be different than the
allocation for new deferrals and Matching Contributions.
3.5 Termination of Employment. If a Participant terminates
employment with Employer prior to the end of the Deferral Period, the
Deferral Period shall end at the date of termination.
3.6 Continuation of Deferral Amount. Once a Participant has
made a Participation Agreement, the elected deferral amount shall remain in
effect for the applicable Deferral Period. The election shall be
irrevocable except as provided in Section 5.1(b) relating to unforeseen
emergency.
- 4 -
<PAGE>
3.7 Change in Employment Status. If the Board determines that a
Participant's performance is no longer at a level that deserves reward
through participation in the Plan, but does not terminate the Participant's
employment with Employer, no new Participation Agreements may be made by
such Participant after notice of such determination is given by the Board.
ARTICLE IV
DEFERRED COMPENSATION ACCOUNT
4.1 Account. The amounts deferred by a Participant under the
Plan, any matching contributions, and Earnings shall be credited to the
Participant's Account. Separate Subaccounts will be maintained to reflect
Mirror Investment Fund selections. The Account and Subaccounts shall be
bookkeeping devices utilized for the sole purpose of determining the
benefits payable under the Plan and shall not constitute a separate fund of
assets.
4.2 Timing of Credits; Withholding. A Participant's deferred
Compensation shall be credited to the Account and Subaccounts at the time
it would have been payable to the Participant. Any withholding of taxes or
other amounts with respect to deferred Compensation (and Matching
Contributions) that is required by state, federal, or local law shall be
withheld from the Participant's corresponding nondeferred Compensation.
4.3 Matching Contributions. Employer shall make Matching
Contributions to a Participant's Account. Matching Contributions shall be
credited as of the last day of each calendar month.
4.4 Determination of Accounts and Subaccounts. Each
Participant's Account and Subaccount(s) as of each Determination Date shall
consist of the balance of the Account and Subaccount(s) as of the
immediately preceding Determination Date, adjusted as follows:
(a) New Deferrals. The Account and Subaccount(s) shall be
increased by any deferred Compensation credited since such
Determination Date.
(b) Employer Contributions. The Account and Subaccount(s)
shall be increased by Matching Contributions credited since such
Determination Date.
(c) Distributions. The Account and Subaccount(s) shall be
reduced by any benefits distributed to the Participant since such
Determination Date.
(d) Earnings. The Account and Subaccount(s) shall be
increased by the Earnings credited on the average daily balance
in the Account and each Subaccount since such Determination Date.
(e) Other Adjustments. The Account and Subaccount(s) shall
be increased or reduced, as the case may be, since such
Determination Date by such adjustments as the Committee may
- 5 -
<PAGE>
determine are necessary and appropriate, including but not limited to
a reduction caused by Employer's payment of the Participant's share of
any payroll taxes attributable to the amount of Earnings.
4.5 Vesting of Accounts. Except as otherwise provided in
Section 5.4, each Participant shall be one hundred percent (100%) vested at
all times in the amounts credited to such Participant's Account,
Subaccount, and Earnings thereon, regardless whether attributable to
deferrals or matching contributions.
4.6 Statement of Accounts. The Committee shall give to each
Participant a statement showing the balances in the Participant's Account
and Subaccount(s) on a semiannual basis and at such other times as may be
determined by the Committee.
4.7 Pension Make-Up. Employer shall restore an amount equal to
any reduction in a Participant's defined benefit pension plan benefits
because of deferrals under this Plan to the extent that the defined benefit
plan benefits are not restored by any other Employer-provided plan or
agreement.
ARTICLE V
PLAN BENEFITS
5.1 Early Withdrawals. A Participant's Account may be
distributed to the Participant before termination of employment as follows:
(a) Election For Early Withdrawal. A Participant may elect
in a Participation Agreement to withdraw all or any portion of
the amount deferred by that Participation Agreement as of a date
specified in the election. Such date shall not be sooner than
five (5) years after the date the Deferral Period commences.
(b) Unforeseeable Emergency. Upon a finding that a
Participant or Beneficiary has suffered an unforeseeable
emergency, the Committee may, in its sole discretion, make
distributions from the Participant's Account. "Unforeseeable
emergency" means an unanticipated emergency that is caused by an
event beyond the control of the Participant or Beneficiary and
that would result in severe financial hardship to the individual
if early withdrawal were not permitted. Any early withdrawal
approved by the Committee shall be limited to the amount
necessary to meet the emergency. If a Participant receives an
early withdrawal, no additional deferrals shall be made for the
Participant for the remainder of the calendar year in which
withdrawal is made or for the immediately succeeding calendar
year.
(c) Form of Payment. Withdrawals shall be paid in a lump
sum and shall be charged to the Participant's Account as a
distribution.
5.2 Termination of Employment. If a Participant terminates
employment with Employer for any reason, including death, Employer shall
- 6 -
<PAGE>
pay to the Participant (or the Participant's Beneficiary, in case of death)
benefits equal to the balance in the Account.
5.3 Form of Benefits. Except as provided below, benefits as a
result of death or other termination of employment shall be paid in the
form elected by the Participant prior to the beginning of the Deferral
Period. Forms of benefit payment shall be:
(a) A lump sum amount which is equal to the applicable
Account balance.
(b) Equal monthly installments of the Account amortized
over a period of sixty (60), one hundred twenty (120), or one
hundred eighty (180) months. Earnings on the unpaid balance
shall continue to be credited to Subaccounts at the appropriate
Mirror Investment Fund rate.
Notwithstanding an installment election, if the Participant's
Account is fifty thousand dollars ($50,000) or less on the valuation date
referred to in Section 5.6, the benefit shall be paid in a lump sum.
A Participant who elects payment in installments may also elect
prior to the beginning of the Deferral Period whether, in the event of the
Participant's death prior to complete distribution of the Participant's
Account:
(a) The remaining amount of the Participant's Account is to
be paid in a lump sum to the Beneficiary (in which case payment
shall be made within thirty (30) days after the date of death),
or
(b) Installment payments are to be made to the Beneficiary
over the elected installment period (or over the remainder of the
period).
5.4 Accelerated Distribution. Notwithstanding any other
provision of the Plan, a Participant at any time shall be entitled to
receive, upon written request to the Committee, a lump sum distribution
equal to ninety percent (90%) of the Account balance as of the
Determination Date immediately preceding the date on which the Committee
receives the written request. The remaining balance shall be forfeited by
the Participant and the Participant shall no longer be eligible to
participate in the Plan from that date forward. The amount payable under
this section shall be paid in a lump sum within sixty-five (65) days
following the receipt of the notice by the Committee from the Participant.
5.5 Withholding; Payroll Taxes. Employer shall withhold from
payments hereunder any taxes required to be withheld from such payments
under federal, state, or local law. A Beneficiary, however, may elect not
to have withholding of federal income tax pursuant to Section 3405 of the
Internal Revenue Code, or any successor provision thereto.
5.6 Valuation Date. Unless a delayed valuation date is elected
by the Participant, the last day of the month following the month of
- 7 -
<PAGE>
termination shall be the valuation date. The Participant may elect prior
to the beginning of the Deferral Period that the valuation date be delayed
to the last day of the month in which occurs the first, second, or third
anniversary of the date of termination; provided, however, that payment
must be made or begun no later than January of the calendar year in which
the Participant attains age 70.
The amount of a lump sum payment shall be based on the value of
the Participant's Account on the valuation date. Except as provided in
Section 5.7, payments shall be made or commence within thirty (30) days
after the valuation date.
5.7 Covered Employee. Notwithstanding Section 5.6, if any
portion of a payment in a calendar year would be disallowed as a deduction
to Employer because the Participant is a "covered employee" for that
calendar year under Section 162(m) of the Internal Revenue Code, that
portion shall instead be paid in the immediately following calendar year,
by January 30. This section does not apply to early withdrawals under
Section 5.1 or accelerated distribution under Section 5.4.
5.8 Payment to Guardian. If a distribution is payable to a
minor or a person declared incompetent or to a person incapable of handling
the disposition of property, the Committee may direct payment to the
guardian, legal representative, or person having the care and custody of
such minor, incompetent, or person. The Committee may require proof of
incompetency, minority, incapacity, or guardianship as it may deem
appropriate prior to distribution. Such distribution shall completely
discharge the Committee from all liability with respect to such benefit.
ARTICLE VI
BENEFICIARY DESIGNATION
6.1 Beneficiary Designation. Each Participant shall have the
right, at any time, to designate one (1) or more persons or an entity as
Beneficiary (both primary as well as secondary) to whom benefits under this
Plan shall be paid in the event of a Participant's death prior to complete
distribution of the Participant's Account. Each Beneficiary designation
shall be in a written form prescribed by the Committee and will be
effective only when filed with the Committee during the Participant's
lifetime. Designation by a married Participant of a Beneficiary other than
the Participant's spouse shall not be effective unless the spouse executes
a written consent that acknowledges the effect of the designation and is
witnessed by a notary public, or the consent cannot be obtained because the
spouse cannot be located.
6.2 Amendments. Except as provided below, any nonspousal
designation of Beneficiary may be changed by a Participant without the
consent of such Beneficiary by the filing of a new designation with the
Committee. The filing of a new designation shall cancel all designations
previously filed.
- 8 -
<PAGE>
6.3 Change in Marital Status. If the Participant's marital
status changes after the Participant has designated a Beneficiary, the
following shall apply:
(a) If the participant is married at death but was
unmarried when the designation was made, the designation shall be
void unless the spouse has consented to it in the manner
prescribed above.
(b) If the Participant is unmarried at death but was
married when the designation was made:
(i) The designation shall be void if the spouse
was named as Beneficiary.
(ii) The designation shall remain valid if a
nonspouse Beneficiary was named.
(c) If the Participant was married when the designation was
made and is married to a different spouse at death, the
designation shall be void unless the new spouse has consented to
it in the manner prescribed above.
6.4 No Beneficiary Designation. If any Participant fails to
designate a Beneficiary in the manner provided above, or if the Beneficiary
designated by a deceased Participant dies before the Participant or before
complete distribution of the Participant's benefits, the Participant's
Beneficiary shall be the person in the first of the following classes in
which there is a survivor:
(a) The Participant's surviving spouse;
(b) The Participant's children in equal shares, except that
if any of the children predeceases the Participant but leaves
issue surviving, then such issue shall take by right of
representation the share the parent would have taken if living;
(c) The Participant's estate.
ARTICLE VII
ADMINISTRATION
7.1 Committee; Duties. This Plan shall be administered by the
Committee, which shall be the Compensation Committee of the Board or such
other Committee as the Board may designate. The Committee shall have the
authority to make, amend, interpret, and enforce all appropriate rules and
regulations for the administration of the Plan and decide or resolve any
and all questions, including interpretations of the Plan, as may arise in
such administration. A majority vote of the Committee members shall
control any decision. Members of the Committee may be Participants under
this Plan.
- 9 -
<PAGE>
7.2 Agents. The Committee may, from time to time, employ agents
and delegate to them such administrative duties as it sees fit, and may
from time to time consult with counsel who may be counsel to the Company.
7.3 Binding Effect of Decisions. The decision or action of the
Committee with respect to any question arising out of or in connection with
the administration, interpretation, and application of the Plan and the
rules and regulations promulgated hereunder shall be final, conclusive, and
binding upon all persons having any interest in the Plan.
7.4 Indemnity of Committee. The Company shall indemnify and
hold harmless the members of the Committee against any and all claims,
loss, damage, expense, or liability arising from any action or failure to
act with respect to this Plan on account of such person's service on the
Committee, except in the case of gross negligence or willful misconduct.
ARTICLE VIII
CLAIMS PROCEDURE
8.1 Claim. Any person claiming a benefit, requesting an
interpretation or ruling under the Plan, or requesting information under
the Plan shall present the request in writing to the Committee, which shall
respond in writing as soon as practicable.
8.2 Denial of Claim. If the claim or request is denied, the
written notice of denial shall state:
(a) The reasons for denial, with specific reference to the
Plan provisions on which the denial is based.
(b) A description of any additional material or information
required and an explanation of why it is necessary.
(c) An explanation of the Plan's claim review procedure.
8.3 Review of Claim. Any person whose claim or request is
denied or who has not received a response within thirty (30) days may
request review by notice given in writing to the Committee. The claim or
request shall be reviewed by the Committee which may, but shall not be
required to, grant the claimant a hearing. On review, the claimant may
have representation, examine pertinent documents, and submit issues and
comments in writing.
8.4 Final Decision. The decision on review shall normally be
made within sixty (60) days. If an extension of time is required for a
hearing or other special circumstances, the claimant shall be notified and
the time limit shall be one hundred twenty (120) days. The decision shall
be in writing and shall state the reasons and the relevant Plan provisions.
All decisions on review shall be final and bind all parties concerned.
- 10 -
<PAGE>
ARTICLE IX
AMENDMENT AND TERMINATION OF PLAN
9.1 Amendment. The Board may at any time amend the Plan by
written instrument, notice of which shall be given to all Participants and
to Beneficiaries receiving installment payments, subject to the following:
(a) Preservation of Account Balance. No amendment shall
reduce the amount accrued in any Account to the date such notice
of the amendment is given.
(b) Changes in Mirror Investment Funds. Amendments may
change the Mirror Investment Funds available to Participants for
any date subsequent to the date of amendment.
9.2 Employer's Right to Terminate. The Board may at any time
partially or completely terminate the Plan if, in its judgment, the tax,
accounting, or other effects of the continuance of the Plan or potential
payments thereunder would not be in the best interests of Employer.
(a) Partial Termination. The Board may partially terminate
the Plan by instructing the Committee not to accept any
additional Participation Agreements. If such a partial
termination occurs, the Plan shall continue to operate and be
effective with regard to Participation Agreements entered into
prior to the effective date of such partial termination.
(b) Complete Termination. The Board may completely
terminate the Plan by instructing the Committee not to accept any
additional Participation Agreements, and by terminating all
ongoing deferrals. If such a complete termination occurs, the
Plan shall cease to operate and Employer shall pay out each
Account. Payment shall be made as a lump sum or in equal monthly
installments over the following period, based on the Account
balance:
<TABLE>
<CAPTION>
Account Balance Payout Period
<S> <C>
Less than $100,000 Lump Sum
$100,000 but less than $500,000 3 Years
$500,000 or more 5 Years
</TABLE>
Earnings at the appropriate rate shall continue to be credited on
the unpaid balance in each Account.
- 11 -
<PAGE>
ARTICLE X
MISCELLANEOUS
10.1 Unfunded Plan. This plan is an unfunded plan maintained
primarily to provide deferred compensation benefits for a select group of
"management or highly-compensated employees" within the meaning of
Sections 201, 301, and 401 of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"), and therefore is exempt from the provisions
of Parts 2, 3, and 4 of Title I of ERISA. Accordingly, the Board may
terminate the Plan and make no further benefit payments or remove certain
employees as Participants if it is determined by the United States
Department of Labor, a court of competent jurisdiction, or an opinion of
counsel that the Plan constitutes an employee pension benefit plan within
the meaning of Section 3(2) of ERISA (as currently in effect or hereafter
amended) which is not so exempt.
10.2 Unsecured General Creditor. Participants and their
Beneficiaries, heirs, successors, and assigns shall have no secured legal
or equitable rights, interest, or claims in any property or assets of
Employer, nor shall they be Beneficiaries of, or have any rights, claims,
or interests in any life insurance policies, annuity contracts, or the
proceeds therefrom owned or which may be acquired by Employer. Except as
provided in Section 10.3, such policies, annuity contracts, or other assets
of Employer shall not be held under any trust for the benefit of
Participants, their Beneficiaries, heirs, successors, or assigns, or held
in any way as collateral security for the fulfilling of the obligations of
Employer under this Plan. Any and all of Employer's assets and policies
shall be, and remain, the general, unpledged, unrestricted assets of
Employer. Employer's obligation under the Plan shall be that of an
unfunded and unsecured promise to pay money in the future.
10.3 Trust Fund. At its discretion, Employer may establish one
(1) or more trusts, with such trustees as the Board may approve, for the
purpose of providing for the payment of benefits owed under the Plan.
Although such a trust shall be irrevocable, its assets shall be held for
payment of all Employer's general creditors in the event of insolvency. To
the extent any benefits provided under the Plan are paid from any such
trust, Employer shall have no further obligation to pay them. If not paid
from the trust, such benefits shall remain the obligation of Employer.
Notwithstanding the existence of such a trust, it is intended that the Plan
be unfunded for tax purposes and for purposes of Title I of ERISA.
10.4 Nonassignability. Neither a Participant nor any other
person shall have any right to commute, sell, assign, transfer, pledge,
anticipate, mortgage, or otherwise encumber, transfer, hypothecate, or
convey in advance of actual receipt the amounts, if any, payable hereunder,
or any part thereof, which are, and all rights to which are, expressly
declared to be unassignable and nontransferable. No part of the amounts
payable shall, prior to actual payment, be subject to seizure or
sequestration for the payment of any debts, judgments, alimony, or separate
maintenance owed by a participant or any other person, nor be transferable
by operation of law in the event of a Participant's or any other person's
bankruptcy or insolvency.
- 12 -
<PAGE>
10.5 Not a Contract of Employment. This Plan shall not
constitute a contract of employment between Employer and the Participant.
Nothing in this Plan shall give a Participant the right to be retained in
the service of Employer or to interfere with the right of Employer to
discipline or discharge a participant at any time.
10.6 Protective Provisions. A Participant will cooperate with
Employer by furnishing any and all information requested by Employer in
order to facilitate the payment of benefits hereunder and by taking such
physical examinations as Employer may deem necessary and taking such other
action as may be requested by Employer.
10.7 Governing Law. The provisions of this Plan shall be
construed and interpreted according to the laws of the state of Oregon,
except as preempted by federal law.
10.8 Validity. In case any provision of this Plan shall be held
illegal or invalid for any reason, said illegality or invalidity shall not
affect the remaining parts hereof, but this Plan shall be construed and
enforced as if such illegal and invalid provision had never been inserted
herein.
10.9 Notice. Any notice required or permitted under the Plan
shall be sufficient if in writing and hand delivered or sent by registered
or certified mail. Such notice shall be deemed as given as of the date of
delivery or, if delivery is made by mail, as of the date shown on the
postmark on the receipt for registration or certification. Mailed notice
to the Committee shall be directed to the Company's address. Mailed notice
to a Participant or Beneficiary shall be directed to the individual's last
known address in Employer's records.
10.10 Successors. The provisions of this Plan shall bind and
inure to the benefit of Employer and its successors and assigns. The term
successors as used herein shall include any corporate or other business
entity which shall, whether by merger, consolidation, purchase, or
otherwise, acquire all or substantially all of the business and assets of
Employer, and successors of any such corporation or other business entity.
Date signed: WILLAMETTE INDUSTRIES, INC.
December 27, 1993 By /s/ J. A. Parsons
Executive Vice President
- 13 -<PAGE>
<PAGE>
EXHIBIT 12
WILLAMETTE INDUSTRIES, INC. AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(DOLLAR AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
Year Ended December 31,
----------------------------------------------
1989 1990 1991 1992 1993
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Fixed Charges:
Interest Cost $42,140 $52,028 $63,986 $73,776 $79,194
One-third rent expense 2,518 2,948 3,725 4,495 4,819
------- ------- ------- ------- -------
Total Fixed Charges 44,658 54,976 67,711 78,271 84,013
======= ======= ======= ======= =======
Add (Deduct):
Earnings before Income Taxes 308,056 208,671 73,609 129,452 189,168
Interest Capitalized (13,304) (22,129) (723) (7,354) (15,904)
------- ------- ------- ------- -------
Earnings for Fixed Charges $339,410 $241,518 $140,597 $200,369 $257,277
======= ======= ======= ======= =======
Ratio of Earnings to
Fixed Charges 7.60 4.39 2.08 2.56 3.06
======= ======= ======= ======= =======
</TABLE>
<PAGE>
<PAGE>
Exhibit 23
Consent of Independent Auditors
The Board of Directors
Willamette Industries, Inc.:
We consent to incorporation by reference in the Registration Statements
No. 2-89514, No. 33-5847 and No. 33-40504 on Form S-8 of Willamette Industries,
Inc. of our report dated February 10, 1994 relating to the consolidated balance
sheets of Willamette Industries, Inc. and subsidiaries as of December 31, 1993
and 1992, and the related consolidated statements of earnings, stockholders'
equity and cash flows for each of the years in the three-year period ended
December 31, 1993, which report appears in the December 31, 1993 annual report
on Form 10-K of Willamette Industries, Inc.
KPMG PEAT MARWICK
March 18, 1994
<PAGE>
