SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
X ANNUAL REPORT PURSUANT TO SECTION 15(d)
------- OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 30, 1996
TRANSITION REPORT PURSUANT TO SECTION 15(d)
------- OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 0-3730
A. Full title of the plan and address of the plan:
WILLAMETTE INDUSTRIES
STOCK PURCHASE PLAN
1300 S.W. Fifth Avenue, Suite 3800
Portland, Oregon 97201
B. Name of issuer of the securities held pursuant to the plan and
the address of its principal executive office:
WILLAMETTE INDUSTRIES, INC.
1300 S.W. FIFTH AVENUE, SUITE 3800
PORTLAND, OREGON 97201
<PAGE>
WILLAMETTE INDUSTRIES STOCK PURCHASE PLAN
Index to Financial Statements and Schedules
Independent Auditors' Report dated April 15, 1997.............................1
Statements of Net Assets Available for Benefits at
December 30, 1996 and 1995.........................................2-3
Statements of Changes in Net Assets Available for Benefits
for the years ended December 30, 1996 and 1995.....................4-5
Notes to Financial Statements..............................................6-10
Schedule of Assets Held for Investment Purposes..............................11
Schedule of Reportable Transactions..........................................12
Exhibit 23 - Consent of Independent Auditors dated June 26, 1997, to the
incorporation by reference of their report dated April 15, 1997,
to Registration Statement No. 33-59517 on Form S-8
<PAGE>
KPMG Peat Marwick LLP
Suite 2000
1211 South West Fifth Avenue
Portland, OR 97204
Independent Auditors' Report
Willamette Industries Stock Purchase
Plan Committee
Willamette Industries Stock Purchase Plan:
We have audited the accompanying statements of net assets available for benefits
of Willamette Industries Stock Purchase Plan as of December 30, 1996 and 1995,
and the related statements of changes in net assets available for benefits for
the years then ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements 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 financial statements referred to above present fairly, in
all material respects, the net assets available for benefits as of December 30,
1996 and 1995, and the changes in net assets available for benefits for the
years then ended in conformity with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplementary information included in
Schedules A and B is presented for purposes of complying with the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974 and is not a required part of the basic
financial statements. The supplemental information has been subjected to the
auditing procedures applied in the audits of the basic financial statements and,
in our opinion, is fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
/s/ KPMG Peat Marwick LLP
April 15, 1997
- 1 -
<PAGE>
WILLAMETTE INDUSTRIES STOCK PURCHASE PLAN
Statement of Net Assets
Available for Benefits
December 30, 1996
<TABLE>
<CAPTION>
Stable Willamette
Asset Balanced Equity Stock
Assets Fund Fund Fund Fund Total
------ ---- ---- ---- ---- -----
Investments at fair value (note 6):
<S> <C> <C> <C> <C> <C>
Cash $ 11 - - - 11
Money market fund 44,152 76,666 139,354 1,999,848 2,260,020
Mutual funds - 8,439,365 9,667,900 - 18,107,265
Common stock - Willamette
Industries, Inc.; 3,567,781
shares - - - 248,406,752 248,406,752
Guaranteed investment contract
fund (GIC) 5,090,754 - - - 5,090,754
--------- --------- --------- ----------- -----------
Total investments 5,134,917 8,516,031 9,807,254 250,406,600 273,864,802
Accrued investment income 149 147 193 5,930 6,419
--------- --------- --------- ----------- -----------
Total assets 5,135,066 8,516,178 9,807,447 250,412,530 273,871,221
Liabilities
-----------
Benefits payable 36,525 19,228 2,556 1,330,840 1,389,149
--------- --------- --------- ----------- -----------
Net assets available for
benefits $ 5,098,541 8,496,950 9,804,891 249,081,690 272,482,072
========= ========= ========= =========== ===========
</TABLE>
See accompanying notes to financial statements.
- 2 -
<PAGE>
WILLAMETTE INDUSTRIES STOCK PURCHASE PLAN
Statement of Net Assets
Available for Benefits
December 30, 1995
<TABLE>
<CAPTION>
Stable Willamette
Asset Balanced Equity Stock
Assets Fund Fund Fund Fund Total
------ ---- ---- ---- ---- -----
Investments at fair value (note 6):
<S> <C> <C> <C> <C> <C>
Cash $ - 7,855 - - 7,855
Money market fund 459,180 133,400 233,897 1,914,843 2,741,320
Mutual funds - 7,686,877 5,571,019 - 13,257,896
Common stock - Willamette
Industries, Inc.; 3,642,611
shares - - - 204,896,869 204,896,869
Guaranteed investment contract
fund (GIC) 4,073,905 - - - 4,073,905
--------- --------- --------- ----------- -----------
Total investments 4,533,085 7,828,132 5,804,916 206,811,712 224,977,845
Accrued investment income 2,073 665 1,274 5,696 9,708
--------- --------- --------- ----------- -----------
Total assets 4,535,158 7,828,797 5,806,190 206,817,408 224,987,553
Liabilities
-----------
Accounts payable - - - 3,294 3,294
Benefits payable 82,864 103,252 9,755 2,633,408 2,829,279
--------- --------- --------- ----------- -----------
Net assets available for
benefits $ 4,452,294 7,725,545 5,796,435 204,180,706 222,154,980
========= ========= ========= =========== ===========
</TABLE>
See accompanying notes to financial statements.
- 3 -
<PAGE>
WILLAMETTE INDUSTRIES STOCK PURCHASE PLAN
Statement of Changes in Net Assets
Available for Benefits
Year ended December 30, 1996
<TABLE>
<CAPTION>
Stable Willamette
Asset Balanced Equity Stock
Fund Fund Fund Fund Total
---- ---- ---- ---- -----
Additions to net assets attributed to:
<S> <C> <C> <C> <C> <C>
Investment income:
Dividends $ - 166,135 92,292 4,404,370 4,662,797
Interest and other income 5,352 212,164 7,689 52,356 277,561
Net change in fair value of
investments 289,921 431,416 1,129,379 49,708,451 51,559,167
--------- --------- --------- ---------- -----------
Total investment income 295,273 809,715 1,229,360 54,165,177 56,499,525
--------- --------- --------- ---------- -----------
Contributions (note 1):
Employer - - - 8,096,370 8,096,370
Employee 404,515 902,360 1,491,079 6,351,148 9,149,102
--------- --------- --------- ---------- -----------
Total contributions 404,515 902,360 1,491,079 14,447,518 17,245,472
--------- --------- --------- ---------- -----------
Transfers from other plans
(note 5) 51,161 97,785 80,051 - 228,997
--------- --------- --------- ---------- -----------
Total additions 750,949 1,809,860 2,800,490 68,612,695 73,973,994
Deductions from net assets attributed to:
Payments and stock distributions to
participants (334,117) (814,886) (830,174) (21,656,385) (23,635,562)
Administrative expenses (11,340) - - - (11,340)
Interfund transfers 240,755 (223,569) 2,038,140 (2,055,326) -
--------- --------- --------- ------------ -----------
Net change in assets 646,247 771,405 4,008,456 44,900,984 50,327,092
Net assets available for benefits:
Beginning of year 4,452,294 7,725,545 5,796,435 204,180,706 222,154,980
--------- --------- --------- ----------- -----------
End of year $ 5,098,541 8,496,950 9,804,891 249,081,690 272,482,072
========= ========= ========= =========== ===========
</TABLE>
See accompanying notes to financial statements.
- 4 -
<PAGE>
WILLAMETTE INDUSTRIES STOCK PURCHASE PLAN
Statement of Changes in Net Assets
Available for Benefits
Year ended December 30, 1995
<TABLE>
<CAPTION>
Stable Willamette
Asset Balanced Equity Stock
Fund Fund Fund Fund Total
---- ---- ---- ---- -----
Additions to net assets attributed to:
<S> <C> <C> <C> <C> <C>
Investment income:
Dividends $ - 375,156 72,212 4,263,744 4,711,112
Interest and other income 11,249 13,044 7,475 84,486 116,254
Net change in fair value of
investments 254,286 693,846 1,057,931 38,329,907 40,335,970
--------- ---------- --------- ---------- ----------
Total investment income 265,535 1,082,046 1,137,618 42,678,137 45,163,336
--------- ---------- --------- ---------- ----------
Contributions (note 1):
Employer - - - 6,864,018 6,864,018
Employee 386,257 880,432 914,759 5,742,569 7,924,017
--------- ---------- --------- ---------- ----------
Total contributions 386,257 880,432 914,759 12,606,587 14,788,035
--------- ---------- --------- ---------- ----------
Transfers from other plans
(note 5) 83,308 103,818 100,367 19,278 306,771
--------- ---------- --------- ---------- ----------
Total additions 735,100 2,066,296 2,152,744 55,304,002 60,258,142
Deductions from net assets attributed to:
Payments and stock distributions to
participants (1,031,715) (1,213,445) (467,980) (36,374,033) (39,087,173)
Administrative expenses (10,465) - - - (10,465)
Interfund transfers 94,938 (1,069,000) (578,067) 1,552,129 -
--------- ---------- --------- --------- -----------
Net change in assets (212,142) (216,149) 1,106,697 20,482,098 21,160,504
Net assets available for benefits:
Beginning of year 4,664,436 7,941,694 4,689,738 183,698,608 200,994,476
--------- --------- --------- ----------- -----------
End of year $ 4,452,294 7,725,545 5,796,435 204,180,706 222,154,980
========= ========= ========= =========== ===========
</TABLE>
See accompanying notes to financial statements.
- 5 -
<PAGE>
WILLAMETTE INDUSTRIES STOCK PURCHASE PLAN
Notes to Financial Statements
December 30, 1996 and 1995
(1) Description of the Plan
The following description of the Willamette Industries Stock Purchase Plan
(the Plan) is provided for general information purposes only. Participants
should refer to the Summary Plan Description for more complete information.
(a) General
Eligible employees may elect to enroll in the Plan on the semiannual
enrollment dates following six months of service. The Plan is subject to
the provisions of the Employee Retirement Income Security Act of 1974
(ERISA).
(b) Contributions
Effective December 31, 1993, eligible employees of Willamette Industries,
Inc. (the Company) and its participating subsidiaries may contribute up to
7% of their regular monthly gross cash earnings as established on January 1
of each year. The Company and its participating subsidiaries contribute
monthly an amount equal to 100% of the contributions of its employees up to
6%, less the amount of any forfeitures.
The Plan provides for a qualified cash or deferred arrangement as defined
in Section 401(k) of the Internal Revenue Code. Participating employees may
elect one of two methods of making employee contributions. A participant
may elect to make either:
1) Pre-tax contributions ("deferred contributions") which will not be
included in the participant's current earnings for federal income tax
purposes; or
2) After-tax contributions ("nondeferred contributions") which will be
included in the participant's current earnings for federal income tax
purposes.
Participating employees may direct that their own contributions be invested
in (a) a Stable Asset Fund holding primarily guaranteed investment
contracts (GIC's), (b) a Balanced Fund holding primarily stocks and bonds,
(c) an Equity Fund holding primarily stocks, or (d) a Willamette Stock Fund
holding common stock of the Company. The contributions can be allocated
among the four investment choices in multiples of 5%. In addition,
reallocation between investment choices is allowed quarterly.
(Continued)
- 6 -
<PAGE>
WILLAMETTE INDUSTRIES STOCK PURCHASE PLAN
Notes to Financial Statements
Employer and employee contributions by participating company for the years
ended December 30, 1996 and 1995 were as follows:
1996 1995
---- ----
Willamette Industries, Inc. $ 17,204,120 14,738,667
Wimer Logging Co. 41,352 49,368
---------- ----------
Total $ 17,245,472 14,788,035
========== ==========
(c) Participant Accounts
Each participant's account is credited with the participant's and employer
contributions and an allocation of Plan earnings. Allocations are based on
participant earnings and account balances, as defined in the Plan.
(d) Vesting
A participant's interest in his or her Employee Contribution Account is
always fully vested and is not subject to forfeiture.
A participant's interest in his or her employer Contribution Account fully
vests when the participant: (i) attains age 65; (ii) completes five years
of service; (iii) dies; or (iv) becomes totally and permanently disabled,
whichever comes first.
Any part of a participant's Employer Contribution Account which is not
vested at the time employment terminates is forfeited when the participant
incurs five consecutive one-year periods of severance. A participant with
less than a 100% vested interest in their Employer Contribution Account who
voluntarily withdraws from the Plan does not forfeit the remainder of the
account merely by reason of withdrawal; the vested percentage in the
remainder continues to increase in accordance with the participant's years
of service.
If there is a complete discontinuance of contributions to the Plan by an
employer, then all participants employed by such employer become fully
vested in their Employer Contribution Accounts. Each participant who is
vested in his or her Employer Contribution Account can elect to have any or
all of his or her respective Employer Contribution Account funds
diversified into one or more of the available elective investment funds
(other than the Willamette Stock Fund). This diversification election
applies only to the participant's then existing Employer Contribution
Account. Future matching contributions will be invested in common stock of
the Company. A participant can make more than one diversification election,
but a subsequent election can be made only after a period of at least 10
years has elapsed since the most recent election.
(Continued)
- 7 -
<PAGE>
WILLAMETTE INDUSTRIES STOCK PURCHASE PLAN
Notes to Financial Statements
(e) Forfeitures
An employer's contribution is reduced by an amount equal to the forfeiture
of participants employed by that employer. The forfeitures are allocated
among the other participants employed by that employer in proportion to
their contributions. A forfeiture of the account is deemed to occur as of
the close of the plan year in which the participant incurs five consecutive
one-year periods of severance. The 1996 employer's contribution has been
reduced by $204,593 as a result of forfeitures.
There are 41,207 shares of Company stock subject to forfeiture relating to
terminated employees as of December 30, 1996 with a fair value of
$2,869,037.
(f) Withdrawals
The Plan provides for participants, during their employment, to seek a
withdrawal based upon financial hardship as determined by the Plan
Administrator in accordance with Federal guidelines. A participant whose
employment terminates for any reason is entitled to a lump sum distribution
of the vested portion of the participant's account.
(2) Summary of Significant Accounting Policies
(a) Basis of Accounting
The Plan prepares its financial statements on the accrual basis of
accounting in accordance with generally accepted accounting principles.
(b) Valuation of Investments
Wells Fargo acted as trustee for the Plan in 1996, while First Interstate
Bank of Oregon, N.A. acted in such capacity in 1995. The Plan changed
investment managers from Fidelity to Vanguard effective December 30, 1996.
The Balanced Fund, Equity Fund and the Stable Asset Fund investments are
valued at quoted market prices. Willamette Industries, Inc. common stock is
valued at the quoted market price with all purchases and sales recorded on
a trade-date basis. Short-term and temporary investments (including cash
and money market funds) are valued at cost, which approximates market.
(c) Expenses of the Plan
Substantially all expenses incurred in the administration of the Plan,
including legal fees, accounting fees, Trustee's fees and other charges of
the plan are charged to and paid by the plan sponsor.
(Continued)
- 8 -
<PAGE>
WILLAMETTE INDUSTRIES STOCK PURCHASE PLAN
Notes to Financial Statements
(d) Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amount of assets and liabilities at
the date of the financial statements and the reported amounts of additions
to and deductions from net assets during the reporting period. Actual
results could differ from those estimates.
(e) Reclassifications
Certain 1995 balances have been reclassified in order to conform to the
1996 presentation.
(3) Plan Termination
The Board of Directors of the Company have reserved the right to amend or
terminate the Plan. A participating employer may also terminate the Plan at
any time with respect to its employees. No amendment may reduce the accrued
benefits of any participant or give an employer any interest in the trust
assets of the Plan. In the event of termination of the Plan, a participant
with respect to whom the Plan has been terminated becomes fully vested in
his or her Employer Contribution Account.
(4) Income Taxes
The Plan obtained its latest determination letter on August 21, 1996, in
which the Internal Revenue Service stated that the Plan, as then designed,
was in compliance with the applicable requirements of the Internal Revenue
Code. This ruling reflects the Plan amendments adopted on December 8, 1995.
Additional amendments have been made to the Plan since that time. The plan
administrator has requested a determination letter from the Internal Revenue
Service covering amendments made to the Plan subsequent to December 8, 1995.
If the Plan were not in compliance with the requirements of the Internal
Revenue Code Section 401(a) and the related trust were not exempt under
Internal Revenue Code Section 501(a), the Company would take corrective
actions to meet the requirements of the Internal Revenue Code.
Amounts contributed to the Plan by the employer are not taxed to the
employee until distribution upon retirement or other termination. Employee
after-tax contributions are taxable in the year made but not upon
distribution. Employees may elect to make pre-tax contributions which are
not included in the employee's current earnings for federal income tax
purposes, but rather are taxable upon distribution. Any increase in the
value of common stock distributed is taxable to the employee when the stock
is sold.
(Continued)
- 9 -
<PAGE>
WILLAMETTE INDUSTRIES STOCK PURCHASE PLAN
Notes to Financial Statements
(5) Transfers From Other Plans
Transfers from other plans in 1996 and 1995 resulted from hourly employees
becoming salaried employees.
(6) Investments
The fair value of individual investments that represent 5% or more of the
Plan's net assets are as follows:
1996 1995
---- ----
Willamette Industries, Inc. common
stock (3,567,781 and 3,642,611
shares in 1996 and 1995, respectively) $ 248,406,752 204,896,869
The total unrealized gain (loss) at December 30, 1996 and 1995 and the
related change by investment type for 1996 were as follows:
1995 Net change 1996
---- ---------- ----
Common stock $ 105,732,112 34,446,944 140,179,056
Mutual funds 390,852 (390,852) -
Guaranteed investment contract 438,707 264,921 703,628
----------- ---------- -----------
$ 106,561,671 34,321,013 140,882,684
=========== ========== ===========
- 10 -
<PAGE>
Schedule A
WILLAMETTE INDUSTRIES STOCK PURCHASE PLAN
Line 27a - Schedule of Assets Held
for Investment Purposes
December 30, 1996
<TABLE>
<CAPTION>
Description of Current
Identity of issue investment Cost value
----------------- ---------- ---- -----
<S> <C> <C>
Federal Government
Obligation Cash equivalent $ 11 11
=========== =========
*Wells Fargo:
Financial Square Prime Money market fund $ 2,260,020 2,260,020
=========== =========
Vanguard:
Balanced Index Fund Mutual fund - 601,094 shares $ 8,439,365 8,439,365
Institutional Index Fund Mutual fund - 138,014 shares 9,667,900 9,667,900
----------- -----------
$ 18,107,265 18,107,265
=========== ===========
*Willamette Industries, Common stock - 3,567,781
Inc. shares $ 108,227,696 248,406,752
=========== ===========
CTC Capital Preservation Guaranteed investment contract
Fund fund - 183,669 units $ 4,387,126 5,090,754
=========== ===========
</TABLE>
*Party in interest.
- 11 -
<PAGE>
<TABLE>
<CAPTION>
Schedule B
WILLAMETTE INDUSTRIES STOCK PURCHASE PLAN
Line 27d - Schedule of Reportable Transactions
Year ended December 30, 1996
Number Book
Identity of Description Number Purchase of sales or Selling value Net
party involved of assets of purchases price disbursements price at sale gain
-------------- --------- ------------ ----- ------------- ----- ------- ----
<S> <C> <C> <C> <C> <C> <C>
Fidelity Disciplined Equity Mutual fund
Fund 17 $ 3,905,180 4 $ 10,605,578 9,476,199 1,129,379
Willamette Industries, Inc. Common stock 50 13,160,227 352 19,358,795 7,033,531 12,325,264
Wells Fargo:
Financial Square Prime Money market
fund 100 23,598,916 131 24,080,216 24,080,216 -
</TABLE>
- 12 -
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the trustees (or other persons who administer the Plan) have duly caused
this annual report to be signed on its behalf by the undersigned hereunto duly
authorized.
WILLAMETTE INDUSTRIES
STOCK PURCHASE PLAN
(Name of Plan)
By: WILLAMETTE INDUSTRIES STOCK
PURCHASE PLAN COMMITTEE
By: /s/ J. A. Parsons
J. A. Parsons, Secretary
Dated: June 26, 1997
KPMG Peat Marwick LLP
Suite 2000
1211 South West Fifth Avenue
Portland, OR 97204
Consent of Independent Auditors
The Board of Directors
Willamette Industries, Inc.:
We consent to incorporation by reference in the Registration Statement No.
33-59517 on Form S-8 of Willamette Industries, Inc. of our report dated April
15, 1997 relating to the statements of net assets available for benefits of
Willamette Industries Stock Purchase Plan as of December 30, 1996 and 1995, and
the related statements of changes in net assets available for benefits and
supplemental schedules referred to in our report, which report appears in the
December 30, 1996 annual report on Form 11-K of Willamette Industries Stock
Purchase Plan.
/s/ KPMG Peat Marwick LLP
June 26, 1997
