<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
-------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
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(3) Filing party:
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(4) Date filed:
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<PAGE>
WILLAMETTE INDUSTRIES, INC.
1300 S.W. FIFTH AVENUE, SUITE 3800
PORTLAND, OREGON 97201
----------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
APRIL 15, 1997
----------------
The annual meeting of shareholders of Willamette Industries, Inc. (the
"Company"), will be held at the RiverPlace Alexis Hotel, 1510 S.W. Harbor Way,
Portland, Oregon, on Tuesday, April 15, 1997, at 10 a.m., to consider and vote
on the following matters:
1.The election of one Class A director, one Class B director, and four
Class C directors.
2.Such other business as may properly come before the meeting or any
adjournment thereof.
Only shareholders of record as of the close of business on February 24,
1997, will be entitled to notice of and to vote at the meeting.
You are cordially invited to attend the meeting in person. Whether or not
you plan to attend, please date, sign and mail the enclosed proxy to avoid the
expense of further solicitation. A majority of the outstanding shares must be
represented at the meeting in order to transact business, and whether you own
few or many shares, your proxy is important in fulfilling this requirement.
If you attend the meeting, you may withdraw your proxy and vote in person.
By Order of the Board of Directors
J. A. Parsons
Secretary
Portland, Oregon
March 7, 1997
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Introduction............................................................... 1
Holders of Common Stock.................................................... 1
Election of Directors...................................................... 4
Other Matters.............................................................. 6
Executive Compensation..................................................... 6
Compensation Committee Interlocks and Insider Participation................ 9
Report of the Compensation Committee....................................... 9
Performance Graph.......................................................... 12
Compensation of Directors.................................................. 12
Employment Agreements...................................................... 13
Section 16(a) Beneficial Ownership Reporting Compliance.................... 14
Relationship with Independent Public Accountants........................... 15
Shareholder Proposals for 1998............................................. 15
Solicitation of Proxies.................................................... 15
</TABLE>
This Proxy Statement has been printed on Penntech Northlite(R) paper produced
by the Company.
i
<PAGE>
PROXY STATEMENT
----------------
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors (the "Board") of Willamette Industries, Inc., an Oregon
corporation (the "Company"), of proxies in the accompanying form for use at
the annual meeting of shareholders to be held on April 15, 1997. This Proxy
Statement and accompanying form of proxy were first sent or given to
shareholders on approximately March 7, 1997.
When a proxy in the enclosed form is properly executed and returned, the
shares represented thereby will be voted at the meeting in accordance with the
instructions specified in the spaces provided in the proxy. If no instructions
are specified, the shares will be voted FOR the election of the nominees named
below except to the extent authority to vote for any or all of the nominees is
withheld. If a quorum is present, a nominee will be elected if the nominee
receives a plurality of the votes cast for the election of directors.
A proxy given pursuant to this solicitation may be revoked by the person
giving the proxy at any time prior to its exercise (i) by delivering written
notice of revocation to the secretary of the Company, (ii) by executing a
subsequent proxy relating to the same shares which is delivered to the
secretary or (iii) by attending the annual meeting and voting in person
(although attendance at the meeting in itself will not constitute revocation
of a proxy).
HOLDERS OF COMMON STOCK
The close of business on February 24, 1997, has been fixed as the record
date for the determination of shareholders entitled to notice of and to vote
at the annual meeting. On the record date, the Company had outstanding
55,364,564 shares of common stock, $.50 par value ("Common Stock"), each share
of which is entitled to one vote at the meeting. A majority of the shares
entitled to vote, represented in person or by proxy, including proxies
reflecting broker nonvotes or abstentions, will constitute a quorum at the
meeting.
The following tables give certain information concerning the holdings of
Common Stock of (i) each person known to the Company to be the beneficial
owner of more than 5 percent of the outstanding Common Stock and (ii) each of
the directors and nominees, each of the named executive officers referred to
in the Summary Compensation Table below and the Company's directors and
executive officers as a group. The information as to beneficial stock
ownership is based on data furnished by the persons concerning whom such
information is given.
FIVE PERCENT BENEFICIAL OWNERS
<TABLE>
<CAPTION>
SHARES OF
COMMON STOCK NATURE OF PERCENT OF
BENEFICIALLY BENEFICIAL OUTSTANDING
NAME AND ADDRESS OWNED OWNERSHIP COMMON STOCK
---------------- ------------ ---------- ------------
<S> <C> <C> <C>
Maurie D. Clark*........ 1,700,955 Sole Voting and Disposition 3.07%
Suite 600 2,382,528 Shared Voting and Disposition 4.30%
1211 S.W. Fifth Avenue 4,083,483 Total 7.37%
Portland, Oregon 97204
William Swindells*...... 1,081,497 Sole Voting and Disposition 1.95%
1300 S.W. Fifth Avenue 127,190 Sole Disposition .23%
Portland, Oregon 97201 1,781,292 Shared Voting and Disposition 3.22%
2,989,979 Total 5.40%
The Prudential
Insurance**............ 205,366 Sole Voting and Disposition 0.37%
Company of America 3,171,174 Shared Voting 5.73%
751 Broad Street 3,210,174 Shared Disposition 5.80%
Newark, New Jersey
07102-3777 3,415,540 Total 6.18%
Wells Fargo Bank,
N.A.**................. 2,205,961 Sole Voting 3.98%
464 California Street 894,580 Shared Voting 1.62%
San Francisco,
California 94163 3,059,040 Shared Disposition 5.53%
3,100,541 Total 5.60%
</TABLE>
- --------
*As of January 31, 1997
**As of December 31, 1996
1
<PAGE>
DIRECTORS AND EXECUTIVE OFFICERS
<TABLE>
<CAPTION>
SHARES OF
COMMON STOCK
BENEFICIALLY NATURE OF PERCENT OF
OWNED AT BENEFICIAL OUTSTANDING
NAME JANUARY 31, 1997(1) OWNERSHIP(1) COMMON STOCK
---- ------------------- ----------- ------------
<S> <C> <C> <C>
Gerard K. Drummond(2)... 2,000 Sole Voting and Disposition --
333 Sole Disposition --
2,333 Total --
Kenneth W. Hergenhan.... 886 Shared Voting and Disposition --
William P. Kinnune(3)... 43,576 Sole Voting and Disposition .08%
1,903 Sole Voting and Shared Disposition --
24,603 Sole Disposition .05%
70,082 Total .13%
C. W. Knodell(2)........ 63,866 Sole Voting and Disposition .12%
333 Sole Disposition --
64,199 Total .12%
Paul N. McCracken(2).... 3,040 Sole Voting and Disposition .01%
333 Sole Disposition --
230 Shared Voting and Disposition --
3,603 Total .01%
Michael R. Onustock(3).. 22,946 Sole Voting and Disposition .04%
1,576 Sole Voting and Shared Disposition --
19,870 Sole Disposition .04%
44,392 Total .08%
J. A. Parsons(3)........ 27,356 Sole Voting and Disposition .05%
1,547 Sole Voting and Shared Disposition --
19,757 Sole Disposition .04%
48,660 Total .09%
G. Joseph Prendergast... 0 N/A
Steven R. Rogel(3)...... 25,373 Sole Voting and Disposition .05%
3,129 Sole Voting and Shared Disposition --
75,567 Sole Disposition .14%
104,069 Total .19%
Stuart J. Shelk, Jr.(2). 773,651 Sole Voting and Disposition 1.40%
333 Sole Disposition --
773,984 Total 1.40%
Robert M. Smelick(2).... 2,000 Sole Voting and Disposition --
333 Sole Disposition --
2,333 Total --
William Swindells(3).... 1,081,497 Sole Voting and Disposition 1.95%
127,190 Sole Disposition .23%
1,781,292 Shared Voting and Disposition 3.22%
2,989,979 Total 5.40%
Floyd Vike(3)........... 16,018 Sole Voting and Disposition .03%
1,457 Sole Voting and Shared Disposition --
15,197 Sole Disposition .03%
442 Shared Voting and Disposition --
33,114 Total .06%
Samuel C. Wheeler(2).... 726,471 Sole Voting and Disposition 1.31%
138,402 Sole Voting and Shared Disposition .25%
333 Sole Disposition --
865,206 Total 1.56%
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
SHARES OF
COMMON STOCK
BENEFICIALLY NATURE OF PERCENT OF
OWNED AT BENEFICIAL OUTSTANDING
NAME JANUARY 31, 1997(1) OWNERSHIP(1) COMMON STOCK
---- ------------------- ----------- ------------
<S> <C> <C> <C>
Benjamin R. Whiteley(2). 333 Sole Disposition --
3,000 Shared Voting and Disposition .01%
3,333 Total .01%
All directors and
executive officers as a
group (15 persons),
including persons
listed above(2)(3)..... 2,787,794 Sole Voting and Disposition 5.04%
148,014 Sole Voting and Shared Disposition .26%
284,515 Sole Disposition .51%
1,785,850 Shared Voting and Disposition 3.23%
5,006,173 Total 9.04%
</TABLE>
- --------
(1) Shares are included in the table as "beneficially owned" if the person
named has or shares the right to vote or direct the voting of or the right
to dispose or direct the disposition of such shares. Inclusion of shares
in the table does not necessarily imply that the persons named receive the
economic benefits of the shares so listed.
(2) Includes shares subject to options exercisable within 60 days after
January 31, 1997, under the nonemployee director provisions of the 1995
Long-Term Incentive Compensation Plan ("1995 Plan") as follows: Messrs.
Drummond, Knodell, McCracken, Shelk, Smelick, Wheeler, and Whiteley, 333
shares each; and all directors as a group, 2,331 shares.
(3) Includes shares subject to options exercisable within 60 days after
January 31, 1997, under the Company's 1995 Plan and 1986 Stock Option and
Stock Appreciation Rights Plan ("1986 Plan") as follows: Mr. Kinnune,
24,603 shares; Mr. Onustock, 19,870 shares; Mr. Parsons, 19,757 shares;
Mr. Rogel, 75,567 shares; Mr. Swindells, 127,190 shares; Mr. Vike, 15,197
shares; and all directors and executive officers as a group, 282,184
shares.
3
<PAGE>
ELECTION OF DIRECTORS
The Board is divided into three classes serving staggered three-year terms.
The Board held six meetings during 1996. Each director attended at least 75
percent of the total of (i) the meetings of the Board and (ii) the meetings
held by all committees of the Board on which he served.
The nominees named below for election as directors are members of the Board.
The nominees include the four Class C directors, whose three-year terms will
expire at the 1997 annual meeting, and two directors of other classes, Mr.
Hergenhan and Mr. Prendergast, who were appointed within the last year to fill
vacancies on the Board and whose current terms will therefore expire at the
1997 annual meeting. The terms of the directors to be elected at the 1997
annual meeting will expire as follows: the Class A director at the 1998 annual
meeting; the Class B director at the 1999 annual meeting; and the Class C
directors at the 2000 annual meeting.
Under the Company's bylaws, a shareholder desiring to nominate a candidate
for election as a director must give written notice to the Company with
specified information not less than 90 days prior to any annual meeting and
not less than seven days after the giving of notice to the shareholders of any
special meeting at which directors are to be elected.
If for any reason any of the nominees named below should become unavailable
for election (an event that the Board does not anticipate), the proxy will be
voted for the election of such substitute nominee as may be designated by the
Board. Information with respect to each person nominated for election as a
director and each other person whose term of office as a director will
continue after the meeting is set forth below. Ages shown are as of December
31, 1996.
CLASS A (NOMINEE AND DIRECTORS WHOSE TERM OF OFFICE WILL EXPIRE IN 1998)
Kenneth W. Hergenhan, age 65, has been a director of the Company since his
appointment in February 1997 to fill a vacancy. Mr. Hergenhan was a partner in
the law firm of Miller, Nash, Wiener, Hager & Carlsen LLP for more than five
years prior to his retirement in December 1996.
Robert M. Smelick, age 54, has been a director of the Company since 1990.
Mr. Smelick has been the managing principal of Sterling Payot Company, an
investment company, since 1989. Mr. Smelick is also a director of Metricom,
Inc.(3)
Benjamin R. Whiteley, age 67, has been a director of the Company since 1990.
Mr. Whiteley has been chairman of the board of Standard Insurance Company, a
life insurance company, of which he is also a director, since August 1994. He
served as chairman and chief executive officer of Standard Insurance Company
from January 1993 until August 1994 and, prior to that time, as president and
chief executive officer for more than five years. Mr. Whiteley is also a
director of Northwest Natural Gas Company, U. S. Bancorp and The Greenbrier
Companies, Inc.(1)(2)
CLASS B (NOMINEE AND DIRECTORS WHOSE TERMS OF OFFICE WILL EXPIRE IN 1999)
G. Joseph Prendergast, age 51, has been a director of the Company since his
appointment in August 1996 to fill a vacancy. Mr. Prendergast has been
executive vice president of Wachovia Corporation since October 1988 and
chairman of Wachovia Bank of Georgia and Wachovia Bank of South Carolina since
April 1994. Mr. Prendergast is also a director of The Georgia Power Company.
C. W. Knodell, age 69, has been a director of the Company since 1988. Prior
to his retirement from the Company in April 1989, Mr. Knodell was executive
vice president, chief financial officer, secretary and treasurer of the
Company for more than five years.(1)(2)
Steven R. Rogel, age 54, has been chief executive officer and a director of
the Company since October 1995, and president of the Company since April 1991.
He served as chief operating officer of the Company from
4
<PAGE>
April 1991 until October 1995 and, prior to that time, as an executive and
group vice president for more than five years. Mr. Rogel is also a director of
Fred Meyer, Inc.(1)
William Swindells, age 66, has been a director of the Company since 1964.
For more than the past five years, Mr. Swindells served as chairman of the
Company's board of directors and, until his retirement in September 1995, as
chief executive officer of the Company. Mr. Swindells is also a director of
Oregon Steel Mills, Inc., and Airborne Freight Corp.(1)
CLASS C (NOMINEES WHOSE TERMS OF OFFICE WILL EXPIRE IN 2000)
Gerard K. Drummond, age 59, has been a director since 1991. Since July 1993,
Mr. Drummond has been of counsel to the law firm of Stoel Rives. For more than
the prior five years, he was chairman of the board of NERCO, Inc., a natural
resources company, its chief executive officer (except during the period
February 1992 to November 1992), and executive vice president of PacifiCorp, a
public utility company.(2)
Paul N. McCracken, age 68, has been a director of the Company since 1986.
Mr. McCracken has been chairman of the board of directors of Tumac Lumber Co.,
Inc., a wood products broker for more than the past five years.(1)(2)
Stuart J. Shelk, Jr., age 52, has been a director of the Company since 1983.
Mr. Shelk has been managing general partner of Ochoco Lumber Co., a lumber
manufacturer, for more than the past five years.(3)
Samuel C. Wheeler, age 68, has been a director of the Company since 1972.
Mr. Wheeler has been vice president of Barclay Logging Company, a logging
contractor, and served in that capacity for more than the past five years. Mr.
Wheeler was also president of Wheeler Management Co., Inc., a wood products
manufacturer, to June 1996 and for more than the five years previous.(1)(2)
- --------
(1) Member of the Company's executive committee.
(2) Member of the Company's compensation and nomination committee
("Compensation Committee"). The Compensation Committee, which held three
meetings during 1996, reviews the compensation of the Company's directors
and officers prior to consideration of such matters by the Board as a
whole and administers the Company's 1986 Plan. It also administered the
1995 Plan until April 25, 1996, when responsibility for the administration
of the 1995 Plan was assigned to a subcommittee of the Compensation
Committee consisting of Messrs. Drummond and Whiteley. In addition, the
Compensation Committee makes recommendations to the Board concerning
nominations of directors and selection of executive personnel. The
Compensation Committee will consider shareholder suggestions as to
nominees for directors; such suggestions should be addressed to the
secretary of the Company at its principal executive offices. In order to
be considered prior to next year's annual meeting, such suggestions should
be received by December 31 of this year.
(3) Member of the Company's audit committee. The audit committee, which met
twice during 1996, is responsible for: (i) nominating and recommending
independent auditors for selection by the Board, (ii) reviewing the scope
of audit proposed to be performed, (iii) reviewing the results of the past
year's audit with the auditors and (iv) reviewing the independent
auditors' suggestions and comments with respect to internal financial and
operational controls, including monitoring the steps taken to implement
suggestions by the independent auditors.
5
<PAGE>
OTHER MATTERS
Management knows of no matters to be brought before the meeting other than
that described above. However, should any other matters properly come before
the meeting, the persons named in the accompanying form of proxy will vote or
refrain from voting thereon in accordance with their judgment.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth certain information concerning the
compensation of the Company's chief executive officer and each of its four
other most highly compensated executive officers (the "named executive
officers") during each of the years in the three-year period ended December
31, 1996.
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION AWARDS
---------------------
RESTRICTED NUMBER OF
ANNUAL STOCK SECURITIES
NAME AND PRINCIPAL COMPENSATION AWARDS UNDERLYING ALL OTHER
POSITION YEAR SALARY (1)(2) OPTIONS COMPENSATION(3)
------------------ ---- ------------ ---------- ---------- ---------------
<S> <C> <C> <C> <C> <C>
Steven R. Rogel......... 1996 $783,333 $119,980 18,220 $33,783
President and Chief
Executive Officer 1995 622,917 31,260 14,680 14,922
1994 507,500 26,272 12,500 14,537
William P. Kinnune...... 1996 429,000 65,270 8,780 34,071
Executive Vice
President 1995 411,333 20,858 9,700 14,922
1994 395,000 20,010 8,490 14,537
Michael R. Onustock..... 1996 355,667 54,155 7,270 24,989
Executive Vice
President 1995 340,000 17,252 8,000 14,922
1994 325,000 16,517 6,950 14,537
J. A. Parsons........... 1996 349,333 53,229 7,120 25,037
Executive Vice
President and 1995 333,333 16,892 7,860 14,922
Chief Financial Officer 1994 319,500 16,199 6,850 14,537
Floyd Vike.............. 1996 345,667 52,673 7,060 29,508
Executive Vice
President 1995 323,417 16,737 7,520 14,922
1994 262,667 13,566 5,430 14,537
</TABLE>
- --------
(1) The value of a restricted stock award is calculated by multiplying the
number of shares of Common Stock awarded by the closing sale price of the
Common Stock on the date of grant as reported by the New York Stock
Exchange or, for grants prior to December 31, 1996, by The Nasdaq Stock
Market.
(2) The aggregate number of restricted shares of Common Stock held by each
named executive officer and the value of such shares on December 31, 1996
(based on the closing sale price of the Common Stock, $69 5/8, as reported
by the New York Stock Exchange), are as follows:
<TABLE>
<CAPTION>
NAME NO. OF SHARES VALUE
---- ------------- --------
<S> <C> <C>
Steven R. Rogel.................. 3,129 $217,857
William P. Kinnune............... 1,903 132,496
Michael R. Onustock.............. 1,576 109,729
J. A. Parsons.................... 1,547 107,710
Floyd Vike....................... 1,457 101,444
</TABLE>
Dividends are paid on the restricted shares at the same rate as on other
shares of Common Stock.
(3) The amounts shown for 1996 represent (i) Company contributions to its
Stock Purchase Plan ("401(k) Plan"), a qualified plan under Section 401(a)
of the Internal Revenue Code of 1986, as amended (the "Internal Revenue
Code"), for the benefit of each of the named executive officers and to its
1993 Deferred Compensation Plan for the benefit of such officers to the
extent contributions would have been made to the 401(k) Plan had
compensation subject to such plan included deferred compensation and had
the Internal Revenue Code limits not been applicable, and (ii) the imputed
value to the named executives of a portion of the premiums paid for life
insurance policies under which they are to receive an interest in the cash
surrender value. The amounts attributable to (i) 401(k) Plan and 1993
Deferred Compensation Plan contributions, and (ii) the imputed value of
premiums, respectively, for each of the named executives for 1996 are as
follows: Mr. Rogel--$15,000, $18,783; Mr. Kinnune--$15,000, $19,071; Mr.
Onustock--$15,000, $9,989; Mr. Parsons--$15,000, $10,037; Mr. Vike--
$15,000, $14,508.
6
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
The following table provides information as to options to purchase Common
Stock granted to the named executive officers during 1996 pursuant to the
Company's 1995 Plan. No SARs were granted during 1996.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE AT
ASSUMED ANNUAL RATES OF
STOCK PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM(3)
-------------------------------------------------- -----------------------------
NUMBER OF PERCENTAGE OF
SECURITIES TOTAL OPTIONS
UNDERLYING GRANTED TO
OPTIONS EMPLOYEES IN EXERCISE PRICE EXPIRATION
NAME GRANTED(1) FISCAL YEAR PER SHARES(2) DATE 5% 10%
---- ---------- ------------- -------------- ---------- -----------------------------
<S> <C> <C> <C> <C> <C> <C>
Steven R. Rogel......... 18,220 6.67% $61.75 April 2006 $ 707,560 $ 1,793,096
William P. Kinnune...... 8,780 3.22 61.75 April 2006 340,965 864,071
Michael R. Onustock..... 7,270 2.66 61.75 April 2006 282,325 715,467
J. A. Parsons........... 7,120 2.61 61.75 April 2006 276,500 700,705
Floyd Vike.............. 7,060 2.59 61.75 April 2006 274,170 694,800
</TABLE>
- --------
<TABLE>
<S> <C>
</TABLE>
(1) Options were granted for the numbers of shares indicated at an exercise
price equal to the fair market value of the Common Stock on the date of
grant. The options, which have terms of ten years and two days, become
exercisable as follows: 33 1/3 percent after one year, an additional 33
1/3 percent after two years, and the remainder after three years. Upon a
change in control, all options under the 1995 Plan become and remain
exercisable in full until the earlier of three years after the date the
change in control occurs or the expiration of the stated term of the
option. For purposes of the 1995 Plan, a change in control is defined to
include (i) a change in composition of the Board during any 24-month
period such that the directors in office at the beginning of the period
and any additional directors elected with the approval of two-thirds of
the directors cease to constitute at least 70 percent of the Board and
(ii) unless approved by two-thirds of the directors, excluding directors
employed by the Company, (A) a merger, or sale of substantially all the
assets, of the Company, (B) the acquisition by a person or group (other
than certain affiliates of the Company) of 20 percent or more of the
combined voting power of the Company's outstanding securities or (C) the
approval by the shareholders of the Company of a plan of liquidation or
dissolution of the Company.
(2) Subject to certain conditions, the exercise price and tax withholding
obligations related to exercise may be paid by delivery of previously
acquired shares of Common Stock.
(3) The amounts shown are hypothetical gains based on the indicated assumed
rates of appreciation of the Common Stock compounded annually over the
full term of the options. There can be no assurance that the Common Stock
will appreciate at any particular rate or at all.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
Information regarding exercises of stock options by the named executive
officers during 1996 and unexercised options held by them as of December 31,
1996, is summarized in the table set forth below. The named executives did not
exercise any SARs during 1996 and did not hold any in-the-money SARs at year-
end.
<TABLE>
<CAPTION>
NUMBER OF VALUE OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
NUMBER OF OPTIONS AT OPTIONS AT
SHARES DECEMBER 31, 1996 DECEMBER 31, 1996(2)
ACQUIRED ON VALUE ------------------------- -------------------------
NAME EXERCISE REALIZED(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Steven R. Rogel......... 0 $ 0 73,567 32,173 $2,701,924 $421,906
William P. Kinnune...... 0 0 24,603 18,077 675,654 254,977
Michael R. Onustock..... 8,000 332,000 19,870 14,920 544,554 210,096
J. A. Parsons........... 0 0 19,757 14,643 542,091 206,415
Floyd Vike.............. 6,500 283,563 15,197 13,883 410,039 190,357
</TABLE>
7
<PAGE>
- --------
(1) Represents the difference between the fair market value of shares of the
Common Stock received on exercise of stock options at the date of exercise
and the option exercise price.
(2) Calculated based on the difference between the closing sale price of the
Common Stock, $69 5/8, as reported by the New York Stock Exchange on
December 31, 1996, and the aggregate exercise price of the unexercised
options. All options reflected in the table were granted at an exercise
price equal to the fair market value of a share of Common Stock on the
date of grant.
PENSION PLAN
The retirement plan (the "Retirement Plan") that the Company maintains for
its salaried and office employees (including officers) provides for payment of
retirement benefits generally based upon an employee's years of service with
the Company and compensation level. Funding of the Retirement Plan is
actuarially determined. The Company also maintains a supplemental retirement
plan (the "Supplemental Plan") under which salaried employees (including
officers) receive retirement benefits substantially equal to those the
Retirement Plan would have provided but for certain limitations required by
the Internal Revenue Code.
The following table shows the aggregate estimated annual benefits payable
under the Retirement Plan and the Supplemental Plan upon retirement (assuming
normal retirement at age 65) for unmarried employees at specified compensation
levels (based upon the highest average of five consecutive years) with various
years of service (assuming continuous full-time employment with the Company
from date of hire to date of retirement):
<TABLE>
<CAPTION>
YEARS OF SERVICE
-----------------------------------------------------
REMUNERATION 15 20 25 30 35 40
------------ -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
$300,000......... $ 72,052 $ 96,070 $120,087 $144,104 $168,122 $190,622
400,000......... 96,802 129,070 161,337 193,604 225,872 255,872
500,000......... 121,552 162,070 202,587 243,104 283,622 321,122
600,000......... 146,302 195,070 243,837 292,604 341,372 386,372
700,000......... 171,052 228,070 285,087 342,104 399,122 451,622
800,000......... 195,802 261,070 326,337 391,604 456,872 516,872
900,000......... 220,552 294,070 367,587 441,104 514,622 582,122
</TABLE>
Compensation used in determining retirement benefits consists of the
employee's regular fixed salary including amounts deferred at the election of
the employee and contributed to the Company's 401(k) Plan. With respect to the
named executive officers, such compensation is the amount shown for the
officers under "Salary" in the Summary Compensation Table above.
The credited years of service for each of the named executive officers is as
follows: Mr. Rogel, 24; Mr. Kinnune, 35; Mr. Onustock, 24; Mr. Parsons, 30;
and Mr. Vike, 35.
The benefits payable upon retirement are single-life annuity amounts and are
not subject to any deduction for Social Security or other offset amounts. The
level of benefits is based in part upon the average of the Social Security
wage bases for the 35 years ending with Social Security retirement age.
Amounts shown in the table are based upon the Social Security covered
compensation for an employee attaining age 65 in 1997. Retirement benefits may
be reduced from the amounts shown in the case of early retirement (or other
early termination of employment), in the case of a married employee whose
benefits are paid in the form of a joint and survivor annuity and in the case
of an employee whose employment with the Company has not been continuous.
Special provisions in the Retirement Plan may apply in the case of death or
disability; there are also provisions relating to the computation of years of
service for vesting or benefit purposes in the case of service with certain
employers acquired by the Company at various times in the past.
8
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
COMPENSATION COMMITTEE
During 1996, Messrs. Drummond, Knodell (who served as an executive officer
of the Company until his retirement in 1989), McCracken, Wheeler and Whiteley
served on the Company's Compensation Committee.
Mr. McCracken is chairman of Tumac Lumber Co., Inc., a wood products broker,
which purchases building materials products from, and sells such products to,
the Company in the ordinary course of business at prevailing market prices.
During 1996, such transactions amounted to approximately $51,190,000.
Mr. Wheeler is vice president of Barclay Logging Company, which performs
contract logging services for the Company in the ordinary course of business
at prevailing market prices. During 1996, such transactions amounted to
approximately $1,053,000. Mr. Wheeler served as a vice president of the
Company until his resignation in 1973.
OTHER TRANSACTIONS AND RELATIONSHIPS
Ochoco Lumber Co., of which Mr. Shelk is managing general partner, sells
wood products to, and purchases such products from, the Company in the
ordinary course of business at prevailing market prices. During 1996, such
transactions amounted to approximately $2,201,000.
The Company purchases equipment in the ordinary course of business at
prevailing market prices from Rogers Machinery Co., Inc., in which members of
Mr. Parsons' immediate family own a majority interest. During 1996, such
purchases amounted to approximately $377,000.
In the ordinary course of business at prevailing market prices, the Company
has sold paper products to, and obtained credit and other banking and
financial services from, Wachovia Corporation, of which Mr. Prendergast is an
executive vice president. During 1996, such paper sales amounted to
approximately $1,074,000, and the financial services amounted to approximately
$2,021,000, for an aggregate of approximately $3,095,000.
The Company has retained and continues to retain the law firm of Miller,
Nash, Wiener, Hager & Carlsen LLP, from which Mr. Hergenhan retired as a
partner in December 1996.
REPORT OF THE COMPENSATION COMMITTEE
It is the responsibility of the Compensation Committee to oversee the
compensation of officers of the Company (22 persons). The Compensation
Committee's salary recommendations, when approved by the Board, set the level
of the compensation for all officers. Until April 1996, the Compensation
Committee was also responsible for selecting the key employees, including
officers, to receive awards under the 1995 Plan and for determining the types,
amounts and terms of such awards. On April 25, 1996, responsibility for the
administration of the 1995 Plan was assigned to the Long-Term Incentive
Compensation Committee (the "Awards Committee"), a subcommittee of the
Compensation Committee consisting of Messrs. Drummond and Whiteley. None of
the awards made in 1996 under the 1995 Plan were made by the Awards Committee.
In addition, the Compensation Committee hears reports from the Company's chief
executive officer, and considers the performance of individual officers,
planned succession and related matters.
The compensation policy of the Company recognizes that the Company's
business is the conversion of timber and wood fiber into products which are
largely of a commodity nature and that the Company is integrated "from the
stump to the customer" with only the president and chief executive officer
responsible for all operations. For these two reasons--little control of sales
prices in commodity markets and little individual control over material costs
and transfer prices of specific business segments--the Company does not
ordinarily
9
<PAGE>
compensate employees with bonuses or other forms of short-term incentive
compensation. The Company's policy is to pay salaried employees, including all
officers, base salaries only.
From time to time, the Compensation Committee receives reports from
compensation consultants regarding competitive industry salaries. The Company
also participates in industrywide salary surveys and conducts its own annual
review of compensation information in proxy statements of competing companies.
From these sources, the Compensation Committee evaluates compensation levels
of a peer group of nine other forest products companies which the Compensation
Committee, based on its general knowledge of the forest products industry,
believes are comparable to the Company. The Company uses these evaluations
when reviewing and approving management's recommendations regarding
compensation. The nine companies constituting the peer group include three of
the eleven companies in the Standard & Poor's Paper & Forest Products Index
referred to under "Performance Graph" below and six other forest products
companies.
The 1996 salaries recommended by the Compensation Committee at its April
1996 meeting for the Company's executive officers were determined after
comparison with the cash compensation paid by the peer group to officers in
comparable positions and taking into account available information concerning
comparable levels of responsibility. In arriving at salary recommendations for
individual officers, the committee also compared their duties to the duties of
other officers and employees in the Company. Each recommended salary was
within the range of the cash compensation paid to the comparable peer group
officers. Some of the recommended salaries were near the high end of the range
and others were closer to the low end of the range. In formulating its salary
recommendations, the Compensation Committee did not consider stock options and
other noncash compensation programs of the peer group companies or the stock
options granted to Company officers.
In April 1996, based on the recommendations of the Compensation Committee,
the Board increased Mr. Rogel's annual salary level by 6.8 percent to
$800,000. In recommending the increase in Mr. Rogel's salary, the Compensation
Committee considered the additional responsibilities Mr. Rogel assumed when he
was appointed chief executive officer in October 1995.
As an incentive to stock ownership by employees and as a form of long-term
incentive compensation, the Compensation Committee has annually granted stock
options and for each of the last three years awarded shares of restricted
Common Stock to selected key employees.
Stock options were granted by the Compensation Committee based on a formula
relating to base salary and the Company's return on shareholder equity
("ROE"). Under the formula, a target number of options for each executive
officer is determined by dividing a percentage of the officer's salary
(ranging from 100 percent to 150 percent based on level of responsibility) by
the market price of the Common Stock at the date of grant. The target number
is subject to downward adjustment based on the Company's ROE for its most
recent fiscal year. No adjustment is made if the Company's ROE exceeds by a
specified margin the composite ROE of 19 forest products companies, including
the Company, as reported by a nationally recognized financial publication (the
"Composite Group"). If the specified margin is not achieved, the options are
reduced proportionately by up to 30 percent of the target number. The
Company's 1995 ROE exceeded the published industry composite by more than the
specified margin. Accordingly, option grants in 1996 were not adjusted. The
formula does not take into account the number of stock options previously
granted to an executive officer.
The Composite Group includes a broad range of companies in terms of size,
some of which are substantially larger than the Company in terms of sales. The
Compensation Committee believes that the broader Composite Group is more
appropriate for measuring performance based on ROE, which is not related to a
Company's size, and the peer group is more appropriate for comparing
compensation levels which typically depend in part on a company's size.
Restricted stock has been awarded to executive officers based upon the
Compensation Committee's subjective evaluation of the Company's performance.
In April 1996, shares of restricted stock, which vest based on years of
continuous employment after the date of the award, were awarded to executive
officers in an amount
10
<PAGE>
equal to 15 percent of the officer's salary based on the market value of the
Common Stock at the date of the award.
The Compensation Committee determined the stock option and restricted stock
awards to Mr. Rogel using the same principles as it uses in granting stock
options and restricted stock awards to other executive officers. Under the
formula used by the Compensation Committee in granting stock options, options
for 18,220 shares were targeted for and issued to Mr. Rogel in 1996.
The Awards Committee presently intends to continue to grant options and
award shares of restricted stock in accordance with the principles followed by
the Compensation Committee.
Section 162(m) of the Internal Revenue Code generally disallows a federal
income tax deduction to the Company for compensation over $1 million paid to
any of the Company's chief executive officer and four other most highly
compensated executive officers unless such compensation is payable only on
account of the attainment of one or more performance goals determined by a
Board committee comprised solely of two or more outside directors and
otherwise qualifies as performance based pursuant to Section 162(m).
Responsibility for the administration of the 1995 Plan was assigned to the
Awards Committee, which is comprised solely of outside directors, so that
awards under the 1995 Plan can be qualified as performance based within the
meaning of Section 162(m). Stock options granted by the Awards Committee as
well as awards of restricted stock which vest based upon the attainment of
performance goals established by the Awards Committee will qualify as
performance based pursuant to Section 162(m). The Company does not have a
policy favoring awards to executive officers which qualify as performance
based pursuant to Section 162(m). However, the Awards Committee will consider
the net cost to the Company of awards of restricted stock under the 1995 Plan
that do not qualify pursuant to Section 162(m).
COMPENSATION COMMITTEE
Gerard K. Drummond C. W. Knodell
Samuel C. Wheeler Benjamin R. Whiteley
Paul N. McCracken, Chairman
11
<PAGE>
PERFORMANCE GRAPH
The following graph compares the annual percentage change in the cumulative
total shareholder return on the Common Stock with the cumulative total return
of the Standard & Poor's 500 Stock Index and the cumulative total return of the
Standard & Poor's Paper & Forest Products Index, in each case assuming
investment of $100 on December 31, 1991, and reinvestment of dividends.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN*
AMONG WILLAMETTE INDUSTRIES, INC., THE S & P 500 INDEX
AND THE S & P PAPER & FOREST PRODUCTS INDEX
PERFORMANCE GRAPH APPEARS HERE
<TABLE>
<CAPTION>
WILLAMETTE S & P PAPER
Measurement Period INDUSTRIES S & P & FOREST
(Fiscal Year Covered) INC. 500 INDEX PRODUCTS INDEX
- --------------------- ---------- --------- -------------
<S> <C> <C> <C>
Measurement Pt- 12/91 $100 $100 $100
FYE 12/92 $142 $108 $114
FYE 12/93 $174 $118 $126
FYE 12/94 $170 $120 $131
FYE 12/95 $206 $165 $145
FYE 12/96 $260 $203 $160
</TABLE>
* $100 INVESTED ON 12/31/91 IN STOCK OR INDEX -
INCLUDING REINVESTMENT OF DIVIDENDS.
FISCAL YEAR ENDING DECEMBER 31.
COMPENSATION OF DIRECTORS
FEES
Each director of the Company who is not also an employee of the Company or a
subsidiary (a "nonemployee director") receives a fee of $1,200 for each Board
meeting attended and $1,000 for each committee meeting attended, except that
the chairman of a committee receives an attendance fee of $1,500. In addition,
each nonemployee director, other than Mr. Swindells, receives a retainer fee of
$20,000 per year.
RETIREMENT BENEFITS
The Company maintains a retirement plan for nonemployee directors who serve
on the Board on or after September 1, 1989, and who complete five years of
service as nonemployee directors after January 31, 1980. Upon retirement, a
former director receives a number of annual payments equal to the number of
years he or she
12
<PAGE>
served as a nonemployee director after January 31, 1980. Payments terminate on
death. The amount of each annual payment equals the annual retainer fee for
directors at the time the director retires. Benefits under the plan are not
funded.
STOCK OPTIONS
Under the 1995 Plan, each person who was a nonemployee director at the date
of the 1995 annual meeting of shareholders was granted an option to purchase
1,000 shares of Common Stock (an "Initial Option") and each person who
subsequently becomes a nonemployee director, other than a former officer of
the Company or a subsidiary, is also granted an Initial Option. In addition,
on the date of each annual meeting of shareholders, commencing with the 1996
annual meeting, an option for 600 shares of Common Stock (an "Annual Option")
is granted to each person who is then a nonemployee director, including former
officers of the Company or its subsidiaries, and who is to continue to serve
as a director.
Options granted to nonemployee directors under the 1995 Plan are granted at
an exercise price equal to the fair market value of the Common Stock on the
date of grant, have terms of ten years and two days, and are exercisable as
specified in note (1) to the table under "Option Grants in Last Fiscal Year"
above. Accordingly, the Annual Options granted to the nonemployee directors on
the date of the 1996 annual meeting were granted at an exercise price of
$61.75 per share, the fair market value of the Common Stock on that date. The
Initial Options granted to Mr. Prendergast on August 1, 1996, and to Mr.
Hergenhan on February 13, 1997, were granted at exercise prices of $59.4375
and $63.00, respectively, the fair market value of the Common Stock on the
date of grant.
CONSULTING AGREEMENT
The Company entered into a consulting agreement with Mr. Swindells effective
upon his retirement as chief executive officer of the Company under which Mr.
Swindells agreed to provide consulting services to the Company for a two-year
term expiring September 30, 1997. Thereafter, the consulting agreement will
continue on a month-to-month basis until terminated by either party. Under the
consulting agreement, Mr. Swindells receives consulting fees at the rate of
$10,000 a month, secretarial services and office space, and is reimbursed for
certain expenses including dues for a business club. The consulting agreement
provides that, while Mr. Swindells is receiving fees under the agreement, he
shall not receive the annual retainer fees payable to other nonemployee
directors of the Company.
EMPLOYMENT AGREEMENTS
GENERAL
The Company has entered into agreements ("CIC Agreements") with certain of
its key employees, including the named executive officers, that provide for
severance compensation for the employees in the event their employment with
the Company is terminated subsequent to a Change in Control (as defined) of
the Company under the circumstances set forth in the CIC Agreements. Pursuant
to the CIC Agreements, each employee has agreed to remain in the Company's
employ following a tender offer or exchange offer for more than 30 percent of
the combined voting power of the Company's voting securities until such offer
has been abandoned or terminated or a Change in Control has occurred and
unless the Company reduces the employee's compensation.
If, within 36 months following a Change in Control, the employee's
employment with the Company is terminated by the Company without Cause (as
defined) or by the employee with Good Reason (as defined), then the Company
shall pay to the employee, upon demand, his full base salary through the date
of termination at the rate in effect on the date the Change in Control
occurred, plus severance compensation in an amount equal to 2.99 times the sum
of (a) his annual base salary at the above-specified rate and (b) the average
annual incentive compensation (if any) paid or accrued for his benefit in
respect of the two fiscal years prior to the fiscal year in which the Change
in Control occurs.
13
<PAGE>
The CIC Agreements further provide for the continuation of all noncash
employee benefit plans and arrangements, with certain exceptions, for a period
of one year following termination of employment after a Change in Control
except by death, by the Company for Cause or disability or by the employee
other than for Good Reason. The employee is also entitled to be reimbursed for
any reasonable legal fees and expenses he may incur in enforcing his rights
under the CIC Agreement.
In the event it is determined that any payment by the Company to or for the
benefit of the employee in connection with a Change in Control is not
deductible by the Company for federal income tax purposes, then amounts
otherwise payable or distributable under the agreement are reduced to the
maximum deductible amount.
The CIC Agreements are for one-year terms which extend annually for an
additional one-year term, unless either the Company or the employee gives
notice that the CIC Agreement shall not be extended. In the event of a Change
in Control while the CIC Agreements are in effect, the CIC Agreements are
automatically extended for 36 months from the date the Change in Control
occurs. The CIC Agreements terminate upon termination of employment prior to a
Change in Control.
CERTAIN DEFINITIONS
Lengthy definitions of Cause, Change in Control and Good Reason are included
in the CIC Agreements. Summaries of the definitions, which are necessarily
incomplete, are set forth below.
"Cause" with respect to the termination of an employee's employment by the
Company means termination because the employee committed an act of fraud,
embezzlement or theft constituting a felony, or an act intentionally against
the interest of the Company which causes it material harm, or because of his
repeated failure, after written notice, to perform his responsibilities under
the CIC Agreement.
"Change in Control" means (i) a change in control required to be disclosed
pursuant to Regulation 14A under the Securities Exchange Act of 1934 (the
"Exchange Act"), (ii) subject to certain exceptions, the acquisition by a
person or group of beneficial ownership of 20 percent or more of the
outstanding Common Stock, (iii) a change in the composition of the Board such
that the directors at the beginning of any two-year period cease to constitute
at least a majority of the Board unless the election or nomination of each new
director was approved by two-thirds of the directors still in office who were
directors at the beginning of such period, (iv) subject to certain exceptions,
any consolidation or merger of the Company or any sale or other transfer of
substantially all its assets or (v) approval by the shareholders of the
Company of a plan or proposal for its liquidation or dissolution.
"Good Reason" with respect to the termination by an employee of his
employment with the Company means (i) subject to certain exceptions, any
change in the employee's status or position with the Company which in his
reasonable judgment does not represent a promotion, (ii) a reduction in the
employee's base salary, (iii) the failure by the Company to continue in effect
for the employee certain benefit plans and policies, (iv) the transfer of the
employee to a different location, (v) the failure of any successor to the
Company to expressly assume the Company's obligations under the CIC Agreement,
(vi) a purported termination by the Company of the employee's employment which
is not effected in accordance with the CIC Agreement or (vii) a refusal by the
Company to allow the employee to continue to engage in certain activities not
related to the Company's business.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under Section 16 of the Exchange Act, holders of more than 10 percent of the
Common Stock and directors and certain officers of the Company are required to
file reports ("Section 16 Statements") of beneficial ownership of Common Stock
and changes in such ownership with the Securities and Exchange Commission and
the New York Stock Exchange. The Company is required to identify in its proxy
statements those persons who
14
<PAGE>
to the Company's knowledge were required to file Section 16 Statements and did
not do so on a timely basis. Based solely on a review of copies of Section 16
Statements furnished to the Company during and with respect to its most recent
fiscal year and on written representations from reporting persons, the Company
believes that each person who at any time during the most recent fiscal year
was a reporting person filed all required Section 16 Statements on a timely
basis except there was a less than one month delay in filing an initial
Section 16 Statement on behalf of Greg W. Hawley, Vice President and
Controller.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The firm of KPMG Peat Marwick LLP, independent public accountants, has
audited the accounts of the Company for a number of years and has been
selected to do so for 1997. Representatives of KPMG Peat Marwick LLP are
expected to be present at the annual shareholder meeting with the opportunity
to make a statement if they desire to do so and to be available to respond to
appropriate questions.
SHAREHOLDER PROPOSALS FOR 1998
Shareholder proposals intended to be presented at the next annual meeting of
shareholders of the Company must be received by the Company no later than
November 7, 1997, in order to be included in the proxy statement and proxy
card for such meeting.
SOLICITATION OF PROXIES
The cost of soliciting proxies will be borne by the Company. In addition to
the use of the mails, proxies may be solicited in person or by telephone or
other means of communication by certain directors, officers, and other
employees of the Company without extra compensation for their services. The
Company has retained D.F. King & Co., Inc., to assist in the solicitation of
proxies at an estimated fee of $4,500 plus expenses. The Company will
reimburse brokers and other persons holding shares in their names, or in the
names of nominees, for their reasonable expenses in forwarding soliciting
materials to their principals and obtaining authorization for the execution of
proxies.
By Order of the Board of Directors
J. A. Parsons
Secretary
Portland, Oregon
15
<PAGE>
(THIS PAGE INTENTIONALLY LEFT BLANK)
<PAGE>
- -------------------------------------------------------------------------------
WILLAMETTE INDUSTRIES, INC.
PROXY SOLICITED ON BEHALF OF BOARD OF DIRECTORS
FOR ANNUAL MEETING ON APRIL 15,1997
The undersigned hereby appoints William Swindells, Steven R. Rogel and J. A.
Parsons, and each of them, proxies with power of substitution, to represent
and vote the common stock of Willamette Industries, Inc. ("Company"), which
the undersigned may be entitled to vote at the annual meeting of the Company's
shareholders on April 15, 1997, or at any adjournment thereof with all powers
the undersigned would possess if personally present. A majority of the proxies
present, or if only one is present, then that one, shall have all the powers
granted herein.
By signing on the reverse, the undersigned acknowledges receipt of the Notice
of Annual Meeting to be held April 15, 1997, and accompanying proxy statement,
and revokes all prior proxies for said meeting.
(CONTINUED, AND TO BE MARKED, DATED AND SIGNED, ON THE OTHER SIDE)
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
<PAGE>
- -------------------------------------------------------------------------------
Please mark
your vote as
indicated in
this example
[X]
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN ACCORDANCE WITH THE CHOICE
SPECIFIED, OR, IF NO CHOICE IS SPECIFIED, WILL BE VOTED FOR THE ELECTION OF
DIRECTORS. IF ANY OTHER BUSINESS PROPERLY COMES BEFORE THE MEETING, THIS PROXY
WILL BE VOTED THEREON IN THE DISCRETION OF THE PROXIES NAMED HEREIN.
THE BOARD OF
DIRECTORS
RECOMMENDS A
VOTE FOR
- -----------------
WITHHELD
Item 1-Election of directors: Gerard K. Drummond, FOR FOR ALL
Paul N. McCracken, Kenneth W. Hergenhan, G. Joseph [_] [_]
Prendergast, Stuart J. Shelk, Jr., Samuel C. Wheeler
WITHHELD FOR: (Write that nominee's name in the space provided below).
- -------------------------------------------------------------------------------
Signature(s) __________________________ Date _________________________, 1997
NOTE: Please sign as name appears hereon. Joint owners should each sign. When
signing as attorney, executor, administrator, trustee or guardian, please give
full title as such.
- -------------------------------------------------------------------------------
FOLD AND DETACH HERE
