<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
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
TJ INTERNATIONAL INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / 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 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
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.:
------------------------------------------------------------------------
3) Filing Party:
------------------------------------------------------------------------
4) Date Filed:
------------------------------------------------------------------------
<PAGE>
[TJ International Logo]
NOTICE OF 1995 ANNUAL MEETING
AND
PROXY STATEMENT
<PAGE>
[TJ International Logo]
P.O. Box 65
Boise, Idaho 83707
NOTICE OF ANNUAL MEETING
You are cordially invited to attend TJ International's annual meeting of
stockholders. The meeting will be held in the Juniper Room of the Red Lion
Riverside, 29th Street and Chinden Boulevard, Boise, Idaho, on Wednesday, May
24, 1995 at 10:30 a.m., Mountain Daylight Time.
We hope you will be able to join us, but whether or not you plan to attend,
it would be very helpful if you would sign the enclosed proxy card and return it
in the envelope provided. Please do this immediately so that we can save the
time and expense of contacting you again. Voting by proxy will not prevent you
from voting in person if you attend the meeting, but will assure that your vote
will be counted if you are unable to attend.
The meeting will be held for the following purposes:
1. To elect as directors the three (3) nominees listed in the
accompanying Proxy Statement to hold office for three years.
2. To ratify the appointment of Arthur Andersen & Co. as the Company's
independent auditors for the fiscal year ending December 30, 1995.
3. To transact such further or other business as may properly come before
the meeting, or any adjournments thereof.
The Board of Directors has fixed Monday, March 27, 1995, at the close of
business, as the record date for the determination of the stockholders entitled
to notice of, and to vote at, this meeting.
During the meeting, management will review the past year's performance and
comment on the Company's future prospects. There will be time for any questions
stockholders may have about the Company and its operations. Also, management
representatives will be on hand to talk individually with stockholders about the
Company's business.
Your vote is important regardless of the number of shares you own. Please
sign and date the enclosed proxy and return it promptly in the enclosed
self-addressed, postage-paid envelope, so that your shares may be represented.
If you attend this meeting, you may vote either in person or by your proxy.
If you have any questions, please do not hesitate to contact us.
RICHARD B. DRURY
Secretary and Treasurer
Boise, Idaho
April 10, 1995
<PAGE>
PROXY STATEMENT
OF
TJ INTERNATIONAL, INC.
200 E. MALLARD DRIVE
BOISE, IDAHO 83707
(208) 364-3300
ANNUAL MEETING OF STOCKHOLDERS
MAY 24, 1995
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of TJ International, Inc., (the "Company") to
be used at the Annual Meeting of Stockholders of the Company to be held in the
Juniper Room of the Red Lion Riverside, 29th Street and Chinden Boulevard,
Boise, Idaho, on Wednesday, May 24, 1995 at 10:30 a.m., Mountain Daylight Time.
The accompanying Notice of Annual Meeting of Stockholders and this Proxy
Statement are being first mailed to stockholders on or about April 10, 1995. All
expenses of this solicitation of proxies will be borne by the Company.
EXECUTION AND REVOCATION OF PROXY
When stock is registered in the name of more than one person, each such
person should sign the proxy. If the stockholder is a corporation, the proxy
should be signed in its corporate name by an executive or other authorized
officer. If the proxy is signed by an attorney, executor, administrator,
trustee, guardian, or in any other representative capacity, the signor's full
title should be given; and, if not previously furnished but available, a
certificate or other evidence of appointment should be furnished.
A proxy may be revoked by a stockholder at any time prior to the voting
thereof by giving written notification to the Secretary of the Company, by
delivering a later dated proxy, or by voting in person.
RECORD DATE, OUTSTANDING VOTING SECURITIES,
AND VOTING RIGHTS
Only stockholders of record at the close of business on March 27, 1995,
will be entitled to vote at the meeting. As of the close of business on March
27, 1995, the Company had outstanding and entitled to vote at the meeting
16,930,202 shares of common stock and 1,247,837 shares of ESOP convertible
preferred stock. Each such share of common or preferred stock shall be entitled
to one vote on each proposition and one vote for each director to be elected.
Abstentions and broker non-votes shall have no impact on the vote. Votes for
directors may not be voted cumulatively.
The shares represented by proxies will be voted by the proxyholders at the
annual meeting (or any adjournment thereof) if the proxies are properly signed
by the stockholders, duly returned to the Company, and not revoked. If the
stockholder specifies a choice by means of the ballot provided on the proxy, the
shares represented by proxy will be voted in accordance with such specification.
In the absence of specific instructions, however, the shares represented by
proxy will be voted in favor of the nominees and the proposition set forth in
the Notice. Further, the proxyholders shall have discretionary authority to vote
the shares represented by proxy on matters which the Company did not know, a
reasonable time before this solicitation, would be presented at the annual
meeting, and on any other matter with respect to which the rules and regulations
of the Securities and Exchange Commission permit the solicitation of
discretionary authority.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
COMMON STOCK
The following table sets forth, as of March 27, 1995, the persons
(including any group deemed a "person" under Section 13(d)(3) of the Securities
Exchange Act of 1934) known to the Company who beneficially own more than 5
percent of the Company's Common Stock. It also shows beneficial owner-
- 1 -
<PAGE>
ship, direct or indirect, of the Company's Common Stock for each director and
nominee, for each executive officer named in the Summary Compensation Table, and
for the directors and executive officers as a group.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENT
BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
---------------------------------------------------------------------------
<S> <C> <C>
DIRECTORS AND NOMINEES
----------------------
Thomas H. Denig 43,078 (1) *
Robert B. Findlay 6,000 *
Robert V. Hansberger 9,800 *
J.L. Scott 15,800 *
Harold E. Thomas 851,687 (2) 5.0%
Arthur L. Troutner 1,142,146 (3) 6.7%
J. Robert Tullis 465,022 (4) 2.7%
Steven C. Wheelwright 18,800 *
William J. White 3,000 *
OTHER NAMED EXECUTIVES
----------------------
Kevin R. Case 11,187 (5) *
Robert J. Dingman 9,367 (5) *
Walter C. Minnick 253,180 (6) 1.5%
All Directors and Executive Officers
as a group 4,192,066 (7) 24.8%
<FN>
*Less than one percent of class
(1) Mr. Denig directly owns 22,742 shares. The amount beneficially owned by Mr.
Denig also includes 20,336 shares which are not outstanding but which are
subject to certain options exercisable by Mr. Denig within 60 days of this
Proxy Statement.
(2) Mr. Thomas directly owns 751,631 shares. The amount beneficially owned by
Mr. Thomas, as reflected in the table, includes 100,056 shares held in
trust. The table does not include 179,666 shares owned by several Thomas
family trusts for the benefit of Mr. Thomas' grandchildren because the
trust agreements do not permit Mr. Thomas to exercise voting or investment
power; and Mr. Thomas disclaims beneficial ownership of such shares. By
virtue of their relationship, however, Mr. Thomas may influence Mr. Tullis'
exercise of those powers as Trustee.
(3) Mr. Troutner directly owns 328,858 shares. The amount beneficially owned by
Mr. Troutner, as reflected in the table, includes 813,288 shares owned
beneficially and of record by Katherine Troutner. Mr. Troutner disclaims
any beneficial interest in these shares but has a contractual right to vote
them until their sale or other disposition by Katherine Troutner; and the
inclusion of such shares in the table showing the amount beneficially owned
by Mr. Troutner shall not be construed as an admission that he is the
beneficial owner of such shares.
(4) Mr. Tullis directly owns 104,300 shares. The amount beneficially owned by
Mr. Tullis, as reflected in the table, includes 279,722 shares owned by the
Thomas trusts mentioned in note (2) above, and 81,000 shares owned by
unrelated trusts of which Mr. Tullis is Trustee. Mr. Tullis disclaims
beneficial interest in the shares held by these trusts; and the inclusion
of such shares in the table showing the amount beneficially owned by Mr.
Tullis shall not be construed as an admission that he is the beneficial
owner of such shares.
(5) Messrs. Case and Dingman directly own 379 and 1,087 shares, respectively.
The amount beneficially owned by each of these individuals also includes
10,808 and 8,080 shares, respectively, which are not outstanding but which
are subject to certain options exercisable within 60 days of this Proxy
Statement. The amount beneficially owned by Mr. Dingman, as reflected in
the table, includes 200 shares owned by his minor child. As custodian of
these shares, Mr. Dingman has sole voting and investment power over these
shares.
(6) Mr. Minnick directly owns 129,174 shares. The amount beneficially owned by
Mr. Minnick, as reflected in the table, includes 1,600 shares owned by his
minor child and 99,286 shares owned by an unrelated trust. As custodian of
the shares owned by his minor child, Mr. Minnick has sole voting power and
investment power over those shares. As one of three trustees for the
unrelated trust, Mr. Minnick may exercise sole voting power. The amount
beneficially owned by Mr. Minnick also includes 23,120 shares which are not
outstanding but which are subject to certain options exercisable by Mr.
Minnick within 60 days of this Proxy Statement.
(7) The amount beneficially owned by all directors and officers includes those
shares identified in the preceding footnotes. The amount beneficially owned
by all directors and officers also includes 1,401,029 shares held by the
Trustee for the Company's U.S. retirement plans. All of the Company's
executive officers participate in these plans; and certain of the Company's
employees administer these plans.
</TABLE>
- 2 -
<PAGE>
PREFERRED STOCK
In September 1990, the Company issued 1,269,842 shares of $1.00 par value
ESOP convertible preferred stock at $11.8125 per share (liquidation preference)
to the employee stock ownership plan (ESOP). Each share of the preferred stock
is convertible into the Company's common stock at the higher of the liquidation
preference or the fair market value of the underlying common stock. The
preferred stock has voting rights equal to one vote per share and is entitled to
preferential dividends of $1.065 per share each year. The preferred stock is
redeemable by the Company in certain situations. As of March 27, 1995, 1,247,837
shares of the preferred stock, representing 100% of the class, were held by the
Trustee for the ESOP. All of the Company's executive officers participate in the
ESOP; and certain of the Company's employees administer the ESOP.
ELECTION OF DIRECTORS
(PROPOSAL 1)
The Company's Board of Directors is divided into three classes, as nearly
equal in number as possible, so that each director (after a transitional period)
serves a three-year term. During 1994, Messrs. Harold S. Eastman and Walter C.
Minnick resigned from the Company's Board of Directors. The Board has not yet
filled the vacancy created by the resignation of Mr. Eastman, whose term would
have expired at the 1996 Annual Meeting. On February 16, 1995, the Board of
Directors elected Mr. Thomas H. Denig, the Company's new President and Chief
Executive Officer, to fill the vacancy created by the resignation of Mr.
Minnick, with a term expiring at the May 1995 Annual Meeting. The following
directors have also been nominated to stand for election, both of whom also have
terms expiring at May 1995 Annual Meeting: Mr. Arthur L. Troutner and Mr. Steven
C. Wheelwright. The Board of Directors has been informed that each of the three
nominees is willing to serve as a director for a three-year term.
Information as to the nominees and as to each other Director whose term
will continue after the 1995 Annual Meeting of Stockholders is as follows:
NOMINEES FOR TERMS EXPIRING AT THE 1998 ANNUAL MEETING AND
PRINCIPAL OCCUPATION AND POSITION WITH TJ INTERNATIONAL
THOMAS H. DENIG (1)
200 E. Mallard Drive
Boise, Idaho
PRESIDENT AND CHIEF EXECUTIVE OFFICER OF TJ INTERNATIONAL, INC., Boise,
Idaho, since January 1995. Also serves as President and Chief Executive
Officer of Trus Joist MacMillan a Limited Partnership, a joint venture
between TJ International, Inc. and MacMillan Bloedel of America, since
September 1991. President of Trus Joist Corporation, 1990 to 1991; and its
Vice President, Eastern Operations, and Western Division Manager, 1974 to
1990. Lieutenant, U.S. Marine Corp prior to 1974. Graduate of Valpariso
University. Age 48. Director since February, 1995. Currently a director on
the Trus Joist MacMillan Management Board.
ARTHUR L. TROUTNER (3)
200 E. Mallard Drive
Boise, Idaho
CO-FOUNDER OF TJ INTERNATIONAL, INC. and a consultant to the Company since
March 1990. Formerly Vice President since 1960. Invented and obtained
patents on many of the Company's structural products. Graduate of the
University of Idaho. Age 73. Director since 1960.
- 3 -
<PAGE>
STEVEN C. WHEELWRIGHT (2) (4)
Harvard School of Business
Morgan Hall T-75
Boston, Massachusetts
CLASS OF 1949 PROFESSOR OF MANAGEMENT, GRADUATE SCHOOL OF BUSINESS, HARVARD
UNIVERSITY, Boston, Massachusetts, since September 1988. Formerly Kleiner,
Perkins, Caufield & Buyers Professor of Management, Graduate School of
Business, Stanford University, Stanford, California, since 1983. Visiting
professor, Harvard Business School, 1985-1986. Previously, faculty member
of Stanford Graduate School of Business and Harvard Graduate School of
Business. Author or co-author of numerous cases, articles, and books in the
areas of product development manufacturing strategy, operations management,
and forecasting. Graduate of University of Utah. MBA and Ph.D. from the
Graduate School of Business, Stanford University. Age 51. Director since
1980. Currently a director of Quantum Corp. and Allegheny Ludlum Steel
Corporation.
CONTINUING DIRECTORS
TERMS EXPIRING AT THE 1996 ANNUAL MEETING
ROBERT B. FINDLAY (3) (4)
925 W. Georgia St.
Vancouver, British Columbia
PRESIDENT AND CHIEF EXECUTIVE OFFICER OF MACMILLAN BLOEDEL LIMITED,
Vancouver, British Columbia, (forest products company) since December 1990.
Senior Vice President for MacMillan Bloedel's world marketing group from
April 1989 to December 1990; Senior Vice President for MacMillan Bloedel's
Aberni Region from 1982 to 1989. Graduate of McGill University. Age 61.
Director since 1991. Currently a director of MacMillan Bloedel Limited,
Methanex Corporation, and Bank of Nova Scotia.
ROBERT V. HANSBERGER (2) (4)
380 E. ParkCenter Blvd., Suite 230
Boise, Idaho
CHAIRMAN AND CHIEF EXECUTIVE OFFICER OF FUTURA INDUSTRIES CORPORATION,
Boise, Idaho, (holding company for diversified subsidiaries) since 1965.
Founder and formerly Chief Executive Officer of Boise Cascade Corporation.
Graduate of University of Minnesota and Harvard Business School. Age 74.
Director since 1975. Currently a director of:
- BMC West - Volunteer Hospitals of America - MK Gold Company
- Primary Health, Inc. - IDA-WEST, Inc. - Thrifty Foods
CONTINUING DIRECTORS
TERMS EXPIRING AT THE 1997 ANNUAL MEETING
J.L. SCOTT (1) (3)
Salt Lake City, Utah
FORMER PRESIDENT AND CHIEF EXECUTIVE OFFICER OF AMERICAN STORES CO., Salt
Lake City, Utah (supermarkets, drug stores and combination food and drug
stores) from June 1990 to September 1992; Vice Chairman and Chief Executive
Officer of American Stores Co. since January 1989; Chairman and Chief
Executive Officer of American Superstores, Inc. since June 1987; Vice
Chairman and Chief Executive Officer of American Superstores, Inc., since
January 1987. Prior to 1987, Mr. Scott was Chairman and Chief Executive
Officer of J.L. Scott Enterprises, Inc., since September 1980. From 1975 to
1980, Mr. Scott was Chairman and Chief Executive Officer of the Great
Atlantic and Pacific Tea Company, Inc. Prior to 1975, Mr. Scott served as
Vice Chairman and Chief Executive Officer of Albertson's Inc. Graduate of
Albertson College of Idaho. Age 65. Director since 1980. Currently a
director of American Stores Co., and a member and trustee for the Committee
for Economic Development.
- 4 -
<PAGE>
HAROLD E. THOMAS (1)
200 E. Mallard Drive
Boise, Idaho
CO-FOUNDER AND CHAIRMAN OF THE BOARD OF TJ INTERNATIONAL, INC. Chairman and
President from 1960 to 1971, Chairman and Chief Executive Officer from 1971
to 1975, again appointed Chief Executive Officer from 1979 to 1986.
Graduate of the University of Idaho. Age 68. Director since 1960.
J. ROBERT TULLIS (1) (3)
680 S. Clearwater Lane
Boise, Idaho
CHAIRMAN AND CHIEF EXECUTIVE OFFICER OF QUINTEX CORPORATION, Nampa, Idaho
(primarily an injection and blow molding plastics manufacturing firm) since
1979. Treasurer of Trus Joist Corporation from 1960 to 1972. Graduate of
the University of Idaho. Certified Public Accountant since 1954. Age 69.
Director since 1960.
WILLIAM J. WHITE (2)
5215 Old Orchard Road
Skokie, Illinois
CHAIRMAN AND CHIEF EXECUTIVE OFFICER OF BELL & HOWELL COMPANY, Skokie,
Illinois, since February 1990. Previously served as Chairman and President
of Whitestar Graphics, Inc. since 1989; Executive Vice President and
Director of USG Corporation, as well as President and Chief Executive
Officer of its largest subsidiary, United States Gypsum from 1984 to 1989;
President and Chief Operating Officer of Masonite Corporation from 1981 to
1984 (when it was acquired by USG Corporation); President of Mead Products
Division and ultimately Group Vice President of Consumer and Distribution
for Mead Corporation from 1974 to 1981. Graduate of Northwestern University
and Harvard Business School. Age 56. Director since 1994. Currently a
director of Bell & Howell, Evanston Hospital, the IMSA Fund for Advancement
of Education, and Instead International Council.
(1) Member of the Executive Committee.
(2) Member of the Executive Compensation Committee.
(3) Member of the Audit Committee.
(4) Member of the Nominating and Corporate Governance Committee.
(5) By virtue of their ownership of the Company's common stock or their
positions as corporate officers, Messrs. Denig or Thomas may technically be
considered under the reporting rules to be control persons of the
Corporation.
- 5 -
<PAGE>
COMMITTEES AND MEETINGS OF
THE BOARD OF DIRECTORS
The Board of Directors presently consists of nine members - seven
non-management and two management. Regular meetings are usually held quarterly.
In 1994 there were five meetings of the full Board and eleven committee meetings
as described more fully below. Except for Mr. Troutner, no incumbent director
attended fewer than 75% of the aggregate number of meetings of the Board and all
committees of the Board of which the person is a member.
The Board of Directors has established the following committees to deal
with particular areas of responsibility:
1. The Executive Committee consists of any number of members, to include the
Chairman of the Board and President, so designated by the full Board as
specified in the Company's Bylaws. Currently, there are four members, two
non-management directors and two management directors. The Committee meets
at such times as needed throughout the year at the request of management.
It exercises virtually all the powers of the Board in the management and
direction of the business affairs of the Company that require immediate
action. Any action taken by this Committee is reported to the full Board at
its next regular meeting. The Committee met once in 1994. The current
members of the Committee are: Thomas H. Denig, J. L. Scott, Harold E.
Thomas and J. Robert Tullis.
2. The Executive Compensation Committee consists of three of the
non-management directors. The Committee meets as needed to review and
recommend to the full Board matters concerning the compensation of officers
and the grant of incentives to key employees. The Committee is also
responsible for keeping abreast of compensation programs in similar
businesses in order to ensure that the Company remains competitive in the
recruitment and retention of top quality employees. The Committee met five
times in 1994. The current members of the Committee are: Robert V.
Hansberger, William J. White, and Steven C. Wheelwright.
3. The Audit Committee currently consists of four of the non-management
directors. The Committee periodically reviews accounting policies,
reporting practices, internal and external auditing and control, and other
matters as appropriate. The Company's outside auditors, Vice President,
Finance, Treasurer, internal auditor and various other top executives are
generally requested by the Committee Chairman to attend the meetings as
appropriate to answer questions posed by the Committee. The Committee met
twice in 1994. The current members of the Committee are: Robert B. Findlay,
J. L. Scott, Arthur L. Troutner and J. Robert Tullis.
4. The Nominating and Corporate Governance Committee currently consists of
three of the non-management directors. The Committee was established by the
full Board in May, 1995. The Committee meets as needed to review, advise
and make recommendations to the full Board with respect to nominees to fill
vacancies on the Board, and as to the general structure, responsibilities,
and functions of the Board and its committees. The Committee met once in
1994. The current members of the Committee are: Robert B. Findlay, Robert
V. Hansberger, and Steven C. Wheelwright.
During 1994, there were no Executive Compensation Committee interlocks or
other relationships requiring disclosure under applicable rules of the
Securities and Exchange Commission.
COMPENSATION OF DIRECTORS
Directors' fees are determined by the Board of Directors. All directors who
were not officers during fiscal 1994 received fees of $300 per month; $2,000 for
each Board meeting attended; $500 for each Executive, Audit, Executive
Compensation, or Nominating and Corporate Governance Committee meeting attended
on the same day as a Board meeting; and $1,000 for each Executive, Audit,
Executive Compensation, or Nominating and Corporate Governance Committee meeting
attended on a day other than the day of a Board meeting. Directors who are
officers receive no directors' fees.
In addition, with stockholder approval, the Company implemented the Amended
and Restated Restricted Stock Plan for Non-Employee Directors in 1993. Under
this Plan, once every three years each non-employee director of the Company is
granted 2,000 shares of common stock subject to a three-year "earn-out" whereby
33 1/3% of the shares vest after each succeeding year of service as a
- 6 -
<PAGE>
director. Each director has the right, commencing on the date of grant, to
receive dividends and to vote the shares of common stock. A director is not
entitled to delivery of the shares or to sell or transfer them until the end of
the three-year period or the earlier termination of his status as an eligible
nonemployee director. If the recipient of such shares becomes ineligible before
the end of the three-year period, the nonvested shares are forfeited to the
Company.
COMPENSATION OF EXECUTIVE OFFICERS
The following sections of the Proxy Statement set forth and discuss the
compensation paid or granted during the last three years to the Company's five
most highly compensated executive officers at the end of 1994.
REPORT OF THE EXECUTIVE COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION
OVERALL POLICY
The Executive Compensation Committee of the Board of Directors consists of
three non-management directors. It meets regularly to evaluate the performance
of senior managers and makes recommendations to the full Board with respect to
the promotion, continued tenure, and compensation of all officers of the Company
and such officers of its subsidiaries and partnerships who report directly to
the chief executive officers of such operations. These include the five most
highly compensated executive officers of the Company and its subsidiary
corporations or partnerships (the "Named Executives"). The objective is to
attract and retain the best possible executive talent, to motivate these
executives to achieve the goals inherent in the Company's business strategy, to
link executive and stockholder interests through providing incentives to
managers toward maximizing long-term growth in earnings and to becoming owners
of the Company's stock, and to provide each officer with an appropriate and
competitive compensation package. That package is intended to recognize his or
her individual effort and contribution as well as the overall results of the
business.
The Committee, the full Board, and management have adopted as a general
philosophy that base salary for the officer group of the Company and of Trus
Joist MacMillan a Limited Partnership (TJM), for which the Company is the 51%
owner and managing partner, including the Named Executives, should vary
approximately plus or minus 10% around a scale targeted at the midpoint (the
50th percentile) of the relevant market, defined as other building materials and
forest products companies (the "comparator group"), for the individual's
position and skill. Incentive compensation opportunity is targeted at the lower
end of the top one-third (the 67th percentile) of the relevant market. The
com-panies considered for the comparator group used for compensation purposes
generally are not the same companies which comprise the published industry index
in the Performance Graph included in this proxy statement. The Committee
believes that the Company's most direct competitors for executive talent are not
necessarily all of the companies that would be included in the published
industry index established for comparing stockholder returns. The top one-third
philosophy applies to the total of incentive compensation and the value of stock
options or other equity-based incentives. While each of these elements is also
considered separately, the Committee in its deliberations attempts to take into
account the total compensation package, including the Company's profit sharing
and ESOP plans, as well as insurance and other benefits in addition to the more
direct forms of compensation.
The Committee also recognizes that in times of general economic distress it
may not be economically practical to maintain total compensation, particularly
for senior managers, within the targeted ranges. To ensure executive
compensation is appropriately aligned with performance and the financial
interest of the stockholders, and that senior managers share with those
associates subject to layoff and shorter work weeks the financial impact of
difficult economic conditions, it has been the practice of the Committee to
recommend temporary salary reductions for senior managers during periods of
general economic distress and poor corporate performance. As a result, the
salaries of senior managers were temporarily reduced between 5% and 25% during
the last three recessions, including a portion of the 1991-1992 recession.
- 7 -
<PAGE>
SALARIES
Salary levels of the Named Executives are reviewed once each year by the
Committee, with any adjustments normally made effective June 1st of each year.
The Committee may perform additional reviews of salary levels for specific
individuals during the year in exceptional cases such as appointment and/or
evaluation of new officers. In making its recommendations, the Committee
evaluates the size and complexity of operations under the Named Executive's
responsibility, the salary levels and size of any adjustments being recommended
for other officers and for the non-officer employee group, any relevant salary
survey information, the profitability of the operations managed by the officer
and of the Company as a whole, and the impact the specific individual has had on
the profitability of the Company. The Committee also considers non-financial
performance measures. These may include increases in market share,
manufacturing efficiency gains, and improvement in product quality. The Company
occasionally engages professional salary consultants to evaluate the Company's
executive compensation programs compared with the comparator group. The
recommendations of the consultants are considered as relevant background
information by the Committee and management. No one of the factors mentioned
above is specifically more important than the others, but rather they are
considered in aggregate.
With respect to the base salary granted to Mr. Minnick effective June 1,
1994, the Committee took into account a comparison of base salaries to chief
executive officers of the comparator group, the Company's return to
profitability in 1993 and 1992 after a recession-related 1991 loss, the improved
operations for the Company for the first few months of 1994 compared to the same
period of 1993, and the assessment by the Committee of Mr. Minnick's individual
performance. No one of these factors was particularly determinative as all the
factors were considered. Mr. Minnick was granted a base salary of $300,000
effective June 1, 1994, an increase of 18% over his $254,800 base salary
effective June 1, 1993. The salaries of the other Named Executives, effective
June 1, 1994, were evaluated by the Committee after considering all the above
factors including the experience, performance, and competence of the individual
Named Executives.
ANNUAL INCENTIVE COMPENSATION
Incentive compensation programs vary each year depending upon economic and
industry circumstances. For the fiscal year ended December 31, 1994, a formula
approach to bonuses was taken with the focus on Pre-tax Return on Capital
Employed (PROCE) as a measure of performance. This percentage indicates how well
an individual operation performed in generating operating income given the
capital employed in the process. Eligible executives were assigned target bonus
levels based on a percentage of base salary. These target bonus awards were set
at market levels. Two PROCE factors were then considered, the absolute PROCE
achieved measured against a long-term target and improvement in performance over
the prior year measured by subtracting the prior year PROCE from the current
year PROCE. Each of these factors were then applied across the various levels of
the individual executive's accountability. The three levels of accountability
were TJ International consolidated, the Company's strategic business units, and
various operations groups. The weighting of each of these factors for individual
executives was determined at the beginning of the year by a subjective
evaluation of the executive's ability to influence the operating results at the
various levels of accountability.
For the fiscal year ended December 31, 1994, both the absolute PROCE and
improvement in PROCE resulted in some measure of payout to the Named Executives.
Based on the application of the formulas, Mr. Minnick was awarded a bonus equal
to 11.4% of his year-end salary or $34,252, compared to a bonus equal to 40% of
his then base salary or $101,920 paid to him for the prior fiscal year. The
prior year bonus was discretionary, and not based on any formulas.
STOCK OPTIONS
The Committee believes that stock ownership by management and employees is
a major incentive in building stockholders' wealth and aligning the interest of
employees with those of the stockholders, and that broad and deep stock
ownership is highly motivating. As a result, the stock option program is the
Company's primary long-term compensation vehicle for both the Named Executives
and other key employees. Options are granted to individuals much deeper in the
organization than is typical in the industry. Other equity incentives, primarily
in the form of discounted matching stock purchase programs, are available to
employees who do not participate in the stock option program.
- 8 -
<PAGE>
Stock options are granted pursuant to stock option plans approved by
stockholders. Generally, stock option grants are in the form of nonstatutory
options. While stock options can, under the terms of the plans approved by the
stockholders, be granted in several forms, the present philosophy of the
Committee is to utilize $1.00 per share discounted options with 40% of the
option grant becoming exercisable three years after date of grant. The
remaining 60% becomes exercisable in 20% annual installments commencing five
years after date of grant. Recognizing the value of deeply discounted shares,
the Company usually issues fewer options than are typically issued in more
conventional programs.
If the employee ceases to be employed by the Company, all unexercised
options, whether exercisable or not, are generally forfeited. However, in
recognition that the stock option program is the primary long-term compensation
vehicle for the Company and that stock options constitute an important portion
of the retirement program for both the Named Executives and other key employees,
in 1994 and in accordance with plan provisions, the Committee recommended and
the full Board approved a change in the policy. For options outstanding at least
three years on the date employment ceases, if the employee is not terminated for
cause, upon specific action by the full Board the vesting will be accelerated at
3% for each year of service. In other words, a 20 year employee would have 60%
of the otherwise unvested options become exercisable. This provides the
individual with an incentive not only to remain with the Company, but also to
perform his or her responsibilities in such a way as to increase the value of
the Company's common stock over the long term. In a cyclical business, the
Company typically has wide swings in the price of its stock. The grant of
options at a deep discount serves to provide a financial incentive for option
recipients to remain in the Company's employ even during severe recessions when
market value options might have no value, when salaries may have been frozen or
reduced, and when annual bonuses are reduced or eliminated. The Committee takes
into account the number of options granted in prior years to a particular
individual, including the Named Executives, and the current stock price, as well
as the Company's competitive compensation philosophy described earlier when
determining the size of current year option grants to that individual.
In 1994, stock options were granted to the Named Executives as indicated in
the Option Grants During Fiscal 1994 table on page 12. Mr. Minnick did not
receive any stock option grants in 1994 or 1993. This is because in 1992, Mr.
Minnick was awarded a nonstatutory stock option grant of 25,000 shares, which
became 50,000 shares because of the two-for-one stock split in 1993. The value
of these options at the grant date under the Black-Scholes methodology was
$418,000. The 1992 grant was the balance of a one-time option grant of 50,000
shares, 100,000 after the stock split, the first half of which was awarded
during 1991, and reflected the fact that Mr. Minnick had been granted no options
or bonuses during the preceding two years. This one-time grant was awarded in
recognition of Mr. Minnick's performance, as well as to provide incentive for
him to remain with the Company for the foreseeable future. None of these
options could be exercised before June 1994, and the last cannot be exercised
until June 2001.
SEVERANCE
The Committee determines the terms and conditions of any severance
arrangements with its executive officers and key management personnel on a
case-by-case basis, taking into account the officer's tenure with the Company,
his or her responsibilities and duties, and contribution to the business and
operations of the Company.
At the end of 1994, the Committee approved a severance agreement with Mr.
Minnick, who resigned as President and Chief Executive Officer of the company
effective January 31, 1995. Pursuant to this agreement, the Company will pay Mr.
Minnick the sum of $25,000 per month for nine months commencing February 1,
1995, and $8,333.33 per month for nine months thereafter, in accordance with
customary company payroll practices. The total to be paid pursuant to the
foregoing is $300,000, or the equivalent of Mr. Minnick's base salary for one
year.
In addition, during the 18-month period, Mr. Minnick will continue to vest
in 34,734 options granted under the Company's stock option plans, and the Board
of Directors has agreed in May 1996 to accelerate the vesting of 36,439 options
outstanding as of July 31, 1996. The 36,439 options represents 63% of
- 9 -
<PAGE>
the total non-vested options outstanding as of such date. The Committee arrived
at this percentage by agreeing, in accordance with the new policy, to accelerate
the vesting of 3% of the nonvested options outstanding for each of Mr. Minnick's
21 years of service to the Company. The estimated value of unexercised options
granted to Mr. Minnick as of December 31, 1994 is indicated in the Aggregate
Option Exercises in Fiscal 1994 and Fiscal 1994 Year End Option Values table on
page 12. The aggregate cash value of the severance payment and options will be
paid to Mr. Minnick's heirs in the event of his death. The Committee has
required Mr. Minnick to enter into a non-competition agreement, which he has
agreed to do for a period of 36 months commencing on the effective date of the
severance agreement.
POLICY WITH RESPECT TO THE $1 MILLION DEDUCTION LIMIT
Recently enacted Section 162(m) of the Internal Revenue Code generally
limits the corporate reduction for compensation paid to the Named Executives to
one million dollars, unless the compensation is performance-based. One
condition to qualify compensation as performance-based is to base the amount of
the award on an objective formula that precludes any discretion.
The Committee has carefully considered the impact of this new tax code
provision on the Company's incentive plans, and believes that, due to the
current and projected levels of compensation, the limits of Section 162(m) will
not apply to the compensation paid to the Company's Named Executives in the near
future. However, if in the future the limits of Section 162(m) do apply, the
Committee intends to modify to whatever extent is necessary, its compensation
programs for executive officers subject to the deduction limit so the corporate
tax deduction is preserved on all compensation paid.
CONCLUSION
Through the programs described above, a significant portion of the
Company's executive compensation is linked directly to individual and corporate
performance and stock price appreciation. The Committee intends to continue the
policy of linking executive compensation to corporate performance and returns to
stockholders, recognizing that the cyclicality of the business may from time to
time result in compensation for its senior managers being above or below its
general target ranges during any one year.
Robert V. Hansberger, Chairman
Steven C. Wheelwright
William J. White
- 10 -
<PAGE>
PERFORMANCE GRAPH
The following graph provides a comparison of the five year cumulative total
return (assuming reinvestment of dividends) for the Standard and Poor's 500
Index, the Value Line Building Materials Industry Group, and the Company.
[Graph]
[Legend] TJ International 100.00 79.15 99.65 97.17 264.09 156.72
[Legend] Building Materials 100.00 88.36 107.84 143.52 182.31 155.32
[Legend] S & P 500 100.00 96.83 126.41 136.25 150.00 151.97
Assumes $100 invested at the close of trading on the
last trading day of 1989.
EXECUTIVE COMPENSATION TABLES
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
--------------------------------------------------------------------------
(a) (b) (c) (d) (g) (i)
OPTIONS
NAME AND FISCAL GRANTED ALL OTHER
PRINCIPAL POSITION YEAR SALARY (1) BONUS (NUMBER) (2) COMP (3)
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
THOMAS H. DENIG 1994 $220,974 $ 68,032 7,000 $22,530
President and CEO 1993 194,548 120,000 7,000 12,502
1992 175,555 64,750 10,000 8,342
WALTER C. MINNICK 1994 279,053 34,252 0 17,967
Former President and CEO 1993 251,455 101,920 0 12,502
1992 227,555 61,250 50,000 10,010
HAROLD E. THOMAS 1994 188,406 22,264 0 11,449
Chairman of the Board 1993 174,627 61,250 0 11,456
1992 149,884 42,500 0 6,606
KEVIN R. CASE 1994 153,156 44,334 3,500 16,685
Senior Vice President, TJM 1993 141,717 80,442 5,000 10,452
1992 122,483 55,350 4,000 5,828
ROBERT J. DINGMAN 1994 161,992 33,424 3,500 8,754
Senior Vice President, TJM 1993 142,780 79,389 4,000 9,760
1992 129,072 41,440 5,000 6,258
- 11 -
<PAGE>
<FN>
(1) Includes compensation reduction amounts contributed by the Company to the
Profit Sharing Plan for the benefit of the named executive and cash profit
sharing distributions.
(2) The number of options included in this table have been adjusted to reflect
the Company's two-for-one stock split declared in 1993.
(3) Includes Company contributions to defined contribution retirement plans,
other than compensation reduction amounts described in note (1). The
amounts reported represent the contributions that became vested during
fiscal 1994 without regard to the year in which the contributions were
made.
(4) Columns for "Other Annual Compensation," "Restricted Stock Award(s)" and
"LTIP Payouts" are excluded because the Company had no such compensation
items or amounts. The Company makes available no special fringe benefits to
its executive officers not made available to all full-time employees other
than stock options. The Company, as a matter of philosophy, does not
provide company cars, subsidized travel, club memberships, or like
perquisites to its executive officer group.
</TABLE>
OPTION GRANTS DURING FISCAL 1994
<TABLE>
<CAPTION>
Individual Grants
(a) (b) (c) (d) (e) (f)
---------------------------------------------------------------------------
% OF TOTAL
OPTIONS OPTIONS EXERCISE EXPIRATION GRANT DATE
NAME GRANTED (1) GRANTED PRICE (1) DATE VALUE (2)
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
THOMAS H. DENIG 7,000 6.6% $1.00 5-25-04 $81,550
WALTER C. MINNICK 0 NA NA NA 0
HAROLD E. THOMAS 0 NA NA NA 0
KEVIN R. CASE 3,500 3.3% $1.00 5-25-04 40,775
ROBERT J. DINGMAN 3,500 3.3% $1.00 5-25-04 40,775
<FN>
(1) The options granted become exercisable as follows: 40% three years after
date of grant, and the remaining 60% in 20% annual installments commencing
five years after date of grant. All unexercised options expire ten years
after date of grant. Except as expressly provided in the plans or
accelerated by the Board in accordance with plan provisions and company
policy, if an optionee ceases to be employed by the Company, all options,
whether otherwise exercisable or not, are immediately forfeited at no cost
to the Company.
(2) Grant date value is determined under the modified Black Scholes option
pricing model. The assumptions used in this methodology include: grant date
market value per share - $21.875; exercise price per share - $1.00; annual
stock volatility factor - .504; risk free rate of return - 7.2%; annual
dividend yield - 1.0%; and, vesting adjustment factor - 44% based on the
term and vesting schedule described in note (1) above. The Company does not
believe that any model can accurately determine the future value of an
option because such values depend on future unpredictable factors. The
future values realized may vary significantly from the values estimated by
this or any other model. Any future values realized will ultimately depend
upon the excess of the market value of the stock over the exercise price on
the date the option is exercised.
</TABLE>
AGGREGATED OPTION EXERCISES IN FISCAL 1994
AND FISCAL 1994 YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e)
Number of Value of
Unexercised Unexercised
Options at Options at
Year End (2) Year End (3)
Shares
Acquired on Value Exercisable/ Exercisable/
Name Exercise Realized (1) Unexercisable Unexercisable
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
THOMAS H. DENIG 111,936 $224,064 11,056 $ 1,102,180
58,416 $ 1,004,440
WALTER C. MINNICK 24,366 $542,908 1,246 21,21,805
69,927 1,206,553
HAROLD E. THOMAS 0 $196,190 0 0
0 0
KEVIN R. CASE 0 0 8,248 97,950
18,116 310,775
ROBERT J. DINGMAN 6,440 107,300 4,520 78,330
22,820 392,255
- 12 -
<PAGE>
<FN>
(1) Value realized is the market value on date of exercise less exercise price.
These amounts are subject to federal and state income taxation.
(2) Number of unexercised options at year end have been adjusted to reflect the
Company's two-for-one stock split declared in 1993.
(3) Value of unexercised options at year end represents market value at year
end less exercise price. It does not consider the volatility of the
underlying stock, the vesting schedule of the options, or the risk of
forfeiture.
</TABLE>
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
(PROPOSAL 2)
Upon the recommendation of its Audit Committee, the Board of Directors has
reappointed Arthur Andersen & Co. as independent auditors for the fiscal year
ending December 30, 1995, and is requesting ratification by the stockholders for
such reappointment.
Arthur Andersen & Co. has been auditing the accounts of the Company and its
subsidiaries since 1972, the year the Company first registered with the
Securities and Exchange Commission. In recommending ratification by the
stockholders of the appointment of that firm, the Board of Directors is acting
upon the recommendation of the Audit Committee, which is composed entirely of
non-management directors, and has satisfied itself as to the firm's professional
competence and standing.
The Audit Committee of the Board of Directors has reviewed the audit and
non-audit professional services provided to the Company by Arthur Andersen &
Co., and has determined that the performance of the non-audit services would not
adversely affect the audit independence of Arthur Andersen & Co. Included in
the audit services are the examination of the annual financial statements of the
Company and its subsidiaries, limited reviews of interim financial statements,
and examination of the annual financial statements for the Company's employee
deferred benefit plans.
In the event this proposal is defeated, the adverse vote will be considered
as a direction to the Board of Directors to select other auditors for the next
fiscal year. However, because of the difficulty and expense of making any
substitution of auditors after the beginning of a fiscal year, it is
contemplated that the appointment for the 1995 fiscal year will be permitted to
stand unless the Board of Directors finds other reasons for making a change.
Ratification of the appointment of Arthur Andersen & Co. as independent
auditors requires the affirmative vote of the holders of a majority of the
shares of the Company's Common Stock present at the meeting, in person or by
proxy, and entitled to vote. In determining whether the proposal has received
the requisite number of affirmative votes, abstentions and broker non-votes will
be counted and will have the same effect as a vote against the proposal.
Representatives of Arthur Andersen & Co. are expected to be present at the
annual meeting with the opportunity to make a statement if they desire to do so,
and are expected to be available to respond to appropriate questions.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR PROPOSAL 2.
STOCKHOLDER PROPOSALS
From time to time stockholders present proposals which may be proper
subjects for inclusion in the Proxy Statement and for consideration at the
annual meeting. To be considered, proposals must be submitted on a timely basis.
Proposals for the 1996 annual stockholders' meeting must be received by the
Company no later than December 31, 1995. Any such proposals, as well as any
questions related thereto, should be directed to the Secretary of the Company.
- 13 -
<PAGE>
OTHER MATTERS
As of the date of this Proxy Statement, the only business which the Company
intends to present is that heretofore set forth, together with regular financial
and other reports by officers of the Company. If any other matter or matters are
properly brought before the meeting, or any adjournments thereof, it is the
intention of the proxyholders to vote the shares represented by proxy on such
matters in accordance with their judgment.
In the absence of instructions to the contrary, the proxyholders intend to
vote the shares represented by proxy in favor of (1) election as directors of
the nominees specified in the Proxy Statement; and, (2) ratification of
appointment of Arthur Andersen & Co. as the Company's independent auditors.
The undersigned hereby certifies that the information given in this Proxy
Statement is true and complete in every respect to the best of my knowledge and
belief.
DATED: At Boise, Idaho, the 10th day of April, 1995.
TJ INTERNATIONAL, INC.
Richard B. Drury
Secretary and Treasurer
- 14 -
<PAGE>
ANNUAL MEETING -- 1995 TJ INTERNATIONAL, INC. PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Harold E. Thomas and Thomas H. Denig as
Proxyholders, each with the power to appoint his substitute and hereby
authorizes them to represent and to vote, as designated below, all the shares of
common stock of the Company held of record by the undersigned on March 27, 1995,
at the annual meeting of stockholders to be held on May 24, 1995, or any
adjournment thereof.
1. ELECT AS DIRECTORS THE THREE (3) NOMINEES TO HOLD OFFICE FOR THREE YEARS:
Thomas H. Denig, Arthur L. Troutner, Steven C. Wheelwright
/ / FOR ALL NOMINEES (EXCEPT AS INDICATED ON THE LINE PROVIDED BELOW)
/ / WITHHOLD AUTHORITY TO VOTE FOR ALL NOMINEES
To withhold authority to vote for any individual nominee, write that
nominee's name on the space provided below.
__________________________________________________________________________
2. RATIFY THE APPOINTMENT OF ARTHUR ANDERSEN LLP AS THE COMPANY'S INDEPENDENT
AUDITORS FOR THE FISCAL YEAR ENDING DECEMBER 30, 1995
/ / FOR / / AGAINST / / ABSTAIN
_______________________________________________________________________________
3. IN THEIR DISCRETION, THE PROXYHOLDERS ARE AUTHORIZED TO VOTE UPON SUCH
OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING, INCLUDING SUCH
MATTERS WHICH THE BOARD OF DIRECTORS DID NOT KNOW A REASONABLE TIME BEFORE
THIS SOLICITATION OF PROXIES, WOULD BE PRESENTED AT THE MEETING.
<PAGE>
THE SHARES REPRESENTED BY THIS PROXY IF PROPERLY SIGNED WILL BE VOTED IN THE
MANNER DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER, IF NO CHOICE IS
SPECIFIED, THIS PROXY WILL BE VOTED "FOR" PROPOSALS 1 AND 2. IF EXECUTED IN
SUCH MANNER AS NOT TO WITHHOLD AUTHORITY TO VOTE FOR THE ELECTION OF ANY
NOMINEE, THIS PROXY SHALL BE DEEMED TO GRANT SUCH AUTHORITY.
Please sign exactly as name appears below. When shares are held by joint
tenants, both should sign. When signing as attorney, as executor,
administrator, or guardian, please give full title as such. If a corporation,
please sign in full corporate name by President or other authorized officer.
If a partnership, please sign in
partnership name, by authorized person.
Date _____________________________, 1995
________________________________________
Signature
_______________________________________
Signature if held jointly.
PLEASE MARK, SIGN, DATE, AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
