<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
SCHEDULE 14D-1
Tender Offer Statement Pursuant to
Section 14(d)(1) of the Securities Exchange Act of 1934
----------------
TJ INTERNATIONAL, INC.
(Name of Subject Company)
WTJ, INC.
WEYERHAEUSER COMPANY
(Bidders)
----------------
Common Stock, Par Value $1.00 Per Share
(including the associated Preferred Share Purchase Rights)
(Title of Class of Securities)
----------------
872534102
(CUSIP Number of Class of Securities)
----------------
Robert A. Dowdy
Vice President & General Counsel
Weyerhaeuser Company
33663 Weyerhaeuser Way South
Federal Way, WA 98003
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications on Behalf of Bidders)
----------------
Copy To:
Richard Hall, Esq.
Cravath, Swaine & Moore
Worldwide Plaza
825 Eighth Avenue
New York, NY 10019
(212) 474-1000
----------------
CALCULATION OF FILING FEE
<TABLE>
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- --------------------------------------------------------------------------------
<CAPTION>
Amount of
Transaction Valuation* Filing Fee
- --------------------------------------------------------------------------------
<S> <C>
$861,416,892....................................................... $172,283.38
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- --------------------------------------------------------------------------------
</TABLE>
* For purposes of calculating amount of filing fee only. The amount assumes
the purchase of 20,509,926 shares of common stock of the subject company,
par value $1.00 per share (the "Shares"), at a price per Share of $42.00 in
cash. Such number of Shares represents all the Shares outstanding as of
November 17, 1999, plus the number of Shares issuable upon the exercise of
all outstanding options or other rights to acquire Shares, including the
conversion of outstanding ESOP Convertible Preferred Stock into Shares.
[_]Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the Form
or Schedule and the date of its filing.
Amount Previously Paid: None Filing Party: N/A
Form or Registration No.: N/A Date Filed: N/A
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<PAGE>
SCHEDULE 14D-1
CUSIP No. 872534102
Name of Reporting Person S.S. or I.R.S. Identification
No. of Above Person
1.
Weyerhaeuser Company
- --------------------------------------------------------------------------------
I.R.S. No. 91-0470860
Check the Appropriate Box if a Member of a Group
(a) [_]
2.
(b) [_]
- --------------------------------------------------------------------------------
3.
SEC Use Only
- --------------------------------------------------------------------------------
Source of Funds WC
4.
- --------------------------------------------------------------------------------
5.
Check Box if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(e) or 2(f) [_]
- --------------------------------------------------------------------------------
Citizenship or Place of Organization
Washington
6.
- --------------------------------------------------------------------------------
Aggregate Amount Beneficially Owned by Each Reporting
Person
7.
0
- --------------------------------------------------------------------------------
8.
Check Box if the Aggregate Amount in Row (7) Excludes
Certain Shares
[_]
- --------------------------------------------------------------------------------
Percent of Class Represented by Amount in Row (7)
0%
9.
- --------------------------------------------------------------------------------
Type of Reporting Person
CO
10.
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2
<PAGE>
SCHEDULE 14D-1
CUSIP No. 872534102
Name of Reporting Person S.S. or I.R.S. Identification
No. of Above Person
1.
WTJ, Inc.
- --------------------------------------------------------------------------------
I.R.S. No. Application pending
Check the Appropriate Box if a Member of a Group
(a) [_]
2.
(b) [_]
- --------------------------------------------------------------------------------
3.
SEC Use Only
- --------------------------------------------------------------------------------
Sources of Funds AF
4.
- --------------------------------------------------------------------------------
5.
Check Box if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(e) or 2(f) [_]
- --------------------------------------------------------------------------------
Citizenship or Place of Organization
Delaware
6.
- --------------------------------------------------------------------------------
Aggregate Amount Beneficially Owned by Each Reporting
Person
7.
0
- --------------------------------------------------------------------------------
8.
Check Box if the Aggregate Amount in Row (7) Excludes
Certain Shares
[_]
- --------------------------------------------------------------------------------
Percent of Class Represented by Amount in Row (7)
0%
9.
- --------------------------------------------------------------------------------
Type of Reporting Person
CO
10.
- --------------------------------------------------------------------------------
3
<PAGE>
Item 1. Security and Subject Company.
(a) The name of the subject company is TJ International, Inc., a Delaware
corporation (the "Company"), which has its principal executive offices at 200
East Mallard Drive, Boise, Idaho 83706.
(b) This Schedule 14D-1 relates to the offer by WTJ, Inc. (the "Purchaser")
to purchase all the outstanding shares of common stock of the Company (the
"Common Shares") at a price of $42.00 per Common Share, net to the seller in
cash (the "Offer Price"), upon the terms and subject to the conditions set
forth in the Offer to Purchase and in the related Letter of Transmittal
(which, together with any amendments or supplements thereto, collectively
constitute the "Offer"), copies of which are filed as Exhibits (a)(1) and
(a)(2) hereto, respectively. Information concerning the number of outstanding
Common Shares is set forth in "Introduction" of the Offer to Purchase and is
incorporated herein by reference. The Offer is also for all of the Company's
outstanding shares of ESOP Convertible Preferred Stock (which shares are
convertible into Common Shares on a one-for-one basis). The ESOP Convertible
Preferred Stock is not registered under the Securities Exchange Act of 1934,
as amended.
(c) Information concerning the principal market in which the Common Shares
are traded and the high and low sales prices of Shares for each quarterly
period during the past two years is set forth in Section 6 ("Price Range of
the Shares; Dividends on the Shares") of the Offer to Purchase and is
incorporated herein by reference.
Item 2. Identity and Background.
(a)-(d) and (g) This Schedule 14D-1 is being filed by the Purchaser, a
Delaware corporation, and Weyerhaeuser Company ("Weyerhaeuser"), a Washington
corporation. The Purchaser is a wholly owned subsidiary of Weyerhaeuser.
Information concerning the principal business and the address of the principal
offices of the Purchaser and Weyerhaeuser is set forth in Section 9 ("Certain
Information Concerning the Purchaser and Weyerhaeuser") of the Offer to
Purchase and is incorporated herein by reference. Information regarding the
names, business addresses, principal occupation and occupations, positions,
offices or employments during the last five years as well as the other
information required by Item 2 with respect to the directors and executive
officers of the Purchaser and Weyerhaeuser is set forth in Schedule I to the
Offer to Purchase and is incorporated herein by reference.
(e) and (f) The information set forth in Section 9 ("Certain Information
Concerning the Purchaser and Weyerhaeuser") and Section 15 ("Certain Legal
Matters") of the Offer to Purchase is incorporated herein by reference.
Item 3. Past Contacts, Transactions or Negotiations with the Subject Company.
(a) and (b) The information set forth in Section 11 ("Contacts and
Transactions with the Company; Background of the Offer") and Section 12
("Purpose of the Offer; the Merger Agreement; the Partnership Agreement;
Certain Other Agreements") of the Offer to Purchase is incorporated herein by
reference.
Item 4. Source and Amount of Funds or Other Consideration.
(a) and (b) The information set forth in Section 10 ("Source and Amount of
Funds") of the Offer to Purchase is incorporated herein by reference.
Item 5. Purpose of the Tender Offer and Plans or Proposals of the Bidder.
(a)-(e) The information set forth in Section 12 ("Purpose of the Offer; the
Merger Agreement; the Partnership Agreement; Certain Other Agreements") of the
Offer to Purchase is incorporated herein by reference.
(f) and (g) The information set forth in Section 7 ("Effect of the Offer on
the Market for Common Shares; Share Quotation; Exchange Act Registration;
Margin Regulations") of the Offer to Purchase is incorporated herein by
reference.
4
<PAGE>
Item 6. Interest in Securities of the Subject Company.
(a) and (b) The information set forth in "Introduction", Section 9 ("Certain
Information Concerning the Purchaser and Weyerhaeuser") and Section 12
("Purpose of the Offer; the Merger Agreement; the Partnership Agreement;
Certain Other Agreements") of the Offer to Purchase is incorporated herein by
reference.
Item 7. Contracts, Arrangements, Understandings or Relationships with Respect
to the Subject Company's Securities.
The information set forth in "Introduction", Section 9 ("Certain Information
Concerning the Purchaser and Weyerhaeuser"), Section 11 ("Contacts and
Transactions with the Company; Background of the Offer") and Section 12
("Purpose of the Offer; the Merger Agreement; the Partnership Agreement;
Certain Other Agreements") of the Offer to Purchase is incorporated herein by
reference.
Item 8. Persons Retained, Employed or to Be Compensated.
The information set forth in "Introduction" and in Section 16 ("Fees and
Expenses") of the Offer to Purchase is incorporated herein by reference.
Item 9. Financial Statements of Certain Bidders.
Not applicable.
Item 10. Additional Information.
(a) Not applicable.
(b) and (c) The information set forth in Section 15 ("Certain Legal
Matters") of the Offer to Purchase is incorporated herein by reference.
(d) The information set forth in Section 7 ("Effect of the Offer on the
Market for the Common Shares; Share Quotation; Exchange Act Registration;
Margin Regulations") of the Offer to Purchase is incorporated herein by
reference.
(e) Not applicable.
(f) The information set forth in the Offer to Purchase, the Letter of
Transmittal, the Agreement and Plan of Merger dated as of November 23, 1999,
among the Purchaser, Weyerhaeuser and the Company, copies of which are filed
as Exhibits (a)(1), (a)(2) and (c)(1) hereto, respectively, is incorporated
herein by reference.
Item 11. Materials to be Filed as Exhibits.
(a)(1) Offer to Purchase.
(a)(2) Letter of Transmittal.
(a)(3) Notice of Guaranteed Delivery.
(a)(4) Letter to Brokers, Dealers, Banks, Trust Companies and Other
Nominees.
(a)(5) Letter to Clients for use by Brokers, Dealers, Banks, Trust Companies
and Other Nominees.
(a)(6) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
(a)(7) Form of Summary Advertisement dated November 30, 1999.
5
<PAGE>
(a)(8) Letter to Participants in the Company's Investment Plan.*
(a)(9) Text of Press Release dated November 23, 1999, issued by the Company
and Weyerhaeuser.
(c)(1) Agreement and Plan of Merger dated as of November 23, 1999, among
Weyerhaeuser, the Purchaser and the Company.
(c)(2) Confidentiality Agreement dated as of November 16, 1999, between
Weyerhaeuser and the Company.
(d) None.
(e) Not applicable.
(f) None.
- --------
* To be filed by amendment.
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify that
the information set forth in this statement is true, complete and correct.
Dated: November 30, 1999
WTJ, Inc.
/s/ Robert A. Dowdy
By___________________________________
Name: Robert A. Dowdy
Title: Vice President
Weyerhaeuser Company
/s/ William R. Corbin
By___________________________________
Name: William R. Corbin
Title: Executive V.P. Wood
Products
7
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Page
Number Exhibit Name Number
------- ------------ ------
<C> <S> <C>
(a)(1) Offer to Purchase.............................................
(a)(2) Letter of Transmittal.........................................
(a)(3) Notice of Guaranteed Delivery.................................
(a)(4) Letter to Brokers, Dealers, Banks, Trust Companies and Other
Nominees......................................................
(a)(5) Letter to Clients for use by Brokers, Dealers, Banks, Trust
Companies and Other Nominees..................................
(a)(6) Guidelines for Certification of Taxpayer Identification Number
on Substitute Form W-9........................................
(a)(7) Form of Summary Advertisement dated November 30, 1999.........
(a)(8) Letter to Participants in the Company's Investment Plan*......
(a)(9) Text of Press Release dated November 23, 1999, issued by the
Company and Weyerhaeuser......................................
(c)(1) Agreement and Plan of Merger dated as of November 23, 1998,
among Weyerhaeuser, the Purchaser and the Company.............
(c)(2) Confidentiality Agreement dated as of November 16, 1999,
between Weyerhaeuser and the Company..........................
</TABLE>
- --------
* To be filed by amendment.
<PAGE>
Exhibit (a)(1)
<PAGE>
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
(including the associated Preferred Share Purchase Rights)
and
All Outstanding Shares of ESOP Convertible Preferred Stock
of
TJ International, Inc.
at
$42.00 Net Per Share
by
WTJ, Inc.,
a wholly owned subsidiary of
Weyerhaeuser Company
---------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 8:00 P.M., NEW YORK CITY TIME,
ON JANUARY 5, 2000 UNLESS THE OFFER IS EXTENDED.
---------------
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER, THAT NUMBER
OF SHARES THAT WOULD REPRESENT AT LEAST 50.1% OF ALL OUTSTANDING COMMON SHARES
(AS DEFINED HEREIN) ON A FULLY DILUTED BASIS AND (2) ANY WAITING PERIOD UNDER
THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED,
APPLICABLE TO THE PURCHASE OF SHARES PURSUANT TO THE OFFER SHALL HAVE EXPIRED
OR BEEN TERMINATED.
---------------
THE BOARD OF DIRECTORS OF TJ INTERNATIONAL, INC. (THE "COMPANY") UNANIMOUSLY
(1) APPROVED THE MERGER AGREEMENT, THE OFFER AND THE MERGER (EACH AS DEFINED
HEREIN), (2) DETERMINED THAT THE TRANSACTIONS CONTEMPLATED BY THE MERGER
AGREEMENT, INCLUDING EACH OF THE OFFER AND THE MERGER, ARE FAIR TO AND IN THE
BEST INTERESTS OF THE COMPANY AND ITS STOCKHOLDERS AND (3) RECOMMENDS THAT THE
STOCKHOLDERS OF THE COMPANY ACCEPT THE OFFER AND TENDER THEIR SHARES (AS
DEFINED HEREIN) PURSUANT TO THE OFFER.
---------------
IMPORTANT
Any stockholder desiring to tender all or any portion of such stockholder's
Common Shares should either (1) complete and sign the Letter of Transmittal
(or a facsimile thereof) in accordance with the instructions in the Letter of
Transmittal, have such stockholder's signature thereon guaranteed if required
by Instruction 1 to the Letter of Transmittal, mail or deliver the Letter of
Transmittal (or such facsimile), and any other required documents to the
Depositary (as defined herein) and deliver the certificates for such Common
Shares to the Depositary along with the Letter of Transmittal (or such
facsimile) or, in the case of a book-entry transfer effected pursuant to the
procedures described in Section 2, deliver an Agent's Message (as defined
herein) and any other required documents to the Depositary and deliver such
Common Shares pursuant to the procedures for book-entry transfer described in
Section 2, in each case prior to the expiration of the Offer, or (2) request
such stockholder's broker, dealer, bank, trust company or other nominee to
effect the transaction for such stockholder. A stockholder having Common
Shares registered in the name of a broker, dealer, bank, trust company or
other nominee must contact such broker, dealer, bank, trust company or other
nominee if such stockholder desires to tender such Common Shares.
A stockholder who desires to tender Common Shares and whose certificates for
such Common Shares are not immediately available or who cannot comply in a
timely manner with the procedures for book-entry transfer, or who cannot
deliver all required documents to the Depositary prior to the expiration of
the Offer, may tender such Common Shares by following the procedures for
guaranteed delivery described in Section 2.
The Preferred Shares may be tendered only by the trustee for the Company's
Investment Plan (as defined herein). Accordingly, holders of beneficial
interests in the Preferred Shares who wish to tender such Shares should do so
by delivering appropriate instructions to the trustee.
Questions and requests for assistance or for additional copies of this Offer
to Purchase, the Letter of Transmittal and the Notice of Guaranteed Delivery
may be directed to Georgeson Shareholder Communications Inc. (the "Information
Agent") or to Morgan Stanley & Co. Incorporated (the "Dealer Manager") at
their respective addresses and telephone numbers set forth on the back cover
of this Offer to Purchase.
---------------
The Dealer Manager for the Offer is:
MORGAN STANLEY DEAN WITTER
November 30, 1999
<PAGE>
TABLE OF CONTENTS
<TABLE>
<C> <S> <C>
INTRODUCTION.............................................................. 1
THE TENDER OFFER.......................................................... 3
1. Terms of the Offer................................................... 3
2. Procedure for Tendering Shares....................................... 4
3. Withdrawal Rights.................................................... 7
4. Acceptance for Payment and Payment................................... 8
5. Certain U.S. Federal Income Tax Consequences......................... 8
6. Price Range of the Common Shares; Dividends on the Shares............ 10
7. Effect of the Offer on the Market for the Common Shares; Share
Quotation; Exchange Act Registration; Margin Regulations............. 10
8. Certain Information Concerning the Company........................... 11
9. Certain Information Concerning the Purchaser and Weyerhaeuser........ 13
10. Source and Amount of Funds........................................... 14
11. Contacts and Transactions with the Company; Background of the Offer.. 14
12. Purpose of the Offer; the Merger Agreement; the Partnership
Agreement; Certain Other Agreements.................................. 20
13. Dividends and Distributions.......................................... 37
14. Certain Conditions of the Offer...................................... 37
15. Certain Legal Matters................................................ 39
16. Fees and Expenses.................................................... 42
17. Miscellaneous........................................................ 42
</TABLE>
SCHEDULE I--Directors and Executive Officers of Weyerhaeuser and the Purchaser.
<PAGE>
To the Holders of Common Stock and
ESOP Convertible Preferred Stock
of TJ INTERNATIONAL, INC.:
INTRODUCTION
WTJ, Inc., a Delaware corporation (the "Purchaser"), which is a wholly owned
subsidiary of Weyerhaeuser Company, a Washington corporation ("Weyerhaeuser"),
hereby offers to purchase all the issued and outstanding (i) shares (the
"Common Shares") of Common Stock, par value $1.00 per share (the "Common
Stock"), of TJ International, Inc., a Delaware corporation (the "Company"),
together with the associated Preferred Share Purchase Rights (the "Rights")
issued pursuant to the Company's Rights Agreement dated August 26, 1999 (as
amended from time to time, the "Rights Agreement"), at a price per Common
Share (including the associated Rights) of $42.00 and (ii) shares (the
"Preferred Shares" and, together with the Common Shares, the "Shares") of ESOP
Convertible Preferred Stock (the "Preferred Stock" and, together with the
Common Stock, the "Capital Stock") at a price per Preferred Share of $42.00,
in each case, net to the seller in cash, without interest thereon (the "Offer
Price"), upon the terms and subject to the conditions set forth in this Offer
to Purchase and in the related Letter of Transmittal (which, together with
amendments or supplements hereto or thereto, collectively constitute the
"Offer"). Unless the context otherwise requires, all references to Common
Shares include the associated Rights, and all references to the Rights include
the benefits that may enure to holders of the Rights pursuant to the Rights
Agreement.
Tendering stockholders will not be obligated to pay brokerage fees or
commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, transfer taxes on the purchase of Shares pursuant to the Offer.
The Purchaser will pay all fees and expenses of Morgan Stanley & Co.
Incorporated ("Morgan Stanley"), which is acting as Dealer Manager, First
Chicago Trust Company of New York, which is acting as the Depositary (the
"Depositary"), and Georgeson Shareholder Communications Inc., which is acting
as the Information Agent, incurred in connection with the Offer. See Section
16.
The Offer is being made pursuant to the Agreement and Plan of Merger dated
as of November 23, 1999 (the "Merger Agreement"), among Weyerhaeuser, the
Purchaser and the Company pursuant to which, following the consummation of the
Offer and the satisfaction or waiver of certain conditions, the Purchaser will
be merged with and into the Company (the "Merger"), with the Company surviving
the Merger as a subsidiary of Weyerhaeuser. At the election of Weyerhaeuser,
any direct or indirect subsidiary of Weyerhaeuser may be substituted for the
Purchaser as a constituent corporation in the Merger.
The Board of Directors of the Company unanimously (i) approved the Merger
Agreement, the Offer and the Merger, (ii) determined that the transactions
contemplated by the Merger Agreement, including each of the Offer and the
Merger, are fair to and in the best interests of the Company and its
stockholders and (iii) recommends that stockholders of the Company accept the
Offer and tender their Shares pursuant to the Offer. The factors considered by
the Board of Directors of the Company in arriving at its decision to approve
the Merger Agreement, the Offer and the Merger and recommending that
stockholders of the Company accept the Offer and tender their Shares pursuant
to the Offer, are described in the Company's Solicitation/Recommendation
Statement on Schedule 14D-9 (the "Schedule 14D-9"), which is being mailed to
stockholders of the Company together with this Offer to Purchase.
Goldman, Sachs & Co. ("Goldman Sachs") has acted as the Company's financial
advisor. Goldman Sachs delivered its written opinion to the Board of Directors
of the Company that, as of November 23, 1999, the $42.00 per share proposed to
be paid by the Purchaser in the Offer and the Merger to the holders of Common
Shares was fair from a financial point of view to such holders. The entire
text of the opinion, which sets forth assumptions made, matters considered and
limitations in connection with the opinion is attached as Annex B to the
Schedule 14D-9 mailed to stockholders. The opinion of Goldman Sachs referred
to herein does not constitute a recommendation as to whether or not any holder
of Shares should tender such Shares in connection with the Offer. Stockholders
are urged to, and should, read such opinion carefully in its entirety.
1
<PAGE>
The Offer is conditioned upon, among other things, (1) there being validly
tendered and not withdrawn prior to the Expiration Date (as defined in Section
1) that number of Shares that would represent at least 50.1% of the Fully
Diluted Shares (as defined in Section 14) on the date of purchase (the
"Minimum Condition"), and (2) any waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "HSR Act"), applicable to
the purchase of Shares pursuant to the Offer shall have expired or been
terminated. See Sections 1, 12 and 14.
In the Merger, each issued Share (other than Shares owned by Weyerhaeuser,
the Purchaser or the Company or any wholly owned subsidiary of Weyerhaeuser,
the Purchaser or the Company or by stockholders, if any, who are entitled to
and properly exercise appraisal rights under Delaware law) will be converted
into an amount in cash equal to the Offer Price, without interest thereon.
Consummation of the Merger is subject to a number of conditions, including
approval by stockholders of the Company if such approval is required under
applicable law. In order to consummate the Merger without the approval of
stockholders of the Company, Weyerhaeuser and the Purchaser will need to own
at least 90% of the outstanding Common Shares and 90% of the outstanding
Preferred Shares. Section 12 more fully describes the requirements for
consummating a merger under Delaware law and the terms of the Merger
Agreement.
The Company has informed the Purchaser that, as of November 17, 1999, there
were 18,351,054 Common Shares and 1,097,719 Preferred Shares issued and
outstanding and 1,671,436 Common Shares reserved for issuance upon the
exercise of outstanding options or other rights to purchase Shares from the
Company. Based upon the foregoing and assuming that no Shares are otherwise
issued after November 17, 1999 (except upon the exercise of such options or
the conversion of the Preferred Shares), there will be 21,120,209 Fully
Diluted Shares outstanding and the Minimum Condition will be satisfied if at
least 10,771,306 Shares are validly tendered and not withdrawn prior to the
Expiration Date. The actual number of Shares required to be tendered to
satisfy the Minimum Condition will depend upon the actual number of Fully
Diluted Shares outstanding on the date that the Purchaser accepts Shares for
payment pursuant to the Offer. If the Minimum Condition is satisfied and the
Purchaser accepts for payment Shares tendered pursuant to the Offer, the
Purchaser will be able to elect a majority of the members of the Company's
Board of Directors and to effect the Merger without the affirmative vote of
any other stockholder of the Company. See Section 12.
Certain U.S. federal income tax consequences of the sale of Shares pursuant
to the Offer and the conversion of Shares pursuant to the Merger are described
in Section 5.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION THAT SHOULD BE READ BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFER.
2
<PAGE>
THE TENDER OFFER
1. Terms of the Offer
Upon the terms and subject to the conditions of the Offer, the Purchaser
will accept for payment and pay for all Shares validly tendered prior to the
Expiration Date and not theretofore withdrawn in accordance with Section 3.
The term "Expiration Date" means 8:00 p.m., New York City time, on Wednesday,
January 5, 2000, unless and until the Purchaser shall have extended the period
of time during which the Offer is open, in which event the term "Expiration
Date" shall mean the latest time and date on which the Offer, as so extended
by the Purchaser, will expire.
In the Merger Agreement, the Purchaser has agreed that, except as described
below, it will not, without the consent of the Company, (a) reduce the number
of Shares subject to the Offer, (b) reduce the Offer Price, (c) modify or add
to the conditions to the Offer (which are set forth in Section 14), (d) extend
the Offer, (e) change the form of consideration payable in the Offer or (f)
otherwise amend the Offer in any manner materially adverse to the holders of
Shares. However, the Merger Agreement provides that, without the consent of
the Company, the Purchaser may (i) extend the Offer, if, at the Expiration
Date, any of the conditions to the Purchaser's obligation to purchase Shares
are not satisfied, until such time as such conditions are satisfied or waived,
(ii) extend the Offer for any period required by any rule, regulation,
interpretation or position of the Commission or the staff thereof applicable
to the Offer and (iii) extend the Offer for any term for a period (a
"Weyerhaeuser Extension Period") of not more than ten business days beyond the
latest expiration date that would otherwise be permitted or required under the
terms of the Merger Agreement; provided, however, that if the Purchaser
extends the Offer pursuant to clause (iii) of this sentence, it must waive
during any such Weyerhaeuser Extension Period all conditions of the Offer set
forth in Section 14 other than (x) the Minimum Condition and (y) the condition
in paragraph (b) of Section 14 solely to the extent Weyerhaeuser and the
Purchaser would otherwise violate any law in purchasing Common Shares pursuant
to the Offer. If any of the conditions of the Offer set forth in Section 14
(other than the Minimum Condition) is not satisfied or waived on the
Expiration Date of the Offer, then, if requested by the Company, the Purchaser
must extend the Offer one or more times (the period of each such extension to
be determined by the Purchaser) for up to 30 days in the aggregate for all
such extensions, provided that at the time of such extension any such
condition is reasonably capable of being satisfied. As used in this Offer to
Purchase, "business day" has the meaning set forth in Rule 14d-1 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act").
Subject to the Merger Agreement (which, as described above, prohibits
certain amendments to the Offer without the consent of the Company) and the
applicable rules and regulations of the Commission, the Purchaser reserves the
right (but is not obligated except as described below), at any time and from
time to time, and regardless of whether or not any of the events or facts set
forth in Section 14 have occurred, (a) to extend the period of time during
which the Offer is open, and thereby delay acceptance for payment of and the
payment for any Shares, by giving oral or written notice of such extension to
the Depositary and (b) to amend the Offer in any other respect by giving oral
or written notice of such amendment to the Depositary. Under no circumstances
will interest be paid on the purchase price for tendered Shares, whether or
not the Purchaser exercises its right to extend the Offer.
If by 8:00 p.m., New York City time, on Wednesday, January 5, 2000 (or any
date or time then set as the Expiration Date), any of or all the conditions to
the Offer have not been satisfied or waived, the Purchaser reserves the right
(but is not obligated except as described below), subject to the Merger
Agreement and to the applicable rules and regulations of the Commission, (a)
to terminate the Offer and not accept for payment or pay for any Shares and
return all tendered Shares to tendering stockholders, (b) to waive all the
unsatisfied conditions and accept for payment and pay for all Shares validly
tendered prior to the Expiration Date and not theretofore withdrawn, (c) to
extend the Offer and, subject to the right of stockholders to withdraw Shares
until the Expiration Date, retain the Shares that have been tendered during
the period or periods for which the Offer is extended or (d) to amend the
Offer.
3
<PAGE>
Any extension, waiver, amendment or termination will be followed as promptly
as practicable by public announcement thereof. In the case of an extension,
Rule 14e-l(d) under the Exchange Act requires that the announcement be issued
no later than 9:00 a.m., New York City time, on the next business day after
the previously scheduled Expiration Date in accordance with the public
announcement requirements of Rule 14d-3(c) under the Exchange Act. Subject to
applicable law (including Rules 14d-4(c) and 14d-6(d) under the Exchange Act,
which require that any material change in the information published, sent or
given to stockholders in connection with the Offer be promptly disseminated to
stockholders in a manner reasonably designed to inform stockholders of such
change) and without limiting the manner in which the Purchaser may choose to
make any public announcement, the Purchaser will not have any obligation to
publish, advertise or otherwise communicate any such public announcement other
than by making a release to the Dow Jones News Service.
If the Purchaser extends the Offer or if the Purchaser is delayed in its
acceptance for payment of or payment (whether before or after its acceptance
for payment of Shares) for Shares or it is unable to pay for Shares pursuant
to the Offer for any reason, then, without prejudice to the Purchaser's rights
under the Offer, the Depositary may retain tendered Shares on behalf of the
Purchaser, and such Shares may not be withdrawn except to the extent tendering
stockholders are entitled to withdrawal rights as described in Section 3.
However, the ability of the Purchaser to delay the payment for Shares that the
Purchaser has accepted for payment is limited by Rule 14e-l(c) under the
Exchange Act, which requires that a bidder pay the consideration offered or
return the securities deposited by or on behalf of holders of securities
promptly after the termination or withdrawal of such bidder's offer, and by
the terms of the Merger Agreement, which require that the Purchaser pay for
Shares accepted for payment as soon as practicable after the Expiration Date.
If the Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer or waives a material condition of the Offer,
the Purchaser will disseminate additional tender offer materials and extend
the Offer to the extent required by Rules 14d-4(c), 14d-6(d) and 14e-1(b) and
(d) under the Exchange Act. The minimum period during which an offer must
remain open following material changes in the terms of such offer or
information concerning such offer, other than a change in price or a change in
the percentage of securities sought, will depend upon the facts and
circumstances then existing, including the relative materiality of the changed
terms or information. With respect to a change in price or a change in the
percentage of securities sought, under Rule 14e-1(b) a minimum period of ten
business days is generally required to allow for adequate dissemination to
stockholders.
The Company has provided the Purchaser with the Company's stockholder lists
and security position listings for the purpose of disseminating the Offer to
holders of Shares. This Offer to Purchase, the related Letter of Transmittal
and other relevant materials will be mailed by the Purchaser to record holders
of Shares, and will be furnished to brokers, dealers, banks, trust companies
and similar persons whose names, or the names of whose nominees, appear on the
stockholder lists, or, if applicable, who are listed as participants in a
clearing agency's security position listing, for subsequent transmittal to
beneficial owners of Shares.
2. Procedure for Tendering Shares
Valid Tender. For a stockholder validly to tender Shares pursuant to the
Offer, either (a) a Letter of Transmittal (or a facsimile thereof), properly
completed and duly executed, together with any required signature guarantees,
or, in the case of a book-entry transfer, an Agent's Message (as defined
below), and any other required documents, must be received by the Depositary
at one of its addresses set forth on the back cover of this Offer to Purchase
prior to the Expiration Date and either certificates for tendered Shares must
be received by the Depositary at one of such addresses or such Shares must be
delivered pursuant to the procedures for book-entry transfer set forth below
(and a Book-Entry Confirmation (as defined below) received by the Depositary),
in each case prior to the Expiration Date, or (b) the tendering stockholder
must comply with the guaranteed delivery procedures described below.
4
<PAGE>
Book-Entry Transfer. The Depositary will establish an account with respect
to the Shares at The Depository Trust Company (the "Book-Entry Transfer
Facility") for purposes of the Offer within two business days after the date
of this Offer to Purchase. Any financial institution that is a participant in
the Book-Entry Transfer Facility's system may make book-entry delivery of
Shares by causing the Book-Entry Transfer Facility to transfer such Shares
into the Depositary's account in accordance with the Book-Entry Transfer
Facility's procedures for such transfer. However, although delivery of Shares
may be effected through book-entry transfer into the Depositary's account at
the Book-Entry Transfer Facility, the Letter of Transmittal (or a facsimile
thereof), properly completed and duly executed, with any required signature
guarantees, or an Agent's Message, and any other required documents, must, in
any case, be transmitted to, and received by, the Depositary at one of its
addresses set forth on the back cover of this Offer to Purchase prior to the
Expiration Date, or the tendering stockholder must comply with the guaranteed
delivery procedures described below. The confirmation of a book-entry transfer
of Shares into the Depositary's account at the Book-Entry Transfer Facility as
described above is referred to herein as a "Book-Entry Confirmation". Delivery
of documents to the Book-Entry Transfer Facility in accordance with the Book-
Entry Transfer Facility's procedures does not constitute delivery to the
Depositary.
The term "Agent's Message" means a message transmitted by the Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that the Book-Entry Transfer Facility
has received an express acknowledgment from the participant in the Book-Entry
Transfer Facility tendering the Shares that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that the
Purchaser may enforce such agreement against the participant.
The method of delivery of Shares, the Letter of Transmittal and all other
required documents, including delivery through the Book-Entry Transfer
Facility, is at the election and risk of the tendering stockholder. Shares
will be deemed delivered only when actually received by the Depositary
(including, in the case of a book-entry transfer, by Book-Entry Confirmation).
If delivery is by mail, registered mail with return receipt requested,
properly insured, is recommended. In all cases, sufficient time should be
allowed to ensure timely delivery.
Signature Guarantees. No signature guarantee is required on the Letter of
Transmittal (a) if the Letter of Transmittal is signed by the registered
holder(s) (which term, for purposes of this Section 2, includes any
participant in the Book-Entry Transfer Facility's system whose name appears on
a security position listing as the owner of the Shares) of Shares tendered
therewith and such registered holder has not completed either the box entitled
"Special Delivery Instructions" or the box entitled "Special Payment
Instructions" on the Letter of Transmittal or (b) if such Shares are tendered
for the account of a financial institution (including most commercial banks,
savings and loan associations and brokerage houses) that is a participant in
the Security Transfer Agents Medallion Program, the New York Stock Exchange
Medallion Signature Guarantee Program or the Stock Exchange Medallion Program
(such participant, an "Eligible Institution"). In all other cases, all
signatures on the Letter of Transmittal must be guaranteed by an Eligible
Institution. See Instructions 1 and 5 to the Letter of Transmittal. If the
certificates for Shares are registered in the name of a person other than the
signer of the Letter of Transmittal, or if payment is to be made or
certificates for Shares not tendered or not accepted for payment are to be
returned to a person other than the registered holder of the certificates
surrendered, the tendered certificates must be endorsed or accompanied by
appropriate stock powers, in either case signed exactly as the name or names
of the registered holders or owners appear on the certificates, with the
signatures on the certificates or stock powers guaranteed as aforesaid. See
Instructions 1 and 5 to the Letter of Transmittal.
Guaranteed Delivery. If a stockholder desires to tender Shares pursuant to
the Offer and such stockholder's certificates for Shares are not immediately
available or the procedures for book-entry transfer cannot be completed on a
timely basis or time will not permit all required documents to reach the
Depositary prior to the Expiration Date, such stockholder's tender may be
effected if all the following conditions are met:
(i) such tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided by the Purchaser, is received
by the Depositary, as provided below, prior to the Expiration Date; and
5
<PAGE>
(iii) the certificates for all tendered Shares, in proper form for
transfer (or a Book-Entry Confirmation with respect to all such Shares),
together with a Letter of Transmittal (or a facsimile thereof), properly
completed and duly executed, with any required signature guarantees, or, in
the case of a book-entry transfer, an Agent's Message, and any other
required documents are received by the Depositary within three trading days
after the date of execution of such Notice of Guaranteed Delivery. A
"trading day" is any day on which the Nasdaq Stock Market ("Nasdaq") is
open for business.
The Notice of Guaranteed Delivery may be delivered to the Depositary and
must include a guarantee by an Eligible Institution in the form set forth in
such Notice of Guaranteed Delivery.
The valid tender of Shares pursuant to one of the procedures described above
will constitute a binding agreement between the tendering stockholder and the
Purchaser upon the terms and subject to the conditions of the Offer.
Distribution of Rights. Holders of Common Shares will be required to tender
one Right for each Common Share tendered to effect a valid tender of such
Common Share. Unless and until the Distribution Date (as defined in the Rights
Agreement) occurs, the Rights are represented by and transferred with the
Common Shares. Accordingly, if the Distribution Date does not occur prior to
the Expiration Date of the Offer, a tender of Common Shares will constitute a
tender of the associated Rights. If, however, pursuant to the Rights Agreement
or otherwise, a Distribution Date does occur, certificates representing a
number of Rights equal to the number of Common Shares being tendered must be
delivered to the Depositary in order for such Common Shares to be validly
tendered. If a Distribution Date has occurred, a tender of Common Shares
without Rights constitutes an agreement by the tendering stockholder to
deliver certificates representing a number of Rights equal to the number of
Common Shares tendered pursuant to the Offer to the Depositary within three
trading days after the date such certificates are distributed. The Purchaser
reserves the right to require that it receive such certificates prior to
accepting Common Shares for payment. Payment for Common Shares tendered and
purchased pursuant to the Offer will be made only after timely receipt by the
Depositary of, among other things, such certificates, if such certificates
have been distributed to holders of Common Shares. The Purchaser will not pay
any additional consideration for the Rights tendered pursuant to the Offer.
The Rights Agreement has been amended as of November 23, 1999, to exempt the
Merger Agreement, the Merger and the acquisition of Shares by Weyerhaeuser or
the Purchaser pursuant to the Offer from the provisions of the Rights
Agreement.
Appointment. By executing a Letter of Transmittal (or a facsimile thereof),
a tendering stockholder will irrevocably appoint designees of the Purchaser as
such stockholder's attorneys-in-fact and proxies in the manner set forth in
the Letter of Transmittal, each with full power of substitution, to the full
extent of such stockholder's rights with respect to the Shares tendered by
such stockholder and accepted for payment by the Purchaser and with respect to
any and all other Shares or other securities or rights issued or issuable in
respect of such Shares on or after November 23, 1999. All such proxies will be
considered coupled with an interest in the tendered Shares. Such appointment
will be effective when, and only to the extent that, the Purchaser accepts for
payment Shares tendered by such stockholder as provided herein. Upon such
appointment, all prior powers of attorney, proxies and consents given by such
stockholder with respect to such Shares or other securities or rights will,
without further action, be revoked and no subsequent powers of attorney,
proxies, consents or revocations may be given (and, if given, will not be
effective). The designees of the Purchaser will thereby be empowered to
exercise all voting and other rights with respect to such Shares and other
securities or rights in respect of any annual, special or adjourned meeting of
the Company's stockholders, actions by written consent in lieu of any such
meeting or otherwise, as they in their sole discretion deem proper. The
Purchaser reserves the right to require that, in order for Shares to be deemed
validly tendered, immediately upon the Purchaser's acceptance for payment of
such Shares, the Purchaser must be able to exercise full voting, consent and
other rights with respect to such Shares and other securities or rights,
including voting at any meeting of stockholders.
Determination of Validity. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance of any tender of Shares
will be determined by the Purchaser in its sole discretion, which
determination will be final and binding. The Purchaser reserves the absolute
right to reject any or all tenders
6
<PAGE>
determined by it not to be in proper form or the acceptance for payment of or
payment for which may, in the opinion of the Purchaser's counsel, be unlawful.
The Purchaser also reserves the absolute right to waive any defect or
irregularity in the tender of any Shares of any particular stockholder whether
or not similar defects or irregularities are waived in the case of other
stockholders. No tender of Shares will be deemed to have been validly made
until all defects or irregularities relating thereto have been cured or
waived. None of the Purchaser, Weyerhaeuser, the Company, the Depositary, the
Information Agent, the Dealer Manager or any other person will be under any
duty to give notification of any defects or irregularities in tenders or incur
any liability for failure to give any such notification. The Purchaser's
interpretation of the terms and conditions of the Offer (including the Letter
of Transmittal and the instructions thereto) will be final and binding.
Backup Withholding. In order to avoid "backup withholding" of U.S. federal
income tax on payments of cash pursuant to the Offer or the Merger, a
stockholder surrendering Shares in the Offer or the Merger must, unless an
exemption applies, provide the Depositary with such stockholder's correct
taxpayer identification number ("TIN") on a Substitute Form W-9 and certify
under penalties of perjury that such TIN is correct and that such stockholder
is not subject to backup withholding. If a stockholder does not provide such
stockholder's correct TIN or fails to provide the certifications described
above, the Internal Revenue Service (the "IRS") may impose a penalty on such
stockholder and payment of cash to such stockholder pursuant to the Offer or
Merger may be subject to backup withholding of 31%. All stockholders
surrendering Shares pursuant to the Offer or the Merger should complete and
sign the main signature form and the Substitute Form W-9 included as part of
the Letter of Transmittal to provide the information and certification
necessary to avoid backup withholding (unless an applicable exemption exists
and is proved in a manner satisfactory to the Purchaser and the Depositary).
Certain stockholders (including, among others, all corporations and certain
foreign individuals and entities) are not subject to backup withholding.
Noncorporate foreign stockholders should complete and sign the main signature
form and a Form W-8, Certificate of Foreign Status, a copy of which may be
obtained from the Depositary, in order to avoid backup withholding. See
Instruction 9 to the Letter of Transmittal.
Preferred Shares. Preferred Shares may be tendered only by the trustee for
the Company's Investment Plan. Accordingly, holders of beneficial interests in
Preferred Shares who wish to tender such Shares should do so by delivering
appropriate instructions to the trustee.
3. Withdrawal Rights
Except as otherwise provided in this Section 3, tenders of Shares are
irrevocable. Shares tendered pursuant to the Offer may be withdrawn pursuant
to the procedures set forth below at any time prior to the Expiration Date
and, unless theretofore accepted for payment and paid for by the Purchaser
pursuant to the Offer, may also be withdrawn at any time after January 28,
2000.
For a withdrawal to be effective, a written notice of withdrawal must be
received by the Depositary at one of its addresses set forth on the back cover
of this Offer to Purchase and must specify the name of the person having
tendered the Shares to be withdrawn, the number of Shares to be withdrawn and
the name of the registered holder of the Shares to be withdrawn, if different
from the name of the person who tendered the Shares. If certificates for
Shares have been delivered or otherwise identified to the Depositary, then,
prior to the physical release of such certificates, the serial numbers shown
on such certificates must be submitted to the Depositary and, unless such
Shares have been tendered by an Eligible Institution, the signatures on the
notice of withdrawal must be guaranteed by an Eligible Institution. If Shares
have been delivered pursuant to the procedures for book-entry transfer
described in Section 2, any notice of withdrawal must also specify the name
and number of the account at the Book-Entry Transfer Facility to be credited
with the withdrawn Shares and otherwise comply with the Book-Entry Transfer
Facility's procedures. Withdrawals of tenders of Shares may not be rescinded,
and any Shares properly withdrawn will thereafter be deemed not validly
tendered for purposes of the Offer. However, withdrawn Shares may be tendered
by again following one of the procedures described in Section 2 at any time
prior to the Expiration Date.
7
<PAGE>
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by the Purchaser in its sole
discretion, which determination will be final and binding. None of the
Purchaser, Weyerhaeuser, the Company, the Depositary, the Information Agent,
the Dealer Manager or any other person will be under any duty to give
notification of any defects or irregularities in any notice of withdrawal or
incur any liability for failure to give any such notification.
4. Acceptance for Payment and Payment
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any such extension
or amendment), the Purchaser will accept for payment and will pay for all
Shares validly tendered prior to the Expiration Date and not properly
withdrawn in accordance with Section 3 promptly after the Expiration Date. The
Purchaser expressly reserves the right to delay acceptance for payment of or
payment for Shares in order to comply in whole or in part with any applicable
law, including the HSR Act. Any such delays will be effected in compliance
with Rule 14e-l(c) under the Exchange Act (relating to a bidder's obligation
to pay for or return tendered securities promptly after the termination or
withdrawal of such bidder's offer).
In all cases, payment for Shares accepted for payment pursuant to the Offer
will be made only after timely receipt by the Depositary of (a) certificates
for (or a timely Book-Entry Confirmation with respect to) such Shares, (b) a
Letter of Transmittal (or a facsimile thereof), properly completed and duty
executed, with any required signature guarantees, or, in the case of a book-
entry transfer, an Agent's Message, with respect to such Shares and (c) any
other documents required by the Letter of Transmittal. The per Share
consideration paid to any stockholder pursuant to the Offer will be the
highest per Share consideration paid to any other stockholder pursuant to the
Offer. Accordingly, tendering stockholders may be paid at different times
depending upon when certificates for Shares or Book-Entry Confirmations with
respect to Shares we are actually received by the Depositary.
For purposes of the Offer, the Purchaser will be deemed to have accepted for
payment, and thereby purchased, Shares properly tendered to the Purchaser and
not withdrawn as, if and when the Purchaser gives oral or written notice to
the Depositary of the Purchaser's acceptance for payment of such Shares.
Payment for Shares accepted for payment pursuant to the Offer will be made by
deposit of the purchase price therefor with the Depositary, which will act as
an agent for tendering stockholders for the purpose of receiving payment from
the Purchaser and transmitting payment to tendering stockholders. Under no
circumstances will interest be paid on the purchase price of the Shares to be
paid by the Purchaser, regardless of any extension of the Offer or any delay
in making such payment.
If any tendered Shares are not purchased pursuant to the Offer for any
reason, certificates for any such Shares will be returned, without expense to
the tendering stockholder (or, in the case of Shares delivered by book-entry
transfer of such Shares into the Depositary's account at the Book-Entry
Transfer Facility pursuant to the procedures described in Section 2, such
Shares will be confirmed to an account maintained at the Book-Entry Transfer
Facility), as promptly as practicable after the expiration or termination of
the Offer.
The Purchaser reserves the right to transfer or assign, in whole or from
time to time in part, to Weyerhaeuser, or to one or more direct or indirect
wholly owned subsidiaries of Weyerhaeuser, the right to purchase Shares
tendered pursuant to the Offer, but any such transfer or assignment will not
relieve the Purchaser of its obligations under the Offer and will in no way
prejudice the rights of tendering stockholders to receive payment for Shares
validly tendered and accepted for payment pursuant to the Offer.
5. Certain U.S. Federal Income Tax Consequences
The receipt of cash pursuant to the Offer or the Merger will be a taxable
transaction for U.S. federal income tax purposes under the Internal Revenue
Code of 1986, as amended (the "Code"), and may also be a taxable transaction
under applicable state, local or foreign income or other tax laws. Generally,
for U.S. federal income
8
<PAGE>
tax purposes, a stockholder will recognize gain or loss equal to the
difference between the amount of cash received by the stockholder pursuant to
the Offer or the Merger and the aggregate tax basis in the Shares tendered by
the stockholder and purchased pursuant to the Offer or converted into cash in
the Merger, as the case may be. Gain or loss will be calculated separately for
each block of Shares tendered and purchased pursuant to the Offer or converted
into cash in the Merger, as the case may be.
If Shares are held by a stockholder as capital assets, gain or loss
recognized by the stockholder will be capital gain or loss, and will be long-
term capital gain or loss if the stockholder's holding period for the Shares
exceeds one year. Certain noncorporate stockholders will be eligible for a
maximum U.S. federal income tax rate of 20% on long-term capital gain. In
addition, the deductibility of capital losses is subject to limitations for
both individuals and corporations.
A stockholder that tenders or converts Shares may be subject to 31% backup
withholding unless the stockholder provides its TIN and certifies that such
number is correct or properly certifies that it is awaiting a TIN, or unless
an exemption applies. Exemptions are available for stockholders that are
corporations and for certain foreign individuals and entities. A stockholder
that does not furnish a required TIN may be subject to a penalty imposed by
the IRS. See "Backup Withholding" under Section 2.
If backup withholding applies to a stockholder, the Depositary is required
to withhold 31% from payments to such stockholder. Backup withholding is not
an additional tax. Rather, the amount of the backup withholding can be
credited against the U.S. federal income tax liability of the person subject
to the backup withholding, provided that the required information is given to
the IRS. If backup withholding results in an overpayment of tax, a refund can
be obtained by the stockholder by filing a federal income tax return.
The foregoing discussion may not be applicable with respect to Shares
received pursuant to the exercise of employee stock options or otherwise as
compensation or with respect to holders of Shares who are subject to special
tax treatment under the Code, such as non-U.S. persons, life insurance
companies, tax-exempt organizations and financial institutions and may not
apply to a holder of Shares in light of its individual circumstances.
Stockholders are urged to consult their own tax advisors to determine the
particular tax consequences to them (including the application and effect of
any state, local or foreign income and other tax laws) of the Offer and the
Merger.
9
<PAGE>
6. Price Range of the Common Shares; Dividends on the Shares
The Common Shares are traded on the Nasdaq under the symbol TJCO. The
Preferred Shares are not listed for public trading on any market. The
following table sets forth, for each quarter of the calendar years indicated,
the high and low sales prices per Common Share on the Nasdaq and the amount of
cash dividends paid per Common Share.
TJ INTERNATIONAL, INC.
<TABLE>
<CAPTION>
Common Stock
High Low Cash Dividends
------ ------ --------------
<S> <C> <C> <C>
1997:
First Quarter................................. $23.50 $18.00 $0.055
Second Quarter................................ 24.38 18.75 0.055
Third Quarter................................. 17.13 22.22 0.055
Fourth Quarter................................ 27.75 22.00 0.055
1998:
First Quarter................................. 34.50 22.38 0.055
Second Quarter................................ 33.75 27.13 0.055
Third Quarter................................. 31.25 18.63 0.055
Fourth Quarter................................ 29.50 16.50 0.055
1999:
First Quarter................................. 27.00 21.25 0.055
Second Quarter................................ 33.88 23.50 0.055
Third Quarter................................. 33.50 24.88 0.055
Fourth Quarter (through November 29, 1999).... 42.00 24.88 --
</TABLE>
On November 22, 1999, the last full trading day before the public
announcement of the execution of the Merger Agreement, the last reported sales
price of the Common Shares on the Nasdaq was $32.25 per share. On November 29,
1999, the last full trading day before commencement of the Offer, the last
reported sales price of the Common Shares on the Nasdaq was $41.63 per share.
Stockholders are urged to obtain current market quotations for the Common
Shares.
All Preferred Shares are held by the trustee under the Company's Investment
Plan for the benefit of participants in such plan and are not publicly traded.
Each Preferred Share is entitled to receive an annual dividend of $1.065, and
no dividends can be paid on Common Shares until all dividends then due and
payable on Preferred Shares have been paid. The Merger Agreement permits the
Company to continue to pay regular quarterly dividends on the Common Shares of
not more than $0.055 per Share and regular annual cash dividends on the
Preferred Shares of not more than $1.065 per share. The payment of dividends
on the Common Shares is a matter for the discretion of the Board of Directors
of the Company and is subject to customary restrictions thereon.
7. Effect of the Offer on the Market for the Common Shares; Share Quotation;
Exchange Act Registration; Margin Regulations
Market for the Shares. The purchase of Common Shares pursuant to the Offer
will reduce the number of holders of Common Shares and the number of Common
Shares that might otherwise trade publicly and could adversely affect the
liquidity and market value of the remaining Common Shares held by the public.
Share Quotation. Depending upon the number of Common Shares purchased
pursuant to the Offer, the Common Shares may no longer meet the requirements
of the Nasdaq for continued listing. According to the Nasdaq's published
guidelines, the Nasdaq would consider delisting the Common Shares if, among
other things, the total number of round-lot stockholders (including both
holders of record and beneficial holders of stock) were to fall below 300, or
the number of publicly held Common Shares (exclusive of management or other
concerned holdings) were to fall below 500,000 or the aggregate market value
of publicly held Common Shares were to not
10
<PAGE>
exceed $1 million. According to the Company, as of November 24, 1999, there
were approximately 1,712 holders of record of Common Shares and there were
18,351,048 Common Shares outstanding. If, as a result of the purchase of
Common Shares pursuant to the Offer or otherwise, the Common Shares no longer
meet the requirements of the Nasdaq for continued listing and the Common
Shares are no longer listed, the market for Common Shares would be adversely
affected.
If the Nasdaq were to delist the Common Shares, it is possible that the
Common Shares would continue to trade on other securities exchanges or in the
over-the-counter market and that price quotations would be reported by such
exchanges or through other sources. The extent of the public market for the
Common Shares and the availability of such quotations would, however, depend
upon the number of holders of Common Shares remaining at such time, the
interests in maintaining a market in Common Shares on the part of securities
firms, the possible termination of registration of the Common Shares under the
Exchange Act, as described below, and other factors.
Exchange Act Registration. The Common Shares are currently registered under
the Exchange Act. Registration of the Common Shares under the Exchange Act may
be terminated upon application of the Company to the Commission if the Common
Shares are neither listed on a national securities exchange nor held by 300 or
more holders of record. Termination of registration of the Common Shares under
the Exchange Act would substantially reduce the information required to be
furnished by the Company to its stockholders and to the Commission and would
make certain provisions of the Exchange Act no longer applicable to the
Company, such as the short-swing profit recovery provisions of Section 16(b)
of the Exchange Act, the requirement of furnishing a proxy statement pursuant
to Section 14(a) of the Exchange Act in connection with stockholders' meetings
and the related requirement of furnishing an annual report to stockholders and
the requirements of Rule 13e-3 under the Exchange Act with respect to "going
private" transactions. Furthermore, the ability of "affiliates" of the Company
and persons holding "restricted securities" of the Company to dispose of such
securities pursuant to Rule 144 or 144A promulgated under the Securities Act
of 1933, may be impaired or eliminated. The Purchaser intends to seek to cause
the Company to apply for termination of registration of the Common Shares
under the Exchange Act as soon after the completion of the Offer as the
requirements for such termination are met.
If registration of the Common Shares is not terminated prior to the Merger,
then the Common Shares will be delisted from all stock exchanges and the
registration of the Common Shares under the Exchange Act will be terminated
following the consummation of the Merger.
Margin Regulations. The Common Shares are currently "margin securities"
under the regulations of the Board of Governors of the Federal Reserve System
(the "Federal Reserve Board"), which has the effect, among other things, of
allowing brokers to extend credit on the collateral of the Common Share.
Depending upon factors similar to those described above regarding listing and
market quotations, it is possible that, following the Offer, the Common Shares
would no longer constitute "margin securities" for the purposes of the margin
regulations of the Federal Reserve Board and therefore could no longer be used
as collateral for loans made by brokers.
8. Certain Information Concerning the Company
The Company is a Delaware corporation with its principal offices at 200 East
Mallard Drive, Boise, Idaho 83706. The Company has a 51% partnership interest
in, and is the general and managing partner of, Trus Joist MacMillan a Limited
Partnership, a Delaware limited partnership (the "Partnership"), a
manufacturer and marketer of engineered lumber products.
Historical Financial Information. Set forth below is certain selected
financial information with respect to the Company and its subsidiaries
excerpted from the information contained in the Company's Annual Report on
Form 10-K for the fiscal year ended January 2, 1999 (the "Company 1998 10-K")
and the Company's Quarterly Report on Form 10-Q for the three fiscal quarters
ended October 2, 1999 (the "Company 1999 10-Q"). More comprehensive financial
information is included in the Company 1998 10-K, the Company 1999 10-Q and
other documents filed by the Company with the Commission, and the following
summary is qualified in its entirety by reference to the Company 1998 10-K,
the Company 1999 10-Q and such other documents and all the financial
11
<PAGE>
information (including any related notes) contained therein. The Company 1998
10-K, the Company 1999 10-Q and such other documents should be available for
inspection and copies thereof should be obtainable in the manner set forth
below under "Available Information".
TJ INTERNATIONAL, INC.
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(amounts in thousands except per share amounts and percentages)
<TABLE>
<CAPTION>
Fiscal year ended and as Three fiscal quarters
of ended and as of
---------------------------- ---------------------
Jan 2 Jan 3 Dec 28 Oct 2 Oct 3
1999 1998 1996 1999 1998
-------- -------- -------- ---------- ----------
(unaudited)
<S> <C> <C> <C> <C> <C>
Sales..................... $778,063 $706,316 $ 57,166 $ 672,900 $ 601,613
Income from continuing
operations............... 28,842 27,525 16,175 24,882 22,838
Net income................ 28,842 27,525 16,175 24,882 22,838
Net income from continuing
operations per share
Basic................... 1.69 1.55 0.88 1.56 1.32
Diluted................. 1.57 1.44 0.88 1.44 1.23
Weighted average number of
shares outstanding
Basic................... 16,464 17,156 17,277 15,511 16,711
Diluted................. 17,927 18,663 18,853 16,931 18,219
Cash dividends declared
per common share......... $ 0.22 $ 0.22 $ 0.22 $ 0.165 $ 0.165
Working capital, excluding
discontinued operations.. 241,843 219,205 116,862 225,797 223,350
Total assets.............. 730,939 712,104 599,815 749,077 727,951
Long term debt, excluding
current portion.......... 142,390 142,390 88,140 142,390 142,390
Stockholders' equity...... 232,805 241,412 228,070 249,357 225,264
Net book value per share.. 14.78 14.16 13.03 -- --
Return from continuing
operations on average
stockholders' equity..... 12.2% 11.7% 7.4% -- --
</TABLE>
Certain Forecast Information. During the course of due diligence discussions
between representatives of Weyerhaeuser and the Company that were conducted
after Weyerhaeuser had made its proposal of $42 per share, the Company
provided Weyerhaeuser or its representatives with certain non-public business
and financial information about the Company. The following is a summary of
certain selected projected financial information provided by the Company (the
"Projections"). The Company advised Weyerhaeuser that in preparing the
Projections, the Company assumed, among other matters, (1) that the housing
market would continue to be strong, with only mild declines in housing starts
through 2001 with a significant recession assumed beginning in 2002, and
recovery beginning in 2003; (2) that engineered lumber products would continue
to replace regular lumber products and increase market penetration; (3) that
the Company would continue its value-added marketing strategy; (4) a reduction
of prices of raw materials (primarily oriented strand board and veneer) due to
reduced demand as residential construction activity slows, with a more
significant decline in 2002 due to the assumed recession; (5) a continuation
of the trend in the reduction of manufacturing costs in new technology plants,
combined with continued growth in acceptance of the Company's new technology
products; (6) the leveraging of the Company's sales, general and
administrative expenses over an increasing sales base, thus reducing those
expenses as a percentage of sales; and (7) capital expenditures estimated to
average approximately $90 million per year over the four-year period
represented by the Projections.
TRUS JOIST MACMILLAN
TJ INTERNATIONAL, INC.
SELECTED CONSOLIDATED PROJECTIONS
(amounts in millions)
<TABLE>
<CAPTION>
Fiscal year
-----------------------
2000 2001 2002 2003
---- ------ ---- ------
<S> <C> <C> <C> <C>
Partnership net sales............................. $933 $1,019 $970 $1,189
Partnership net operating profit.................. 132 151 122 173
Partnership net income............................ 125 151 123 176
Company net income................................ 44 53 44 61
</TABLE>
12
<PAGE>
The Company has advised the Purchaser and Weyerhaeuser that it does not as a
matter of course make public any projections as to future performance or
earnings, and the Projections are included in this Offer to Purchase only
because the information was provided to Weyerhaeuser. The Projections have not
been adjusted to reflect the effects of the Offer or the Merger including,
without limitation, the effect of the announcement of execution of the Merger
Agreement on existing and future collaborations of the Company. The
Projections should be read together with the other information contained in
this Section 8.
The Projections were prepared by the Company and were not prepared with a
view to public disclosure or compliance with the published guidelines of the
SEC or the guidelines established by the American Institute of Certified
Public Accountants regarding projections or forecasts. These forward-looking
statements are subject to certain risks and uncertainties that could cause
actual results to differ materially from the Projections. The Projections
reflect numerous assumptions (not all of which were stated in the Projections
and not all of which were provided to Weyerhaeuser), all made by management of
the Company, with respect to industry performance, general business, economic,
market and financial conditions and other matters, all of which are difficult
to predict, many of which are beyond the Company's control and none of which
were subject to approval by Weyerhaeuser or the Purchaser. Accordingly, there
can be no assurance that the assumptions made in preparing the Projections
will prove accurate, and actual results may be materially greater or less than
those contained in the Projections. The inclusion of the Projections herein
should not be regarded as an indication that any of Weyerhaeuser, the
Purchaser or their respective representatives considered or consider the
Projections to be a reliable prediction of future events, and the Projections
should not be relied upon as such. None of Weyerhaeuser, the Purchaser or
their respective representatives assumes any responsibility for the validity,
reasonableness, accuracy or completeness of the Projections. None of
Weyerhaeuser, the Purchaser or any of their representatives has made, or
makes, any representation to any person regarding the information contained in
the Projections, and none of them intends to update or otherwise revise the
Projections to reflect circumstances existing after the date when made or to
reflect the occurrence of future events even in the event that any or all of
the assumptions underlying the Projections are shown to be in error.
Available Information. The Company is subject to the informational
requirements of the Exchange Act and, in accordance therewith, is required to
file reports relating to its business, financial condition and other matters.
Information as of particular dates concerning the Company's directors and
officers, their remuneration, stock options and other matters, the principal
holders of the Company's securities and any material interest of such persons
in transactions with the Company is required to be disclosed in the Company's
proxy statements distributed to the Company's stockholders and filed with the
Commission. Such information should be available for inspection at the public
reference facilities of the Commission at 450 Fifth Street, N.W., Washington,
DC 20549, and at the regional offices of the Commission located at Seven World
Trade Center, 13th Floor. New York, NY 10048 and Citicorp Center, 500 West
Madison Street (Suite 1400), Chicago, IL 60661. Copies of such information
should be obtainable, by mail, upon payment of the Commission's customary
charges, by writing to the Commission's principal office at 450 Fifth Street,
N.W., Washington, DC 20549. The Commission maintains a Web site that contains
reports, proxy and information statements and other information regarding
registrants that date file electronically with the Commission. Such reports,
proxy and information statements and other information may be found on the
Commission's Web site address, http://www.sec.gov.
Except as otherwise stated in this Offer to Purchase, the information
concerning the Company contained herein has been taken from or based upon
publicly available documents on file with the Commission and other publicly
available information. Although the Purchaser and Weyerhaeuser do not have any
knowledge that any such information is untrue, neither the Purchaser nor
Weyerhaeuser takes any responsibility for the accuracy or completeness of such
information or for any failure by the Company to disclose events that may have
occurred and may affect the significance or accuracy of any such information.
9. Certain Information Concerning the Purchaser and Weyerhaeuser
The Purchaser, a Delaware corporation that is a wholly owned subsidiary of
Weyerhaeuser, was organized to acquire the Company and has not conducted any
unrelated activities since its organization. The principal office
13
<PAGE>
of the Purchaser is located at the principal office of Weyerhaeuser. All
outstanding shares of capital stock of the Purchaser are owned by
Weyerhaeuser.
Weyerhaeuser is a Washington corporation with its principal office located
at 33663 Weyerhaeuser Way South, Federal Way, Washington 98003. Weyerhaeuser
is one of the largest integrated forest products companies, engaged in the
growing and harvesting of timber and the manufacture, distribution and sale of
forest products, real estate development and construction and other real
estate activities.
Available Information. Weyerhaeuser is subject to the informational
requirements of the Exchange Act and, in accordance therewith, files reports
relating to its business, financial condition and other matters. Information,
as of particular dates, concerning Weyerhaeuser's directors and officers,
their remuneration, stock options and other matters, the principal holders of
Weyerhaeuser's securities and any material interest of such persons in
transactions with Weyerhaeuser is required to be disclosed in proxy statements
distributed to Weyerhaeuser's stockholders and filed with the Commission. Such
reports, proxy statements and other information should be available for
inspection at the Commission and copies thereof should be obtainable from the
Commission in the same manner as is set forth with respect to the Company in
Section 8.
10. Source and Amount of Funds
The Purchaser estimates that the total amount of funds required to purchase
pursuant to the Offer the number of Shares that are outstanding on a fully
diluted basis and to pay fees and expenses related to the Offer and the Merger
will be approximately $780 million. The Purchaser plans to obtain all funds
needed for the Offer and the Merger through a capital contribution or loan
from Weyerhaeuser. Weyerhaeuser intends to fund this capital contribution or
loan from existing cash on hand.
11. Contacts and Transactions with the Company; Background of the Offer
Background of the Offer. On June 20, 1999, Weyerhaeuser, an indirect wholly
owned subsidiary of Weyerhaeuser and MacMillan Bloedel Limited ("MB") entered
into a merger agreement (the "MB Agreement") providing for a plan of
arrangement under Canadian law involving MB in which MB would become an
indirect wholly owned subsidiary of Weyerhaeuser (the "MB Transaction"). The
MB Transaction was consummated on November 1, 1999. MB is now an indirect,
wholly-owned subsidiary of Weyerhaeuser named Weyerhaeuser Company Limited
("WCL").
MacMillan Bloedel America Inc. ("MBA"), a wholly owned subsidiary of MB,
holds a 49% limited partnership interest in the Partnership. The Company holds
a 51% interest in the Partnership and is the general and managing partner of
the Partnership. See Section 8 and Section 12--"Partnership Agreement".
Weyerhaeuser is a principal supplier of material and products to, and
Weyerhaeuser and WCL are principal distributors of products produced by, the
Partnership. See "Transactions with the Company" below.
On June 11, 1999, Mr. William R. Corbin, Executive Vice President of
Weyerhaeuser, and Mr. Keith Purchase, Executive Vice President and Chief
Operating Officer of MB, met with Mr. Thomas H. Denig, President and Chief
Executive Officer of the Company, to inform him of the anticipated MB
Transaction. At this meeting, Mr. Purchase proposed that the Company waive any
right that it might have to purchase MBA's 49% partnership interest as a
result of the MB Transaction.
On June 13 and June 14, 1999, Mr. Steven R. Rogel, President and Chief
Executive Officer of Weyerhaeuser, and Mr. Denig discussed the anticipated MB
Transaction and its potential impact on the Partnership. Mr. Denig stated that
the Company had retained financial and legal advisors to assist the Company in
analyzing its options in light of the proposed MB Transaction. Mr. Rogel
stated that Weyerhaeuser did not believe that the consummation of the MB
Transaction would give rise to any rights of the Company under the Partnership
Agreement. Mr. Denig, however, stated that the Company believed that the MB
Transaction would give the Company the rights provided in the Partnership
Agreement upon a change of control of a partner,
14
<PAGE>
including the right to purchase MBA's interest in the Partnership. See Section
12--"Partnership Agreement". Messrs. Rogel and Denig agreed that they should
meet with other senior officers of each of their respective companies to
discuss the future of the Partnership after the MB Transaction. Mr. Denig
suggested that the two companies enter into a confidentiality and standstill
agreement before discussing the various options that might be available and
sent a form of agreement to Mr. Rogel on June 14, 1999. This confidentiality
and standstill agreement was never executed by Weyerhaeuser.
Following the June 14 telephone conversation between Messrs. Rogel and
Denig, there were conversations between Goldman Sachs, the Company's financial
advisor, and Morgan Stanley & Co. ("Morgan Stanley"), Weyerhaeuser's financial
advisor, regarding these matters.
Messrs. Rogel and Denig spoke again by telephone on June 17, 1999, regarding
the conversations between the financial advisors to the two companies and the
confidentiality and standstill agreement proposed by the Company. Mr. Rogel
stated that Weyerhaeuser was not willing to enter into such an agreement. Mr.
Denig stated that, after consulting with members of the Board of Directors of
the Company, he did not believe that consolidation with Weyerhaeuser was the
Company's preferred alternative, but that he would take any compelling offer
by Weyerhaeuser to acquire the Company to the Company's Board of Directors for
consideration. In addition, Mr. Denig indicated that absent such a
transaction, the Company would determine what alternatives to pursue under the
Partnership Agreement (as defined below).
On June 21, 1999, following execution of the MB Agreement the MB Transaction
was publicly announced.
On July 7, 1999, Messrs. Rogel and Denig met in Seattle, Washington, with
Mr. Corbin and Mr. Jody B. Olson, Vice President of the Company, to discuss
the future of the Partnership, strategies for growth of the Partnership's
business and the future relationships between the Company and Weyerhaeuser and
MB. Mr. Denig stated that although the Company was still reviewing its options
and no decision had been reached, in his view there were three viable
alternatives: the Company would purchase MBA's 49% partnership interest,
Weyerhaeuser would acquire the Company or MBA would significantly reduce its
interest in the Partnership and relinquish certain rights under the
Partnership Agreement.
On July 22, 1999, Messrs. Rogel, Denig and Olson and Mr. William C. Stivers,
Executive Vice President and Chief Financial Officer of Weyerhaeuser, met in
Seattle. The Weyerhaeuser representatives stated that an acquisition of the
Company was Weyerhaeuser's strongly preferred alternative and indicated that
Weyerhaeuser was considering a purchase price for the Shares in the mid-$30's
range. The Weyerhaeuser representatives indicated that although Weyerhaeuser
preferred a cash transaction, it would be willing to consider a tax-deferred
transaction with the Company involving Weyerhaeuser stock. At this meeting, in
addition to discussing other alternatives, Messrs. Denig and Olson proposed a
structure in which the Company would acquire MBA's Partnership interest on a
tax-advantaged basis. Subsequently Morgan Stanley informed Goldman Sachs that
Weyerhaeuser had no interest in such a transaction.
On September 3, 1999, Messrs. Rogel and Corbin met with Messrs. Denig and
Olson in Boise, Idaho. Mr. Rogel stated that Weyerhaeuser did not agree with
the Company's assessment of alternatives available to the parties and stated
that continuation of the Partnership in its current form also should be
considered. They again stated that Weyerhaeuser did not agree that the Company
would have an option to purchase MBA's Partnership interest as a result of the
MB Transaction. Mr. Rogel emphasized the strategic importance to Weyerhaeuser
of the engineered wood products business and stated that Weyerhaeuser would be
prepared to offer $36 per Share to acquire all the outstanding Shares of the
Company. Mr. Denig stated that he did not view that offer as compelling
compared to the other alternatives he believed were available to the Company
and suggested that the respective financial advisors to the two companies meet
to discuss the business and operational assumptions underlying their
respective valuations of the Company. Mr. Denig also indicated that the
Company would continue to work on the alternative of exercising its rights
under the Partnership Agreement to acquire MBA's interest in the Partnership,
but that he did not believe that the continuation of the Partnership in its
then current
15
<PAGE>
form following consummation of the MB Transaction would be an acceptable
alternative for the Company and its stockholders given Weyerhaeuser's
potential influence on the Company in such a circumstance.
On September 21 and October 1, 1999, the financial advisors to the Company
and Weyerhaeuser met to discuss their respective views on valuation. During
this period, Goldman Sachs advised Morgan Stanley that the Company did not
intend to pursue a transaction of $36 per Share in light of its other
alternatives. On October 11, 1999, Morgan Stanley advised Goldman Sachs that
Weyerhaeuser did not intend to discuss any changes in its proposal to acquire
the Company until it received the Company's view as to an appropriate
acquisition price. Morgan Stanley further stated that Weyerhaeuser wished to
wait until after the MB Transaction was consummated to pursue further
discussions with the Company. In a telephone conversation with Mr. Denig on
October 19, 1999, Mr. Rogel reiterated these statements.
The MB Transaction was consummated on November 1, 1999. That evening,
Messrs. Rogel, Stivers and Corbin met with Messrs. Denig and Olson and Ms.
Valerie A. Heusinkveld, Vice President and Chief Financial Officer of the
Company, in Seattle, Washington. At this meeting the Company representatives
discussed certain of the assumptions underlying Weyerhaeuser's $36 per Share
proposal. The Company representatives presented reasons why they believed a
higher price was justified for the Shares. At the end of this meeting, Messrs.
Rogel and Denig met separately and Mr. Rogel proposed a $40 per Share price to
acquire the Company. Mr. Denig indicated that he would not be willing to
support such a proposal.
On November 3, 1999, Mr. Denig invited Mr. Rogel to visit the Company's
Deerwood, Minnesota, facility the following weekend. On November 7, 1999,
during the visit to the Deerwood facility, Messrs. Rogel and Denig again
discussed the acquisition of the Company by Weyerhaeuser, and Mr. Denig
indicated that he might be prepared to support a transaction at $43 per Share.
Mr. Rogel indicated that Weyerhaeuser was not prepared to raise its price
above $40 per Share although Weyerhaeuser would be willing to consider using
consideration consisting of 50% Weyerhaeuser stock. Mr. Denig indicated that
the Company's Board of Directors would meet on November 11 and that he would
inform the Board of Directors of his most recent discussions with Mr. Rogel.
On November 10, 1999, Mr. Rogel sent the following letter to Mr. Denig:
"November 10, 1999
Mr. Tom Denig
TJ International
200 East Mallard Drive
Boise, Idaho 83706
Dear Tom:
Following our recent discussions regarding the combination of TJ
International (TJI) and Weyerhaeuser Company (Weyerhaeuser), I wanted to
reemphasize, on behalf of Weyerhaeuser and its board of directors, our
strong interest in pursuing a transaction between our two companies. We
believe that the combination of our companies is mutually beneficial for
all of our shareholders. As we discussed, in order to avoid any
miscommunication, I felt it important to commit to paper the proposal we
are making.
After carefully considering all of the information discussed in our
various meetings and taking into account all of the potential synergies and
operating improvements that are realistically achievable, we propose to
purchase TJI for cash at a price of $40.00 for each share of TJI common
stock. Alternatively, as you have indicated a preference for a stock
component, we also would consider a transaction with one-half of the
consideration in cash and one-half in Weyerhaeuser common stock. This
alternative transaction would be structured as a cash tender at $40.00 for
half of the outstanding TJI common stock followed by a second step merger
of 0.6375 shares of Weyerhaeuser common stock for each remaining share of
TJI common stock, based on Weyerhaeuser's closing price yesterday of
$62.75. This proposal assumes there are approximately 18.3 million shares
of TJI common stock outstanding on a fully diluted basis.
16
<PAGE>
We believe this offer creates superior value for your shareholders versus
other options available to TJI. This significant premium we are offering
represents an up-front payment to your shareholders for the synergies and
operating improvements we expect to achieve. Our proposal represents a 30%
premium to the closing price of TJI common stock on November 9, 1999, and a
50% premium to TJI's stock price before the announcement of our merger with
MacMillan Bloedel. In addition our offer represents substantial premiums of
50%, 52% and 81% to TJI's 1-, 2- and 5-year average stock prices,
respectively, as well as a meaningful premium to the long-term price
targets of research analysts who cover TJI. In addition to the premium, if
a component of Weyerhaeuser common stock is included, TJI shareholders
would have a tax-deferred transaction on the stock received, a currency
with significant liquidity, and an enhanced dividend with pickup of more
than 130%. TJI shareholders who choose to receive common stock will also
benefit from the substantial upside in Weyerhaeuser common stock as we
realize benefits from the pulp and paper cycle as well as the benefits from
our recent merger with MacMillan Bloedel and a combination with TJI.
In analyzing your business, we have adopted an aggressive view of the
future prospects for engineered wood products and TJI's position in the
market. We have projected operating parameters that exceed TJI's historical
performance. Given the strategic alliance between Weyerhaeuser and TJI
signed in 1993 and the close working relationship between our two
companies, we believe we have fully accounted for all potential synergies.
Furthermore, now that we have completed our transaction with MacMillan
Bloedel, Weyerhaeuser is responsible for distributing and providing in-
market support for products generating over 60% of your revenues, a system
that would be time consuming and difficult to replicate. For these and
other reasons, we are convinced that a combination of TJI and Weyerhaeuser
will generate the highest value for TJI shareholders relative to any other
alternative.
As we indicated in recent meetings, and you and I discussed this past
Monday, this price reflects our full valuation of TJI and is not
negotiable. We are willing to proceed at this price only if we can achieve
a prompt, negotiated transaction. We are prepared to negotiate a definitive
merger agreement with you and to commence a tender offer quickly. To that
end we are in position to promptly deliver the merger agreement once we
hear back affirmatively from you after your board meeting. We could
concurrently commence our confirmatory due diligence process which we
expect could be completed within one week with your full cooperation. As
part of the agreement, we will require the strong and full commitment of
insiders to this transaction, customary no-shop provisions and a break-up
fee of $30 million. We anticipate the transaction will be subject only to
customary closing conditions, including regulatory approvals and
clearances.
Given the significance to TJI of our proposal, the premium to TJI's
recent and historical trading prices and the strategic alternatives
available to TJI, we expect that our proposal will be carefully considered
by the TJI board.
We look forward to hearing from you shortly.
Very truly yours,
Steven R. Rogel
Chairman, President & CEO"
On November 11, 1999, following a meeting of the Company's Board of
Directors, Mr. Rogel received a call from Mr. Dan Nelson and Mr. J. L. Scott,
two directors of the Company. They indicated that if Weyerhaeuser were
prepared to increase the price in its proposal to $42 per Share, in their
view, the Company's Board would support a transaction at $42 per Share. These
directors did not discuss any of the other conditions set forth in this
Weyerhaeuser letter of November 10, 1999.
On November 12, 1999, Mr. Rogel called Mr. Scott to advise him that he would
discuss a price of $42 per Share with the Board of Directors of Weyerhaeuser
on November 15 and that he would be in a position to respond on November 16,
1999. Mr. Rogel stated that any increase by Weyerhaeuser above its proposed
price of $40 per Share would have to be on an all-cash basis.
On November 15, 1999, the Board of Directors of Weyerhaeuser approved a cash
offer price of $42 per Share.
17
<PAGE>
On November 16, 1999, Mr. Rogel called Mr. Scott and stated that
Weyerhaeuser was willing to offer $42 per Share in an all-cash transaction
subject to certain other terms. Mr. Rogel then called Mr. Denig and confirmed
Weyerhaeuser's willingness to proceed with a transaction on this basis.
Later on November 16, 1999, Mr. Rogel sent the following letter to Mr.
Denig:
"November 16, 1999
Mr. Tom Denig
TJ International
200 East Mallard Drive
Boise, Idaho 83706
Dear Tom:
Following up on my conversation earlier today with Joe Scott, I wanted to
reemphasize Weyerhaeuser Company's strong interest in pursuing a
combination with TJ International (TJI). The Weyerhaeuser Company
(Weyerhaeuser) board has unanimously authorized me to pursue a transaction
between our two companies and is convinced that the union would further
strengthen our combined leadership position in the engineered wood products
market.
After thorough consideration and based on the terms outlined below, we
have agreed to meet your price for TJI of $42.00 per share, payable solely
in cash. As we discussed on the phone this morning, this meets the price
you provided me to receive strong and unanimous board support for a cash
transaction on the terms we have proposed. We believe this represents an
extremely compelling transaction for your shareholders based on its
substantial premium to TJI's recent and historical share price.
The transaction would be structured as a cash tender offer for all of the
outstanding common and preferred shares, followed by a second step merger
for the remaining shares. In order to move quickly to completion, the
Weyerhaeuser team is in place and prepared to commence confirmatory due
diligence immediately. We would expect that with TJI's full cooperation a
definitive agreement could be signed and announced next Monday as you
suggested.
In consideration for increasing our bid to $42.00 per share, Weyerhaeuser
expects to receive the following terms (all of which are detailed in the
draft merger agreement):
. Strong support from TJI's insiders including shareholder agreements
locking up insider shares;
. A break-up fee of $30 million payable under customary circumstances;
. A customary no-shop provision; and
. A waiver of any buy/sell rights TJI may have under the Partnership
Agreement as a result of the MacMillan-Bloedel transaction.
An important reason why our Board is willing to increase the price to
$42.00 per share is the ability to complete the tender offer and merger in
approximately six weeks versus the several month process to complete the
second step merger if a stockholder vote is required. In order to ensure
the acquisition of 90% of each class of TJI's stock, the draft merger
agreement will require a "share top up" provision. In addition, we will
need to obtain and review a copy of TJI's ESOP Plan, which is not publicly
available. Furthermore we expect full cooperation from TJI in structuring
the transaction so that the ESOP and the ESOP convertible preferred stock
does not limit our ability to use the "short form" merger procedure.
As soon as we have confirmation from you following your Board meeting
this morning, we will deliver a draft merger agreement. We believe it is in
the best interests of both our companies for our discussions to be kept on
a strictly confidential basis.
18
<PAGE>
We have been impressed by the strength of the management team and the
significant steps you have taken to position the company for future growth.
We are excited about the prospects of acquiring such an outstanding company
with strong brand and product recognition. I believe a combination of TJI
and Weyerhaeuser will create the leading engineered wood products company
in the world.
Very truly yours,
Steven R. Rogel
Chairman, President & CEO"
Following a meeting of the Company's Board of Directors later that day, Mr.
Denig informed Mr. Rogel that the Company was prepared to proceed with
negotiation of a transaction at $42 per share assuming that the parties could
agree to a mutually acceptable merger agreement.
Later that evening, Weyerhaeuser and the Company entered into a
confidentiality agreement covering non-public information to be provided to
Weyerhaeuser by the Company on the evening of November 16. This agreement did
not contain any standstill provisions restricting a unilateral offer by
Weyerhaeuser.
Counsel to Weyerhaeuser provided counsel to the Company with a draft form of
Merger Agreement on November 16, 1999. During the period from November 17
until November 23, 1999, representatives of Weyerhaeuser and the Company and
their respective financial and legal advisors negotiated the terms of the
Merger Agreement, and Weyerhaeuser held meetings in Boise to conduct a due
diligence investigation of the Company. On November 22, 1999, the Board of
Directors of the Company met to approve the Merger Agreement. On November 23,
the Merger Agreement was executed by Weyerhaeuser and the Company, and public
announcement of the Merger Agreement was made prior to the opening of trading
that day.
Transactions with the Company. The Company holds a 51% partnership interest
in and is the general and managing partner of, the Partnership. MBA, now a
wholly owned subsidiary of Weyerhaeuser, owns the remaining 49% interest in
the Partnership. The Partnership sells engineered lumber products to
Weyerhaeuser and its subsidiaries (including WCL) in the ordinary course of
business and on terms comparable to the Partnership's other customers. Sales
to Weyerhaeuser and its subsidiaries (including WCL) were $418 million in the
nine months ended September 30, 1999, $466 million in 1998, $424 million in
1997, and $357 million in 1996. Accounts receivable from Weyerhaeuser and its
subsidiaries (including WCL) in connection with these transactions were $16.2
million at January 2, 1999, $17.4 million at January 3, 1998 and $16.7 million
at December 28, 1996. A substantial portion of these transactions occurred
pursuant to a strategic alliance between the Partnership and Weyerhaeuser's
Building Materials Distribution Division pursuant to which the Partnership
distributes its engineered wood products through Weyerhaeuser customer service
centers and Weyerhaeuser has agreed not to actively market engineered wood
products in direct competition with the Partnership's products. The
distribution arrangement may be terminated by either party with two years'
written notice.
Pursuant to supply agreements, the Partnership purchases certain materials
such as oriented strand board from Weyerhaeuser and its subsidiaries on terms
comparable to other customers for such products. The supply agreements may be
terminated by either party with two years' written notice. Purchases by the
Partnership from Weyerhaeuser and its subsidiaries were $35 million in the
nine months ended September 30, 1999, $36 million in 1998, $27 million in
1997, and $32 million in 1996.
The Partnership makes quarterly cash distributions to its partners for
payment of state and federal income taxes. These included distributions to MBA
of $17.5 million in 1998, $13.4 million in 1997 and $7.96 million in 1996.
Certain employees who perform services for the Company at facilities
formerly owned by a subsidiary of Weyerhaeuser remain on such subsidiary's
payroll. The Partnership Agreement provides that the Company must reimburse
the Weyerhaeuser subsidiary for actual payroll and related benefit costs
relating to those employees. Payroll reimbursements were $5.9 million for
1998, $5.9 million for 1997, and $5.8 million for 1996. Total
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payables to Weyerhaeuser subsidiaries for such services and tax distributions
were $3.8 million at January 2, 1999, $4.6 million at January 3, 1998, and
$2.7 million at December 28, 1996.
Except as described in this Offer to Purchase (including Schedule I hereto),
none of the Purchaser, Weyerhaeuser or, to the best knowledge of the Purchaser
and Weyerhaeuser, any of the persons listed in Schedule I hereto, or any
associate or majority-owned subsidiary of the Purchaser, Weyerhaeuser or any
of the persons so listed, beneficially owns any equity security of the
Company, and none of the Purchaser, Weyerhaeuser or, to the best knowledge of
the Purchaser and Weyerhaeuser, any of the other persons referred to above,
has effected any transaction in any equity security of the Company during the
past 60 days. The Purchaser and Weyerhaeuser disclaim beneficial ownership of
any shares owned by any pension plan of Weyerhaeuser or any affiliate of
Weyerhaeuser.
Except as described in this Offer to Purchase, as of the date hereof (a)
there have not been any contacts, transactions or negotiations between the
Purchaser or Weyerhaeuser, any of their respective subsidiaries or, to the
best knowledge of the Purchaser, any of the persons listed in Schedule I
hereto, on the one hand, and the Company or any of its directors, officers or
affiliates, on the other hand, that are required to be disclosed pursuant to
the rules and regulations of the Commission and (b) none of the Purchaser,
Weyerhaeuser or, to the best knowledge of the Purchaser and Weyerhaeuser, any
of the person listed in Schedule I hereto has any contract, arrangement,
understanding or relationship with any person with respect to any securities
of the Company. During the Offer, the Purchaser and Weyerhaeuser intend to
have ongoing contacts and negotiations with the Company and its directors,
officers and stockholders.
12. Purpose of the Offer; the Merger Agreement; the Partnership Agreement;
Certain Other Agreements
Purpose
The purpose of the Offer is to enable Weyerhaeuser to acquire control of the
Company and to acquire all of the outstanding Shares. The Offer, as the first
step in the acquisition of the Company, is intended to facilitate the
acquisition of all of the outstanding Shares. The purpose of the Merger is to
acquire all outstanding Shares not tendered and purchased pursuant to the
Offer or otherwise.
The Merger Agreement
The Merger Agreement provides that following the satisfaction or waiver of
the conditions described below under "Conditions to the Merger", the Purchaser
will be merged with and into the Company, and each issued Share (other than
Shares owned by Weyerhaeuser, the Purchaser or the Company or a wholly-owned
subsidiary of Weyerhaeuser, the Purchaser or the Company or by stockholders,
if any, who are entitled to and who properly exercise appraisal rights under
Delaware law) will be converted into the right to receive an amount in cash
equal to the price per Share paid pursuant to the Offer.
Vote Required To Approve Merger. The Delaware General Corporation Law
("DGCL") requires, among other things, that the adoption of any plan of merger
or consolidation of the Company must be approved by the Board of Directors,
and, if the "short-form" merger procedure described below is not available,
adopted by the Company's stockholders. The Board of Directors of the Company
has approved the Offer, the Merger and the Merger Agreement; consequently, the
only additional action of the Company that may be necessary to effect the
Merger is adoption of the Merger Agreement by the Company's stockholders if
such "short-form" merger procedure is not available. Under the DGCL, if
stockholder adoption of the Merger Agreement is required in order to
consummate the Merger, the vote required is the affirmative vote of the
holders of a majority of the outstanding Shares (including any Shares owned by
the Purchaser) voting together as a single class. If the Purchaser acquires,
through the Offer, the Merger Agreement or otherwise, voting power with
respect to at least a majority of the outstanding Shares (which would be the
case if the Minimum Condition were satisfied and the Purchaser were to accept
for payment Shares tendered pursuant to the Offer), it would have sufficient
voting power to effect the Merger without the affirmative vote of any other
stockholder of the Company.
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The DGCL also provides that if a parent company owns at least 90% of the
outstanding shares of each class of stock of a subsidiary, the parent company
may merge that subsidiary into the parent company, or the parent company may
merge itself into that subsidiary, pursuant to "short-form" merger procedures
without prior notice to, or the approval of, the other stockholders of the
subsidiary. In order to consummate the Merger pursuant to the provisions of
the DGCL, the Purchaser would have to own at least 90% of the outstanding
Common Shares and at least 90% of the outstanding Preferred Shares.
All the outstanding Preferred Shares are held by the trustee for the
Company's Investment Plan. Upon any transfer of Preferred Shares to the
Purchaser or Weyerhaeuser pursuant to the Offer or otherwise, such Preferred
Shares will automatically convert into Common Shares in accordance with their
terms. Accordingly, unless all the outstanding Preferred Shares are tendered
pursuant to the Offer and purchased by the Purchaser or otherwise acquired by
the Purchaser or Weyerhaeuser, the Purchaser and Weyerhaeuser will not own 90%
of the Preferred Shares remaining outstanding.
The Merger Agreement provides that if, upon consummation of the Offer, the
Purchaser owns a number of Common Shares that, together with the Common Shares
that the Purchaser has the option to purchase pursuant to the provision
described in the next paragraph, equals at least 90% of the then outstanding
Common Shares (after giving effect to the exercise of such option) then the
Company shall take such action as is requested by Weyerhaeuser and permitted
by the certificate of designation for the Preferred Shares and applicable law
to terminate and or amend the employee stock ownership portion of the
Company's Investment Plan (the "ESOP") and to call for redemption all of the
then-outstanding Preferred Shares as promptly as practicable after such
request by Weyerhaeuser. Upon such redemption of the Preferred Shares, no
Preferred Shares would remain outstanding and the Purchaser would own, or have
the ability to own, 90% of the then outstanding Common Shares (after giving
effect to the exercise of the option described in the next paragraph).
As part of the Merger Agreement, the Company has granted to the Purchaser an
option to purchase such number of Common Shares for a price of $42 per Common
Share that, when added to the number of Common Shares owned by Weyerhaeuser
and the Purchaser immediately prior to the exercise of the option, would
result in the Purchaser owning immediately after the exercise 90% of the then
outstanding Common Shares. The Purchaser may exercise the option only if, at
the time of exercise of the option, Weyerhaeuser, the Purchaser and any other
subsidiary of Weyerhaeuser own at least 50.1% of the Fully Diluted Shares (as
defined in Section 14). See "Grant of Conditional Option" below.
Although Weyerhaeuser and the Purchaser have the ability, through their
rights to cause the Company to redeem the Preferred Shares and their option to
purchase Common Shares, to obtain the ownership levels necessary to consummate
the Merger using the "short-form" merger procedure, their ability to cause the
redemption of the Preferred Shares and exercise the option for Common Shares
is subject to certain contingencies and they cannot provide any assurance that
they will be successful. In addition, Weyerhaeuser and the Purchaser are not
obliged to do anything in this regard. Accordingly, no assurance can be given
that the Merger can or will be consummated as a "short form" merger without
approval by the stockholders of the Company.
Conditions to the Merger. The Merger Agreement provides that the respective
obligations of each party to effect the Merger are subject to the satisfaction
or waiver of certain conditions, including the following: (a) if required by
applicable law, the Merger Agreement having been approved and adopted by the
affirmative vote of the holders of a majority of the Shares; (b) no temporary
restraining order, preliminary or permanent injunction or other order issued
by any court of competent jurisdiction or other legal restraint or prohibition
preventing the consummation of the Merger being in effect; provided, however,
that each of the Company, the Purchaser and Weyerhaeuser has used all
reasonable efforts to prevent the entry of any such injunction or other order
and to appeal as promptly as possible any such injunction or other order that
may have been entered; and (c) the Purchaser having previously accepted for
payment and paid for Shares pursuant to the Offer.
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Termination of the Merger Agreement. The Merger Agreement may be terminated
at any time prior to the effective time of the Merger, whether before or after
adoption of the Merger Agreement by the stockholders of the Company:
(1) by mutual written consent of Weyerhaeuser, the Purchaser and the
Company; provided that, any such consent shall require the concurrence of a
majority of the independent directors of the Company if it occurs after the
purchase of Shares pursuant to the Offer;
(2) by either Weyerhaeuser or the Company;
(a) if the Offer is not consummated on or before April 3, 2000 (the
"Outside Date"), unless the failure to consummate the Offer is the
result of a material breach of the Merger Agreement by the party
seeking to terminate the Merger Agreement; provided, however, that the
passage of such period will be tolled for any part thereof during which
any party is subject to a nonfinal order, decree, ruling or action
restraining, enjoining or otherwise prohibiting the consummation of the
Offer and the Outside Date shall be extended day-by-day for each day
tolled: provided further, however, that the Outside Date shall not be
extended past May 18, 2000;
(b) if any federal, state, local or foreign government or any court
of competent jurisdiction, administrative agency or commission or other
governmental authority or instrumentality, domestic or foreign (a
"Governmental Entity"), issues an order, decree or ruling or takes any
other action permanently enjoining, restraining or otherwise
prohibiting the Merger and such order, decree, ruling or other action
has become final and nonappealable; or
(c) if as the result of the failure of any of the conditions to the
Offer set forth in Section 14, the Offer has terminated or expired in
accordance with its terms and the terms of the Merger Agreement without
the Purchaser having purchased any Shares pursuant to the Offer;
provided, however, that the right to terminate the Merger Agreement
pursuant to the terms of this clause (c) will not be available to any
party whose failure to fulfill any of its obligations under the Merger
Agreement results in the failure of such condition;
(3) by Weyerhaeuser if, prior to the consummation of the Offer, the
Company breaches or fails to perform in any material respect any of its
representations, warranties or covenants contained in the Merger Agreement,
which breach or failure to perform (a) would give rise to the failure of a
condition set forth in Section 14 and (b) has not been or is not capable of
being cured within 30 days of the giving of written notice to the Company
of such breach, provided that Weyerhaeuser is not then in material breach
of any representation, warranty or covenant in the Merger Agreement;
(4) by Weyerhaeuser:
(a) if the Board of Directors of the Company or any committee thereof
withdraws or modifies, or publicly proposes to withdraw or modify, in a
manner adverse to Weyerhaeuser or the Purchaser, its approval or
recommendation of the Merger Agreement, the Offer or the Merger or
fails to recommend to the Company's stockholders that they approve the
Merger Agreement and the Merger (the "Stockholder Approval") or
approves or recommends, or publicly proposes to approve or recommend,
any Takeover Proposal (as defined below); or
(b) if the Board of Directors of the Company fails to reaffirm
publicly and unconditionally within ten business days after
Weyerhaeuser's written request to do so (which request may be made at
any time that a Takeover Proposal is pending and not withdrawn) and
must also include the unconditional rejection of such Takeover Proposal
(to the extent not previously withdrawn) its recommendation to the
Company's stockholders that they give the Stockholder Approval;
provided, however, that Weyerhaeuser may not request the Board of
Directors of the Company to make more than one such reaffirmation in
respect of any Takeover Proposal unless such Takeover Proposal has been
materially amended or modified (and not withdrawn);
(5) by the Company if, prior to the acceptance of Shares for payment
pursuant to the Offer, Weyerhaeuser breaches or fails to perform in any
material respect any of its representations, warranties or covenants
contained in the Merger Agreement, which breach or failure to perform has
not or is not capable
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of being cured within 30 days after the giving of written notice to
Weyerhaeuser of such breach provided that the Company is not then in
material breach of any representation, warranty or covenant contained in
the Merger Agreement);
(6) by the Company prior to the acceptance of Shares for payment pursuant
to the Offer in accordance with the terms of the Merger Agreement described
in the second paragraph below under "Takeover Proposals", provided it has
complied with all provisions described in the second paragraph under
"Takeover Proposals", including the notice provisions therein; or
(7) by the Company if the offer has not been commenced within seven
business days after the date of the Merger Agreement (satisfied by the
commencement of this Offer); or
(8) by the Company if any event occurs which would result in the
condition set forth in paragraph (d) of Section 14 not being satisfied, and
five business days have elapsed since such occurrence, unless Weyerhaeuser
shall have waived its right to terminate this Agreement and its right not
to consummate the Offer for the failure of such condition resulting from
such event.
Takeover Proposals. The Merger Agreement provides that the Company will not,
nor will it permit any of its subsidiaries to, nor will it authorize any
officer, director or employee of, or any investment banker, attorney or other
advisor or representative of, the Company or any of its subsidiaries to (1)
solicit, initiate or knowingly encourage the submission of any Takeover
Proposal, (2) enter into any agreement with respect to any Takeover Proposal
or (3) participate in any discussions or negotiations regarding, or furnish to
any person any information with respect to, or take any other action to
knowingly facilitate any inquiries or the making of any proposal that
constitutes, or may reasonably be expected to lead to, any Takeover Proposal;
provided, however, that, at any time during the period following the execution
of the Merger Agreement and prior to the consummation of the Offer (the
"Applicable Period"), if the Company receives a proposal or offer that was not
solicited by the Company and that did not otherwise result from a breach of
these provisions and that the Board of Directors of the Company determines in
good faith (based on consultation with its outside counsel and a financial
advisor of nationally recognized reputation) could result in a third party
making a Superior Proposal (as defined below, including the determination by
the Board of Directors of the Company set forth in such definition), and
subject to compliance with the notice provisions described in the second
succeeding paragraph below, the Company may, to the extent necessary to comply
with the fiduciary obligations of the Board of Directors of the Company, as
determined in good faith by it after consultation with outside counsel, (A)
furnish information with respect to the Company to the person making such
proposal or offer pursuant to a customary confidentiality agreement as
determined by the Company after consultation with its outside counsel, and (B)
participate in discussions or negotiations with such person regarding such
proposal or offer. The Merger Agreement provides that any action that is in
violation of the restrictions set forth in the preceding sentence by any
executive officer of the Company or any of its subsidiaries or any affiliate,
director or investment banker, attorney or other advisor or representative of
the Company or any of the Company's subsidiaries, shall be deemed to be a
breach of the provisions described in this paragraph by the Company. The
Merger Agreement provides that the Company shall, and shall cause its officers
and directors, and any investment banker, attorney or other advisor or
representative of the Company or any subsidiary of the Company, to cease
immediately all discussions and negotiations regarding any proposal that
constitutes, or may reasonably be expected to lead to, a Takeover Proposal.
The Merger Agreement defines "Takeover Proposal" as any inquiry, proposal or
offer for a merger, consolidation, dissolution, liquidation, recapitalization
or other business combination involving the Company or any subsidiary of the
Company, any proposal or offer for the issuance by the Company of over 15% of
its equity securities as consideration for the assets or securities of any
person or any proposal or offer to acquire in any manner, directly or
indirectly, over 15% of the equity securities or consolidated total assets of
the Company in each case, other than the transactions contemplated by the
Merger Agreement.
The Merger Agreement further provides that, except as described below,
neither the Board of Directors of the Company nor any committee thereof may
approve any letter of intent, agreement in principle (although no additional
time period shall be required following such determinations), acquisition
agreement or similar agreement (an "Acquisition Agreement") related to any
Takeover Proposal or approve or recommend, or propose
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to approve or recommend, any Takeover Proposal. The Company may terminate the
Merger Agreement pursuant to clause (6) under "Termination of the Merger
Agreement" only if (i) the Board of Directors of the Company has received a
Superior Proposal (as defined below), (ii) in light of such Superior Proposal
the Board of Directors of the Company has determined in good faith, after
consultation with outside counsel, that it is necessary for the Board of
Directors of the Company to withdraw or modify its approval or recommendation
of the Merger Agreement, the Offer or the Merger in order to comply with its
fiduciary obligations, (iii) the Company has notified Weyerhaeuser in writing
of the determinations described in clause (ii) above, (iv) at least three
business days following receipt by Weyerhaeuser of the notice referred to in
clause (iii) above, and taking into account any revised proposal by
Weyerhaeuser since the receipt of the notice referred to in clause (iii)
above, such Superior Proposal remains a Superior Proposal and the Board of
Directors of the Company has again made the determinations referred to in
clause (ii) above (although no additional time period shall be required
following such determinations), (v) the Company is in compliance with its
obligations with respect to Takeover Proposals, (vi) the Board of Directors of
the Company concurrently approves, and the Company concurrently enters into, a
definitive agreement providing for the implementation of such Superior
Proposal, (vii) such definitive agreement contains the guarantee described
below under "Waiver Under Partnership Agreement" and (viii) Weyerhaeuser is
not at such time entitled to terminate the Merger Agreement pursuant to clause
(3) under "Termination of the Merger Agreement" above solely as a result of a
knowing and deliberate breach by the Company of a representation or warranty
in the Merger Agreement or a material breach by the Company of a covenant in
the Merger Agreement. The Merger Agreement defines "Superior Proposal" as any
proposal made by a third party to acquire all or substantially all of the
equity securities or assets of the Company, pursuant to a tender or exchange
offer, a merger, a consolidation, a liquidation or dissolution, a
recapitalization, a sale of its assets or otherwise, which a majority of the
disinterested directors of the Company determines in its good faith judgment
to be (i) on terms superior from a financial point of view to the holders of
Shares than the transactions contemplated by the Merger Agreement (based on
consultation with the Company's independent financial advisor), taking into
account all the terms and conditions of such proposal and the Merger Agreement
(including any proposal by Weyerhaeuser to amend the terms of the transactions
contemplated by the Merger Agreement) and (ii) reasonably capable of being
completed, taking into account all financial, regulatory, legal and other
aspects of such proposal.
In addition to the obligations of the Company described in the preceding two
paragraphs, the Merger Agreement provides that the Company will promptly
advise Weyerhaeuser orally and in writing of any Takeover Proposal or any
inquiry with respect to or that could reasonably be expected to lead to any
Takeover Proposal, the identity of the person making any such Takeover
Proposal or inquiry and the material terms of any such Takeover Proposal or
inquiry. The Company is further required under the terms of the Merger
Agreement to (i) keep Weyerhaeuser fully informed of the status of any such
Takeover Proposal or inquiry and (ii) provide to Weyerhaeuser as soon as
practicable after receipt or delivery thereof with copies of all
correspondence and other written material sent or provided to the Company from
any third party in connection with any Takeover Proposal; provided, however,
that the Company shall not be required to provide any nonpublic information
specified in this clause (ii) regarding the business or financial condition or
prospects of such third party if (A) the Company is prohibited from disclosing
such information pursuant to a legally binding confidentiality agreement and
(B) such Takeover Proposal provides for consideration consisting solely of
cash.
The Merger Agreement provides that nothing contained in this section
entitled "Takeover Proposals" will prohibit the Company from taking and
disclosing to its stockholders a position contemplated by Rule 14e-2(a)
promulgated under the Exchange Act or from making any disclosure to the
Company's stockholders if, in the good faith judgment of the Board of
Directors of the Company, after consultation with outside counsel, failure so
to disclose would be inconsistent with applicable law; provided, however, that
neither the Company nor its Board of Directors nor any committee thereof may
withdraw or modify, or propose publicly to withdraw or modify, in a manner
adverse to Weyerhaeuser or the Purchaser, the approval or recommendation of
the Board of Directors of the Company of the Merger, the Offer or the Merger
Agreement or approve or recommend, or propose publicly to approve or
recommend, a Takeover Proposal unless a withdrawal or modification of such
approval or recommendation is, in the good faith judgment of the Board of
Directors of the Company after consultation with its outside counsel,
necessary to comply with its fiduciary obligations.
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Fees and Expenses; Termination Fee. The Merger Agreement provides that,
except as described below, all fees and expenses incurred in connection with
the Offer, the Merger and the other transactions contemplated by the Merger
Agreement will be paid by the party incurring such fees or expenses, whether
or not the Merger is consummated.
The Merger Agreement further provides that the Company will pay in same-day
funds to Weyerhaeuser (a) a fee of $12,500,000 if the Merger Agreement is
terminated in accordance with the provisions described above in clause (6)
under "Termination of the Merger Agreement"; (b) in addition to the fee paid
under clause (a) above, a fee of $12,500,000 if the Merger Agreement is
terminated in the circumstances contemplated in clause (a) above and
thereafter a Takeover Proposal is consummated that involves the person whose
Superior Proposal resulted in such termination; (c) a fee of $12,500,000 if
the Merger Agreement is terminated in accordance with the provisions described
above in clause (4) under "Termination of the Merger Agreement"; (d) in
addition to the fee paid under clause (c), a fee of $12,500,000 if the Merger
Agreement is terminated in the circumstances contemplated by clause (c) and
within 12 months of such termination either (x) an Acquisition Proposal (as
defined below) is consummated or (y) the Company enters into an agreement to
consummate an Acquisition Proposal and any Acquisition Proposal is thereafter
consummated that includes the person party to such agreement, whether or not
such consummation is within such 12 month period; (e) a fee of $12,500,000 if
(i) after the date of the Merger Agreement and prior to the termination of the
Merger Agreement, any person makes a Takeover Proposal, (ii) the Offer remains
open until the scheduled expiration date immediately following the date such
Takeover Proposal is made (or such later date as the Offer may be extended at
the Company's request pursuant to the Merger Agreement), (iii) the Minimum
Condition is not satisfied at the expiration of the Offer, (iv) the Merger
Agreement is terminated pursuant to clause (2)(c) under "Termination of the
Merger Agreement" and (v) within 12 months of such termination the Company
enters into an agreement to consummate an Acquisition Proposal; (f) in
addition to the fee paid under clause (e), a fee of $12,500,000 if the Merger
Agreement is terminated in the circumstances contemplated by clause (e) and
thereafter an Acquisition Proposal is consummated that involves the person
party to the agreement referred to in clause (e)(v); and (g) a fee of
$25,000,000 if (i) after the date of the Merger Agreement and prior to the
termination of the Merger Agreement, any person makes a Takeover Proposal,
(ii) the Offer remains open until the scheduled expiration date immediately
following the date such Takeover Proposal is made (or such later date as the
Offer may be extended at the Company's request pursuant to the Merger
Agreement), (iii) the Minimum Condition is not satisfied at the expiration of
the Offer, (iv) the Merger Agreement is terminated pursuant to clause (2)(c)
of "Termination of the Merger Agreement" above; and (v) within 12 months of
such termination an Acquisition Proposal is consummated. The Merger Agreement
provides that under no circumstances will the Company be obligated to pay fees
as described in this paragraph in excess of $25,000,000 in the aggregate. The
Merger Agreement defines "Acquisition Proposal" to mean a Takeover Proposal,
provided that for the purpose of this definition, each reference to "15%" in
the definition of Takeover Proposal shall be deemed a reference to "50%".
Conduct of Business. The Merger Agreement provides that, except as
contemplated or permitted by the terms of the Merger Agreement from the date
of the Merger Agreement to the effective time of the Merger or earlier
termination of the Merger Agreement, the Company will, and will cause its
subsidiaries to, conduct their respective business in the usual and ordinary
course consistent with past practice except as required to comply with changes
in applicable law occurring after the date of the Merger Agreement and, to the
extent consistent therewith, use all reasonable efforts to preserve intact
their current business organizations and keep available the services of their
current officers and employees to maintain their respective goodwill and
ongoing business, in addition, and without limiting the generality of the
foregoing, except as contemplated or permitted by the terms of the Merger
Agreement, from the date of the Merger Agreement to the effective time of the
Merger Agreement, the Company shall not, and shall not permit any of its
subsidiaries to, do any of the following without the prior written consent of
Weyerhaeuser:
(i) (A) declare, set aside or pay any dividends on, or make any other
distributions in respect of, any of its capital stock, other than (1)
dividends and distributions by a direct or indirect wholly-owned subsidiary
of the Company to its parent, (2) regular quarterly cash dividends with
respect to the Common Stock, not in excess of $0.055 per share, with usual
declaration, record and payment dates and in accordance with the
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Company's past dividend policy, (3) regular annual cash dividends, not in
excess of $1.065 per share, payable on outstanding Preferred Stock in
accordance with the current terms thereof, and (4) any dividend or
distribution permitted by the terms of the Partnership Agreement (as
defined under "Waiver Under Partnership Agreement") or previously approved
by the Board of Directors of the Partnership, (B) split, combine or
reclassify any of its capital stock or issue or authorize the issuance of
any other securities in respect of, in lieu of or in substitution for
shares of its capital stock, or (C) except for the redemption of Preferred
Stock as required by paragraph (C) of Section 8 of the Certificate of
Designation for the Preferred Stock by reason of the Merger Agreement or
pursuant to a request by Weyerhaeuser pursuant to the Merger Agreement,
purchase, redeem or otherwise acquire any shares of capital stock of the
Company or any of its subsidiaries or any other securities thereof or any
rights, warrants or options to acquire any such shares or other securities;
(ii) issue, deliver, sell or grant (A) any shares of its capital stock,
(B) any voting debt or other voting securities, (C) any securities
convertible into or exchangeable for, or any options, warrants or rights to
acquire, any such shares, voting company debt, voting securities or
convertible or exchangeable securities or (D) any "phantom" stock,
"phantom" stock rights, stock appreciation rights or stock-based
performance units, other than (1) the issuance of Common Stock (and
associated Rights) upon the exercise of Company Employee Stock Options
outstanding on the date of the Merger Agreement and in accordance with
their present terms, (2) the issuance of up to an additional 2,500 Company
Employee Stock Options, each of which shall have an exercise price not less
than the fair market value of Common Stock on the date of grant, pursuant
to the Company Stock Plans in accordance with their present terms and the
issuance of Common Stock (and associated Rights) upon the exercise of such
Company Employee Stock Options and (3) the issuance of junior preferred
stock upon the exercise of Rights;
(iii) amend its certificate of incorporation, by-laws or other comparable
charter or organizational documents;
(iv) except in the ordinary course consistent with past practice, acquire
or agree to acquire (A) by merging or consolidating with, or by purchasing
a substantial portion of the assets of, or by any other manner, any equity
interest in or business or any corporation, partnership, joint venture,
association or other business organization or division thereof or (B) any
assets that are material, individually or in the aggregate, to the Company
and any of its subsidiaries, taken as a whole;
(v) (A) grant to any officer or director of the Company or any of its
subsidiaries any increase in compensation, except in the ordinary course
consistent with prior practice or to the extent required under employment
agreements in effect as of the date hereof, (B) grant to any employee,
officer or director of the Company or any of its subsidiaries any increase
in severance or termination pay, except to the extent required under any
agreement in effect as of the date hereof, (C) enter into any employment,
consulting, indemnification, severance or termination agreement with any
officer or director of the Company or any of its subsidiaries, (D)
establish, adopt, enter into or amend in any material respect any
collective bargaining agreement or benefit plan, except as may be required
by applicable law in effect as of the date hereof, (E) take any action to
accelerate any rights or benefits, or make any material determinations not
in the ordinary course consistent with prior practice, under any collective
bargaining agreement or benefit plan or (F) enter into any agreement
described in clause (C) hereof with (1) any other employee of the Company
or any of its subsidiaries employed in the United States or Canada or (2)
any such employee employed outside the United States and Canada except for
agreements required by applicable law in the relevant jurisdiction;
(vi) make any change in financial accounting methods, principles or
practices materially affecting the reported consolidated assets,
liabilities or results of operations of the Company, except insofar as may
have been required by a change in GAAP or by operation of applicable law;
(vii) sell, lease (as lessor), license or otherwise dispose of or subject
to any lien any properties or assets, except sales of inventory and excess
or obsolete assets or real property in the ordinary course consistent with
past practice;
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(viii) (A) incur any indebtedness for borrowed money or guarantee any
such indebtedness of another person, issue or sell any debt securities or
warrants or other rights to acquire any debt securities of the Company or
any of its subsidiaries, guarantee any debt securities of another person,
enter into any "keep well" or other agreement to maintain any financial
statement condition of another person or enter into any arrangement having
the economic effect of any of the foregoing, except for short-term
borrowings incurred in the ordinary course consistent with past practice,
or (B) make any loans, advances or capital contributions to, or investments
in, any other person, other than to or in the Company or any direct or
indirect wholly-owned subsidiary of the Company or to or in the
Partnership;
(ix) make or agree to make any new capital expenditure or expenditures
(other than expenditures in the existing capital expenditure budget that,
individually, is in excess of $5,000,000 or, in the aggregate, are in
excess of $9,000,000;
(x) make any material tax election, except in the ordinary course
consistent with past practice or as required to comply with changes in
applicable law occurring after the date of the Merger Agreement, or settle
or compromise any material tax liability or refund;
(xi) (A) pay, discharge or satisfy any claims, liabilities or obligations
(absolute, accrued, asserted or unasserted, contingent or otherwise), other
than the payment, discharge or satisfaction, in the ordinary course
consistent with past practice or in accordance with their terms or the
terms of the Merger Agreement, of liabilities reflected or reserved against
in, or contemplated by, the most recent consolidated financial statements
(or the notes thereto) of the Company included in the documents filed by
the Company with the Commission or incurred in the ordinary course
consistent with past practice, (B) cancel any material indebtedness
(individually or in the aggregate) or waive any claims or rights of
substantial value or (C) waive the benefits of, or agree to modify in any
manner, any confidentiality, standstill or similar agreement to which the
Company or any subsidiary of the Company is a party, except, in the case of
this clause (C), to the extent required by the fiduciary obligations of the
Board of Directors of the Company, as determined in good faith by it after
consultation with outside counsel;
(xii) exercise any rights it may have under the Limited Partnership
Agreement between the Company and MBA dated as of September 30, 1991, as
amended by the Amendment to Limited Partnership Agreement, dated February
14, 1992 (the "Partnership Agreement"), to purchase MBA's interest in the
Partnership, as a result of the MB Transaction; or
(xiii) authorize any of, or commit or agree to take any of, the foregoing
actions.
In addition to the foregoing, in the Merger Agreement the Company and
Weyerhaeuser have agreed that they will not, and will not permit any of their
respective subsidiaries to, take any action that would, or that would
reasonably be expected to, result in (a) any of the representations and
warranties of such party set forth in the Merger Agreement that is qualified
as to Material Adverse Effect becoming untrue, (b) any of such representations
and warranties that is not so qualified becoming untrue in any material
respect or (c) any of the conditions to the Merger described under "Conditions
to the Merger" above not being satisfied.
Board of Directors. The Merger Agreement provides that promptly upon the
acceptance for payment of, and payment by the Board of Directors of the
Company for, Shares pursuant to the Offer, the Purchaser will be entitled to
designate such number of directors on the Board of Directors of the Company as
will give the Purchaser, subject to compliance with Section 14(f) of the
Exchange Act, representation on the Board of Directors of the Company equal to
at least that number of directors, rounded up to the next whole number, which
is the product of (a) the total number of directors on the Board of Directors
of the Company (giving effect to the directors elected pursuant to this
sentence) multiplied by (b) the percentage that (i) such number of Shares so
accepted for payment and paid for by the Purchaser plus the number of Shares
otherwise owned by the Purchaser or any other subsidiary of Weyerhaeuser bears
to (ii) the number of Fully Diluted Shares (as defined in Section 14), and the
Company will, at such time, cause the Purchaser's designees to be so elected;
provided, however, that in the event that the Purchaser's designees are
appointed or elected to the Board of Directors of the Company, until the
effective time of the Merger, the Board of Directors of the Company will
include at least three directors who were directors of the Company as of the
date of the Merger Agreement and who are not
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officers of the Company ("Independent Directors"); and provided further,
however, that, in such event, if the number of Independent Directors shall be
reduced below three for any reason whatsoever, any remaining Independent
Directors (or Independent Director, if there shall be only one remaining)
shall be entitled to designate persons to fill such vacancies who shall be
deemed to be Independent Directors for purposes of the Merger Agreement or, if
no Independent Directors then remain, the other directors shall designate
three persons to fill such vacancies who are not officers, stockholders or
affiliates of the Company, Weyerhaeuser or the Purchaser, and such persons
shall be deemed to be Independent Directors for purposes of the Merger
Agreement. Subject to applicable law, the Company has agreed to take all
action requested by Weyerhaeuser necessary to effect any such election,
including mailing to its stockholders the Information Statement containing the
information required by Section 14(f) of the Exchange Act and Rule 14f-1
promulgated thereunder, which Information Statement is attached as Annex A to
the Schedule 14D-9 (provided that the Purchaser shall have provided to the
Company on a timely basis all information required in the Information
Statement with respect to the Purchaser's designees). In connection with the
foregoing, the Company promptly shall, at the option of the Purchaser, use all
reasonable efforts to either increase the size of the Company Board or obtain
the resignation of such number of its current directors as is necessary to
enable the Purchaser's designees to be elected or appointed to the Company
Board as provided above. See "Plans for the Company" below.
Following the election or appointment of the Purchaser's designees pursuant
to the provisions described in this section, and prior to the effective time
of the Merger, any amendment or termination of the Merger Agreement approved
by the Company, extension for the performance or waiver of the obligations of
Weyerhaeuser or the Purchaser or waiver of the Company's rights hereunder
shall require the concurrence of a majority of the Independent Directors.
Stock Options. The Merger Agreement provides that as soon as practicable
after the date of the Merger Agreement, the Board of Directors of the Company
(or, if appropriate, any committee administering the Company Stock Plans)
shall adopt such resolutions or take such other actions as are required,
subject to any required consent of the holders, to adjust the terms of all
outstanding Company Employee Stock Options and all outstanding Company SARs
heretofore granted under any Company Stock Plan to provide that each Company
Employee Stock Option (and any Company SAR related thereto) outstanding
immediately prior to the acceptance for payment of Common Shares pursuant to
the Offer shall be canceled in exchange for a cash payment by the Company at
that time of an amount equal to (i) the excess, if any, of (x) the
consideration payable pursuant to the Merger over (y) the exercise price per
Common Share subject to such Company Employee Stock Option, multiplied by (ii)
the number of Common Shares for which such Company Employee Stock Option shall
not theretofore have been exercised. The Merger Agreement defines (a) "Company
Employee Stock Option" as any option to purchase Common Stock granted under
any Company Stock Plan, (b) "Company SAR" as any stock appreciation right
linked to the price of Common Stock and granted under any Company Stock Plan,
and (c) "Company Stock Plans" as the Company's Key Employees' 1992 Stock
Option Plan, Key Employees' 1993 Stock Option Plan, Amended and Restated
Restricted Stock Plan for Non-Employee Directors, Key Employees' 1982
Incentive Stock Option Plan, as amended, 1985 Incentive Stock Option Plan, as
amended, 1998 Stock Option Plan, as amended, Non-Employee Directors 1997 Stock
Plan and 1996 Stock Option Plan.
The Merger Agreement provides that the Company shall use its reasonable best
efforts to obtain all consents of the holders of the Company Employee Stock
Options as shall be necessary to effectuate the provisions described in the
prior paragraphs and to ensure that following the effective time of the Merger
no holder of a Company Employee Stock Option or Company SAR or any participant
in any Company Stock Plan or other Company Benefit Plan shall have any right
thereunder to acquire any capital stock of the Company or the surviving
corporation. Notwithstanding anything to the contrary contained in the Merger
Agreement, payment shall, at Weyerhaeuser's request, be withheld in respect of
a Company Employee Stock Option until all necessary consents in respect of
such Company Employee Stock Option are obtained.
The Merger Agreement provides that the Company Stock Plans shall terminate
as of the effective time of the Merger, and the provisions in any other
Benefit Plan providing for the issuance, transfer or grant of any capital
stock of the Company or any interest in respect of any capital stock of the
Company shall be deleted as of the effective time of the Merger.
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Existing Agreements, Plans and Policies. The Merger Agreement provides that
from and after the effective time of the Merger, Weyerhaeuser will and will
cause the surviving corporation to honor in accordance with their respective
terms (as in effect on the date of the Merger Agreement), all the Company's
employment, severance and termination agreements, plans and policies disclosed
to Weyerhaeuser.
If prior to the effective time Weyerhaeuser agrees to grant options to
acquire common stock of Weyerhaeuser to any officer or director of the Company
prior to the effective time of the Merger, the Board of Directors of
Weyerhaeuser, or an appropriate committee of non-employee directors thereof,
shall if necessary adopt a resolution consistent with the interpretive
guidance of the Commission so that the acquisition by any officer or director
of the Company who may become a covered person of Weyerhaeuser for purposes of
Section 16 of the Exchange Act and the rules and regulations thereunder
("Section 16") of options to acquire common stock of Weyerhaeuser pursuant to
the Merger Agreement and the Merger shall be an exempt transaction for
purposes of Section 16.
For a period of not less than one year following the effective time of the
Merger, Weyerhaeuser shall provide, or shall cause to be provided, to current
employees of the Company and its subsidiaries (the "Company Employees"), taken
as a whole, employee benefits that are, in the aggregate, no less favorable
than those provided from time to time after the effective time of the Merger
to employees of Weyerhaeuser and its subsidiaries who are similarly situated,
in terms of positions and geographic locations, to such Company Employees;
provided, however, that nothing described in this paragraph shall require
Weyerhaeuser to continue or cause to be continued any Company Stock Plan.
Without limiting the generality of the foregoing, all Company Employees who
are covered by the Company's Severance Pay Plan as in effect on the date
hereof and whose employment is terminated on or before the first anniversary
of the effective time of the Merger shall be provided with severance pay and
benefits on a basis, and in amounts, not less favorable than those provided
for under the Company's Severance Pay Plan.
For all purposes under the employee benefit plans of Weyerhaeuser and its
affiliates providing benefits to any Company Employees after the effective
time of the Merger (the "New Plans"), each Company Employee shall be credited
with his or her years of service with the Company and its affiliates before
the effective time of the Merger, to the same extent as such Company Employee
was entitled, before the effective time of the Merger, to credit for such
service under any similar Company Benefit Plans, except for purposes of
benefit accrual under defined benefit pension plans. In addition, and without
limiting the generality of the foregoing: (i) each Company Employee shall be
immediately eligible to participate, without any waiting time, in any and all
New Plans to the extent coverage under such New Plan replaces coverage under a
comparable Company Benefit Plan in which such Company Employee participated
immediately before the effective time of the Merger and previously described
to Weyerhaeuser (such plans, collectively, the "Old Plans"); and (ii) for
purposes of each New Plan providing medical, dental, pharmaceutical and/or
vision benefits to any Company Employee, Weyerhaeuser shall cause all pre-
existing condition exclusions and actively-at-work requirements of such New
Plan to be waived for such employee and his or her covered dependents (other
than limitations or waiting periods that are already in effect with respect to
such employees and dependents and that have not been satisfied as of the
effective time of the Merger), and Weyerhaeuser shall cause any eligible
expenses incurred by such employee and his or her covered dependents during
the portion of the plan year of the Old Plan ending on the date such
employee's participation in the corresponding New Plan begins to be taken into
account under such New Plan for purposes of satisfying all deductible,
coinsurance and maximum out-of-pocket requirements applicable to such employee
and his or her covered dependents for the applicable plan year as if such
amounts had been paid in accordance with such New Plan.
Under the Merger Agreement, Weyerhaeuser agrees that for purposes of any of
the Company Benefit Plans conferring rights on a current or former employee,
officer or director as a result of a change of control of the Company, the
consummation of the Merger (or such earlier event contemplated by the Merger
Agreement and specified in such Company Benefit Plans) shall be deemed to
constitute a "Change of Control" (as that term is defined in such Company
Benefit Plans).
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Subject to compliance by Weyerhaeuser with its obligations described under
the first and third paragraphs of this section entitled "Existing Agreement
Plans and Policies", nothing described in this section or elsewhere in the
Merger Agreement shall be construed to prevent the termination of employment
of any Company Employee or any change in the employee benefits available to
any Company Employee or the amendment or termination of any particular Company
Benefit Plan to the extent permitted by its terms as in effect immediately
prior to the effective time of the Merger.
Indemnification. Weyerhaeuser has agreed, to the fullest extent permitted by
law: (a) to cause the surviving corporation to honor all the Company's
obligations to indemnify (including any obligations to advance funds for
expenses) the current or former directors or officers of the Company and its
subsidiaries for acts or omissions by such directors and officers occurring at
or prior to the effective time of the Merger to the extent that such
obligations of the Company exist on the date of the Merger Agreement, whether
pursuant to the Restated Certificate of Incorporation, as amended, or By-laws,
as amended, of the Company, individual indemnity agreements or otherwise and
that such obligations will survive the Merger and will continue in full force
and effect in accordance with the terms of the Restated Certificate of
Incorporation, as amended, and By-laws, as amended, of the Company and such
individual indemnity agreements from the effective time of the Merger until
the expiration of the applicable statute of limitations with respect to any
claims against such directors or officers arising out of such acts or
omissions; and (b) for a period of six years after the effective time of the
Merger, to cause to be maintained in effect the current policies of directors'
and officers' liability insurance maintained by the Company (provided that
Weyerhaeuser may substitute therefor policies with reputable and financially
sound carriers of at least the same coverage and amounts containing terms and
conditions which are no less advantageous) with respect to claims arising from
or related to facts or events which occurred at or before the effective time
of the Merger, provided, however, that Weyerhaeuser will not be obligated to
make annual premium payments for such insurance to the extent such premiums
exceed 300% of the annual premiums paid as of the date hereof by the Company
for such insurance (such 300% amount, the "Maximum Amount") . If such
insurance coverage cannot be obtained at all, or can only be obtained at an
annual premium in excess of the Maximum Amount, Weyerhaeuser will maintain the
most advantageous policies of directors' and officers' insurance obtainable
for an annual premium equal to such amount; provided, however, that if such
insurance coverage cannot be obtained at all, Weyerhaeuser shall purchase all
available extended reporting periods with respect to pre-existing insurance in
an amount which, together with all other insurance purchased pursuant to
clause (b) above, does not exceed the Maximum Amount. The Merger Agreement
further provides that Weyerhaeuser will not, and will cause the Company not
to, take any action that would have the effect of limiting the aggregate
amount of insurance coverage required to be maintained for the individuals
referred to in clause (b) above.
Weyerhaeuser has also agreed that: (a) from and after the consummation of
the Offer, to the full extent permitted by law, Weyerhaeuser will, and will
cause the Company (or any successor to the Company) to, indemnify, defend and
hold harmless the present officers and directors of the Company and its
subsidiaries (each an "Indemnified Party") against all losses, claims,
damages, liabilities, fees and expenses (including attorneys' fees and
disbursements) , judgments, fines and amounts paid in settlement
(collectively, "Losses") arising out of actions or omissions occurring at or
prior to the effective time of the Merger in connection with the Merger
Agreement, the Offer, the Merger and the other transactions contemplated by
the Merger Agreement; provided, however, that an Indemnified Party shall not
be entitled to indemnification under this clause (a) for Losses arising out of
actions or omissions by the Indemnified Party constituting (i) a breach of the
Merger Agreement or the Stockholder Agreement, (ii) criminal conduct or (iii)
any violation of federal, state or foreign securities laws; and provided
further, however, that in order to be entitled to indemnification under this
clause (a), an Indemnified Party must give Weyerhaeuser and the Company
written notice of any third party claim which may give rise to any indemnity
obligation under this clause (a), and Weyerhaeuser and the Company shall have
the right to assume the defense of any such claim through counsel of their own
choosing (subject to such counsel's reasonable judgment that separate defenses
that would create a conflict of interest on the part of such counsel are not
available), provided that if Weyerhaeuser and the Company do not assume any
such defense, they shall be liable for all reasonable costs and expenses of
defending such claim incurred by the Indemnified Party, including
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reasonable fees and disbursements of counsel and shall advance such reasonable
costs and expenses to the Indemnified Party; provided, however, that such
advance shall be made only after receiving an undertaking from the Indemnified
Party that such advance shall be repaid if it is determined that such
Indemnified Party is not entitled to indemnification therefor and that neither
Weyerhaeuser nor the Company shall be liable under this clause (a) for any
Losses resulting from any settlement, compromise or offer to settle or
compromise any such claim or litigation or other action, without the prior
written consent of Weyerhaeuser and the Company; (b) the Company shall not,
and Weyerhaeuser shall not permit the Company to, amend or repeal any
provision of the Restated Certificate of Incorporation or By-laws of the
Company after the consummation of the Offer if such action would adversely
affect the rights of individuals who on or prior to the consummation of the
Offer were entitled to advances, indemnification or exculpation thereunder,
for actions or omissions by such individuals prior to the effective time of
the Merger provided, that the individuals referred to in this clause (b) shall
include any individuals who served as of the effective time of the Merger as
directors or officers of any subsidiary of the Company at the Company's
request, it being acknowledged by the parties hereto that each director or
officer of the Company who is currently serving as a director or officer of a
subsidiary of the Company is doing so at such request of the Company; and (c)
in the event the surviving corporation or any successor to the surviving
corporation (i) consolidates with or merges into any other person and shall
not be the continuing or surviving corporation or entity in such consolidation
or merger or (ii) transfers all or substantially all its properties and assets
to any person, then, and in each case, proper provision shall be made so that
the successors of the surviving corporation honor the obligations of the
Company set forth in the provisions of the Merger Agreement described, in this
and the immediately preceding paragraph.
Reasonable Efforts; Notification. The Merger Agreement provides that: (a)
upon the terms and subject to the conditions set forth in the Merger
Agreement, each of the Company, Weyerhaeuser and the Purchaser will use all
reasonable efforts to take, or cause to be taken, all actions, and to do, or
cause to be done, and to assist and cooperate with the other parties in doing,
all things necessary, proper or advisable to consummate and make effective, in
the most expeditious manner practicable, the Offer, the Merger and the other
transactions contemplated by the Merger Agreement, including (i) the obtaining
of all necessary actions or nonactions and Consents (as defined below) from
Governmental Entities and the making of all necessary registrations and
filings (including filings with Governmental Entities, if any) and the taking
of all reasonable steps as may be necessary to obtain an approval or waiver
from, or to avoid an action or proceeding by, any Governmental Entity, (ii)
the obtaining of all necessary Consents waivers from third parties, (iii) the
defending of any lawsuits or other legal proceedings, whether judicial or
administrative, challenging the Merger Agreement or the consummation of the
transactions contemplated thereby, including seeking to have any stay or
temporary restraining order entered by any court or other Governmental Entity
vacated or reversed and (iv) the execution and delivery of any additional
instruments necessary to consummate the transactions contemplated by the
Merger Agreement and to fully carry out the purposes of the Merger Agreement;
(b) in connection with and without limiting the foregoing, the Company and the
Board of Directors of the Company will, if any state takeover statute or
similar statute or regulation is or becomes applicable to any transaction
contemplated by the Merger Agreement, take all action necessary to ensure that
the Offer, the Merger and the transactions contemplated by the Merger
Agreement may be consummated as promptly as practicable on the terms
contemplated by the Merger Agreement; provided, however, that nothing in
clause (a) or (b) will prevent the Company from taking any action permitted in
the second paragraph under "Takeover Proposals" and that nothing in the Merger
Agreement will require any party to take any action that would result in any
of the consequences referred to in paragraph (a) of Section 14; and (c) the
Company shall give prompt notice to Weyerhaeuser of (i) any representation or
warranty made by it contained in the Merger Agreement that is qualified as to
a Material Adverse Effect becoming untrue or inaccurate in any respect or any
such representation or warranty that is not so qualified becoming untrue or
inaccurate in any material respect or (ii) the failure by it to comply with or
satisfy in any material respect any covenant, condition or agreement to be
complied with or satisfied by it under the Merger Agreement; provided,
however, that no such notification shall affect the representations,
warranties, covenants or agreements of the parties or the conditions to the
obligations of the parties under the Merger Agreement. The Merger Agreement
defines "Consent" to mean any consent, approval, license, permit, order or
authorization of a governmental entity. The Merger Agreement defines "Material
Adverse Effect" on a party as a material adverse effect on the
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business, financial condition, as ongoing, longer-term profitability (but not
prospects) of such party and its subsidiaries.
Representations and Warranties. The Merger Agreement contains various
customary representations and warranties.
Procedure for Termination, Amendment, Extension or Waiver. The Merger
Agreement provides that following the election or appointment of the
Purchaser's designees to the Board of Directors of the Company as described
above under "Board of Directors", prior to the effective time of the Merger,
any amendment or termination of the Merger Agreement, extension for the
performance or waiver of the obligations of Weyerhaeuser or the Purchaser or
waiver of the Company's rights thereunder will require the concurrence of a
majority of the directors of the Company who were directors on the date of the
Merger Agreement and who are not officers of the Company.
Rights Agreement. The Rights Agreement has been amended as of November 23,
1999 to render the Rights inapplicable to the Merger Agreement, the Offer, the
Merger and the other transactions contemplated by the Merger Agreement. The
Company has agreed that neither it nor the Board of Directors will, without
the prior consent of Weyerhaeuser, (i) further amend the Rights Agreement,
(ii) redeem the Rights or (iii) take any action with respect to, or make any
determination under, the Rights Agreement, except, in each case, to the extent
necessary to comply with the fiduciary obligations of the Board of Directors
of the Company as determined by it in good faith after consultation with
outside counsel.
Waiver Under Partnership Agreement. The Company has waived, and agreed to
cause any of its subsidiaries with a partnership interest under the
Partnership Agreement to waive, any rights they may have described below under
"Partnership Agreement" to exercise (x) the "sell procedure" or (y) the
"mandatory buy/sell procedure" (the rights referred to in clauses (x) and (y),
together with the "buy procedure" described below under "Partnership
Agreement", are referred to as the "Buy/Sell Rights"), in each case, as result
of the consummation of the MB Transaction. In the Merger Agreement, the
Company acknowledges that Weyerhaeuser does not agree that the Company is
entitled to exercise any of the Buy/Sell Rights as a result of the MB
Transaction, and Weyerhaeuser acknowledges that the Company believes that it
is entitled to exercise the Buy/Sell Rights as a result of the MB Transaction.
The Merger Agreement provides that if the Merger Agreement is terminated
pursuant to clause (6) under "Termination of the Merger Agreement", the
Company will, subject to the next sentence, purchase the entire partnership
interest (the "Weyerhaeuser Interest") of Weyerhaeuser and its subsidiaries in
the Partnership, and Weyerhaeuser will, and will cause its subsidiaries to, in
each case subject to the next sentence, sell the Weyerhaeuser Interest to the
Company, for $700,000,000 in cash. Such purchase and sale will be consummated
simultaneously with, and as a condition to, the consummation of the
transactions contemplated by any Takeover Proposal made by the person who made
the Superior Proposal that gave rise to such termination. In the agreement
entered into by the Company with such person in connection with such
termination, such person must unconditionally guarantee (for the benefit of
Weyerhaeuser and its subsidiaries) the obligations of the Company contained
this paragraph.
The Merger Agreement provides that if (i) after the date of the Merger
Agreement, any person makes a Takeover Proposal or amends a Takeover Proposal
made prior to the date of the Merger Agreement, (ii) the Offer remains open
until the scheduled expiration date immediately following the date such
Takeover Proposal is made (or such later date as the Offer may be extended to
at the Company's request pursuant to the Merger Agreement), (iii) the Minimum
Condition is not satisfied at the expiration of the Offer and (iv) the Merger
Agreement is terminated pursuant to clause (2)(c) under "Termination of the
Merger Agreement", the Buy Rights, if any, resulting from the MB Transaction
will terminate; provided, however, notwithstanding anything in the Partnership
Agreement to the contrary:
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(A) the Company may exercise the Buy Rights within the 10 day period
beginning with the date of termination of the Merger Agreement for a "Buy
Price" of $700,000,000 in cash and otherwise pursuant to the terms of the
Partnership Agreement; and
(B) if the Company did not exercise its right under clause (A) above and
within 12 months following such termination the Company enters into an
agreement to consummate an Acquisition Proposal, or an Acquisition Proposal
is consummated, the Company shall purchase the Weyerhaeuser Interest, and
Weyerhaeuser shall, and shall cause its subsidiaries, to sell the
Weyerhaeuser Interest to the Company, for $700,000,000 in cash, such
purchase and sale to be consummated simultaneously with, and as a condition
to, the consummation of such Acquisition Proposal.
The Merger Agreement provides that, notwithstanding anything contained in
the Partnership Agreement to the contrary, but subject to this provisions
described in this section, the Company may not exercise the Buy Rights as a
result of the MB Transaction if the Merger Agreement is terminated prior to
the acceptance for payment of Shares pursuant to the Offer:
(A) in the circumstances contemplated by the two preceding paragraphs;
(B) pursuant to clause (2)(c) or clause (4) under "Termination of the
Merger Agreement" following the failure of the condition in paragraph (f)
of Section 14; or
(C) pursuant to clause (2)(c) or clause (3) under "Termination of the
Merger Agreement" following the failure of the condition in paragraph (e)
of Section 14, because, in either case, (A) other than as disclosed, since
the date of the most recent audited financial statements included in
documents filed by the Company with the Commission and prior to the date of
the Merger Agreement, there shall have occurred any event, change, effect
or development that, individually or in the aggregate, has had or is
reasonably likely to have a Material Adverse Effect or (B)(1) any
representation or warranty of the Company in the Merger Agreement that is
qualified as to Material Adverse Effect shall not be true and correct as of
the date of the Merger Agreement or (2) the representations and warranties
of the Company that are not qualified as to Material Adverse Effect shall
not be true and correct in all respects as of the date of the Merger
Agreement if the failure of all such representations and warranties in this
clause (2) to be true and correct, individually or in the aggregate, is
materially adverse to the transactions contemplated by the Merger
Agreement, taken as a whole.
The Merger Agreement provides that notwithstanding any provision to the
contrary in the Partnership Agreement, if the Merger Agreement is terminated
in accordance with the terms hereof and none of the preceding three paragraphs
is applicable, the 90-day period under the Partnership Agreement during which
the Company may exercise its Buy Rights, if any, in connection with the MB
Transaction shall be deemed to begin to run from the date of such termination
of the Merger Agreement. Except with respect to the running of the 90-day
period, the procedures governing the Buy Rights as set forth in the
Partnership Agreement, to the extent applicable, shall apply.
Grant of Conditional Option. Pursuant to the Merger Agreement, the Company
has granted to the Purchaser an irrevocable option (the "Option") to purchase
for a price of $42.00 per share (the "Per Share Price") in cash a number of
Common Shares (the "Optioned Shares") equal to the Applicable Amount. The
"Applicable Amount" shall be the number of Common Shares which, when added to
the number of Common Shares owned by Weyerhaeuser and the Purchaser
immediately prior to its exercise of the Option, would result in the Purchaser
owning immediately after its exercise of the Option 90% of the then-
outstanding Common Shares. The Purchaser may exercise the Option only if, at
the time of exercise, Weyerhaeuser, the Purchaser and any other subsidiary of
Weyerhaeuser shall have acquired at least 50.1% of the Fully Diluted Shares
pursuant to the Offer. The Option shall expire if not exercised prior to the
effective time of the Merger. The Per Share Price may, at the election of the
Purchaser, be paid either (i) in cash or (ii) a combination of $1.00 in cash
and a promissory note of Weyerhaeuser in a principal amount equal to $41.00,
which promissory note shall mature in 12 months (and be Prepayable at any time
by Parent without penalty) and shall bear interest at an annual rate of 6.50%
payable at maturity.
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Termination/Amendment of ESOP; Redemption of Company Preferred Stocks;
Repayment of ESOP Loan. If upon consummation of the Offer, the Purchaser owns
a number of Common Shares that, together with the Common Shares that the
Purchaser has the Option to purchase as described under "Grant of Conditional
Option", equals at least 90% of the then-outstanding Common Shares (after
giving effect to the exercise of such Option), then the Company shall take
such action as requested by Weyerhaeuser and permitted by the terms of the
Company Preferred Certificate of Designation and applicable law to terminate
and/or amend the ESOP and to call for redemption all the then-outstanding
Preferred Stock as promptly as practicable after such request by Weyerhaeuser.
As soon as practicable after the date of the Merger Agreement, the Company
shall direct the trustee for the Company's Investment Plan to use any cash
proceeds resulting from the redemption of the Preferred Stock or resulting
from the purchase or exchange of Common Stock (into which Preferred Stock was
converted) for cash pursuant to the Offer or the Merger, in each case, with
respect to shares that have not been allocated to participants or
beneficiaries under the Company's Investment Plan, shall be used to repay any
outstanding amounts under the loan from the Company to the trustee for the
Company's Investment Plan, and shall use its best efforts to take or cause to
be taken such other actions consistent with applicable law to cause the
Trustee to comply with such direction, and the parties agree that any
remaining cash proceeds shall be allocated to participants and beneficiaries
under the Company's Investment Plan in accordance with applicable law.
The foregoing summary of the Merger Agreement is qualified in its entirety
by reference to the Merger Agreement, a copy of which is filed as Exhibit
(c)(1) to the Schedule 14D-1. The Merger Agreement should be read in its
entirety for a more complete description of the matters summarized above.
Partnership Agreement
Substantially all of the current business of the Company is conducted
through the Partnership. In 1991, the Company contributed its North American
engineered lumber products business to the Partnership in exchange for general
and limited partnership interests representing a 51% interest in the
Partnership, and MBA, a wholly-owned subsidiary of MB, contributed all of its
and MB's North American engineered lumber technology and manufacturing
facilities in exchange for a 49% limited partnership interest in the
Partnership.
The management and control of the Partnership is vested in the Company as
general partner. Under the Partnership Agreement a management board was
established and consists of four members appointed by the Company and three
members appointed by MBA. The Company, as general partner, is required to
consult with the management board with respect to certain matters regarding
the operation of the Partnership. In addition, unanimous approval of the
management board is required to approve certain significant matters, including
distributions of distributable cash to the partners, redemptions of
partnership interests, dissolution or winding up of the Partnership, the
merger or consolidation of the Partnership, and certain other matters
including the encumbrance of assets, incurrence of debt, investments and
capital expenditures by the Partnership.
The Partnership is to continue for an indefinite term until terminated by
mutual agreement of the partners.
The Partnership Agreement prohibits each partner from selling, pledging or
otherwise disposing of its interest in the Partnership, without the consent of
the other partner, other than certain permitted transfers to affiliates of a
partner, permitted encumbrances and transfers by a partner that offers the
other partner a right of first refusal.
The Partnership Agreement specifies certain events of default by a partner
and the remedies available to the nondefaulting partner. Among the "events of
default" under the Partnership Agreement is a change in control of a partner.
The Partnership Agreement states that an event of default will occur if a
partner is "taken over or purchased by a third party or parties resulting in a
change in control compared with those controlling the defaulting partner" as
of September 30, 1991, the date the Partnership became effective. The
Partnership Agreement defines "control" as " (i) the right to exercise a
majority of the votes which may be cast at a general meeting of a corporation;
and (ii) the right to elect or appoint, directly or indirectly, a majority of
the directors of
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a corporation or other persons who have the right to manage or supervise the
management of the affairs and business of the corporation."
On November 1, 1999, MBA became an indirect wholly owned subsidiary of
Weyerhaeuser. As described in Section 11, the Company has asserted that the
consummation of the MB Transaction constituted a change of control of MBA
within the meaning of the Partnership Agreement that gives the Company the
ability to exercise the rights under the Purchase Agreement described below.
Weyerhaeuser has asserted that the consummation of the MB Transaction did not
constitute such a change of control of MBA and that the Company does not have
any of such rights. See "The Merger Agreement--Waiver Under Partnership
Agreement" above.
The Purchase Agreement provides that if a change in control of a partner
(the "defaulting partner") occurs, the other partner (the "nondefaulting
partner") may initiate one of the following procedures within 90 days of the
change in control.
(1) Buy Procedure: The nondefaulting partner may purchase all of the
defaulting partner's interest in the Partnership at a purchase price equal
to the value of the business of the Partnership represented by each
partner's interest, as determined by two investment bankers selected by the
partners. If they are unable to agree on value, the values determined by
each of them will be submitted to a third investment banker, which will
make a final determination by choosing between the two values submitted.
The value to be determined by the investment bankers is the value of the
defaulting partner's interest without the premium, if any, attributable to
the change in control of the defaulting partner. The nondefaulting partner
then has 30 days after the determination of the purchase price to exercise
its right to buy the defaulting partner's interest and the closing of such
purchase is to occur on the 90th business day following such exercise.
(2) Sell Procedure: The nondefaulting partner may sell all of its
interest in the Partnership to the defaulting partner at a sale price equal
to the value determined by investment bankers as described under (1) above,
plus the premium, if any, attributable to the change in control of the
defaulting partner. If the sale procedure is implemented, the defaulting
partner must purchase the nondefaulting partner's interest within 90
business days of the determination of the sale price.
(3) Mandatory Buy/Sell Procedure: The nondefaulting partner may give the
defaulting partner notice containing an offer to purchase all of the
interest held by the defaulting partner and an offer to sell all of the
interest held by the nondefaulting partner. The offer to buy and the offer
to sell will be at the same price, adjusted for the percentage represented
by each partner's interest. If the defaulting partner does not accept
either offer within 30 days after receipt of notice, it will be deemed to
have accepted an offer by the nondefaulting partner to purchase all the
defaulting partner's interest in the Partnership.
See "The Merger Agreement--Waiver Under Partnership Agreement" above for a
description of certain changes to rights of the partners under the Partnership
Agreement agreed in connection with the Merger Agreement.
The summary of certain provisions of the Partnership Agreement above does
not purport to be a complete description of the terms of the Partnership
Agreement and is qualified by reference to the Partnership Agreement which is
filed as an Exhibit to the Form 8-K filed by the Company with the Commission
on September 30, 1991.
Standstill Agreement
In connection with the formation of the Partnership, MB and the Company
entered into an agreement dated as of October 1, 1991 (the "Standstill
Agreement"). The Standstill Agreement prohibits MB and entities controlled by
it (the "MB Group"), either alone or in concert with others, from (a)
acquiring voting securities of the Company, with certain exceptions including
the acquisition of voting securities in response to a tender offer by a third
party for the Company's voting securities or in the event that a third party
acquires voting securities of the Company representing more than 40% of the
total voting power of all outstanding voting securities, (b) participating in
a solicitation of holders of voting securities of the Company or otherwise
attempting to influence such holders unless approved by the Board of Directors
of the Company, or (c) participating in arrangements
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with respect to the voting, holding or acquisition of voting securities of the
Company or any matter relating to the control of the Company. The Standstill
Agreement also contains provisions for the disposition of voting securities
that may be owned or acquired by members of the MB Group. The Standstill
Agreement provides that it shall continue in effect until six years after the
dissolution of the Partnership.
Confidentiality Agreement
Weyerhaeuser and the Company entered into a Confidentiality Agreement on
November 16, 1999. Pursuant to the Confidentiality Agreement, Weyerhaeuser
agreed to treat confidentially any information that the Company or its agents
or advisors furnish to Weyerhaeuser or its representatives, subject to
exceptions for applicable law and deposition, interrogatory, request for
documents, subpoena, civil investigative demand or similar process.
Weyerhaeuser also agreed that, for the period ending six months from the date
of the Confidentiality Agreement, it will not solicit for employment any
person who is currently employed in a management position with the Company.
Plans for the Company
Currently, Weyerhaeuser anticipates that, following the Merger, the Company
will operate as a separate operating division of Weyerhaeuser under the
Company's current management team. Weyerhaeuser expects that the Company will
continue to own its assets and conduct its business as it currently does,
although the Company's sales and marketing functions will be integrated into
and rationalized with Weyerhaeuser's. Weyerhaeuser also currently expects to
leverage its staff to provide greater efficiencies in staff and
logistical/purchasing support for the Company's operations.
Appraisal Rights
The holders of Shares do not have appraisal rights as a result of the Offer.
However, if the Merger is consummated, holders of Shares at the effective time
of the Merger will have certain rights pursuant to the provisions of Section
262 of the DGCL ("Section 262") to dissent and demand appraisal of their
Shares. Under Section 262, dissenting stockholders who comply with the
applicable statutory procedures will be entitled to receive a judicial
determination of the fair value of their Shares (exclusive of any element of
value arising from the accomplishment or expectation of the Merger) and to
receive payment of such fair value in cash, together with a fair rate of
interest, if any. Any such judicial determination of the fair value of Shares
could be based upon factors other than, or in addition to, the price per Share
to be paid in the Merger or the market value of the Shares. The value so
determined could be more or less than the price per Share to be paid in the
Merger.
The foregoing summary of Section 262 does not purport to be complete and is
qualified in its entirety by reference to Section 262. Failure to follow the
steps required by Section 262 for perfecting appraisal rights may result in
the loss of such rights.
Going Private Transactions
The Commission has adopted Rule 13e-3 under the Exchange Act, which is
applicable to certain "going private" transactions. The Purchaser does not
believe that Rule 13e-3 will be applicable to the Merger unless the Merger is
consummated more than one year after the termination of the Offer. If
applicable, Rule 13e-3 requires, among other things, that certain financial
information concerning the fairness of the Merger and the consideration
offered to minority stockholders in the Merger be filed with the Commission
and disclosed to stockholders prior to the consummation of the Merger.
Except as otherwise described in this Offer to Purchase, the Purchaser and
Weyerhaeuser have no current plans or proposals that would relate to, or
result in, an extraordinary corporate transaction involving the Company, such
as a merger, reorganization or liquidation involving the Company or any of its
subsidiaries, a sale or transfer of a material amount of assets of the Company
or any of its subsidiaries, any change in the present
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Board of Directors or management of the Company, including, but not limited
to, any plans or proposals to change the number or term of directors or to
fill any existing vacancies on the Board of Directors, any material change in
the Company's present capitalization or dividend policy, any other material
change in the Company's corporate structure or business, causing a class of
securities of the Company to be delisted from a national securities exchange
or to cease to be authorized to be quoted in an inter-dealer quotation system
of a registered national securities association or a class of equity
securities of the Company becoming eligible for termination of registration
pursuant to Section 12(g)(4) of the Exchange Act.
13. Dividends and Distributions
Pursuant to the terms of the Merger Agreement, the Company is prohibited
from taking any of the actions described in the two succeeding paragraphs, and
nothing herein shall constitute a waiver by the Purchaser or Weyerhaeuser of
any of its rights under the Merger Agreement or a limitation of remedies
available to the Purchaser or Weyerhaeuser for any breach of the Merger
Agreement, including termination thereof.
If the Company (a) splits, combines or otherwise changes the Shares or its
capitalization, (b) acquires or otherwise causes a reduction in the number of
outstanding Shares or other securities or (c) issues or sells additional
Shares, shares of any other class of Capital Stock, other voting securities or
any securities convertible into, or rights, warrants or options, conditional
or otherwise, to acquire any of the foregoing, other than Shares issued
pursuant to the exercise of outstanding Company Employee Stock Options, then,
subject to the provisions described in Section 14, the Purchaser may, subject
to the terms of the Merger Agreement (which restricts the Purchaser from
taking certain actions without the consent of the Company) make such
adjustments as it deems appropriate in the Offer Price and other terms of the
Offer, including without limitation, the number or type of securities offered
to be purchased.
If, on or after November 23, 1999, the Company declares or pays any cash
dividend on the Shares or other distribution on the Shares, or issues with
respect to the Shares any additional Shares, shares of any other class of
capital stock, other voting securities or any securities convertible into, or
rights, warrants or options, conditional or otherwise, to acquire, any of the
foregoing, payable or distributable to stockholders of record on a date prior
to the transfer of the Shares purchased pursuant to the Offer to the Purchaser
or its nominee or transferee on the Company's stock transfer records (other
than the dividends permitted under the Merger Agreement as described in clause
(b)(i) under the heading "The Merger Agreement--Conduct of Business" in
Section 12), then, subject to the provisions described in Section 14 and
subject to the terms of the Merger Agreement (which restrict the Purchaser
from taking certain actions without the consent of the Company), (a) the Offer
Price may be reduced by the amount of any such cash dividend or cash
distribution and (b) the whole of any such noncash dividend, distribution or
issuance to be received by the tendering stockholders will (i) be received and
held by the tendering stockholders for the account of the Purchaser and will
be required to be promptly remitted and transferred by each tendering
stockholder to the Depositary for the account of the Purchaser, accompanied by
appropriate documentation of transfer, or (ii) at the direction of the
Purchaser, be exercised for the benefit of the Purchaser, in which case the
proceeds of such exercise will promptly be remitted to the Purchaser. Pending
such remittance and subject to applicable law, the Purchaser will be entitled
to all rights and privileges as owner of any such noncash dividend,
distribution, issuance or proceeds and may withhold the entire Offer Price or
deduct from the Offer Price the amount or value thereof, as determined by the
Purchaser in its sole discretion.
14. Certain Conditions of the Offer
Notwithstanding any other term of the Offer or the Merger Agreement, the
Purchaser will not be required to accept for payment or, subject to any
applicable rules and regulations of the Commission, including Rule 14e-l(c)
under the Exchange Act (relating to the Purchaser's obligation to pay for or
return tendered Shares promptly after the termination or withdrawal of the
Offer), to pay for any Shares tendered pursuant to the Offer unless (i) the
Minimum Condition shall have been satisfied and (ii) (A) any waiting period
under the HSR Act applicable to the purchase of Shares pursuant to the Offer
shall have expired or been terminated, (B) any waiting period under the
Canadian Competition Act applicable to the purchase of Shares pursuant to the
Offer shall have
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expired or been terminated and/or an advance ruling certificate pursuant to
the Canadian Competition Act or, in the alternative of an advance ruling
certificate, a no-action letter from the Commissioner of Competition, related
thereto shall have been received and (C) any consents, approvals and filings
under any foreign antitrust law, the absence of which would prohibit the
consummation of the Offer, shall have been obtained or made. For purposes of
the Minimum Condition, the Merger Agreement defines "Fully Diluted Shares" as
all outstanding securities entitled generally to vote in the election of
directors of the Company on a fully diluted basis, after giving effect to the
exercise or conversion of all options, rights and securities exercisable or
convertible into such voting securities, other than potential dilution
attributable to the Rights and the Option. Furthermore, notwithstanding any
other term of the Offer, the Purchaser may, subject to the terms of the Merger
Agreement, amend the Offer or postpone the acceptance for payment of or
payment for tendered Shares if, at any time on or after the date of the Merger
Agreement and before the expiration of the Offer, any of the following
conditions exists:
(a) there shall be pending any suit, action or proceeding by any
Governmental Entity that has a reasonable likelihood of success, (i)
challenging the acquisition by Weyerhaeuser or the Purchaser of any Shares,
seeking to restrain or prohibit the making or consummation of the Offer or
the Merger or seeking to obtain from the Company, Weyerhaeuser or the
Purchaser any damages that are material in relation to the Company and its
subsidiaries taken as whole as a result of the transactions contemplated by
the Merger Agreement, (ii) seeking to prohibit or limit in any material
respect the ownership or operation by the Company, Weyerhaeuser or any of
their respective subsidiaries of any material portion of the business or
assets of the Company, Weyerhaeuser or any of their respective
subsidiaries, or to compel the Company, Weyerhaeuser or any of their
respective subsidiaries to dispose of or hold separate any material portion
of the business or assets of the Company, Weyerhaeuser or any of their
respective subsidiaries, as a result of the Offer and the Merger, (iii)
seeking to impose limitations on the ability of Weyerhaeuser or the
Purchaser to acquire or hold, or exercise full rights of ownership of, any
Shares, including the right to vote the Shares purchased by it on all
matters properly presented to the stockholders of the Company or (iv)
seeking to prohibit Weyerhaeuser or any of its subsidiaries from
controlling in any material respect the business or operations of the
Company and its subsidiaries;
(b) any statute, rule, regulation, legislation, interpretation, judgment,
order or injunction shall be enacted, entered, enforced, promulgated or
issued with respect to, or deemed applicable to, or any consent or approval
withheld with respect to (i) Weyerhaeuser, the Company or any of their
respective subsidiaries or (ii) the Offer, the Merger or any other
transaction contemplated by the Merger Agreement, in each case, by any
Governmental Entity that is reasonably likely to result, directly or
indirectly, in any of the consequences referred to in paragraph (a) above;
(c) except as disclosed, since the date of the Merger Agreement there
shall have occurred any event, change, effect or development that,
individually or in the aggregate, has had or is reasonably likely to have,
a Material Adverse Effect;
(d) there shall have occurred and continued to exist (i) any general
suspension of trading in, or limitation on prices for, securities on any
national securities exchange or in the over-the-counter market in the
United States (excluding any suspension or limitations resulting from
physical damage or interference with such exchange not related to market
conditions), (ii) a decline of at least 30% in the Dow Jones Industrial
Average, (iii) a declaration of a banking moratorium or any suspension of
payments in respect of banks in the United States, (iv) any mandatory
limitation by any Governmental Entity on, or other event that materially
and adversely affects, the extension of credit by banks or other lending
institutions in the United States, (v) a commencement of a war or armed
hostilities or other national or international calamity directly or
indirectly involving the United States or (vi) in the case of any of the
foregoing existing on the date of the Merger Agreement, a material
acceleration or worsening thereof;
(e) (i) any representation and warranty of the Company in the Merger
Agreement that is qualified as to Material Adverse Effect shall not be true
and correct as of the date of the Merger Agreement or as of such time,
except to the extent such representation and warranty expressly relates to
an earlier date (in which case on and as of such earlier date) and (ii) the
representations and warranties of the Company that are not qualified as to
Material Adverse Effect shall not be true and correct in all respects as of
the date of the
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Merger Agreement, or as of such time, except to the extent such
representations and warranties expressly relate to an earlier date (in
which case on and as of such earlier date) if the failure of all such
representations and warranties in this clause (ii) to be true and correct,
in aggregate, is materially adverse to the transactions contemplated by the
Merger Agreement, taken as a whole;
(f) the Company shall have failed to perform in any material respect any
obligation or to comply in any material respect with any agreement or
covenant of the Company to be performed or complied with by it under the
Merger Agreement; or
(g) the Merger Agreement shall have been terminated in accordance with
its terms;
which, in the sole judgment of the Purchaser or Weyerhaeuser, in any such
case, and regardless of the circumstances giving rise to any such condition
(including any action or inaction by Weyerhaeuser or any of its affiliates not
otherwise required by the Merger Agreement), makes it inadvisable to proceed
with such acceptance for payment or payment.
The foregoing conditions are for the sole benefit of the Purchaser and
Weyerhaeuser and may be asserted by the Purchaser or Weyerhaeuser regardless
of the circumstances giving rise to such condition or may be waived by the
Purchaser and Weyerhaeuser in whole or in part at any time and from time to
time in their sole discretion. The failure by Weyerhaeuser, the Purchaser or
any other affiliate of Weyerhaeuser at any time to exercise any of the
foregoing rights shall not be deemed a waiver of any such right, the waiver of
any such right with respect to particular facts and circumstances shall not be
deemed a waiver with respect to any other facts and circumstances and each
such right shall be deemed an ongoing right that may be asserted at any time
and from time to time.
15. Certain Legal Matters
Except as described in this Section 15, based on a review of publicly
available filings made by the Company with the Commission and other publicly
available information concerning the Company and discussions of
representatives of Weyerhaeuser with representatives of the Company, none of
the Purchaser, Weyerhaeuser or the Company is aware of any license or
regulatory permit that appears to be material to the business of the Company
and its subsidiaries, taken as a whole, that might be adversely affected by
the Purchaser's acquisition of Shares (and the indirect acquisition of the
stock of the Company's subsidiaries) as contemplated herein or of any approval
or other action by any Governmental Entity that would be required or desirable
for the acquisition or ownership of Shares by the Purchaser as contemplated
herein. Should any such approval or other action be required or desirable, the
Purchaser and Weyerhaeuser currently contemplate that such approval or other
action will be sought, except as described below under "State Takeover Laws".
While (except as otherwise expressly described in this Section 15) the
Purchaser does not presently intend to delay the acceptance for payment of or
payment for Shares tendered pursuant to the Offer pending the outcome of any
such matter, there can be no assurance that any such approval or other action,
if needed, would be obtained or would be obtained without substantial
conditions or that failure to obtain any such approval or other action might
not result in consequences adverse to the Company's business or that certain
parts of the Company's business might not have to be disposed of if such
approvals were not obtained or such other actions were not taken or in order
to obtain any such approval or other action. If certain types of adverse
action are taken with respect to the matters discussed below, the Purchaser
could decline to accept for payment or pay for any Shares tendered. See
Section 14 for a description of certain conditions to the Offer.
State Takeover Laws. A number of states throughout the United States have
enacted takeover statutes that purport, in varying degrees, to be applicable
to attempts to acquire securities of corporations that are incorporated or
have assets, stockholders, executive offices or places of business in such
states. In Edgar v. MITE Corp., the Supreme Court of the United States held
that the Illinois Business Takeover Act, which involved state securities laws
that made the takeover of certain corporations more difficult, imposed a
substantial burden on interstate commerce and therefore was unconstitutional.
In CTS Corp. v. Dynamics Corp. of America, however, the Supreme Court of the
United States held that a state may, as a matter of corporate law and, in
particular, those laws concerning corporate governance, constitutionally
disqualify a potential acquiror from voting on the affairs
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of a target corporation without prior approval of the remaining stockholders,
provided that such laws were applicable only under certain conditions.
Subsequently, a number of federal courts ruled that various state takeover
statutes were unconstitutional insofar as they apply to corporations
incorporated outside the state of enactment.
Section 203 of the DGCL, in general, prohibits a Delaware corporation such
as the Company from engaging in a "Business Combination" (defined as a variety
of transactions including, mergers with an "Interested Stockholder") (defined
generally as a person that is the beneficial owner of 15% or more of a
corporation's outstanding voting stock) for a period of three years following
the time that such person became an Interested Stockholder unless, among other
things, prior to the time such person became an Interested Stockholder, the
board of directors of the corporation approved either the Business Combination
or the transaction that resulted in the stockholder becoming an Interested
Stockholder. The Board of Directors of the Company has taken action sufficient
to render Section 203 and Article Tenth of the Company Charter inapplicable
(a) to Weyerhaeuser and the Purchaser solely by reason of their entering into
the Merger Agreement or consummating the Offer or the Merger or the grant or
exercise of the Option and (b) to the Offer, the Merger and certain other
transactions contemplated by the Merger Agreement, assuming the accuracy of
Weyerhaeuser's representations that neither Weyerhaeuser nor the Purchaser
beneficially owns any Shares and that neither Weyerhaeuser nor the Purchaser
is an Interested Stockholder of the Company.
Based on information supplied by the Company, the Purchaser does not believe
that any other state takeover statutes or similar laws purport to apply to the
Offer or the Merger. In particular, the Company has not elected to be subject
to the control share acquisition provisions and the business combination
provisions of the State of Idaho. Neither the Purchaser nor Weyerhaeuser has
currently complied with any state takeover statute or regulation. The
Purchaser reserves the right to challenge the applicability or validity of any
state law purportedly applicable to the Offer or the Merger and nothing in
this Offer to Purchase or any action taken in connection with the Offer or the
Merger is intended as a waiver of such fight. If it is asserted that any state
takeover statute is applicable to the Offer or the Merger and an appropriate
court does not determine that it is inapplicable or invalid as applied to the
Offer or the Merger, the Purchaser might be required to file certain
information with, or to receive approvals from, the relevant state
authorities, and the Purchaser might be unable to accept for payment or pay
for Shares tendered pursuant to the Offer, or be delayed in consummating the
Offer or the Merger. In such case, the Purchaser may not be obligated to
accept payment or pay for any Shares tendered pursuant to the Offer. See
Section 14.
Antitrust. Under the provisions of the HSR Act applicable to the Offer, the
acquisition of Shares under the Offer may be consummated after the expiration
of a 15-calendar day waiting period commenced by the filing by Weyerhaeuser of
a Notification and Report Form with respect to the Offer, unless Weyerhaeuser
receives a request for additional information or documentary material from the
Antitrust Division or the FTC or earlier if early termination of the waiting
period is granted. Weyerhaeuser expects to make such filing in the near
future. If, within the initial 15-day waiting period, either the Antitrust
Division or the FTC requests additional information or material from
Weyerhaeuser concerning the Offer, the waiting period will be extended and
would expire at 11:59 p.m., New York City time, on the tenth calendar day
after the date of substantial compliance by Weyerhaeuser with such request,
unless earlier terminated. Only one extension of the waiting period pursuant
to a request for additional information is authorized by the HSR Act.
Thereafter, such waiting period may be extended only by court order or with
the consent of Weyerhaeuser. In practice, complying with a request for
additional information or material can take a significant amount of time. In
addition, if the Antitrust Division or the FTC raises substantive issues in
connection with a proposed transaction, the parties frequently engage in
negotiations with the relevant governmental agency concerning possible means
of addressing those issues and may agree to delay consummation of the
transaction while such negotiations continue. Expiration or termination of the
applicable waiting period under the HSR Act is a condition to the Purchaser's
obligation to accept for payment and pay for Shares tendered pursuant to the
Offer. Pursuant to the HSR Act, Weyerhaeuser will request early termination of
the applicable waiting period, but there can be no assurance that the waiting
period will be terminated early.
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The Merger will not require an additional filing under the HSR Act if the
Purchaser owns 50% or more of the outstanding Shares at the time of the Merger
or if the Merger occurs within one year after the HSR Act waiting period
applicable to the Offer expires or is terminated.
The Antitrust Division and the FTC frequently scrutinize the legality under
the antitrust laws of transactions such as the Purchaser's proposed
acquisition of the Company. At any time before or after the Purchaser's
acquisition of Shares pursuant to the Offer, the Antitrust Division or the FTC
could take such action under the antitrust laws as it deems necessary or
desirable in the public interest, including seeking to enjoin the purchase of
Shares pursuant to the Offer or the consummation of the Merger or seeking the
divestiture of Shares acquired by the Purchaser or the divestiture of
substantial assets of the Company or its subsidiaries or Weyerhaeuser or its
subsidiaries. Private parties and states may also bring legal action under the
antitrust laws under certain circumstances. Although Weyerhaeuser currently
owns a 49% interest in the Partnership, there can be no assurance that a
challenge to the Offer on antitrust grounds will not be made or, if such a
challenge is made, of the result thereof.
Canadian Competition Act. Under the provisions of the Competition Act
(Canada) (the "Canadian Act"), the acquisition of Shares under the Offer may
be consummated after the expiration of a 7-calendar day waiting period
commenced by the filing by Weyerhaeuser of a short-form premerger filing under
the Canadian Act with respect to the Offer, unless Weyerhaeuser receives a
request to complete a long-form filing prior to the expiration of the 7-
calendar day waiting period, in which case a long-form filing must be made,
after completion of which a 21-day calendar day waiting period is mandated.
These waiting periods are expected to be doubled by legislative changes that
may be implemented in respect of premerger notification filings under the
Canadian Act made after mid-December 1999. Weyerhaeuser expects to make a
short-form filing under the Canadian Act in the near future. Before or after
the waiting periods referred to above have expired, upon application by the
Commissioner of Competition under the Canadian Act (the "Commissioner") which
certifies that in the Commissioner's opinion more time is required to complete
his inquiry into the Offer, the Canadian Competition Tribunal may issue an
interim order forbidding any person from, among other things, completing the
Offer. The interim order shall not have a term longer than thirty days; on
further application by the Commissioner that he is unable to complete an
inquiry within the period specified in the order because of circumstances
beyond his control, the Canadian Competition Tribunal may extend the duration
of the order to a day not more than sixty days after the order takes effect.
In the course of his inquiry, the Commissioner may request additional
information. In practice, complying with such requests can take a significant
amount of time. In addition, if the Commissioner raises substantive issues in
connection with a proposed transaction, the parties frequently engage in
negotiations with the Commissioner concerning possible means of addressing
those issues and may agree to delay consummation of the transaction while such
negotiations continue. Expiration of the applicable waiting periods under the
Canadian Act is a condition to the Purchaser's obligation to accept for
payment and pay for Shares tendered pursuant to the Offer.
The Merger will not require an additional filing under the Canadian Act if
the Purchaser owns more than 50% of the outstanding Shares at the time of the
Merger or if the Merger is completed within one year after the making of the
premerger notification filings under the Canadian Act.
The Commissioner frequently scrutinizes the legality under the Canadian Act
of transactions such as the Purchaser's proposed acquisition of the Company.
At any time before or after the Purchaser's acquisition of Shares pursuant to
the Offer, the Commissioner could take such action under the Canadian Act as
he deems necessary or desirable in the public interest, including seeking to
enjoin the purchase of Shares pursuant to the Offer or the consummation of the
Merger or seeking the divestiture of Shares acquired by the Purchaser or the
divestiture of substantial assets of the Company or its subsidiaries or
Weyerhaeuser or its subsidiaries. There can be no assurance that a challenge
to the Offer under the Canadian Act will not be made or, if such a challenge
is made, of the result thereof.
Other Foreign Laws. The Company and certain of its subsidiaries conduct
business in several foreign countries where regulatory filings or approvals
may be required or desirable in connection with the consummation of the Offer.
Certain of such filings or approvals, if required or desirable, may not be
made or
41
<PAGE>
obtained prior to the expiration of the Offer. The Purchaser is seeking
further information regarding the applicability of any such laws and currently
intends to take such action as may be required or desirable. If any foreign
Governmental Entity takes any action prior to the completion of the Offer that
might have certain adverse effects, the Purchaser will not be obligated to
accept for payment or pay for any Shares tendered. See Section 14.
16. Fees and Expenses
Morgan Stanley is acting as Dealer Manager in connection with the Offer and
is providing certain financial advisory services to the Purchaser and
Weyerhaeuser in connection with the Offer. Pursuant to an engagement letter
dated November 15, 1999, between Weyerhaeuser and Morgan Stanley, advisory
fees of $875,000 are currently payable to Morgan Stanley. An additional fee of
$2,085,000 will be payable to Morgan Stanley in the event the Offer is
consummated. Weyerhaeuser has also agreed to reimburse Morgan Stanley for its
out-of-pocket expenses, including the fees and expenses of its counsel and any
other advisor retained by Morgan Stanley in connection with its engagement,
and to indemnify Morgan Stanley and certain related persons against certain
liabilities and expenses, including certain liabilities under federal
securities laws.
In the ordinary course of its business, Morgan Stanley engages in securities
trading, market-making and brokerage activities and may, at any time, hold
long or short positions and may trade or otherwise effect transactions in debt
or equity securities or senior loans of the Company.
The Purchaser and Weyerhaeuser have retained Georgeson Shareholder
Communications Inc. to act as the Information Agent and the First Chicago
Trust Company of New York to serve as the Depositary in connection with the
Offer. The Information Agent and the Depositary each will receive reasonable
and customary compensation for their services, be reimbursed for certain
reasonable out-of-pocket expenses and be indemnified against certain
liabilities and expenses in connection therewith, including certain
liabilities and expenses under the U.S. federal securities laws.
Neither the Purchaser nor Weyerhaeuser will pay any fees or commissions to
any broker or dealer or other person (other than the Dealer Manager and the
Information Agent) in connection with the solicitation of tenders of Shares
pursuant to the Offer. Brokers, dealers, banks and trust companies will be
reimbursed by the Purchaser upon request for customary mailing and handling
expenses incurred by them in forwarding material to their customers.
17. Miscellaneous
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of Shares in any jurisdiction in which the making of the
Offer or the acceptance thereof would not be in compliance with the laws of
such jurisdiction. Neither the Purchaser nor Weyerhaeuser is aware of any
jurisdiction in which the making of the Offer or the acceptance thereof would
not be in compliance with the laws of such jurisdiction. To the extent the
Purchaser or Weyerhaeuser becomes aware of any state law that would limit the
class of offerees in the Offer, the Purchaser will amend the Offer and,
depending on the timing of such amendment, if any, will extend the Offer to
provide adequate dissemination of such information to holders of Shares prior
to the expiration of the Offer. In any jurisdiction the securities, blue sky
or other laws of which require the Offer to be made by a licensed broker or
dealer, the Offer is being made on behalf of the Purchaser by the Dealer
Manager or one or more registered brokers or dealers licensed under the laws
of such jurisdiction.
No person has been authorized to give any information or to make any
representation on behalf of the Purchaser or Weyerhaeuser not contained herein
or in the Letter of Transmittal and, if given or made, such Information or
representation must not be relied upon as having been authorized.
The Purchaser and Weyerhaeuser have filed with the Commission the Schedule
14D-1 pursuant to Rule 14d-3 under the Exchange Act together with exhibits,
furnishing certain additional information with respect to the Offer, and may
file amendments thereto. In addition, the Company has filed the Schedule 14D-9
pursuant to
42
<PAGE>
Rule 14d-9 under the Exchange Act, together with exhibits, setting forth its
recommendation with respect to the Offer and the reasons for such
recommendation and furnishing certain additional related information. Such
Schedules and any amendments thereto, including exhibits, should be available
for inspection and copies should be obtainable in the manner set forth in
Section 8 (except that such material will not be available at the regional
offices of the Commission) .
WTJ, INC.
November 30, 1999
43
<PAGE>
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF
WEYERHAEUSER AND THE PURCHASER
1. Directors and Executive Officers of Weyerhaeuser. The name, business
address, present principal occupation or employment and employment history of
each of the directors and executive officers of Weyerhaeuser are set forth
below. All such directors and executive officers listed below are citizens of
the United States except Mr. Mazankowski, who is a citizen of Canada. Unless
otherwise indicated, the principal business address of each director or
executive officer is 33663 Weyerhaeuser Way South, Federal Way, Washington,
98003.
<TABLE>
<CAPTION>
Name, Age and Business Present Principal Occupation or Employment;
Address Material Positions Held During the Past Five Years
---------------------- --------------------------------------------------
<S> <C>
W. John Driscoll, 70....... Mr. Driscoll, a director of Weyerhaeuser since
1979, was chairman of Rock Island Company (private
investment company) until his retirement in 1994.
He is also a director of Comshare Incorporated,
Northern States Power Company, John Nuveen &
Company and The St. Paul Companies, Inc.
Philip M. Hawley, 74....... Mr. Hawley, a director of Weyerhaeuser since 1989,
is chairman and chief executive officer of Krause
Furniture, Inc. (retailing). He was chairman and
chief executive officer of Broadway Stores, Inc.
(retailing) (formerly Carter Hawley Hale Stores,
Inc.) until his retirement in 1993. He was
chairman of the California Retailers Association
from 1993 to 1995. He is a director of Atlantic
Richfield Company and Johnson & Johnson.
Robert J. Herbold, 57...... Mr. Herbold, director since 1999, is executive
vice president and chief operating officer of
Microsoft Corporation. Mr. Herbold joined
Microsoft in November 1994, and was formerly
senior vice president, advertising and information
services, at The Procter & Gamble Company. He is
also a director of Browning-Ferris Industries,
Inc. and a member of the Advertising Council, the
Washington Roundtable, the James Madison Council
of the Library of Congress, and the Board of
Trustees of Case Western Reserve University.
Martha R. Ingram, 64....... Mrs. Ingram, a director of Weyerhaeuser since
1995, has been chairman of Ingram Industries Inc.
(microcomputer book and video distribution, and
inland barging) since 1995, a member of the board
since 1981 and was director of public affairs from
1979 to 1995. She is also a director of Ingram
Micro, Inc., Baxter International Inc. and First
American Corporation. Mrs. Ingram was chairman of
the 1996 Tennessee Bicentennial Commission and
serves on the boards of Vassar College, Ashley
Hall and Vanderbilt University.
John I. Kieckhefer, 55..... Mr. Kieckhefer, a director of Weyerhaeuser since
1990, has been president of Kieckhefer Associates,
Inc. (investment and trust management) since 1989
and was senior vice president prior to that time.
He has been engaged in commercial cattle
operations since 1967 and is a trustee of J. W.
Kieckhefer Foundation, an Arizona charitable
trust.
</TABLE>
S-1
<PAGE>
<TABLE>
<S> <C>
Arnold G. Langbo, 62....... Mr. Langbo, director since 1999, has been Kellogg
Company's chairman since January 1, 1992. Mr.
Langbo joined Kellogg Canada Inc. in November 1956
and was elected president, chief operating officer
and a director of Kellogg Company in December
1990. He was chief executive officer from 1992 to
April 1999. Mr. Langbo, is a member of the board
of directors of Atlantic Richfield Co., Johnson &
Johnson and Whirlpool Corporation. He also serves
on the board of the Grocery Manufacturers of
America, International Youth Foundation, the
advisory board of the J.L. Kellogg Graduate School
of Management at Northwestern University and the
Business Roundtable.
Rt. Hon. Donald F. Mr. Mazankowski, a director of Weyerhaeuser since
Mazankowski, 64........... 1997, was a Member of Parliament, Government of
Canada, from 1968 to 1993, served as Deputy Prime
Minister from 1986-1993 and Minister of Finance
from 1991 to 1993. He is also a director of the
Power Group of Companies, Canadian Utilities Ltd.,
Shaw Communications Inc., IMC Global Inc., Gulf
Canada Resources Ltd., Gulf Indonesia Resources
Ltd., Golden Star Resources Ltd. and Weyerhaeuser
Canada Ltd., a wholly owned subsidiary of
Weyerhaeuser. He is also a member of the Board of
Governors of the University of Alberta.
Steven R. Rogel, 57........ Mr. Rogel, a director of Weyerhaeuser since 1997,
has been the Company's president and chief
executive officer since December 1997 and Chairman
since April 1999. Prior to joining Weyerhaeuser he
served as the president and chief executive
officer of Willamette Industries, Inc. from 1995
to 1997 and as president and chief operating
officer from 1991 to 1995. He is also a director
of Fred Meyer, Inc. and the Cascade Pacific
Council Boy Scouts of America.
William D. Ruckelshaus, Mr. Ruckelshaus, a director of Weyerhaeuser since
67........................ 1989, has been chairman of Browning-Ferris
Industries, Inc. (waste services) since 1988 and
from 1988 to 1995 was chairman and chief executive
officer until his retirement in 1995. He has been
president of William D. Ruckelshaus Associates
since 1987. He was administrator, Environmental
Protection Agency from 1983 to 1985 and a senior
vice president of Weyerhaeuser from 1976 to 1983.
He is also a director of Cummins Engine Company,
Inc., Monsanto Company, Nordstrom, Inc., and
Gargoyles, Inc.
Richard H. Sinkfield, 57... Mr. Sinkfield, a director of Weyerhaeuser since
1993, is a senior partner in the law firm of
Rogers and Hardin in Atlanta, where he has been a
partner since 1976. He is also a director of the
United Auto Group, Inc, Metropolitan Atlanta
Community Foundation, Inc. and the Atlanta College
of Art. He is a member of the Board of Trust of
Vanderbilt University and of the Board of
Governors of the State Bar of Georgia. He is a
former chairman of the board of Atlanta Urban
League, Inc.
</TABLE>
S-2
<PAGE>
<TABLE>
<S> <C>
James N. Sullivan, 62...... Mr. Sullivan, a director of Weyerhaeuser since
1998, is vice-chairman of the board of Chevron
Corporation (international oil company) where he
has been a director since 1988. He joined Chevron
in 1961 as a Process Engineer, was elected a vice-
president in 1983 and assumed his present position
in 1989. He is a member of the Board of Trustees
of the University of San Francisco, the California
Academy of Sciences and the Committee for Economic
Development. He is a director of the American
Petroleum Institute and the United Way of the Bay
Area.
George H. Weyerhaeuser, Mr. Weyerhaeuser, has been a director of
73........................ Weyerhaeuser since 1960 and was chairman of
Weyerhaeuser from 1988 to April 1999. He joined
Weyerhaeuser in 1949, became its president in 1966
and was chief executive officer from 1966 to 1991.
He is also a director of The Boeing Company,
Chevron Corporation and SAFECO Corporation and a
member of The Business Council.
Ambassador Clayton K. Ambassador Yeutter, director of Weyerhaeuser since
Yeutter, 68............... 1999, is Of Counsel to Hogan & Hartson. Between
1985 and 1988 Ambassador Yeutter served as U.S.
Trade Representative. He has also served as
Secretary of Agriculture and National Chairman of
the Republican Party. He is a director of
Caterpillar, Inc.; ConAgra, Inc.; Farmers
Insurance Company; FMC Corporation; Oppenheimer
Funds; Texas Instruments and Zurich Financial
Services.
William R. Corbin, 58...... Mr. Corbin has been executive vice president, Wood
Products for Weyerhaeuser since 1998. Prior to
assuming his current position, he served as
executive vice president, Timberlands and
Distribution, from 1995 to 1998 and executive vice
president, Wood Products, from 1992, when he
joined Weyerhaeuser, to 1995. Mr. Corbin serves on
the board of directors of Weyerhaeuser Canada Ltd.
and is a member of the management board of the
World TimberFund, a trustee and executive
committee member of the Weyerhaeuser Company
Foundation and a member of the company's policy
committee. He is an advisory board member of both
the University of Washington's School of Business
Administration and college of Forest Resources. He
serves as vice president and an executive
committee member of the Mountains to Sound
Greenway Trust and is a charter member of the
International Advisory Board of the Institute for
Environment and Natural Resource Policy at the
University of Wyoming.
C. William Gaynor, 59...... C. William Gaynor has been a senior vice
president, Canada, of Weyerhaeuser since September
1999 and has been president and chief executive
officer of Weyerhaeuser Canada, Ltd., a wholly
owned subsidiary of Weyerhaeuser, since 1998. In
his 25 years with Weyerhaeuser, he has held
numerous management positions and served as vice
president and general manager--Saskatchewan
Division of Weyerhaeuser Canada, Ltd. from 1987 to
1998. Mr. Gaynor has been a
</TABLE>
S-3
<PAGE>
<TABLE>
<S> <C>
member of the Saskatchewan Provincial Action
Committee on the Economy, the Roundtable on
Environment and Economy and past-president of the
Saskatchewan Chamber of Commerce.
Richard C. Gozon, 61........ Mr. Gozon joined Weyerhaeuser on June 1, 1994, as
executive vice president for Pulp, Paper and
Packaging. Prior to that he was president and
chief operating officer of Alco Standard
Corporation (distributor of paper and office
equipment). He is a director of U.G.I.
Corporation, The Triumph Group and AmeriSource
Health Corporation. He served as a director of
Alco Standard Corporation from 1984 to 1993 and
served on the board of trustees for Children's
Hospital of Philadelphia from 1992 to 1994.
Richard E. Hanson, 59....... Mr. Hanson is a senior vice president of
Timberlands. During his 29-year career with
Weyerhaeuser, he has held numerous management
positions in the timberlands, wood products and
paper businesses. Most recently, he served as vice
president, Western Timberlands from February 1996
to November 1998. Mr. Hanson serves on the board
of directors of the Oregon Forest Industries
Council and Operating Committee, the advisory
committee of the Oregon State University Forest
Research Laboratory, and the board of trustees for
the Oregon Zoo.
Steven R. Hill, 52.......... Mr. Hill has been senior vice president, human
resources since 1990 and was vice president, human
resources from 1986 to 1990. He began his
association with Weyerhaeuser as a forester in
1968. He joined Corporate Human Resources in 1980.
Mr. Hill was appointed to the board of directors
of Weyerhaeuser Canada Ltd., in February 1996. He
is a director of the Tacoma YMCA and Seattle
Symphony and serves as trustee for both the
Greater Tacoma Community Foundation and the
Weyerhaeuser Foundation.
Mack L. Hogans, 50.......... Mr. Hogans has been senior vice president,
Corporate Affairs since April 1995. He was the
director of Government Affairs and public-policy
issues management before being appointed vice
president of Government Affairs in December 1990.
Mr. Hogans serves as a board member for The
Association of Washington Business, the Washington
Council on International Trade, the Seattle
Chamber of Commerce and the University of Puget
Sound, the Zion Preparatory Academy, the Public
Affairs Council, the Discovery Institute and The
Nature Conservancy.
William C. Stivers, 61...... Mr. Stivers has been executive vice president and
chief financial officer of Weyerhaeuser since 1998
and was senior vice president and chief financial
officer from 1990 to 1998. Mr. Stivers is a
director and officer of various Weyerhaeuser
subsidiaries and affiliates. In addition, he is a
director of the Factory Mutual Insurance Co. and
is chairman of the Financial Management Committee
of the American Forest & Paper Association.
</TABLE>
S-4
<PAGE>
<TABLE>
<S> <C>
George H. Weyerhaeuser, Jr., Mr. Weyerhaeuser Jr., serves as senior vice
46......................... president, technology, responsible for corporate
research and development. He also is chairman of
the board of Weyerhaeuser Canada and currently
serves as chairman of the Pulp and Paper Research
Institute of Canada, chair of the Canadian
National Advisory Board on Forestry Research and
chairman of the Forest Alliance of British
Columbia. He is a director of the Dietzen
Corporation and Clearwater Management Company and
a board member of the Thea Foss Waterway Public
Development Authority. He served as president and
chief executive officer of Weyerhaeuser Canada
from 1993 to 1998.
</TABLE>
2. Directors and Executive Officers of the Purchaser. The name, business
address, present principal occupation or employment and five-year employment
history of each of the directors and executive officers of the Purchaser are
set forth below. The business address of each such director and executive
officer is WTJ, Inc. in care of Weyerhaeuser, 33663 Weyerhaeuser Way South,
Federal Way, Washington, 98003. All such directors and executive officers
listed below are citizens of the United States. Further information concerning
the directors and executive officers listed below, each of whom also serves as
an executive officer of Weyerhaeuser, is provided above.
<TABLE>
<CAPTION>
Name, Age and Business Present Principal Occupation or Employment;
Address Material Positions Held During the Past Five Years
---------------------- --------------------------------------------------
<S> <C>
Robert A. Dowdy, 58........ Robert A. Dowdy, a director and vice president of
the Purchaser, has been an attorney with
Weyerhaeuser Company since 1972; a senior legal
counsel from 1974 to 1986; assistant general
counsel 1986 to 1991; deputy general counsel from
1991 to 1997 and vice president and general
counsel since 1997. Mr. Dowdy is a member of the
Association of General Counsel; the American
Forest and Paper Association, General Counsel's
Committee; the Advisory Council of the Kitsap
County Foundation; and the Board of Law Fund.
Sandy D. McDade, 47........ Sandy D. McDade, a director and vice president of
the Purchaser, has been an attorney with
Weyerhaeuser since 1980, a senior legal counsel
from 1989-1998, Assistant General Counsel since
1998 and Corporate Secretary since 1993. Mr.
McDade has been chair of the Corporate Law
Department Section of the Washington State Bar
Association and serves on the Camping Services
Board of the Seattle Metropolitan YMCA.
William R. Corbin, 58...... Vice president. Additional information provided
above.
Scott R. Marshall, 53...... Mr. Marshall is a vice president of the Purchaser
and has served as the vice president, Policy,
Finance & Strategic Planning, Timberlands for
Weyerhaeuser since 1991. Mr. Marshall is a member
of the Technical Association of the Pulp and Paper
Industry, the Society of American Foresters,
Forest Products Research Society, BOD Foundation
for Russian-American Economic Cooperation, World
TimberFund Management Committee and the Executive
Committee of the Board of Directors for APEC.
Steven R. Rogel, 57........ President. Additional information provided above.
William C. Stivers, 61..... Vice president. Additional information provided
above.
</TABLE>
S-5
<PAGE>
Manually signed facsimile copies of the Letter of Transmittal will be
accepted. The Letter of Transmittal, certificates for Shares and any other
required documents should be sent or delivered by each stockholder of the
Company or such stockholder's broker, dealer, bank, trust company or other
nominee to the Depositary at one of its addresses set forth below.
The Depositary for the Offer is:
First Chicago Trust Company Of New York
By Mail: By Overnight Courier: By Hand:
First Chicago Trust First Chicago Trust First Chicago Trust
Company Company Company
of New York of New York of New York
Corporate Actions Corporate Actions, Suite c/o Securities Transfer
Suite 4660 4660 and
P.O. Box 2569 525 Washington Blvd., Reporting Services Inc.
Jersey City, NJ 07303- 3rd Floor Attn. Corporate Actions
2569 Jersey City, NJ 07310 100 William Street,
Galleria
By Facsimile: New York, NY 10038
(201) 324-3402
or
(201) 324-3403
Confirm by Telephone:
(201) 222-4707
Questions and requests for assistance or for additional copies of this Offer
to Purchase, the Letter of Transmittal and the Notice of Guaranteed Delivery
may be directed to the Information Agent or to the Dealer Manager at their
respective telephone numbers and location listed below. You may also contact
your banker, dealer, bank, trust company or other nominee for assistance
concerning the Offer.
The Information Agent for the Offer is:
[LOGO] GEORGESON
SHAREHOLDER
COMMUNICATIONS INC.
17 State Street, 10th Floor
New York, New York 10004
Banks and Brokers Call Collect: (212) 440-9800
All Others Call Toll-Free: (800) 223-2064
The Dealer Manager for the Offer is:
MORGAN STANLEY DEAN WITTER
Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
(212) 761-6531
<PAGE>
Exhibit (a)(2)
LETTER OF TRANSMITTAL
To Tender Shares of Common Stock
(including the associated Preferred Share Purchase Rights)
and
Shares of ESOP Convertible Preferred Stock
of
TJ International, Inc.
Pursuant to the Offer to Purchase Dated November 30, 1999
by
WTJ, Inc.,
a wholly owned subsidiary of
Weyerhaeuser Company
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 8:00 P.M., NEW YORK CITY TIME
ON WEDNESDAY, JANUARY 5, 2000, UNLESS THE OFFER IS EXTENDED.
To: First Chicago Trust Company of New York, as Depositary
By Mail: By Overnight Courier: By Hand:
First Chicago Trust First Chicago Trust First Chicago Trust
Company Company Company
of New York of New York of New York
Suite 4660 Corporate Actions, c/o Securities Transfer
P.O. Box 2569 Suite 4660 and
Jersey City, NJ 07303- 525 Washington Blvd, Reporting Services Inc.
2569 3rd Floor Attn: Corporate Actions
Jersey City, NJ 07310 100 William Street,
Galleria
New York, NY 10038
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OR TRANSMISSION OF
INSTRUCTIONS VIA A FACSIMILE NUMBER, OTHER THAN AS SET FORTH ABOVE, DOES NOT
CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be used either if certificates for Shares
(as defined below) are to be forwarded herewith or, unless an Agent's Message
(as defined herein) is utilized, if delivery of Shares is to be made by book-
entry transfer to an account maintained by the Depositary (as defined herein)
at the Book-Entry Transfer Facility as defined in and pursuant to the
procedures described in Section 2 of the Offer to Purchase. Stockholders who
deliver Shares by book-entry transfer are referred to herein as "Book-Entry
Stockholders" and other stockholders are referred to herein as "Certificated
Stockholders". Stockholders whose certificates for Shares are not immediately
available or who cannot deliver either the certificates for, or a Book-Entry
Confirmation (as defined in Section 2 of the Offer to Purchase) with respect
to, their Shares and all other documents required hereby to the Depositary
prior to the Expiration Date (as defined in Section 1 of the Offer to
Purchase) must tender their Shares in accordance with the guaranteed delivery
procedures described in Section 2 of the Offer to Purchase. See Instruction 2.
Delivery of documents to the Book-Entry Transfer Facility does not constitute
delivery to the Depositary.
DESCRIPTION OF SHARES TENDERED
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Name(s) and Address(es) of
Registered Holder(s)
(Please fill in exactly as
name(s) appear(s) on Shares Tendered
certificate(s)) (Attach list, if necessary)
- ----------------------------------------------------------------------------------------
Number of
Share Number of Shares Number of Preferred
Certificate Represented by Common Shares Shares
Number(s)(1) Certificate(s)(1) Tendered(2) Tendered(2)
------------------------------------------------------------
<S> <C> <C> <C> <C>
------------------------------------------------------------
------------------------------------------------------------
------------------------------------------------------------
------------------------------------------------------------
Total Shares
</TABLE>
- -------------------------------------------------------------------------------
(1) Need not be completed by Book-Entry Stockholders.
(2) Unless otherwise indicated, it will be assumed that all Shares
described above are being tendered. See Instruction 4.
1
<PAGE>
Holders of Common Shares (as defined below) will be required to tender one
Right (as defined herein) for each Common Share tendered to effect a valid
tender of such Common Share. Unless and until the Distribution Date (as
defined in the Offer to Purchase) occurs, the Rights are represented by and
transferred with the Common Shares. Accordingly, if the Distribution Date does
not occur prior to the Expiration Date, a tender of Common Shares will
constitute a tender of the associated Rights. If, however, pursuant to the
Rights Agreement (as defined herein) or otherwise, a Distribution Date does
occur, certificates representing a number of Rights equal to the number of
Common Shares being tendered must be delivered to the Depositary in order for
such Common Shares to be validly tendered. If a Distribution Date has
occurred, a tender of Common Shares without Rights constitutes an agreement by
the tendering stockholder to deliver certificates representing a number of
Rights equal to the number of Common Shares tendered pursuant to the Offer to
the Depositary within three trading days (as defined herein) after the date
such certificates are distributed. The Purchaser (as defined herein) reserves
the right to require that it receive such certificates prior to accepting
Common Shares for payment. Payment for Common Shares tendered and purchased
pursuant to the Offer will be made only after timely receipt by the Depositary
of, among other things, such certificates, if such certificates have been
distributed to holders of Shares. The Purchaser will not pay any additional
consideration for the Rights tendered pursuant to the Offer.
[_]CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
MADE TO AN ACCOUNT MAINTAINED BY THE DEPOSITARY WITH THE BOOK-ENTRY
TRANSFER FACILITY AND COMPLETE THE FOLLOWING (ONLY PARTICIPANTS IN THE
BOOK-ENTRY TRANSFER FACILITY MAY DELIVER SHARES BY BOOK-ENTRY TRANSFER):
Name of Tendering Institution ___________________________________________
Account Number __________________________________________________________
Transaction Code Number _________________________________________________
[_]CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE
OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE
THE FOLLOWING:
Name(s) of Registered Owners(s) _________________________________________
Date of Execution of Notice of Guaranteed Delivery ______________________
Name of Institution that Guaranteed Delivery ____________________________
If delivered by book-entry transfer:
Name of Tendering Institution _______________________________________
Account Number at Book-Entry Transfer Facility ______________________
Transaction Code Number _____________________________________________
2
<PAGE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
Ladies and Gentlemen:
The undersigned hereby tenders to WTJ, Inc., a Delaware corporation (the
"Purchaser"), which is a wholly owned subsidiary of Weyerhaeuser Company, a
Washington corporation, the above-described shares of common stock, par value
$1.00 per share (the "Common Shares"), and the above-described shares of ESOP
Convertible Preferred Stock (the "Preferred Shares" and together with the
Common Shares, the "Shares") of TJ International, Inc., a Delaware corporation
(the "Company"), together, in the case of the Common Shares, with the
associated Preferred Share Purchase Rights (the "Rights") issued pursuant to
the Company's Rights Agreement dated August 26, 1999 (as amended from time to
time, the "Rights Agreement"), upon the terms and subject to the conditions
set forth in the Purchaser's Offer to Purchase dated November 30, 1999 (the
"Offer to Purchase"), and this Letter of Transmittal (which, together with any
amendments or supplements thereto or hereto, collectively constitute the
"Offer"), receipt of which is hereby acknowledged. Unless the context
otherwise requires, all references to Common Shares include the associated
Rights, and all references to Rights include the benefits that may inure to
holders of the Rights pursuant to the Rights Agreement.
Upon the terms of the Offer, subject to, and effective upon, acceptance for
payment of, and payment for, the Shares tendered herewith in accordance with
the terms of the Offer, the undersigned hereby sells, assigns and transfers
to, or upon the order of, the Purchaser all right, title and interest in and
to all the Shares that are being tendered hereby (and any and all other Shares
or other securities or rights issued or issuable in respect thereof on or
after November 23, 1999), and irrevocably constitutes and appoints First
Chicago Trust Company of New York (the "Depositary"), the true and lawful
agent and attorney-in-fact of the undersigned, with full power of substitution
(such power of attorney being deemed to be an irrevocable power coupled with
an interest), to the full extent of the undersigned's rights with respect to
such Shares (and any such other Shares or securities or rights), (a) to
deliver certificates for such Shares (and any such other Shares or securities
or rights) or transfer ownership of such Shares (and any such other Shares or
securities or rights) on the account books maintained by the Book-Entry
Transfer Facility together, in any such case, with all accompanying evidences
of transfer and authenticity to, or upon the order of, the Purchaser, (b) to
present such Shares (and any such other Shares or securities or rights) for
transfer on the Company's books and (c) to receive all benefits and otherwise
exercise all rights of beneficial ownership of such Shares (and any such other
Shares or securities or rights), all in accordance with the terms of the
Offer.
The undersigned hereby represents and warrants that the undersigned has full
power and authority to tender, sell, assign and transfer the tendered Shares
(and any and all other Shares or other securities or rights issued or issuable
in respect of such Shares on or after November 23, 1999) and, when the same
are accepted for payment by the Purchaser, the Purchaser will acquire good
title thereto, free and clear of all liens, restrictions, claims and
encumbrances, and the same will not be subject to any adverse claim. The
undersigned will, upon request, execute any additional documents deemed by the
Depositary or the Purchaser to be necessary or desirable to complete the sale,
assignment and transfer of the tendered Shares (and any and all such other
Shares or securities or rights).
All authority conferred or agreed to be conferred pursuant to this Letter of
Transmittal shall be binding upon the successors, assigns, heirs, executors,
administrators and legal representatives of the undersigned and shall not be
affected by, and shall survive, the death or incapacity of the undersigned.
Except as stated in the Offer to Purchase this tender is irrevocable.
The undersigned hereby irrevocably appoints Robert A. Dowdy and Sandy D.
McDade, and each of them, and any other designees of the Purchaser, the
attorneys-in-fact and proxies of the undersigned, each with full power of
substitution, to vote at any annual, special or adjourned meeting of the
Company's stockholders or otherwise in such manner as each such attorney-in-
fact and proxy or his substitute shall in his sole discretion deem proper with
respect to, to execute any written consent concerning any matter as each such
attorney-in-fact and proxy or his substitute shall in his sole discretion deem
proper with respect to, and to otherwise act as each such attorney-in-fact and
proxy or his substitute shall in his sole discretion deem proper with respect
to, the Shares tendered hereby that have been accepted for payment by the
Purchaser prior to the time any such action is taken and with respect to which
the undersigned is entitled to vote (and any and all other Shares or other
securities or rights issued or issuable in respect of such Shares on or after
November 23, 1999). This
3
<PAGE>
appointment is effective when, and only to the extent that, the Purchaser
accepts such Shares for payment as provided in the Offer to Purchase. This
power of attorney and proxy are irrevocable and are granted in consideration
of the acceptance for payment of such Shares in accordance with the terms of
the Offer. Upon such acceptance for payment, all prior powers of attorney,
proxies and consents given by the undersigned with respect to such Shares (and
any such other Shares or securities or rights) will, without further action,
be revoked and no subsequent powers of attorney, proxies, consents or
revocations may be given (and, if given, will not be effective) by the
undersigned.
The undersigned understands that the valid tender of Shares pursuant to any
of the procedures described in Section 2 of the Offer to Purchase and in the
Instructions hereto will constitute a binding agreement between the
undersigned and the Purchaser upon the terms and subject to the conditions of
the Offer.
Unless otherwise indicated herein under "Special Payment Instructions",
please issue the check for the purchase price and/or return any certificates
for Shares not tendered or accepted for payment in the name(s) of the
registered holder(s) appearing under "Description of Shares Tendered".
Similarly, unless otherwise indicated under "Special Delivery Instructions",
please mail the check for the purchase price and/or return any certificates
for Shares not tendered or accepted for payment (and accompanying documents,
as appropriate) to the address(es) of the registered holder(s) appearing under
"Description of Shares Tendered". In the event that both "Special Delivery
Instructions" and "Special Payment Instructions" are completed, please issue
the check for the purchase price and/or return any certificates for Shares not
tendered or accepted for payment (and any accompanying documents, as
appropriate) in the name of, and deliver such check and/or return such
certificates (and any accompanying documents, as appropriate) to, the person
or persons so indicated. Please credit any Shares tendered herewith by book-
entry transfer that are not accepted for payment by crediting the account at
the Book-Entry Transfer Facility designated above. The undersigned recognizes
that the Purchaser has no obligation pursuant to "Special Payment
Instructions" to transfer any Shares from the name of the registered holder
thereof if the Purchaser does not accept for payment any of the Shares so
tendered.
[_]CHECK HERE IF ANY OF THE CERTIFICATES REPRESENTING SHARES THAT YOU OWN HAVE
BEEN LOST OR DESTROYED AND SEE INSTRUCTION 11.
Number of Shares represented by the lost or destroyed
certificates:
SPECIAL PAYMENT INSTRUCTIONS (See SPECIAL DELIVERY INSTRUCTIONS
Instructions 5, 6 and 7) (See Instructions 5, 6 and 7)
To be completed ONLY if certifi- To be completed ONLY if certifi-
cates for Shares not tendered or cates for Shares not tendered or
not accepted for payment and/or not accepted for payment and/or
the check for the purchase price the check for the purchase price
of Shares accepted for payment of Shares accepted for payment
are to be issued in the name of are to be sent to someone other
someone other than the under- than the undersigned, or to the
signed. undersigned at an address other
than that above.
Issue[_] Check [_] Certifi-
cate(s) to: Mail[_] Check [_] Certifi-
cate(s) to:
Name _____________________________
(Please Print) Name______________________________
(Please Print)
Address __________________________
Address __________________________
__________________________________
(Include Zip Code) __________________________________
(Include Zip Code)
__________________________________
(Taxpayer Identification or __________________________________
Social Security Number) (Taxpayer Identification or
Social Security Number)
4
<PAGE>
SIGN HERE
(Also Complete Substitute Form W-9 Below)
(right arrow) ------------------------------------------------------- (left
arrow)
(right arrow) ------------------------------------------------------- (left
arrow)
(Signature(s) of Stockholder(s))
Dated:
(Must be signed by registered holder(s) as name(s)
appear(s) on the certificate(s) for the Shares or on a
security position listing or by person(s) authorized
to become registered holder(s) by certificates and
documents transmitted herewith. If signature is by
trustees, executors, administrators, guardians,
attorneys-in-fact, officers of corporations or others
acting in a fiduciary or representative capacity,
please provide the following information and see
Instruction 5.)
Name(s)________________________________________________
-------------------------------------------------------
(Please Print)
Capacity (Full Title) _________________________________
Address _______________________________________________
-------------------------------------------------------
(Include Zip Code)
Daytime Area Code and Telephone No. ___________________
Taxpayer Identification or
Social Security Number ________________________________
(See Substitute Form W-9)
GUARANTEE OF SIGNATURE(S)
(If Required--See Instructions 1 and 5)
-------------------------------------------------------
(Authorized Signature)
-------------------------------------------------------
Name (Please Print)
-------------------------------------------------------
Name of Firm
-------------------------------------------------------
Address
-------------------------------------------------------
(Include Zip Code)
-------------------------------------------------------
Daytime Area Code and Telephone No.
Dated:
5
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. Guarantee of Signatures. No signature guarantee is required on this
Letter of Transmittal (a) if this Letter of Transmittal is signed by the
registered holder(s) (which term, for purposes of this Instruction 1, includes
any participant in the Book-Entry Transfer Facility's system whose name
appears on a security position listing as the owner of the Shares) of Shares
tendered herewith, and such registered holder(s) has not completed either the
box entitled "Special Payment Instructions" or the box entitled "Special
Delivery Instructions" on this Letter of Transmittal or (b) if such Shares are
tendered for the account of a financial institution (including most commercial
banks, savings and loan associations and brokerage houses) that is a
participant in the Security Transfer Agents Medallion Program, the New York
Stock Exchange Medallion Signature Guarantee Program or the Stock Exchange
Medallion Program (such participant, an "Eligible Institution"). In all other
cases, all signatures on this Letter of Transmittal must be guaranteed by an
Eligible Institution. See Instruction 5.
2. Requirements of Tender. This Letter of Transmittal is to be completed by
stockholders either if certificates are to be forwarded herewith or, unless an
Agent's Message is utilized, if delivery of Shares is to be made pursuant to
the procedures for book-entry transfer set forth in Section 2 of the Offer to
Purchase. For a stockholder validly to tender Shares pursuant to the Offer,
either (a) a Letter of Transmittal (or a facsimile thereof), property
completed and duly executed, together with any required signature guarantees,
or, in the case of a book-entry transfer, an Agent's Message, and any other
required documents, must be received by the Depositary at one of its addresses
set forth herein prior to the Expiration Date and either certificates for
tendered Shares must be received by the Depositary at one of such addresses or
Shares must be delivered pursuant to the procedures for book-entry transfer
described herein (and a Book-Entry Confirmation received by the Depositary),
in each case prior to the Expiration Date, or (b) the tendering stockholder
must comply with the guaranteed delivery procedures described below and in
Section 2 of the Offer to Purchase.
Stockholders whose certificates for Shares are not immediately available or
who cannot deliver their certificates and all other required documents to the
Depositary or complete the procedures for book-entry transfer prior to the
Expiration Date may tender their Shares by properly completing and duly
executing the Notice of Guaranteed Delivery pursuant to the guaranteed
delivery procedures described in Section 2 of the Offer to Purchase. Pursuant
to such procedures, (a) such tender must be made by or through an Eligible
Institution, (b) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided by the Purchaser, must be
received by the Depositary prior to the Expiration Date and (c) the
certificates for all tendered Shares in proper form for transfer (or a Book-
Entry Confirmation with respect to all such Shares), together with a Letter of
Transmittal (or a facsimile thereof), properly completed and duly executed,
with any required signature guarantees, or, in the case of a book-entry
transfer, an Agent's Message, and any other required documents, must be
received by the Depositary within three trading days after the date of
execution of such Notice of Guaranteed Delivery as provided in Section 2 of
the Offer to Purchase. A "trading day" is any day on which the Nasdaq Stock
Market is open for business.
The term "Agent's Message" means a message transmitted by the Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation which states that such Book-Entry Transfer Facility
has received an express acknowledgment from the participant in such Book-Entry
Transfer Facility tendering the Shares that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that the
Purchaser may enforce such agreement against the participant.
The method of delivery of Shares, the Letter of Transmittal and all other
required documents, including delivery through the Book-Entry Transfer
Facility, is at the election and risk of the tendering stockholder. Shares
will be deemed delivered only when actually received by the Depositary
(including, in the case of a book-entry transfer, by Book-Entry Confirmation).
If delivery is by mail, registered mail with return receipt requested,
properly insured, is recommended. In all cases, sufficient time should be
allowed to ensure timely delivery.
No alternative, conditional or contingent tenders will be accepted and no
fractional Shares will be purchased. All tendering stockholders, by execution
of this Letter of Transmittal (or facsimile hereof), waive any right to
receive any notice of the acceptance of their Shares for payment.
6
<PAGE>
3. Inadequate Space. If the space provided herein is inadequate, the
certificate numbers and/or the number of Shares should be listed on a separate
schedule attached hereto.
4. Partial Tenders (Applicable to Certificate Stockholders Only). If fewer
than all the Shares evidenced by any certificate submitted are to be tendered,
fill in the number of Shares that are to be tendered in the box entitled
"Number of Shares Tendered". In any case, new certificate(s) for the remainder
of the Shares that were evidenced by the old certificate(s) will be sent to
the registered holder, unless otherwise provided in the appropriate box on
this Letter of Transmittal, as soon as practicable after the acceptance for
payment of, and payment for, the Shares tendered herewith. All Shares
represented by certificates delivered to the Depositary will be deemed to have
been tendered unless otherwise indicated.
5. Signatures on Letter of Transmittal, Stock Powers and Endorsements. If
this Letter of Transmittal is signed by the registered holder of the Shares
tendered hereby, the signature must correspond with the name as written on the
face of the certificate(s) without any change whatsoever.
If any of the Shares tendered hereby are owned of record by two or more
joint owners, all such owners must sign this Letter of Transmittal.
If any tendered Shares are registered in different names on several
certificates, it will be necessary to complete, sign and submit as many
separate Letters of Transmittal as there are different registrations of
certificates.
If this Letter of Transmittal or any certificates or stock powers are signed
by trustees, executors, administrators, guardians, attorneys-in-fact, officers
of corporations or others acting in a fiduciary or representative capacity,
such persons should so indicate when signing, and proper evidence satisfactory
to the Purchaser of their authority so to act must be submitted.
When this Letter of Transmittal is signed by the registered owner(s) of the
Shares listed and transmitted hereby, no endorsements of certificates or
separate stock powers are required unless payment is to be made to, or
certificates for Shares not tendered or accepted for payment are to be issued
to, a person other than the registered owner(s). Signatures on such
certificates or stock powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered owner(s) of the certificates listed, the certificates must be
endorsed or accompanied by appropriate stock powers, in either case signed
exactly as the name or names of the registered owner or owners appear on the
certificates. Signatures on such certificates or stock powers must be
guaranteed by an Eligible Institution.
6. Stock Transfer Taxes. The Purchaser will pay any stock transfer taxes
with respect to the transfer and sale of Shares to it or its order pursuant to
the Offer. If, however, payment of the purchase price is to be made to, or if
certificates for Shares not tendered or accepted for payment are to be
registered in the name of, any person(s) other than the person(s) signing this
Letter of Transmittal, the amount of any stock transfer taxes (whether imposed
on the registered owner(s) or such person(s)) payable on account of the
transfer to such person(s) will be deducted from the purchase price unless
satisfactory evidence of the payment of such taxes or exemption therefrom is
submitted.
Except as provided in this Instruction 6, it will not be necessary for
transfer tax stamps to be affixed to the certificates listed in this Letter of
Transmittal.
7. Special Payment and Delivery Instructions. If a check is to be issued in
the name of, and/or certificates for Shares not accepted for payment are to be
returned to, a person other than the signer of this Letter of Transmittal or
if a check is to be sent and/or such certificates are to be returned to a
person other than the signer of this Letter of Transmittal or to an address
other than that shown above, the appropriate boxes on this Letter of
Transmittal should be completed.
8. Waiver of Conditions. The Purchaser reserves the right, subject to the
Merger Agreement and to the applicable rules and regulations of the
Commission, to waive any of the specified conditions of the Offer, in whole or
in part, in the case of any Shares tendered. If any of the conditions of the
Offer set (other than the Minimum Condition (as defined in the Offer to
Purchase)) is not satisfied on the Expiration Date, then, if requested by the
Company, the Purchaser must extend the
7
<PAGE>
Offer one or more times (the period of each such extension to be determined by
the Purchaser) for up to 30 days in the aggregate for all such extensions,
provided that at the time of such extension any such condition is reasonably
capable of being satisfied and the Company has not received a Takeover
Proposal (as defined in the Offer to Purchase).
9. 31% Backup Withholding. In order to avoid backup withholding of Federal
income tax on payments of cash pursuant to the Offer, a stockholder
surrendering Shares in the Offer must, unless an exemption applies, provide
the Depositary with such stockholder's correct taxpayer identification number
("TIN") on Substitute Form W-9 below in this Letter of Transmittal and certify
under penalties of perjury that such TIN is correct and that such stockholder
is not subject to backup withholding. If a stockholder does not provide such
stockholder's correct TIN or fails to provide the certifications described
above, the Internal Revenue Service (the "IRS") may impose a $50 penalty on
such stockholder and payment of cash to such stockholder pursuant to the Offer
may be subject to backup withholding of 31%.
Backup withholding is not an additional income tax. Rather, the amount of
the backup withholding can be credited against the U.S. federal income tax
liability of the person subject to the backup withholding, provided that the
required information is given to the IRS. If backup withholding results in an
overpayment of tax, a refund can be obtained by the stockholder upon filing an
income tax return.
The stockholder is required to give the Depositary the TIN (i.e., social
security number or employer identification number) of the record owner of the
Shares. If the Shares are held in more than one name or are not in the name of
the actual owner, consult the enclosed "Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9" for additional guidance
on which number to report.
The box in Part 3 of the Substitute Form W-9 may be checked if the tendering
stockholder has not been issued a TIN and has applied for a TIN or intends to
apply for a TIN in the near future. If the box in Part 3 is checked, the
stockholder or other payee must also complete the Certificate of Awaiting
Taxpayer Identification Number below in order to avoid backup withholding.
Notwithstanding that the box in Part 3 is checked and the Certificate of
Awaiting Taxpayer Identification Number is completed, the Depositary will
withhold 31% on all payments made prior to the time a properly certified TIN
is provided to the Depositary. However, such amounts will be refunded to such
stockholder if a TIN is provided to the Depositary within 60 days.
Certain stockholders (including, among others, all corporations and certain
foreign individuals and entities) are not subject to backup withholding.
Noncorporate foreign stockholders should complete and sign the main signature
form and a Form W-8, Certificate of Foreign Status, a copy of which may be
obtained from the Depositary, in order to avoid backup withholding. See the
enclosed "Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9" for more instructions.
10. Requests for Assistance or Additional Copies. Questions and requests for
assistance or additional copies of the Offer to Purchase, this Letter of
Transmittal, the Notice of Guaranteed Delivery and the Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9 may be
directed to the Information Agent at its address set forth below.
11. Lost, Destroyed or Stolen Certificates. If any certificate representing
Shares has been lost, destroyed or stolen, the stockholder should promptly
notify the Depositary by checking the box immediately preceding the special
payment/special delivery instructions and indicating the number of Shares
lost. The stockholder will then be instructed as to the steps that must be
taken in order to replace the certificate. This Letter of Transmittal and
related documents cannot be processed until the procedures for replacing lost
or destroyed certificates have been followed.
IMPORTANT: This Letter of Transmittal (or a facsimile hereof), together with
any required signature guarantees, or, in the case of a book-entry transfer,
an Agent's Message, and any other required documents, must be received by the
Depositary prior to the Expiration Date and either certificates for tendered
Shares must be received by the Depositary or Shares must be delivered pursuant
to the procedures for book-entry transfer, in each case prior to the
Expiration Date, or the tendering stockholder must comply with the procedures
for guaranteed delivery.
8
<PAGE>
PAYER'S NAME: FIRST CHICAGO TRUST COMPANY OF NEW YORK
Part 1--PLEASE PROVIDE YOUR
TIN IN THE BOX AT RIGHT AND ----------------------
SUBSTITUTE CERTIFY BY SIGNING AND Social Security
Form W-9 DATING BELOW Number(s)
OR
Taxpayer identification
Number(s)
Part 2--Certification--Under penalties of perjury, I
certify that:
Department of
the Treasury (1) the number shown on this form is my Part 3--
Internal correct Taxpayer Identification
Revenue Service Number (or I am waiting for a number
to be issued to me) and
Awaiting
(2) I am not subject to backup TIN [_]
withholding because (a) I am exempt -----------
from backup withholding or (b) I have
not been notified by the Internal
Revenue Service (the "IRS") that I am
subject to backup withholding as a
result of a failure to report all
interest or dividends or (c) the IRS
has notified me that I am no longer
subject to backup withholding.
--------------------------------------------------------
Part 4--
Payer's Exempt TIN
Request for [_]
Taxpayer
Identification Number
(TIN)
--------------------------------------------------------
Certification instructions--You must cross out item
(2) in Part 2 above if you have been notified by the
IRS that you are subject to backup withholding be-
cause of under-reporting interest or dividends on
your tax returns. However, if after being notified by
the IRS that you were subject to backup withholding
you received another notification from the IRS stat-
ing that you are no longer subject to backup with-
holding, do not cross out such item (2). If you are
exempt from backup withholding, check the box in Part
4 above.
SIGN
HERE
--------------------------------------------------------------------------
(right
arrow)
SIGNATURE ____________________________________ DATE _________________
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED
THE BOX IN PART 3 OF SUBSTITUTE FORM W-9
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification
number has not been issued to me, and either (a) I have mailed or
delivered an application to receive a taxpayer identification number
to the appropriate Internal Revenue Service Center or Social Security
Administration Office or (b) I intend to mail or deliver such an
application in the near future. I understand that if I do not provide
a taxpayer identification number to the Depositary, 31% of all
reportable payments made to me will be withheld, but will be refunded
if I provide a certified taxpayer identification number within 60
days.
----------------------------------------------- --------------------
Signature Date
NOTE: FAILURE TO COMPLETE AND RETURN THIS SUBSTITUTE FORM W-9 MAY RESULT
IN BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT
TO THE OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR
CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM
W-9 FOR ADDITIONAL INFORMATION.
9
<PAGE>
The Information Agent for the Offer is:
[LOGO] GEORGESON
SHAREHOLDER
COMMUNICATIONS INC.
17 State Street, 10th Floor
New York, New York 10004
Banks and Brokers Call Collect: (212) 440-9800
All others Call Toll-Free: (800) 223-2064
The Dealer Manager for the Offer is:
MORGAN STANLEY DEAN WITTER
Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
(212) 761-6531
November 30, 1999
10
<PAGE>
EXHIBIT (a)(3)
NOTICE OF GUARANTEED DELIVERY
for
Tender of Shares of Common Stock
(including the associated Preferred Share Purchase Rights)
and
ESOP Convertible Preferred Stock
of
TJ International, Inc.
As set forth in Section 2 of the Offer to Purchase (as defined below), this
form or one substantially equivalent hereto must be used to accept the Offer
(as defined below) if certificates for shares of Common Stock, par value $1.00
per share (the "Common Shares"), or shares of ESOP Convertible Preferred Stock
(the "Preferred Shares" and, together with the Common Shares, the "Shares") of
TJ International, Inc., a Delaware corporation (the "Company"), together, in
the case of Common Shares, with the associated Preferred Share Purchase Rights
(the "Rights") issued pursuant to the Company's Rights Agreement dated August
26, 1999 (as amended from time to time, the "Rights Agreement"), are not
immediately available or if the procedures for book-entry transfer cannot be
completed on a timely basis or time will not permit all required documents to
reach the Depositary (as defined in the Offer to Purchase) prior to the
Expiration Date (as defined in Section 1 of the Offer to Purchase). This form
may be delivered by hand to the Depositary or transmitted by telegram,
facsimile transmission or mail to the Depositary and must include a guarantee
by an Eligible Institution (as defined in Section 2 of the Offer to Purchase).
See Section 2 of the Offer to Purchase. Unless the context otherwise requires,
all references to Common Shares shall include the associated Rights, and all
references to Rights include the benefits that may inure to holders of the
Rights pursuant to the Rights Agreement.
The Depositary for the Offer is:
First Chicago Trust Company Of New York
By Overnight Courier: By Hand:
By Mail:
First Chicago Trust First Chicago Trust
First Chicago Trust Company Company
Company of New York of New York
of New York Corporate Actions, Suite c/o Securities Transfer
Corporate Actions, Suite 4660 and
4660 525 Washington Blvd, 3rd Reporting Services Inc.
P.O. Box 2569 Floor Attn: Corporate Actions
Jersey City, NJ 07303- Jersey City, NJ 07310 100 William Street,
2569 Galleria
By Facsimile: New York, NY 10038
(201) 324-3402
or
(201) 324-3403
Confirm by Telephone:
(201) 222-4707
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS, OR TRANSMISSION OF INSTRUCTIONS
VIA A FACSIMILE NUMBER, OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A
VALID DELIVERY.
This form is not to be used to guarantee signatures. If a signature on a
Letter of Transmittal is required to be guaranteed by an Eligible Institution
under the instructions thereto, such signature guarantee must appear in the
applicable space provided in the signature box on the Letter of Transmittal.
THE ELIGIBLE INSTITUTION THAT COMPLETES THIS FORM MUST COMMUNICATE THE
GUARANTEE TO THE DEPOSITARY AND MUST DELIVER THE LETTER OF TRANSMITTAL OR AN
AGENT'S MESSAGE (AS DEFINED IN THE OFFER TO PURCHASE) AND CERTIFICATES FOR
SHARES TO THE DEPOSITARY WITHIN THE TIME PERIOD SHOWN HEREIN. FAILURE TO DO SO
COULD RESULT IN A FINANCIAL LOSS TO SUCH ELIGIBLE INSTITUTION.
THE GUARANTEE ON THE REVERSE SIDE MUST BE COMPLETED.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to WTJ, Inc., a Delaware corporation (the
"Purchaser"), which is a wholly owned subsidiary of Weyerhaeuser Company, a
Washington corporation, upon the terms and subject to the conditions set
forth in the Purchaser's Offer to Purchase, dated November 30, 1999 (the
"Offer to Purchase"), and the related Letter of Transmittal (which, together
with any amendments or supplements thereto, collectively constitute the
"Offer"), receipt of which is hereby acknowledged, the number of Shares set
forth below, all pursuant to the guaranteed delivery procedures described in
Section 2 of the Offer to Purchase.
Name(s) of Record Holder(s)_________
Number of Common Shares ____________
____________________________________
Number of Preferred Shares _________
____________________________________
Certificate Nos. (if available) ____ Please Print
____________________________________ Address(es) ________________________
____________________________________ ____________________________________
Zip Code
If Shares will be tendered by book-
entry transfer: Daytime Area Code and Tel. No. _____
Account Number at Book- Signature(s) _______________________
EntryTransfer Facility _____________
____________________________________
Dated ______________________________
GUARANTEE
(Not to be used for signature guarantee)
The undersigned, a participant in the Security Transfer Agents Medallion
Program, the New York Stock Exchange Medallion Signature Guarantee Program
or the Stock Exchange Medallion Program, hereby guarantees to deliver to the
Depositary either the certificates representing the Shares tendered hereby,
in proper form for transfer, or a Book-Entry Confirmation (as defined in the
Offer to Purchase) with respect to such Shares, in any such case together
with a properly completed and duly executed Letter of Transmittal (or a
facsimile thereof), with any required signature guarantees, or an Agent's
Message (as defined in the Offer to Purchase), and any other required
documents, within three trading days (as defined in the Offer to Purchase)
after the date hereof.
The Eligible Institution that completes this form must communicate this
guarantee to the Depositary and must deliver the Letter of Transmittal and
certificates for Shares to the Depositary within the time period shown
herein. Failure to do so could result in a financial loss to such Eligible
Institution.
Name of Firm _______________________ ____________________________________
Authorized Signature
Address ____________________________
Name _______________________________
____________________________________ Please Print
Zip Code
Title ______________________________
Area Code and Tel. No. _____________
Dated ______________________________
NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE. CERTIFICATES FOR
SHARES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL.
2
<PAGE>
Exhibit (a)(4)
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
(including the associated Preferred Share Purchase Rights)
and
All Outstanding Shares of ESOP Convertible Preferred Stock
of
TJ International, Inc.
at
$42.00 Net Per Share
by
WTJ, Inc.,
a wholly owned subsidiary of
Weyerhaeuser Company
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 8:00 P.M.,
NEW YORK CITY TIME, ON WEDNESDAY, JANUARY 5, 2000, UNLESS EXTENDED.
November 30, 1999
To Broker, Dealers, Banks, Trust Companies and Other Nominees
We have been appointed by WTJ, Inc., a Delaware corporation (the
"Purchaser") and a wholly owned subsidiary of Weyerhaeuser Company, a
Washington corporation ("Weyerhaeuser"), to act as Dealer Manager (as defined
in the Offer to Purchase) in connection with the Purchaser's offer to purchase
all the outstanding shares of common stock, par value $1.00 per share (the
"Common Shares"), and all the outstanding shares of ESOP Convertible Preferred
Stock (the "Preferred Shares" and, together with the Common Shares, the
"Shares") of TJ International, Inc., a Delaware corporation (the "Company"),
together, in the case of the Common Shares, with the associated Preferred
Share Purchase Rights (the "Rights") issued pursuant to the Company's Rights
Agreement dated August 26, 1999 (as amended from time to time, the "Rights
Agreement"), at $42.00 per Share, in each case net to the seller in cash, upon
the terms and subject to the conditions set forth in the Purchaser's Offer to
Purchase dated November 30, 1999 (the "Offer to Purchase"), and the related
Letter of Transmittal (which, together with any supplements or amendments
thereto, collectively constitute the "Offer").
We urge you to contact your clients promptly. Please note that the Offer and
withdrawal rights will expire at 8:00 P.M., New York City time, on Wednesday,
January 5, 2000, unless extended.
Please furnish copies of the enclosed materials to those of your clients for
whom you hold Shares registered in your name or in the name of your nominee.
Unless the context otherwise requires, all references to Common Shares include
the associated Rights, and all references to Rights include benefits that may
enure to holders of the Rights pursuant to the Rights Agreement. Enclosed
herewith are copies of the following documents:
<PAGE>
1. Offer to Purchase dated November 30, 1999;
2. Letter of Transmittal to be used by stockholders of the Company
accepting the Offer;
3. Letter to Stockholders of the Company from the Chairman and Chief
Executive Officer of the Company, accompanied by the Company's
Solicitation/Recommendation Statement on Schedule 14D-9 filed with the
Securities and Exchange Commission and mailed to stockholders;
4. A printed form letter that may be sent to your clients for whose
account you hold Shares in your name or in the name of a nominee, with
space provided for obtaining such client's instructions with regard to the
Offer;
5. Notice of Guaranteed Delivery;
6. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9; and
7. Return envelope addressed to First Chicago Trust Company of New York,
the Depositary.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER THAT NUMBER OF
SHARES THAT WOULD REPRESENT AT LEAST A MAJORITY OF ALL SHARES (DETERMINED ON A
FULLY DILUTED BASIS FOR ALL OUTSTANDING STOCK OPTIONS AND ANY OTHER RIGHTS TO
ACQUIRE SHARES) ON THE DATE OF PURCHASE AND (2) ANY WAITING PERIOD UNDER THE
HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976 APPLICABLE TO THE
PURCHASE OF SHARES PURSUANT TO THE OFFER HAVING EXPIRED OR BEEN TERMINATED.
The Board of Directors of the Company unanimously (A) approved the Merger
Agreement (as defined below), the Offer and the Merger, (B) determined that
the transactions contemplated by the Merger Agreement, including the Offer and
the Merger, are fair to and in the best interests of the Company and its
stockholders and (C) recommends that the stockholders of the Company accept
the Offer and tender their Shares pursuant to the Offer.
The Offer is being made pursuant to the Agreement and Plan of Merger, dated
November 23, 1999 (the "Merger Agreement"), among Weyerhaeuser, the Purchaser
and the Company pursuant to which, following the consummation of the Offer and
the satisfaction or waiver of certain conditions, the Purchaser will be merged
with and into the Company, with the Company surviving the merger as a
subsidiary of Weyerhaeuser (the "Merger"). In the Merger, each outstanding
Share (other than Shares owned by the Company or by any subsidiary of the
Company or by Weyerhaeuser, the Purchaser or any other subsidiary of
Weyerhaeuser or by stockholders, if any, who are entitled to and who properly
exercise appraisal rights under Delaware law) will be converted into the right
to receive $42.00 per Share, without interest, or such higher price as set
forth in the Merger Agreement and described in the Offer to Purchase.
In all cases, payments for Shares accepted for payment pursuant to the Offer
will be made only after timely receipt by First Chicago Trust Company of New
York (the "Depositary") of (a) certificates for (or a timely Book-Entry
Confirmation (as defined in the Offer to Purchase) such Shares, (b) a Letter
of Transmittal (or a facsimile thereof), properly completed and duly executed,
with any required signature guarantees, or, in the case of a book-entry
transfer effected pursuant to the procedures described in Section 2 of the
Offer to Purchase, an Agent's Message (as defined in the Offer to Purchase),
and (c) any other documents required by the Letter of Transmittal.
Accordingly, tendering shareholders may be paid at different times depending
upon when certificates for Shares or Book-Entry Confirmations with respect to
Shares are actually received by the Depositary. The Purchaser shall not have
any obligation to pay interest on the purchase price for tendered Shares,
whether or not the Purchaser exercises its right to extend the Offer.
Neither the Purchaser nor Weyerhaeuser will pay any fees or commissions to
any broker or dealer or other person (other than the Dealer Manager and the
Information Agent as described in the Offer to Purchase) in connection with
the solicitation of tenders of Shares pursuant to the Offer. You will be
reimbursed upon request
2
<PAGE>
for customary mailing and handling expenses incurred by you in forwarding the
enclosed offering materials to your customers.
Questions and requests for additional copies of the enclosed material may be
directed to the Information Agent or the Dealer Manager at their respective
addresses and telephone numbers set forth on the back cover of the enclosed
Offer to Purchase.
Very truly yours,
MORGAN STANLEY & CO.
Incorporated
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL RENDER YOU OR
ANY OTHER PERSON THE AGENT OF THE PURCHASER, WEYERHAEUSER, THE COMPANY, THE
DEALER MANAGER, THE DEPOSITARY, THE INFORMATION AGENT OR ANY AFFILIATE THEREOF
OR AUTHORIZE YOU OR ANY OTHER PERSON TO GIVE ANY INFORMATION OR USE ANY
DOCUMENT OR MAKE ANY STATEMENTS ON BEHALF OF ANY OF THEM WITH RESPECT TO THE
OFFER OTHER THAN THE ENCLOSED DOCUMENTS AND THE STATEMENT CONTAINED THEREIN.
3
<PAGE>
Exhibit (a)(5)
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
(including the associated Preferred Share Purchase Rights)
and
All Outstanding Shares of ESOP Convertible Preferred Stock
of
TJ International, Inc.
at
$42.00 Net Per Share
by
WTJ, Inc.,
a wholly owned subsidiary of
Weyerhaeuser Company
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 8:00 P.M., NEW YORK CITY
TIME, ON WEDNESDAY, JANUARY 5, 2000, UNLESS THE OFFER EXTENDED.
November 30, 1999
To Our Clients:
Enclosed for your consideration is an Offer to Purchase dated November 30,
1999 (the "Offer to Purchase"), and a related Letter of Transmittal (which,
together with any amendments or supplements thereto, collectively constitute
the "Offer") relating to an offer by WTJ, Inc., a Delaware corporation (the
"Purchaser") and a wholly owned subsidiary of Weyerhaeuser Company, a
Washington corporation ("Weyerhaeuser"), to purchase shares of common stock,
par value $1.00 per share (the "Common Shares"), and shares of ESOP
Convertible Preferred Stock (the "Preferred Shares" and, together with the
Common Shares, the "Shares") of TJ International, Inc., a Delaware corporation
(the "Company"), together, in the case of the Common Stock, with the
associated Preferred Share Purchase Rights (the "Rights") issued pursuant to
the Company's Rights Agreement dated August 26, 1999 (as amended from time to
time, the "Rights Agreement"), at $42.00 per Share, in each case net to the
seller in cash, upon the terms and subject to the conditions set forth in the
Offer. Also enclosed is the Letter to Stockholders of the Company from the
Chairman and Chief Executive Officer of the Company accompanied by the
Company's Solicitation/Recommendation Statement on Schedule 14D-9. Unless the
context otherwise requires, all references to Shares include the associated
Rights, and all references to Rights include the benefits that may enure to
holders of the Rights pursuant to the Rights Agreement.
We are the holder of record of Shares held by us for your account. A tender
of such Shares can be made only by us as the holder of record and pursuant to
your instructions. The Letter of Transmittal is furnished to you for your
information only and cannot be used to tender Shares held by us for your
account.
We request instructions as to whether you wish to tender any of or all the
Shares held by us for your account, pursuant to the terms and conditions set
forth in the Offer.
Your attention is directed to the following:
1. The tender price is $42.00 per Share, net to the seller in cash, upon
the terms and subject to the conditions set forth in the Offer.
<PAGE>
2. The Board of Directors of the Company unanimously (A) approved the
Merger Agreement (as defined below), the Offer and the Merger (as defined
below) (B) determined that the transactions contemplated by the Merger
Agreement, including each of the Offer and the Merger, are fair to, and in
the best interests of, the Company and its stockholders and (C) recommends
that the stockholders of the Company accept the Offer and tender their
Shares pursuant to the Offer.
3. The Offer is being made for all outstanding Shares.
4. The Offer is being made pursuant to the Agreement and Plan of Merger
dated November 23, 1999 (the "Merger Agreement"), among Weyerhaeuser, the
Purchaser and the Company pursuant to which, following the consummation of
the Offer and the satisfaction or waiver of certain conditions, the
Purchaser will be merged with and into the Company, with the Company
surviving the merger as a subsidiary of Weyerhaeuser (the "Merger"). In the
Merger, each outstanding Share (other than Shares owned by the Company or
by any subsidiary of the Company or by Weyerhaeuser, the Purchaser or any
other subsidiary of Weyerhaeuser or by stockholders, if any, who are
entitled to and who properly exercise appraisal rights under Delaware law)
will be converted into the right to receive $42.00 per Share, without
interest, as set forth in the Merger Agreement and described in the Offer
to Purchase.
5. The Offer is conditioned upon, among other things, there being validly
tendered and not withdrawn prior to the expiration of the Offer that number
of Shares which would represent at least 50.1% of all Fully Diluted Shares
(as defined in the Offer to Purchase) on the date of purchase.
6. The Offer and withdrawal rights will expire at 8.00 P.M., New York
City time, on Wednesday, January 5, 2000 unless the Offer is extended by
the Purchaser.
7. The Purchaser will pay any stock transfer taxes with respect to the
transfer and sale of Shares to it or its order pursuant to the Offer,
except as otherwise provided in Instruction 6 of the Letter of Transmittal.
8. The Preferred Shares may only be tendered by the trustee for the
Company's Investment Plan (as defined in the Offer to Purchase).
Accordingly, holders of beneficial interests in the Preferred Shares who
wish to tender such shares should do so by delivering appropriate
instructions to the trustee.
If you wish to have us tender any of or all your Shares, please so instruct
us by completing, executing, detaching and returning to us the instruction
form set forth below. An envelope to return your instructions to us is
enclosed. If you authorize tender of your Shares, all such Shares will be
tendered unless otherwise specified below. Your instructions to us should be
forwarded promptly to permit us to submit a tender on your behalf prior to the
expiration of the Offer.
In all cases, payments for Shares accepted for payment pursuant to the Offer
will be made only after timely receipt by First Chicago Trust Company of New
York (the "Depositary"), of (a) certificates for (or a timely Book-Entry
Confirmation (as defined in the Offer to Purchase) with respect to) such
Shares, (b) a Letter of Transmittal (or a facsimile thereof), properly
completed and duly executed, with any required signature guarantees, or, in
the case of a book-entry transfer effected pursuant to the procedures
described in Section 2 of the Offer to Purchase, an Agent's Message (as
defined in the Offer to Purchase), and (c) any other documents required by the
Letter of Transmittal. Accordingly, tendering shareholders may be paid at
different times depending upon when certificates for Shares or Book-Entry
Confirmations with respect to Shares are actually received by the Depositary.
The Purchaser does not have any obligation to pay interest on the purchase
price for tendered Shares, whether or not the Purchaser exercises its right to
extend the Offer.
The Offer is not being made to, nor will tenders be accepted from or on
behalf of, holders of Shares in any jurisdiction in which the making or
acceptance of the Offer would not be in compliance with the laws of such
jurisdiction. However, Weyerhaeuser and Purchaser may, in their discretion,
take such action as they may deem necessary to make the Offer in any
jurisdiction and extend the Offer to holders of Shares in such jurisdiction.
In any jurisdiction where the securities, blue sky or other laws require the
Offer to be made by a licensed broker, or dealer, the Offer will be deemed to
be made on behalf of Weyerhaeuser and Purchaser by Morgan Stanley & Co.
Incorporated, the Dealer Manager for the Offer, or one or more registered
brokers or dealers licensed under the laws of such jurisdiction.
2
<PAGE>
Instructions With Respect To The Offer To Purchase
All Outstanding Shares of Common Stock
(including the associated Preferred Share Purchase Rights)
and
All Outstanding Shares of ESOP Convertible Preferred Stock
of
TJ International, Inc.
by
WTJ, Inc.,
a wholly owned subsidiary of
Weyerhaeuser Company
The undersigned acknowledges receipt of your letter enclosing the Offer to
Purchase, dated November 30, 1999, of WTJ, Inc., a Delaware corporation and a
wholly owned subsidiary of Weyerhaeuser Company, a Washington corporation, and
the related Letter of Transmittal, relating to shares of common stock, par
value $1.00 per share (the "Common Shares"), and ESOP convertible preferred
stock (the "Preferred Shares" and, together with the common shares, the
"Shares") of TJ International, Inc., a Delaware corporation, together in the
case of the Common Shares with the associated Preferred Stock Purchase Rights
(the "Rights") pursuant to the Company's Rights Agreement dated August 26,
1999 (as amended from time to time, the "Rights Agreement"). Unless the
context otherwise requires, all references to Common Shares include the
associated Rights, and all references to Rights include the benefits that may
inure to holders of the Rights pursuant to the Rights Agreement.
This will instruct you to tender the number of Common Shares indicated below
held by you for the account of the undersigned on the terms and conditions set
forth in such Offer to Purchase and the related Letter of Transmittal.
-------------------------------------
Dated: _________________________
-------------------------------------
Number of Common Shares Signature(s)
to be Tendered:*
Shares -------------------------------------
-------------------------------------
Please print name(s)
Address _____________________________
-------------------------------------
-------------------------------------
-------------------------------------
(Include Zip Code)
Area Code and Telephone No. _________
Taxpayer Identification or Social
Security No. _______________________
- --------
* Unless otherwise indicated, it will be assumed that all your Shares are to
be tendered.
3
<PAGE>
EXHIBIT (a)(6)
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
Guidelines for Determining the Proper Identification Number to Give the
Payer.--Social Security numbers have nine digits separated by two hyphens:
i.e. 000-00-0000. Employer identification numbers have nine digits separated
by only one hyphen: i.e. 00-0000000. The table below will help determine the
number to give the payer.
- ------------------------------------- -------------------------------------
<TABLE>
<CAPTION>
Give the
SOCIAL SECURITY
For this type of account: number of--
- ------------------------------------------------
<S> <C>
1. An individual's account The individual
2. Two or more individuals The actual owner of
(joint account) the account or, if
combined funds, the
first individual on
the account(1)
3. Husband and wife (joint The actual owner of
account) the account or, if
joint funds, either
person(1)
4. Custodian account of a The minor(2)
minor (Uniform Gift to
Minors Act)
5. Adult and minor (joint The adult or, if
account) the minor is the
only contributor,
the minor(1)
6. Account in the name of The ward, minor, or
guardian or committee incompetent
for a designated ward, person(3)
minor, or incompetent
person
7.a. The usual revocable The grantor-
savings trust trustee(1)
account (grantor is
also trustee)
b. So-called trust account The actual owner(1)
that is not a legal or
valid trust under State
law
</TABLE>
<TABLE>
<CAPTION>
Give the EMPLOYER
IDENTIFICATION
For this type of account: number of--
------
<S> <C>
8. Sole proprietorship The owner(4)
account
9. A valid trust, estate, The legal entity
or pension trust (Do not furnish the
identifying number
of the personal
representative or
trustee unless the
legal entity itself
is not designated
in the account
title.)(5)
10. Corporate account The corporation
11. Religious, charitable, The organization
educational or other
exempt partnership
organization account
12. Partnership account The partnership
held in the name of the
other exempt
partnership
13. Association, club, or The organization
other tax-exempt
organization
14. A broker or registered The broker or
nominee registered nominee
15. Account with the The public entity
Department of
Agriculture in the name
of a public entity
(such as a State or
local government,
school district, or
prison) that receives
agricultural program
payments
</TABLE>
- ------------------------------------- -------------------------------------
(1) List all names first and circle the name of the person whose number you
furnish. If only one person on a joint account has a Social Security
number, that person's number must be furnished.
(2) Circle the minor's name and furnish the minor's Social Security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's Social Security number.
(4) You must show your individual name, but you may also enter your business
or "doing business as" name. You may use either your Social Security
number or employer identification number (if you have one).
(5) List first and circle the name of the legal trust, estate, or pension
trust.
Note: If no name is circled when there is more than one name, the number will
be considered to be that of the first name listed.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
Page 2
Obtaining a Number
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Card, or Form SS-
4, Application for Employer Identification Number (for business and all other
entities), at the local office of the Social Security Administration or the
Internal Revenue Service and apply for a number.
Payee Exempt from Backup Withholding
Payees specifically exempted from backup withholding on ALL payments include
the following:
. A corporation.
. A financial institution.
. An organization exempt from tax under section 501(a) of the Internal
Revenue Code of 1986, as amended (the "Code"), or an individual retirement
plan, or a custodial account under Section 403(b)(7), if the account
satisfies the requirements of Section 401(f)(2).
. The United States or any agency or instrumentalities.
. A State, the District of Columbia, a possession of the United States, or
any subdivision or instrumentality thereof.
. A foreign government, a political subdivision of a foreign government, or
any agency or instrumentality thereof.
. An international organization or any agency, or instrumentality thereof.
. A registered dealer in securities or commodities registered in the U.S.,
the District of Columbia or a possession of the U.S.
. A real estate investment trust.
. A common trust fund operated by a bank under section 584(a) of the Code.
. An exempt charitable remainder trust, or a non-exempt trust described in
Section 4947(a)(1) of the Code.
. An entity registered at all times under the Investment Company Act of
1940.
. A foreign central bank of issue.
. A middleman known in the investment community as a nominee or who is
listed in the most recent publication of the American Society of Corporate
Securities, Inc. Nominee List.
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
. Payments to nonresident aliens subject to withholding under Section 1441
of the Code.
. Payments to partnerships not engaged in a trade or business in the U.S.
and which have at least one nonresident partner.
. Payments of patronage dividends where the amount received is not paid in
money.
. Payments made by certain foreign organizations.
. Payments made to a nominee.
. Section 404(k) payments made by an ESOP.
Payments of interest not generally subject to backup withholding include the
following:
. Payments of interest on obligations issued by individuals.
Note: You may be subject to backup withholding if this interest is $600 or
more and is paid in the course of the payer's trade or business and you
have not provided your correct taxpayer identification number to the payer.
. Payments of tax-exempt interest (including exempt-interest dividends under
Section 852 of the Code).
. Payments described in Section 6049(b)(5) of the Code to nonresident
aliens.
. Payments on tax-free covenant bonds under Section 1451 of the Code.
. Payments made by certain foreign organizations.
. Payments made to a nominee.
. Mortgage interest paid to you.
Exempt payees described above should file a Form W-9 to avoid possible
erroneous backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR
TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, SIGN
AND DATE THE FORM AND RETURN IT TO THE PAYER. IF YOU ARE A NONRESIDENT ALIEN
OR A FOREIGN ENTITY NOT SUBJECT TO BACKUP WITHHOLDING, FILE WITH A PAYER A
COMPLETED INTERNAL REVENUE FORM W-8 (CERTIFICATE OF FOREIGN STATUS).
Certain payments other than interest, dividends, and patronage dividends that
are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under Section 6041, 6041A, 6042,
6044, 6049, 6050A and 6050N of the Code and the regulations promulgated
thereunder.
Privacy Act Notice.--Section 6109 of the Code requires most recipients of
dividends, interest, or other payments to give taxpayer identification numbers
to payers who must report the payments to the IRS. The IRS uses the numbers
for identification purposes. Payers must be given the numbers whether or not
recipients are required to file tax returns. Payers must generally withhold
31% of taxable interest, dividends and certain other payments to a payee who
does not furnish a taxpayer identification number to a payer. Certain
penalties may also apply.
Penalties
(1) Penalty for Failure to Furnish Taxpayer Identification Number.--If you
fail to furnish your taxpayer identification number to a payer, you are
subject to a penalty of $50 for each such failure unless your failure is due
to reasonable cause and not to willful neglect.
(2) Civil Penalty for False Information With Respect to Withholding.--If you
make a false statement with no reasonable basis that results in no imposition
of backup withholding, you are subject to a penalty of $500.
(3) Criminal Penalty for Falsifying Information.--Willfully falsifying
certifications or affirmations may subject you to criminal penalties including
fines and/or imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE
SERVICE.
<PAGE>
Exhibit (a)(7)
This announcement is neither an offer to purchase nor a solicitation of an offer
to sell Shares. The Offer is made solely by the Offer to Purchase dated November
30, 1999, and the related Letter of Transmittal and is not being made to (nor
will tenders be accepted from or on behalf of) holders of Shares in any
jurisdiction in which the making of the Offer or the acceptance thereof would
not be in compliance with the laws of such jurisdiction. In any jurisdiction
where securities, blue sky or other laws require the Offer to be made by a
licensed broker or dealer, the Offer shall be deemed to be made on behalf of the
Purchaser by Morgan Stanley & Co. Incorporated or one or more registered brokers
or dealers licensed under the laws of such jurisdiction.
Notice of Offer to Purchase for Cash
All Outstanding Shares of Common Stock
(including the associated Preferred Share Purchase Rights)
and
All Outstanding Shares of ESOP Convertible Preferred Stock
of
TJ International, Inc.
at
$42.00 Net Per Share
by
WTJ, Inc.,
a wholly owned subsidiary of
Weyerhaeuser Company
WTJ, Inc., a Delaware corporation (the "Purchaser"), a wholly owned
subsidiary of Weyerhaeuser Company, a Washington corporation ("Weyerhaeuser"),
is offering to purchase all outstanding shares of Common Stock, par value $1.00
per share (the "Common Shares"), and all outstanding shares of ESOP Convertible
Preferred Stock, par value $1.00 per share (the "Preferred Shares" and together
with the Common Shares, the "Shares"), of TJ International, Inc., a Delaware
corporation (the "Company"), together, in the case of the Common Shares, with
the associated preferred share purchase rights (the "Rights") issued pursuant to
the Company's Rights Agreement dated August 26, 1999, as amended (the "Rights
Agreement"), at a price of $42.00 per Share, net to the seller in cash, without
interest thereon, upon the terms and subject to the conditions set forth in the
Offer to Purchase dated November 30, 1999, and in the related Letter of
Transmittal (which, together with any amendments or supplements thereto,
collectively constitute the "Offer"). Unless the context otherwise requires, all
references to Common Shares include the associated Rights, and all references to
the Rights include the benefits that may enure to holders of the Rights pursuant
to the Rights Agreement.
-------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 8:00 PM, NEW YORK
CITY TIME, ON WEDNESDAY, JANUARY 5, 2000, UNLESS THE OFFER IS EXTENDED.
-------------------------------------------------------------------------
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER, THAT NUMBER OF
SHARES THAT WOULD REPRESENT AT LEAST 50.1% OF ALL OUTSTANDING COMMON SHARES ON A
FULLY DILUTED BASIS AND (2) ANY WAITING PERIOD UNDER THE HART-SCOTT-RODINO
ANTITRUST IMPROVEMENTS ACT OF 1976 APPLICABLE TO THE PURCHASE OF SHARES PURSUANT
TO THE OFFER HAVING EXPIRED OR BEEN TERMINATED.
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of November 23, 1999 (the "Merger Agreement"), among Weyerhaeuser, the
Purchaser and the Company pursuant to which, following the consummation of the
Offer and the satisfaction or waiver of certain conditions, the Purchaser will
be merged with the Company (the "Merger") with the company surviving the Merger
as a wholly owned subsidiary of Weyerhaeuser. In the Merger, each issued Share
(other than Shares owned by Weyerhaeuser, the Purchaser or the Company or any of
their wholly owned subsidiaries, or by stockholders, if any, who are entitled to
and properly exercise appraisal rights under Delaware law) will be converted
into $42.00 in cash, without interest (or such higher price as may be paid in
the Offer).
THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY (i) APPROVED THE MERGER
AGREEMENT, THE OFFER AND THE MERGER, (ii) DETERMINED THAT THE TRANSACTIONS
CONTEMPLATED BY THE MERGER AGREEMENT, INCLUDING THE OFFER AND THE MERGER, ARE
FAIR TO AND IN THE BEST INTERESTS OF THE COMPANY AND ITS STOCKHOLDERS AND
(iii) RECOMMENDS THAT THE STOCKHOLDERS OF THE COMPANY ACCEPT THE OFFER AND
TENDER THEIR SHARES PURSUANT TO THE OFFER.
For purposes of the Offer, the Purchaser will be deemed to have accepted
for payment, and thereby purchased, Shares properly tendered to the Purchaser
and not withdrawn as, if and when the Purchaser gives oral or written notice to
the Depositary for the Offer of the Purchaser's acceptance for payment of such
Shares. Upon the terms and subject to the conditions of the Offer, payment for
Shares accepted for payment pursuant to the Offer will be made by deposit of the
purchase price therefor with the Depositary, which will act as an agent for
tendering stockholders for the purpose of receiving payment from the Purchaser
and transmitting payment to tendering stockholders. In all cases, payment for
Shares accepted for payment pursuant to the Offer will be made only after timely
receipt by the Depositary of (a) certificates for such Shares or timely
confirmation of book-entry transfer of such Shares into the Depositary's account
at a Book-Entry Transfer Facility (as defined in the Offer to Purchase) pursuant
to the procedures described in Section 2 of the Offer to Purchase, (b) a Letter
of Transmittal (or a facsimile thereof), properly completed and duly executed,
with any required signature guarantees, or, in the case of a book-entry
transfer, an Agent's Message (as defined in the Offer to Purchase) and (c) any
other documents required by the Letter of Transmittal. Under no circumstances
will interest be paid on the purchase price of the Shares to be paid by the
Purchaser, regardless of any extension of the Offer or any delay in making such
payment.
The term "Expiration Date" means 8:00 PM, New York City time, on Wednesday,
January 5, 2000, unless and until the Purchaser, in its sole discretion (but
subject to the terms of the Merger Agreement), shall have extended the period of
time during which the Offer is open, in which event the term "Expiration Date"
shall mean the latest time and date on which the Offer, as so extended by the
Purchaser, shall expire. Subject to the Merger Agreement (which prohibits
certain amendments to the Offer without the consent of the Company) and the
applicable rules and regulations of the Securities and Exchange Commission, the
Purchaser reserves the right (but shall not be obligated), at any time and from
time to time, and regardless of whether or not any of the events or facts set
forth in Section 14 of the Offer to Purchase shall have occurred, (i) to extend
the period of time during which the Offer is open, and thereby delay acceptance
for payment of and the payment for any Shares, by giving oral or written notice
of such extension to the Depositary and (ii) to amend the Offer in any other
respect by giving oral or written notice of such amendment to the Depositary. If
certain of the conditions set forth in Section 14 of the Offer to Purchase have
not been satisfied or waived, then, if requested by the Company, the Purchaser
must extend the Offer one or more times (the period of each such extension to be
determined by the Purchaser) for up to 30 days in aggregate for all such
extensions, provided that at the time of such extension any such condition is
reasonably capable of being satisfied. Any extension of the Offer will be
followed by a public announcement thereof no later than 9:00 AM, New York City
time, on the next business day after the previously scheduled Expiration Date.
During any such extension, all Shares previously tendered and not withdrawn will
remain subject to the Offer, subject to the right of a tendering stockholder to
withdraw such stockholder's Shares.
Except as otherwise provided below, tenders of Shares are irrevocable.
Shares tendered pursuant to the Offer may be withdrawn pursuant to the
procedures set forth below at any time prior to the Expiration Date and, unless
theretofore accepted for payment and paid for by the Purchaser pursuant to the
Offer, may also be withdrawn at any time after January 28, 2000. For a
withdrawal to be effective, a written notice of withdrawal must be timely
received by the Depositary at one of its addresses set forth on the back cover
of the Offer to Purchase and must specify the name of the person having tendered
the Shares to be withdrawn, the number of Shares to be withdrawn and the name of
the registered holder of the Shares to be withdrawn, if different from the name
of the person who tendered the Shares. If certificates for Shares have been
delivered or otherwise identified to the Depositary, then, prior to the physical
release of such certificates, the serial numbers shown on such certificates must
be submitted to the Depositary and, unless such Shares have been tendered by an
Eligible Institution (as defined in Section 2 of the Offer to Purchase), the
signatures on the notice of withdrawal must be guaranteed by an Eligible
Institution. If Shares have been delivered pursuant to the procedures for
book-entry transfer described in Section 2 of the Offer to Purchase, any notice
of withdrawal must also specify the name and number of the account at the
appropriate Book-Entry Transfer Facility to be credited with the withdrawn
Shares and otherwise comply with such Book-Entry Transfer Facility's procedures.
Withdrawals of tenders of Shares may not be rescinded, and any Shares properly
withdrawn will thereafter be deemed not validly tendered for purposes of the
Offer. However, withdrawn Shares may be retendered by again following one of the
procedures described in Section 2 of the Offer to Purchase at any time prior to
the Expiration Date. All questions as to the form and validity (including time
of receipt) of notices of withdrawal will be determined by the Purchaser in its
sole discretion, which determination will be final and binding.
The Company has provided the Purchaser with the Company's stockholder lists
and security position listings for the purpose of disseminating the Offer to
holders of Shares. The Offer to Purchase, the related Letter of Transmittal and
other relevant materials will be mailed to record holders of Shares and will be
furnished to brokers, dealers, banks, trust companies and similar persons whose
names, or the names of whose nominees, appear on the stockholder lists or, if
applicable, who are listed as participants in a clearing agency's security
position listing for subsequent transmittal to beneficial owners of Shares. The
information required to be disclosed by Rule 14d-6(e)(1)(vii) of the Securities
Exchange Act of 1934, as amended, is contained in the Offer to Purchase and is
incorporated herein by reference.
THE OFFER TO PURCHASE AND LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION WHICH SHOULD BE READ BEFORE ANY DECISION IS MADE WITH RESPECT TO THE
OFFER.
Requests for copies of the Offer to Purchase, the Letter of Transmittal and
other tender offer materials may be directed to the Information Agent or the
Dealer Manager as set forth below, and copies will be furnished promptly at the
Purchaser's expense. No fees or commissions will be payable to brokers, dealers
or other persons other than the Dealer Manager and the Information Agent for
soliciting tenders of Shares pursuant to the Offer.
The Information Agent for the Offer is:
GEORGESON
SHAREHOLDER
COMMUNICATIONS INC.
17 State Street, 10th Floor
New York, New York 10004
Banks and Brokers Call Collect: (212) 440-9800
All Others Call Toll-Free: (800) 223-2064
The Dealer Manager for the Offer is:
MORGAN STANLEY DEAN WITTER
Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
(212) 761-6531
November 30, 1999
<PAGE>
Exhibit (a)(9)
<PAGE>
WEYERHAEUSER TO ACQUIRE TJ INTERNATIONAL FOR $720 MILLION
FEDERAL WAY, Wash. - Weyerhaeuser Company (NYSE: WY), one of North America's
largest forest products companies, today announced an agreement with TJ
International (NASDAQ: TJCO) that will make Weyerhaeuser the leading provider of
"value added" engineered wood products.
Under the definitive agreement, Weyerhaeuser will pay $720 million in cash, or
$42 per share, to acquire all outstanding shares of TJ International, a 51
percent owner and managing partner of Trus Joist MacMillan (TJM). Weyerhaeuser
currently owns 49 percent of Trus Joist MacMillan, the world's leading
manufacturer and marketer of engineered lumber products.
"Trus Joist MacMillan provides an excellent opportunity to grow our value-added
wood business and is a logical extension of our acquisition of MacMillan
Bloedel," said Steven R. Rogel, Weyerhaeuser chairman, president and chief
executive officer. "Engineered wood is a high-margin product with solid growth
potential and Trus Joist MacMillan is the leading company in this area. It is
the worldwide leader in sales, innovation and product quality in its segment. It
has the premier brand name that is associated with quality. This acquisition
will provide us with a growing stream of cash flow and earnings."
Harold E. Thomas, chairman of TJ International and co-founder of Trus Joist
MacMillan, said that today's announcement also will result in significant
customer benefits.
"I have always believed in the critical importance of innovation in our products
and services," Thomas said. "I have long admired the Weyerhaeuser Company and
believe that the organization that will emerge in the months ahead will take
engineered wood products to the next level."
The acquisition further enhances the long-standing relationship between
Weyerhaeuser and TJM. Weyerhaeuser is one of TJM's largest suppliers of raw
material and serves as its largest distributor.
Weyerhaeuser expects the acquisition to generate approximately $50 million in
annual savings, primarily through improving purchasing practices, distribution
and streamlining operations. The acquisition will be immediately accretive to
Weyerhaeuser's earnings and cash flow.
"This is an opportune time to complete this acquisition," Rogel said. "The
outlook for housing starts, interest rates and global GDP remains relatively
strong, and Trus Joist MacMillan's business is closely aligned with ours. This
acquisition will enable us to achieve a smooth and rapid integration of
production, sales, marketing and service. Equally important, it allows us to
capture meaningful synergies that are only possible from the combination of
Weyerhaeuser, MacMillan Bloedel and TJ International."
Weyerhaeuser intends to finance this transaction using cash and existing credit
arrangements. It will account for the acquisition as a purchase. The transaction
is subject to normal regulatory approvals. Weyerhaeuser will commence a tender
offer for all outstanding shares of TJ International within the next five
business days and the companies anticipate a closing date early next year.
"This combination offers significant value to Trus Joist MacMillan customers and
employees and TJ International shareholders," said Tom Denig, Trus Joist
MacMillan president and chief executive officer. "We've worked with Weyerhaeuser
for a long time and we share similar philosophies in innovation and enhanced
product offerings, backed by quality customer support. Additionally, we will
combine production, marketing and distribution efforts, enabling both companies
to realize valuable synergies."
Weyerhaeuser is the world's largest producer of softwood lumber and market pulp
and the world's largest owner of softwood timber. The company also is the third
largest producer of containerboard in the United States and the world's second
largest manufacturer of oriented strand board (OSB). Weyerhaeuser is one of the
largest producers of corrugated packaging in the U.S.
Boise, Idaho-based Trus Joist MacMillan manufactures a variety of engineered
lumber products for structural framing and industrial applications. It currently
operates 16 manufacturing facilities across North America and employs nearly
4,000 people around the world. Trus Joist MacMillan's unique patented
manufacturing technologies transforms wood fiber into high-performance,
consistent products. The company, which utilizes small-diameter trees that
provide resource-efficient alternatives to traditional sawmill products, further
enhances Weyerhaeuser's wood product line.
Weyerhaeuser Company one of the world's largest integrated forest products
companies, was incorporated in 1900. It has offices or operations in 12
countries, with customers worldwide. Weyerhaeuser is principally engaged in the
growing and harvesting of timber; the manufacture, distribution and sale of
forest products; and real estate construction, development and related
activities.
<PAGE>
Exhibit (c)(1)
<PAGE>
EXECUTION COPY
=======
AGREEMENT AND PLAN OF MERGER
Dated as of November 23, 1999
Among
WEYERHAEUSER COMPANY,
WTJ, INC.
And
TJ INTERNATIONAL, INC.
=========
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I The Offer and the Merger
------------------------
SECTION 1.01. The Offer.................................................... 2
SECTION 1.02. Company Actions.............................................. 3
SECTION 1.03. The Merger................................................... 4
SECTION 1.04. Closing...................................................... 5
SECTION 1.05. Effective Time............................................... 5
SECTION 1.06. Effects...................................................... 5
SECTION 1.07. Certificate of Incorporation and By-laws..................... 5
SECTION 1.08. Directors.................................................... 6
SECTION 1.09. Officers..................................................... 6
ARTICLE II Effect on the Capital Stock of the Constituent Corporations;
------------------------------------------------------------
Exchange of Certificates
------------------------
SECTION 2.01. Effect on Capital Stock...................................... 6
SECTION 2.02. Exchange of Certificates..................................... 8
ARTICLE III Representations and Warranties of the Company
---------------------------------------------
SECTION 3.01. Organization, Standing and Power............................. 11
SECTION 3.02. Company Subsidiaries; Equity Interests....................... 11
SECTION 3.03. Capital Structure............................................ 12
SECTION 3.04. Authority; Execution and Delivery; Enforceability............ 14
SECTION 3.05. No Conflicts; Consents....................................... 15
SECTION 3.06. SEC Documents................................................ 17
SECTION 3.07. Information Supplied......................................... 18
SECTION 3.08. Absence of Certain Changes or Events......................... 19
SECTION 3.09. Taxes........................................................ 20
SECTION 3.10. Absence of Changes in Benefit Plans.......................... 21
SECTION 3.11. ERISA Compliance; Excess Parachute Payments.................. 22
SECTION 3.12. Labor Matters................................................ 24
SECTION 3.13. Litigation................................................... 24
<PAGE>
SECTION 3.14. Compliance with Applicable Laws.............................. 25
SECTION 3.15. Brokers; Schedule of Fees and Expenses....................... 25
SECTION 3.16. Opinion of Financial Advisor................................. 25
SECTION 3.17. Year 2000 Compliance......................................... 26
SECTION 3.18. Environmental Matters........................................ 26
SECTION 3.19. Contracts; Debt Instruments.................................. 27
SECTION 3.20. Intellectual Property........................................ 27
ARTICLE IV Representations and Warranties of Parent and Sub
------------------------------------------------
SECTION 4.01. Organization, Standing and Power............................. 28
SECTION 4.02. Sub Actions.................................................. 28
SECTION 4.03. Authority; Execution and Delivery; Enforceability............ 29
SECTION 4.04. No Conflicts; Consents....................................... 29
SECTION 4.05. Information Supplied......................................... 30
SECTION 4.06. Financing.................................................... 30
SECTION 4.07. Stock Ownership; Interested Stockholders..................... 31
SECTION 4.08. Brokers...................................................... 31
ARTICLE V Covenants Relating to Conduct of Business
-----------------------------------------
SECTION 5.01. Conduct of Business.......................................... 31
SECTION 5.02. No Solicitation.............................................. 35
ARTICLE VI Additional Agreements
---------------------
SECTION 6.01. Preparation of Proxy Statement; Stockholders Meetings........ 38
SECTION 6.02. Access to Information; Confidentiality....................... 40
SECTION 6.03. Reasonable Efforts; Notification............................. 40
SECTION 6.04. Company Employee Stock Options............................... 41
SECTION 6.05. Existing Agreements, Plans and Policies...................... 43
SECTION 6.06. Indemnification.............................................. 45
SECTION 6.07. Fees and Expenses............................................ 47
SECTION 6.08. Public Announcements......................................... 49
SECTION 6.09. Transfer Taxes............................................... 49
SECTION 6.10. Rights Agreements; Consequences if Rights Triggered.......... 50
SECTION 6.11. Directors.................................................... 50
SECTION 6.12. TJM Partnership Agreement.................................... 51
SECTION 6.13. Grant of Option.............................................. 54
SECTION 6.14. Termination/Amendment of ESOP; Redemption of
Company Preferred Stock; Repayment of ESOP Loan............ 55
<PAGE>
ARTICLE VII Conditions Precedent
--------------------
SECTION 7.01. Conditions to Each Party's Obligation To Effect the Merger... 56
ARTICLE VIII Termination, Amendment and Waiver
---------------------------------
SECTION 8.01. Termination.................................................. 57
SECTION 8.02. Effect of Termination........................................ 59
SECTION 8.03. Amendment.................................................... 59
SECTION 8.04. Extension; Waiver............................................ 60
SECTION 8.05. Procedure for Termination, Amendment, Extension or Waiver.... 60
ARTICLE IX General Provisions
------------------
SECTION 9.01. Nonsurvival of Representations and Warranties................ 60
SECTION 9.02. Notices...................................................... 60
SECTION 9.03. Definitions.................................................. 61
SECTION 9.04. Interpretation; Disclosure Letters........................... 62
SECTION 9.05. Severability................................................. 62
SECTION 9.06. Counterparts................................................. 63
SECTION 9.07. Entire Agreement; No Third-Party Beneficiaries............... 63
SECTION 9.08. Governing Law................................................ 63
SECTION 9.09. Assignment................................................... 63
SECTION 9.10. Enforcement.................................................. 63
<PAGE>
Exhibits
- --------
Exhibit A Conditions of the Offer
<PAGE>
1
AGREEMENT AND PLAN OF MERGER dated as of November 23, 1999 (this
"Agreement"), among WEYERHAEUSER COMPANY, a Washington
corporation ("Parent"), WTJ, INC. a Delaware corporation ("Sub"),
------ ---
and a wholly owned subsidiary of Parent, and TJ INTERNATIONAL,
INC., a Delaware corporation (the "Company").
-------
WHEREAS the respective Boards of Directors of Parent, Sub and the
Company have approved the acquisition of the Company by Parent on the terms and
subject to the conditions set forth in this Agreement;
WHEREAS, in furtherance of such acquisition, Parent proposes to cause
Sub to make a tender offer (as such tender offer may be amended from time to
time as permitted under this Agreement, the "Offer") to purchase all the
-----
outstanding (x) shares of common stock, par value $1.00 per share, of the
Company (the "Company Common Stock"), including the associated Company Rights
--------------------
(as defined in Section 3.03(a)), at a price per share of Company Common Stock
(including the associated Company Right) of $42.00 (such amount, or any greater
amount per share paid pursuant to the Offer, the "Offer Price") and (y) shares
-----------
of ESOP Convertible Preferred Stock, par value $1.00 per share, of the Company
(the "Company Preferred Stock" and, together with the Company Common Stock, the
-----------------------
"Company Capital Stock") at a price per share of Company Preferred Stock equal
---------------------
to the Offer Price, in each case, net to the seller in cash, on the terms and
subject to the conditions set forth in this Agreement;
WHEREAS the respective Boards of Directors of Parent, Sub and the
Company have approved the merger (the "Merger") of Sub into the Company, or (at
------
the election of Parent) the Company into Sub, on the terms and subject to the
conditions set forth in this Agreement, whereby each issued share of Company
Common Stock not owned by Parent, Sub or the Company, including each share of
Company Common Stock issued upon the automatic conversion of shares of Company
Preferred Stock immediately prior to the Merger, shall be converted into the
right to receive the Offer Price in cash; and
<PAGE>
2
WHEREAS Parent, Sub and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
Offer and the Merger and also to prescribe various conditions to the Offer and
the Merger.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
The Offer and the Merger
------------------------
<PAGE>
3
SECTION 1.01. The Offer. (a) Subject to the conditions of this
---------
Agreement, as promptly as practicable but in no event later than five business
days after the date of this Agreement, Sub shall, and Parent shall cause Sub to,
commence the Offer within the meaning of the applicable rules and regulations of
the Securities and Exchange Commission (the "SEC"). The obligation of Sub to,
---
and of Parent to cause Sub to, commence the Offer and accept for payment, and
pay for, any shares of Company Capital Stock tendered pursuant to the Offer are
subject to the conditions set forth in Exhibit A (any of which may be waived by
Sub, in its sole discretion, provided that, without the consent of the Company,
--------
Sub may not waive the Minimum Tender Condition (as defined in Exhibit A)) and to
the other conditions in this Agreement. The initial expiration date of the
Offer shall be January 5, 2000. Sub expressly reserves the right to modify the
terms of the Offer, except that, without the consent of the Company, Sub shall
not (i) reduce the number of shares of Company Capital Stock subject to the
Offer, (ii) reduce the price per share of Company Common Stock to be paid
pursuant to the Offer, (iii) reduce the price per share of Company Preferred
Stock to be paid pursuant to the Offer, (iv) modify or add to the conditions set
forth in Exhibit A, (v) extend the Offer, (vi) change the form of consideration
payable in the Offer or (vii) otherwise amend the Offer in any manner materially
adverse to holders of Company Capital Stock. Notwithstanding the foregoing, Sub
may, without the consent of the Company, (i) extend the Offer, if, at the
scheduled expiration date of the Offer, any of the conditions to Sub's
obligation to purchase shares of Company Capital Stock are not satisfied, until
such time as such conditions are satisfied or waived, (ii) extend the Offer for
any period required by any rule, regulation, interpretation or position of the
SEC or the staff thereof applicable to the Offer and (iii) extend the Offer for
any reason for a period (a "Parent Extension Period") of not more than 10
-----------------------
business days beyond the latest expiration date that would otherwise be
permitted under clause (i) or (ii) of this sentence or that results from an
extension of the Offer requested by the Company pursuant to the next sentence;
provided, however, that if Sub extends the Offer pursuant to clause (iii) of
- -------- -------
this sentence, it shall waive during any such Parent Extension Period all
conditions of the Offer set forth in Exhibit A other than (x) the Minimum Tender
Condition and (y) the condition in paragraph (b) of Exhibit A solely to the
extent Parent and Sub would violate any Applicable Law (as defined in Section
3.05(a)) or Judgment (as defined in
<PAGE>
4
Section 3.05(a)) in purchasing shares of Company Common Stock pursuant to the
Offer. If any of the conditions of the Offer set forth in Exhibit A (other than
the Minimum Tender Condition) is not satisfied or waived on any scheduled
expiration date of the Offer, then, if requested by the Company, Sub shall
extend the Offer one or more times (the period of each such extension to be
determined by Sub) for up to 30 days in the aggregate for all such extensions,
provided that at the time of such extension any such condition is reasonably
capable of being satisfied. On the terms and subject to the conditions of the
Offer and this Agreement, Sub shall, and Parent shall cause Sub to, pay for all
shares of Company Capital Stock validly tendered and not withdrawn pursuant to
the Offer that Sub becomes obligated to purchase pursuant to the Offer as soon
as practicable after the expiration of the Offer.
(b) On the date of commencement of the Offer, Parent and Sub shall
file with the SEC a Tender Offer Statement on Schedule 14D-1 with respect to the
Offer, which shall contain an offer to purchase and a related letter of
transmittal and summary advertisement (such Schedule 14D-1 and the documents
included therein pursuant to which the Offer will be made, together with any
supplements or amendments thereto, the "Offer Documents"). Each of Parent, Sub
---------------
and the Company shall promptly correct any information provided by it for use in
the Offer Documents if and to the extent that such information shall have become
false or misleading in any material respect, and each of Parent and Sub shall
take all steps necessary to amend or supplement the Offer Documents and to cause
the Offer Documents as so amended or supplemented to be filed with the SEC and
to be disseminated to the Company's stockholders, in each case, as and to the
extent required by applicable Federal securities laws. Parent and Sub shall
provide the Company and its counsel with any comments Parent, Sub or their
counsel may receive from the SEC or its staff with respect to the Offer
Documents promptly after the receipt of such comments.
SECTION 1.02. Company Actions. (a) The Company hereby approves of
-----------------
and consents to the Offer and the Merger and the other transactions contemplated
by this Agreement.
(b) On the date the Offer Documents are filed with the SEC, the
Company shall file with the SEC a Solicitation/Recommendation Statement on
Schedule 14D-9 with respect to the Offer (such Schedule 14D-9, as amended from
time to time, the "Schedule 14D-9") containing the recommendations described in
--------------
Section 3.04(b) and shall mail the
<PAGE>
5
Schedule 14D-9 to the holders of Company Capital Stock. Each of the Company,
Parent and Sub shall promptly correct any information provided by it for use in
the Schedule 14D-9 if and to the extent that such information shall have become
false or misleading in any material respect, and the Company shall take all
steps necessary to amend or supplement the Schedule 14D-9 and to cause the
Schedule 14D-9 as so amended or supplemented to be filed with the SEC and
disseminated to the Company's stockholders, in each case, as and to the extent
required by applicable Federal securities laws. The Company shall provide Parent
and its counsel with any comments the Company or its counsel may receive from
the SEC or its staff with respect to the Schedule 14D-9 promptly after the
receipt of such comments.
(c) In connection with the Offer, the Company shall cause its
transfer agent to promptly furnish Sub with mailing labels containing the names
and addresses of the record holders of Company Capital Stock as of a recent date
and of those persons becoming record holders subsequent to such date, together
with copies of all lists of stockholders, security position listings and
computer files and all other information in the Company's possession or control
regarding the beneficial owners of Company Capital Stock, and shall furnish to
Sub such information and assistance (including updated lists of stockholders,
security position listings and computer files) as Parent may reasonably request
in communicating the Offer to the Company's stockholders. Subject to the
requirements of Applicable Law, and, except for such steps as are necessary to
disseminate the Offer Documents and any other documents necessary to consummate
the transactions contemplated by this Agreement, Parent and Sub shall hold in
confidence the information contained in any such labels, listings and files,
shall use such information only in connection with the Offer and the Merger,
and, if this Agreement shall be terminated, shall, upon request, deliver to the
Company all copies of such information then in their possession.
SECTION 1.03. The Merger. On the terms and subject to the conditions
-----------
set forth in this Agreement, and in accordance with the Delaware General
Corporation Law (the "DGCL"), Sub shall be merged with and into the Company at
----
the Effective Time (as defined in Section 1.05). At the Effective Time, the
separate corporate existence of Sub shall cease and the Company shall continue
as the surviving corporation (the "Surviving Corporation"). Notwithstanding the
---------------------
foregoing, Parent may elect, at any time prior to the
<PAGE>
6
Merger, instead of merging Sub with and into the Company as provided above, to
merge the Company with and into Sub; provided, however, that the Company shall
-------- -------
not be deemed to have breached any of its representations, warranties or
covenants set forth in this Agreement solely by reason of such election. In such
event, the parties shall execute an appropriate amendment to this Agreement in
order to reflect the foregoing. At the election of Parent, any direct or
indirect subsidiary of Parent may be substituted for Sub as a constituent
corporation in the Merger. In such event, the parties shall execute an
appropriate amendment to this Agreement in order to reflect the foregoing.
SECTION 1.04. Closing. The closing (the "Closing") of the Merger
-------- -------
shall take place at the offices of Cravath, Swaine & Moore, 825 Eighth Avenue,
New York, New York 10019 at 10:00 a.m. on the second business day following the
satisfaction (or, to the extent permitted by Applicable Law, waiver by all
parties) of the conditions set forth in Section 7.01, or as soon as practicable
after all the conditions set forth in Section 7.01 have been satisfied (or, to
the extent permitted by Applicable Law, waived by the parties entitled to the
benefits thereof), or at such other place, time and date as shall be agreed in
writing between Parent and the Company. The date on which the Closing occurs is
referred to in this Agreement as the "Closing Date".
------------
SECTION 1.05. Effective Time. Prior to the Closing, Parent shall
---------------
prepare, and on the Closing Date or as soon as practicable thereafter, Parent
shall file with the Secretary of State of the State of Delaware, a certificate
of merger or other appropriate documents (in any such case, the "Certificate of
--------------
Merger") executed in accordance with the relevant provisions of the DGCL, and
- ------
shall make all other filings or recordings required under the DGCL. The Merger
shall become effective at such time as the Certificate of Merger is duly filed
with such Secretary of State, or at such other time as Parent and the Company
shall agree and specify in the Certificate of Merger (the time the Merger
becomes effective being the "Effective Time").
--------------
SECTION 1.06. Effects. The Merger shall have the effects set forth
--------
in Section 259 of the DGCL.
SECTION 1.07. Certificate of Incorporation and By-laws. (a) The
-----------------------------------------
Certificate of Incorporation of the Company shall be amended at the Effective
Time to:
<PAGE>
7
(i) delete Articles Tenth and Eleventh thereof; and (ii) amend paragraph (a) of
Article Fifth thereof to delete all but the first sentence thereof, and, as so
amended, such Certificate of Incorporation shall be the Certificate of
Incorporation of the Surviving Corporation, until thereafter changed or amended
as provided therein or by Applicable Law.
(b) The By-laws of Sub as in effect immediately prior to the
Effective Time shall be the By-laws of the Surviving Corporation, until
thereafter changed or amended as provided therein or by Applicable Law;
provided, however, that the By-laws of the Surviving Corporation shall include
- -------- -------
the provisions of Article XI of the Company By-laws (as defined in Section 3.01)
as of the date of this Agreement (only to the extent such provisions are
applicable to events occurring prior to the Effective Time) for a period of at
least six years following the Effective Time.
SECTION 1.08. Directors. The directors of Sub immediately prior to
----------
the Effective Time shall be the directors of the Surviving Corporation, until
the earlier of their resignation or removal or until their respective successors
are duly elected and qualified, as the case may be.
SECTION 1.09. Officers. The officers of the Company immediately
---------
prior to the Effective Time shall be the officers of the Surviving Corporation,
until the earlier of their resignation or removal or until their respective
successors are duly elected or appointed and qualified, as the case may be.
ARTICLE II
Effect on the Capital Stock of the
----------------------------------
Constituent Corporations; Exchange of Certificates
--------------------------------------------------
SECTION 2.01. Effect on Capital Stock. At the Effective Time, by
------------------------
virtue of the Merger and without any action on the part of the holder of any
shares of Company Capital Stock or any shares of capital stock of Sub:
(a) Capital Stock of Sub. Each issued and outstanding share of
---------------------
capital stock of Sub shall be converted into and become a number of fully paid
and nonassessable shares of common stock, par value $0.01 per share, of the
Surviving Corporation (the "Surviving Corporation Common
----------------------------
<PAGE>
8
Stock") equal to (i) the number of shares of Company Common Stock (including
- -----
each share of Company Common Stock issued upon the automatic conversion of
shares of Company Preferred Stock immediately prior to the Effective Time as
provided in paragraph (B) of Section 8 of the Company Preferred Certificate of
Designation (as defined in Section 2.01(c)) outstanding immediately prior to the
Effective Time divided by (ii) 1000; provided, however, that to the extent the
-------- -------
aggregate number of shares of Surviving Corporation Common Stock into which the
capital stock of Sub is to be converted pursuant to this Section 2.01(a) is not
a whole number, such number shall be rounded up to the next higher whole number.
(b) Cancelation of Treasury Stock, Parent-Owned Stock and Sub-Owned
---------------------------------------------------------------
Stock. Each share of Company Capital Stock that is owned by the Company, Parent
- ------
or Sub shall no longer be outstanding and shall automatically be canceled and
retired and shall cease to exist, and no Parent capital stock or other
consideration shall be delivered or deliverable in exchange therefor. Each
share of Company Capital Stock that is owned by any Company Subsidiary (as
defined in Section 3.01) or Parent (other than Sub) shall automatically be
converted into one fully paid and nonassessable share of Surviving Corporation
Common Stock.
(c) Conversion of Company Capital Stock. Subject to Section 2.01(b),
------------------------------------
each issued share of Company Common Stock (including each share of Company
Common Stock issued upon the automatic conversion of shares of Company Preferred
Stock immediately prior to the Effective Time as provided in paragraph (B) of
Section 8 of the Certificate of Designation of the terms of the Company
Preferred Stock (the "Company Preferred Certificate of Designation")) shall be
--------------------------------------------
converted into the right to receive the Offer Price in cash. The cash payable
upon the conversion of shares of Company Common Stock pursuant to this Section
2.01(c) is referred to, collectively as "Merger Consideration". As of the
--------------------
Effective Time, all shares of Company Capital Stock shall no longer be
outstanding and shall automatically be canceled and retired and shall cease to
exist, and each holder of a certificate representing any such shares of Company
Capital Stock shall cease to have any rights with respect thereto, except the
right to receive Merger Consideration upon surrender of such certificate in
accordance with Section 2.02, without interest.
(d) Appraisal Rights. Notwithstanding anything in this Agreement to
-----------------
the contrary, shares (the "Appraisal
---------
<PAGE>
9
Shares") of Company Common Stock that are outstanding immediately prior to the
- ------
Effective Time and that are held by any person who is entitled to demand and
properly demands appraisal of such Appraisal Shares pursuant to, and who
complies in all respects with, Section 262 of the DGCL ("Section 262") shall not
-----------
be converted into Merger Consideration as provided in Section 2.01(c), but,
rather, each holder of Appraisal Shares shall be entitled to payment of the fair
market value of such Appraisal Shares in accordance with Section 262; provided,
--------
however, that, if any such holder shall fail to perfect or otherwise shall
- -------
waive, withdraw or lose the right to appraisal under Section 262, then the right
of such holder to be paid the fair value of such holder's Appraisal Shares shall
cease and such Appraisal Shares shall be deemed to have been converted as of the
Effective Time into, and to have become exchangeable solely for the right to
receive, Merger Consideration as provided in Section 2.01(c). The Company shall
provide prompt notice to Parent of any demands received by the Company for
appraisal of any shares of Company Capital Stock, and Parent shall have the
right to participate in and direct all negotiations and proceedings with respect
to such demands. Prior to the Effective Time, the Company shall not, without the
prior written consent of Parent, make any payment with respect to, or settle or
offer to settle, any such demands, or agree to do any of the foregoing.
SECTION 2.02. Exchange of Certificates. (a) Paying Agent. Prior to
-------------------------- -------------
the Effective Time, Parent shall select a bank or trust company to act as paying
agent (the "Paying Agent") for the payment of Merger Consideration upon
------------
surrender of certificates representing Company Common Stock. Parent shall take
all steps necessary to enable and cause the Surviving Corporation to provide to
the Paying Agent, immediately following the Effective Time, all the cash
necessary to pay for the shares of Company Common Stock converted into the right
to receive cash pursuant to Section 2.01(c) (such cash, the "Exchange Fund").
-------------
<PAGE>
10
(b) Exchange Procedure. As soon as reasonably practicable after the
-------------------
Effective Time, the Paying Agent shall mail to each holder of record of a
certificate or certificates (the "Certificates") that immediately prior to the
------------
Effective Time represented outstanding shares of Company Common Stock whose
shares were converted into the right to receive Merger Consideration pursuant to
Section 2.01, (i) a letter of transmittal (which shall specify that delivery
shall be effected, and risk of loss and title to the Certificates shall pass,
only upon delivery of the Certificates to the Paying Agent and shall be in such
form and have such other provisions as Parent may reasonably specify), and (ii)
instructions for use in effecting the surrender of the Certificates in exchange
for Merger Consideration. Upon surrender of a Certificate for cancelation to
the Paying Agent or to such other agent or agents as may be appointed by Parent,
together with such letter of transmittal, duly executed, and such other
documents as may reasonably be required by the Paying Agent, the holder of such
Certificate shall be entitled to receive in exchange therefor the amount of cash
into which the shares of Company Common Stock theretofore represented by such
Certificate shall have been converted pursuant to Section 2.01, and the
Certificate so surrendered shall forthwith be canceled. In the event of a
transfer of ownership of Company Common Stock that is not registered in the
transfer records of the Company, payment may be made to a person other than the
person in whose name the Certificate so surrendered is registered if such
Certificate shall be properly endorsed or otherwise be in proper form for
transfer and the person requesting such payment shall pay any transfer or other
taxes required by reason of the payment to a person other than the registered
holder of such Certificate or establish to the satisfaction of Parent that such
tax has been paid or is not applicable. Until surrendered as contemplated by
this Section 2.02, each Certificate shall be deemed, at any time after the
Effective Time, to represent only the right to receive upon such surrender the
amount of cash, without interest, into which the shares of Company Common Stock
theretofore represented by such Certificate have been converted pursuant to
Section 2.01. No interest shall be paid or accrue on the cash payable upon
surrender of any Certificate. If a mutilated Certificate is surrendered to the
Paying Agent or if the holder of a Certificate submits an affidavit to the
Paying Agent stating that the Certificate has been lost, destroyed or wrongfully
taken, such holder shall furnish an indemnity bond sufficient in the judgment of
Parent to
<PAGE>
11
protect Parent, the Surviving Corporation and the Paying Agent from any loss
that any of them may suffer.
(c) No Further Ownership Rights in Company Capital Stock. The Merger
-----------------------------------------------------
Consideration paid in accordance with the terms of this Article II upon
conversion of any shares of Company Common Stock shall be deemed to have been
paid in full satisfaction of all rights pertaining to shares of Company Capital
Stock, subject, however, to the Surviving Corporation's obligation to pay any
dividends or make any other distributions with a record date prior to the
Effective Time that may have been declared or made by the Company on such shares
of Company Capital Stock in accordance with the terms of this Agreement or prior
to the date of this Agreement and that remain unpaid at the Effective Time, and,
after the Effective Time, there shall be no further registration of transfers on
the stock transfer books of the Surviving Corporation of shares of Company
Capital Stock that were outstanding immediately prior to the Effective Time.
If, after the Effective Time, any Certificates are presented to the Surviving
Corporation or the Paying Agent for any reason, they shall be canceled and
exchanged as provided in this Article II.
(d) Termination of Exchange Fund. Any portion of the Exchange Fund
-----------------------------
that remains undistributed to the holders of Company Capital Stock for six
months after the Effective Time shall be delivered to Parent, upon demand, and
any holder of Company Capital Stock who has not theretofore complied with this
Article II shall thereafter look only to Parent for payment of its claim for
Merger Consideration.
(e) No Liability. None of Parent, Sub, the Company or the Paying
-------------
Agent shall be liable to any person in respect of any cash from the Exchange
Fund delivered to a public official pursuant to any applicable abandoned
property, escheat or similar Applicable Law. If any Certificate has not been
surrendered prior to the date on which Merger Consideration in respect of such
Certificate would otherwise escheat to or become the property of any
Governmental Entity (as defined in Section 3.05(b)), any such shares, cash,
dividends or distributions in respect of such Certificate shall, to the extent
permitted by Applicable Law, become the property of the Surviving Corporation,
free and clear of all claims or interest of any person previously entitled
thereto.
<PAGE>
12
(f) Investment of Exchange Fund. The Paying Agent shall invest any
----------------------------
cash included in the Exchange Fund, as directed by Parent, on a daily basis. If
for any reason (including losses) the Exchange Fund is inadequate to pay the
amounts to which holders of Company Capital Stock shall be entitled under this
Article II, Parent and the Surviving Corporation shall in any event be liable
for payment thereof. The Exchange Fund shall not be used except as provided in
this Agreement. Any interest and other income resulting from such investments
shall be paid to Parent.
(g) Withholding Rights. Parent or the Surviving Corporation shall be
-------------------
entitled to deduct and withhold from the consideration otherwise payable to any
holder of Company Capital Stock pursuant to this Agreement such amounts as may
be required to be deducted and withheld with respect to the making of such
payment under the Code (as defined in Section 3.11(b)), or under any provision
of state, local or foreign tax law.
<PAGE>
13
ARTICLE III
Representations and Warranties of the Company
---------------------------------------------
The Company represents and warrants to Parent and Sub that, except as
set forth in the Company SEC Documents filed and publicly available prior to the
date of this Agreement (the "Filed Company SEC Documents") or in the letter,
---------------------------
dated the date of this Agreement, from the Company to Parent and Sub (the
"Company Disclosure Letter"):
- --------------------------
SECTION 3.01. Organization, Standing and Power. Each of the Company
---------------------------------
and each of its subsidiaries (the "Company Subsidiaries") is duly organized,
--------------------
validly existing and in good standing under the laws of the jurisdiction in
which it is organized, and has full power and authority and possesses all
governmental franchises, licenses, permits, authorizations and approvals
necessary to enable it to own, lease or otherwise hold its properties and assets
and to conduct its businesses as presently conducted, except where the failure
(i) to be duly organized, validly existing and in good standing, in each case,
other than any such failure in respect of the Company or the Partnership (as
defined in Section 6.12(b)), or (ii) to have such power or authority or to
possess such franchises, licenses, permits, authorizations and approvals,
individually or in the aggregate, has not had and would not reasonably be
expected to have a material adverse effect on the Company (a "Company Material
----------------
Adverse Effect") or a material adverse effect on the ability of the Company to
- --------------
consummate the transactions contemplated by this Agreement. The Company and
each Company Subsidiary is duly qualified to do business in each jurisdiction
where the nature of its business or their ownership or leasing of its properties
make such qualification necessary other than such failures to qualify that,
individually or in the aggregate, has not had and would not reasonably be
expected to have a Company Material Adverse Effect. The Company has made
available to Parent true and complete copies of the certificates of
incorporation of the Company, as amended to the date of this Agreement (the
"Company Charter"), and the By-laws of the Company, as amended to the date of
- ----------------
this Agreement (the "Company By-laws"), and the comparable charter and
---------------
organizational documents of each Company Subsidiary, in each case, as amended
through the date of this Agreement.
SECTION 3.02. Company Subsidiaries; Equity Interests. (a) The
---------------------------------------
Company Disclosure Letter lists each
<PAGE>
14
Company Subsidiary and its jurisdiction of organization. All the outstanding
shares of capital stock of each Company Subsidiary have been validly issued and
are fully paid and nonassessable and, except as set forth in the Company
Disclosure Letter, are owned by the Company, by another Company Subsidiary or by
the Company and another Company Subsidiary, free and clear of all pledges,
liens, charges, mortgages, encumbrances and security interests of any kind or
nature whatsoever (collectively, "Liens"), except such as, individually or in
-----
the aggregate, would not reasonably be expected to have a Company Material
Adverse Effect (provided that the representation in this sentence with respect
--------
to significant subsidiaries of the Company (within the meaning of Regulation S-X
of the SEC, the "Significant Subsidiaries") is not qualified by reference to
------------------------
such Company Material Adverse Effect).
(b) Except for its interests in the Company Subsidiaries, the Company
does not own, directly or indirectly, any capital stock, membership interest,
partnership interest, joint venture interest or other equity interest in any
person.
SECTION 3.03. Capital Structure. (a) The authorized capital stock of
------------------
the Company consists of 200,000,000 shares of Company Common Stock and
10,000,000 shares of preferred stock, par value $1.00 per share (the "Company
-------
Authorized Preferred Stock" and, together with the Company Common Stock, the
- --------------------------
"Company Stock"). At the close of business on November 17, 1999, (i)
- --------------
18,351,054 shares of Company Common Stock were issued and outstanding, (ii)
1,097,719 shares of Company Authorized Preferred Stock were issued and
outstanding, consisting entirely of shares of Company Preferred Stock, (iii)
2,837,558 shares of Company Common Stock were held by the Company in its
treasury, (iv) 1,097,719 shares of Company Common Stock were reserved for
issuance upon conversion of outstanding shares of Company Preferred Stock,
1,671,436 shares of Company Common Stock were reserved for issuance pursuant to
exercise of outstanding Company Employee Stock Options (as defined in Section
6.04(d)) and 550,564 additional shares of Company Common Stock were reserved for
issuance pursuant to the Company Stock Plans (as defined in Section 6.04(d)),
and (v) 185,000 shares of Series A Junior Participating Preferred Stock, par
value $1.00 per share (the "Junior Preferred Stock"), of the Company were
----------------------
reserved for issuance in connection with the rights (the "Company Rights")
--------------
issued pursuant to the Rights Agreement dated as of August 26,
<PAGE>
15
1999, between the Company and First Chicago Trust Company of New York, as Rights
Agent (as amended from time to time, the "Company Rights Agreement"). Except as
------------------------
set forth above at the close of business on November 17, 1999, no shares of
Company Capital Stock or other equity securities or voting securities of the
Company were issued, reserved for issuance or outstanding. There are no
outstanding Company SARs (as defined in Section 6.04) that were not granted in
tandem with a related Company Employee Company Stock Option. All outstanding
shares of Company Capital Stock are, and all such shares that may be issued
prior to the Effective Time will be when issued, duly authorized, validly
issued, fully paid and nonassessable. There are not any bonds, debentures, notes
or other indebtedness of the Company having the right to vote (or convertible
into, or exchangeable for, securities having the right to vote) on any matters
on which holders of Company Stock may vote ("Voting Company Debt"). Except as
-------------------
set forth above, except pursuant to the ESOP (as defined in Section 3.03(c)), a
true and complete copy of which has been previously provided to Parent, and
except for the transactions contemplated by this Agreement, there are not any
options, warrants, rights, convertible or exchangeable securities, "phantom"
stock rights, stock appreciation rights, stock-based performance units,
commitments, Contracts (as defined in Section 3.05(a)), arrangements or
undertakings of any kind to which the Company or any Company Subsidiary is a
party or by which any of them is bound (i) obligating the Company or any Company
Subsidiary to issue, deliver or sell, or cause to be issued, delivered or sold,
additional shares of capital stock or other equity interests in, or any security
convertible or exercisable for or exchangeable into any capital stock of or
other equity interest in, the Company or of any Company Subsidiary or any Voting
Company Debt, (ii) obligating the Company or any Company Subsidiary to issue,
grant, extend or enter into any such option, warrant, call, right, security,
commitment, Contract, arrangement or undertaking or (iii) that give any person
the right to receive any economic benefit or right similar to or derived from
the economic benefits and rights occurring to holders of Company Capital Stock.
As of the date of this Agreement, except as set forth in the Partnership
Agreement (as defined in Section 6.12(a)), there are not any outstanding
contractual obligations of the Company or any Company Subsidiary to repurchase,
redeem or otherwise acquire any shares of capital stock of the Company or any
Company Subsidiary. The Company has delivered to Parent a complete and correct
copy of the Company Rights Agreement.
<PAGE>
16
(b) The "Liquidation Price" (as defined in the Company Preferred
Certificate of Designation) is $11.8125 per share of Company Preferred Stock.
The annual dividend payable on each share of Company Preferred Stock is $1.065,
and the Company has paid all dividends on the Company Preferred Stock that have
become payable as provided in the Company Preferred Certificate of Designation.
Each share of Company Preferred Stock currently is convertible into one share of
Company Common Stock as provided in the Company Preferred Certificate of
Designation. In accordance with paragraph (B) of Section 8 of the Company
Preferred Certificate of Designation, as a result of the transactions
contemplated by Sections 1.07 and 2.01 each issued share of Company Preferred
Stock will be automatically converted into one share of Company Common Stock
immediately prior to the Effective Time, and, at the Effective Time, there will
not be any shares of Company Preferred Stock issued or outstanding. The Company
has not taken any action to redeem, or that gives any holder the right to
redeem, any shares of Company Preferred Stock other than as required by
paragraph (C) of Section 8 of the Company Preferred Certificate of Designation
by reason of the Company entering into this Agreement. The Company has not
taken any action that would require any adjustment or other action under Section
9 of the Company Preferred Certificate of Designation.
(c) As of the date hereof, the number of outstanding shares of
Company Preferred Stock held by the trustee (the "Trustee") under the employee
-------
stock ownership plan portion of the Company's Investment Plan (the "ESOP") is
----
1,097,719, of which 487,436 shares are allocated to participants and
beneficiaries under the Company's Investment Plan and 610,283 shares are
unallocated. As of the date hereof, the outstanding and unpaid principal amount
of the note evidencing the agreement to repay the loan (the "ESOP Loan") from
---------
the Company to the Trustee, dated September 21, 1990, pursuant to which the
Trustee on behalf of the ESOP purchased on such date 634,921 shares of Company
Preferred Stock (equivalent after giving effect to a subsequent stock split to
1,269,842 shares of Company Preferred Stock), is $8,364,238.
SECTION 3.04. Authority; Execution and Delivery; Enforceability. (a)
--------------------------------------------------
The Company has all requisite corporate power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated by
<PAGE>
17
this Agreement. The execution and delivery by the Company of this Agreement and
the consummation by the Company of the transactions contemplated by this
Agreement have been duly authorized by all necessary corporate action on the
part of the Company, subject, in the case of the Merger, to receipt of the
Company Stockholder Approval (as defined in Section 3.04(c)) if required under
the DGCL and, in the case of the Option (as defined in Section 6.13(a)), any
stockholder approval that may be required pursuant to the rules of The Nasdaq
Stock Market, Inc. The Company has duly executed and delivered this Agreement,
and, assuming the due and valid authorization, execution and delivery of this
Agreement by Parent and Sub, this Agreement constitutes a legal, valid and
binding obligation of the Company, enforceable against it in accordance with its
terms.
(b) The Board of Directors of the Company (the "Company Board"), at a
-------------
meeting duly called and held prior to the date of this Agreement, duly and
unanimously adopted resolutions (i) approving this Agreement, the Offer and the
Merger, (ii) determining that the transactions contemplated by this Agreement,
including each of the Offer and the Merger, are fair to and in the best
interests of the Company and its stockholders, (iii) recommending that the
Company's stockholders accept the Offer and tender their shares pursuant to the
Offer, (iv) recommending that the Company's stockholders adopt this Agreement,
to the extent required by Applicable Law, and (v) declaring that this Agreement
is advisable. In addition, the Company Board has taken action sufficient to
render Section 203 of the DGCL and Article Tenth of the Company Charter
inapplicable (A) to Parent and Sub solely by reason of their entering into this
Agreement or consummating the Offer or the Merger or the grant or exercise of
the Option and (B) to the Offer, the Merger and the other transactions
contemplated by this Agreement, assuming the accuracy of Parent's representation
in Section 4.07. To the Company's Knowledge, as of the date of this Agreement
no other state takeover statute or similar state statute or regulation applies
or purports to apply to the Company with respect to this Agreement, the Offer,
the Merger or the grant or exercise of the Option.
(c) If a vote on the Merger by the Company's stockholder is required
under the DGCL, the only vote of holders of any class or series of Company
Capital Stock necessary to approve and adopt this Agreement and the Merger is
the adoption of this Agreement by the holders of a majority of the outstanding
Company Common Stock and
<PAGE>
18
outstanding Company Preferred Stock, voting together as a single class (the
"Company Stockholder Approval"). The affirmative vote of the holders of Company
----------------------------
Capital Stock, or any of them, is not necessary to consummate the Offer or any
transaction contemplated by this Agreement other than the Merger, except that
the exercise of the Option may require Company stockholder approval pursuant to
the rules of The Nasdaq Stock Market, Inc.
SECTION 3.05. No Conflicts; Consents. (a) None of the execution and
-----------------------
delivery by the Company of this Agreement and the consummation of the Offer, the
Merger and the other transactions contemplated by this Agreement and compliance
with the terms hereof will, (i) conflict with the Company Charter, the Company
By-laws or the comparable charter or organizational documents of any Significant
Subsidiary or (ii) conflict with or result in any violation of or default (with
or without notice or lapse of time, or both) under, or give rise to a right of
termination, cancellation or acceleration of any obligation or to loss of a
material benefit under, or result in the creation of any Lien upon any of the
properties or assets of the Company or any Company Subsidiary under, any
provision of (A) any contract, lease, license, indenture, note, bond, agreement,
permit, concession, franchise or other instrument (a "Contract") to which the
--------
Company or any Company Subsidiary is a party or by which any of their respective
properties or assets is bound or (B) subject to the filings and other matters
referred to in Section 3.05(b), any judgment, order or decree ("Judgment") or
--------
statute, law (including common law), ordinance, rule or regulation ("Applicable
----------
Law") applicable to the Company or any Company Subsidiary or their respective
- ---
properties or assets, other than, in the case of clauses (A) and (B) of this
sentence, any such items that, individually or in the aggregate, have not had
and would not reasonably be expected to have a Company Material Adverse Effect
or a material adverse effect on the ability of the Company to consummate the
transactions contemplated by this Agreement.
(b) No consent, approval, license, permit, order or authorization
("Consent") of, or registration, declaration or filing with, or permit from, any
- ---------
Federal, state, local or foreign government or any court of competent
jurisdiction, administrative agency or commission or other governmental
authority or instrumentality, domestic or foreign (a "Governmental Entity") is
-------------------
required to be obtained or made by or with respect to the Company or any Company
<PAGE>
19
Subsidiary in connection with the execution, delivery and performance of this
Agreement or the consummation of the transactions contemplated by this
Agreement, other than (i) compliance with and filings under the Hart-Scott-
Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), (ii) the
-------
filing with the SEC of (A) the Schedule 14D-9, (B) a proxy or information
statement relating to the adoption of this Agreement by the Company's
stockholders if required under the DGCL (the "Proxy Statement"), (C) any
---------------
information statement (the "Information Statement") required under Rule 14f-1 in
---------------------
connection with the Offer and (D) such reports under Sections 13 and 16 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), as may be
------------
required in connection with this Agreement, the Offer, the Merger and the other
transactions contemplated by this Agreement, (iii) the filing of the Certificate
of Merger with the Secretary of State of the State of Delaware and appropriate
documents with the relevant authorities of the other jurisdictions in which the
Company is qualified to do business, (iv) Consents the failure of which to be
obtained or made would not, individually or in the aggregate, reasonably be
expected to have a Company Material Adverse Effect or a material adverse effect
on the ability of the Company to consummate the transactions contemplated by
this Agreement, (v) such filings as may be required in connection with the
Transfer Taxes (as defined in Section 6.09) described in Section 6.09 and (vi)
any items required solely by reason of the participation of Parent (as opposed
to any third party) in the transactions contemplated by this Agreement.
(c) Assuming the accuracy of Parent's representation in Section 4.07,
the Company and the Company Board have taken all action necessary to (i) render
the Company Rights inapplicable to this Agreement, the Offer, the Merger and the
other transactions contemplated by this Agreement and (ii) ensure that (A)
neither Parent nor any of its affiliates or associates is or will become an
"Acquiring Person" (as defined in the Company Rights Agreement) by reason of
this Agreement, the Offer, the Merger or any other transaction contemplated by
this Agreement), (B) a "Distribution Date" (as defined in the Company Rights
Agreement) shall not occur by reason of this Agreement, the Offer, the Merger or
any other transaction contemplated by this Agreement and (C) the Company Rights
shall expire immediately prior to the Effective Time.
<PAGE>
20
SECTION 3.06. SEC Documents; Financial Statements. The Company has
------------------------------------
filed all reports, schedules, forms, statements and other documents required to
be filed by the Company with the SEC since January 1, 1998 (the "Company SEC
-----------
Documents"). As of its respective date, each Company SEC Document complied in
- ---------
all material respects with the requirements of the Exchange Act or the
Securities Act of 1933, as amended (the "Securities Act"), as the case may be,
--------------
and the rules and regulations of the SEC promulgated thereunder applicable to
such Company SEC Document, and did not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. The consolidated balance sheets as
of January 2, 1999, January 3, 1998, and December 28, 1997, and the related
consolidated statements of income, stockholders' equity and cash flows for each
of the three fiscal years in the period ended January 2, 1999 (including the
related notes and schedules thereto) of the Company contained in the Forms 10-K
for the fiscal years ended January 2, 1999, January 3, 1998, and December 28,
1997 included in the Company SEC Documents present fairly in all material
respects the consolidated financial position and the consolidated results of
operations and cash flows of the Company and its consolidated subsidiaries as of
the dates or for the periods presented therein in conformity with United States
generally accepted accounting principles ("GAAP") applied on a consistent basis
----
during the periods involved except as otherwise noted therein, including the
related notes. The consolidated balance sheets and the related statements of
income and cash flows (including in each case the related notes thereto) of the
Company contained in the Forms 10-Q that are Company SEC Documents have been
prepared in accordance with the requirements for interim financial statements
contained in Regulation S-X, which do not require all the information and
footnotes necessary for a fair presentation of financial position, results of
operations and cash flows in conformity with generally accepted accounting
principles. The Forms 10-Q that are Company SEC Documents reflect all
adjustments, which include only normal recurring adjustments, necessary to
present fairly in all material respects the consolidated financial position,
results of operations and cash flows of the Company for all periods presented.
None of the Company Subsidiaries is, or has at any time since January 1, 1998
been, subject to the reporting requirements of Sections 13(a) and 15(d) of the
Exchange Act.
<PAGE>
21
SECTION 3.07. Information Supplied. None of the information supplied
---------------------
or to be supplied by the Company for inclusion or incorporation by reference in
(i) the Offer Documents, the Schedule 14D-9 or the Information Statement, will,
at the time such document is filed with the SEC, at any time it is amended or
supplemented or at the time it is first published, sent or given to the
Company's stockholders, contain an untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to make
the statements therein not misleading or (ii) the Proxy Statement will, at the
date it is first mailed to the Company's stockholders or at the time of the
Company Stockholders Meeting (as defined in Section 6.01(b)), contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they are made, not misleading. The Schedule 14D-
9, the Proxy Statement and the Information Statement will comply as to form in
all material respects with the requirements of the Exchange Act and the rules
and regulations thereunder, except that no representation is made by the Company
with respect to statements made or incorporated by reference therein based on
information supplied by Parent or Sub in writing for inclusion or incorporation
by reference therein.
SECTION 3.08. Absence of Certain Changes or Events. From the date of
-------------------------------------
the most recent audited financial statements included in the Filed Company SEC
Documents to the date of this Agreement, the Company has, as a general matter,
conducted its business only in the ordinary course (other than any changes that
resulted from the MacMillan Bloedel Transaction (as defined in Section 6.12(a)),
and during such period there has not been:
(i) any event, change, effect or development that, individually or
in the aggregate, has had or would reasonably be expected to have a Company
Material Adverse Effect or a material adverse effect on the ability of the
Company to consummate the transactions contemplated by this Agreement;
(ii) any declaration, setting aside or payment of any dividend or
other distribution (whether in cash, stock or property) with respect to any
Company Capital Stock (other than regular annual quarterly cash dividends
not in excess of $0.055 per share of Company
<PAGE>
22
Common Stock with usual record and payment dates and in accordance with the
Company's present dividend policy and other than regular cash dividends not
in excess of $1.065 per share of Company Preferred Stock payable on
outstanding Company Preferred Stock in accordance with the current terms
thereof);
(iii) any split, combination or reclassification of any Company
Capital Stock or any issuance or the authorization of any issuance of any
other securities in respect of, in lieu of or in substitution for shares of
Company Capital Stock;
(iv) (A) any granting by the Company or any Company Subsidiary to any
director or executive officer of the Company or any Company Subsidiary of
any increase in compensation, except in the ordinary course consistent with
prior practice or as was required under employment agreements in effect as
of the date of the most recent audited financial statements included in the
Filed Company SEC Documents, (B) any granting by the Company or any Company
Subsidiary to any such director or executive officer of any increase in
severance or termination pay, except as was required under any employment,
severance or termination agreements in effect as of the date of the most
recent audited financial statements included in the Filed Company SEC
Documents and except for any increase in severance or termination pay
resulting solely from increases in compensation made in the ordinary
course, or (C) any entry by the Company or any Company Subsidiary into, or
any amendment of, any employment, severance or termination agreement with
any such director or executive officer;
(v) any change in financial accounting methods, principles or
practices by the Company or any Company Subsidiary materially affecting the
consolidated assets, liabilities or results of operations of the Company,
except insofar as may have been required by a change in GAAP; or
(vi) any material elections with respect to Taxes (as defined in
Section 3.09(f)) by the Company or any Company Subsidiary or settlement or
compromise by the Company or any Company Subsidiary of any material Tax
liability or refund, except, in each case, in the ordinary course
consistent with past practice or as
<PAGE>
23
required to comply with changes in Applicable Law occurring prior to the
date of this Agreement.
SECTION 3.09. Taxes. (a) Each of the Company and each Company
------
Subsidiary has timely filed, or has caused to be timely filed on its behalf, all
Tax Returns (as defined in Section 3.09(f)) required to be filed by it, and all
such Tax Returns are true, complete and accurate, except to the extent any
failure to file or any failure to be true, complete or accurate in any filed Tax
Returns would not, individually or in the aggregate, reasonably be expected to
have a Company Material Adverse Effect. All Taxes shown to be due on such Tax
Returns, or otherwise owed, have been timely paid, except to the extent that any
failure to pay, individually or in the aggregate, has not had and would not
reasonably be expected to have a Company Material Adverse Effect.
(b) The most recent financial statements contained in the Filed
Company SEC Documents reflect an adequate reserve for all current Taxes payable
by the Company and the Company Subsidiaries (in addition to any reserve for
deferred Taxes established to reflect timing differences between book and Tax
income) for all taxable periods and portions thereof through the date of such
financial statements, except to the extent that any failures have not had and
would not reasonably be expected to have, individually or in the aggregate, a
Company Material Adverse Effect. No deficiency with respect to any Taxes has
been proposed, asserted or assessed against the Company or any Company
Subsidiary, and no requests for waivers of the time to assess any such Taxes are
pending, except to the extent any such deficiency or request for waiver,
individually or in the aggregate, have not had and would not reasonably be
expected to have a Company Material Adverse Effect.
(c) The Federal income Tax Returns of the Company and each corporation
that is a Company Subsidiary consolidated in such Tax Returns have been examined
by and settled with the United States Internal Revenue Service for all years
through 1991. All material assessments for Taxes due with respect to such
completed and settled examinations or any concluded litigation have been fully
paid.
(d) As of the date of this Agreement, neither the Company nor any
Company Subsidiary is bound by any sharing, allocation or indemnification
agreement with respect to Taxes that is material to the business, financial
condition
<PAGE>
24
or ongoing, longer-term profitability (but not prospects) of the Company and the
Company Subsidiaries, taken as a whole.
(e) Neither the Company nor any Company Subsidiary has constituted
either a "distributing corporation" or a "controlled corporation" (within the
meaning of Section 355(a)(1)(A) of the Code) in a distribution of stock
qualifying for tax-free treatment under Section 355 of the Code (i) in the two
years prior to the date of this Agreement or (ii) in a distribution which
otherwise constitutes part of a "plan" or "series of related transactions"
(within the meaning of Section 355(e) of the Code) in conjunction with the
Merger.
(f) For purposes of this Agreement:
"Taxes" includes all forms of taxation, whenever created or imposed,
-----
and whether of the United States or elsewhere, and whether imposed by a local,
municipal, governmental, state, foreign, Federal or other Governmental Entity,
including all interest, penalties and additions imposed with respect to such
amounts.
"Tax Return" means all Federal, state, local, provincial and foreign
----------
Tax returns, declarations, statements, reports, schedules, forms and information
returns and any amended Tax return required to be filed with any taxing
authority with respect to Taxes.
SECTION 3.10. Absence of Changes in Benefit Plans. There has not
------------------------------------
been any adoption or amendment in any material respect by the Company or any
Company Subsidiary of the Company Benefit Plans described in the Company's
Associate Benefits Summary referred to in Section 3.11(a) or in the Filed
Company SEC Documents. For purposes of this Agreement, the term "Company
-------
Benefit Plans" means, collectively, any bonus, pension, profit sharing, deferred
- -------------
compensation, incentive compensation, stock ownership, stock purchase, stock
option, "phantom" stock, retirement, vacation, severance, disability, death
benefit, hospitalization, medical or other plan, agreement or arrangement
providing benefits to any current or former employee, officer or director of the
Company or any Company Subsidiary. As of the date of this Agreement, there are
not any employment, consulting, indemnification, severance or termination
agreements or arrangements between the Company or any Company Subsidiary and
any current or former executive officer or director of the Company or any
Company
<PAGE>
25
Subsidiary, nor are there any such agreements with any other current or former
employee of the Company or any Company Subsidiary who is or was employed in the
United States or Canada, other than (i) agreements that do not require the
payment of more than $100,000 per year, and (ii) letter agreements setting forth
the terms and conditions of employment in connection with the hiring of such
individual and not providing for any entitlement to severance pay and benefits
in excess of $100,000.
SECTION 3.11. ERISA Compliance; Excess Parachute Payments. (a) The
--------------------------------------------
Company Disclosure Letter includes a copy of the Company's Associate Benefits
Summary, which sets forth an accurate description of the principal Company
Benefit Plans (other than those Company Benefit Plans that are filed with the
Filed Company SEC Documents) provided to employees of the Company and the
Company Subsidiaries who are employed in the United States (the "U.S.
----
Employees"), as in effect as of July 1, 1999 (the "U.S. Benefits"). The
- --------- -------------
compensation and benefits provided pursuant to Company Benefit Plans for
employees of the Company and the Company Subsidiaries who are not U.S. Employees
are (i) with respect to expatriates, consistent with customary practice for
expatriate employees, and (ii) with respect to all other such employees,
designed to provide similar benefits to the U.S. Benefits, to the extent
possible subject to Applicable Law, and, in each case, the aggregate cost
thereof is not materially greater, on a per capita basis, than the aggregate
cost of the U.S. Benefits. The Company has made available, or will hereafter
make available upon request, to Parent true, complete and correct copies of (i)
each Company Benefit Plan (or, in the case of any unwritten Company Benefit
Plan, a description thereof), (ii) the most recent annual report on Form 5500
filed with the Internal Revenue Service with respect to each Company Benefit
Plan (if any such report was required), (iii) the most recent summary plan
description for each Company Benefit Plan for which such summary plan
description is required and (iv) each trust agreement and group annuity contract
relating to any Company Benefit Plan.
(b) All "employee pension benefit plans" (as defined in Section 3(2)
of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"))
-----
that are maintained for U.S. Employees (sometimes referred to herein as "Company
-------
Pension Plans") have been the subject of determination letters from the Internal
- -------------
Revenue Service to the effect that such Company Pension Plans are qualified and
<PAGE>
26
exempt from Federal income taxes under Sections 401(a) and 501(a), respectively,
of the Internal Revenue Code of 1986, as amended (the "Code"), and no such
----
determination letter has been revoked nor, to the Knowledge of the Company, has
revocation been threatened, nor has any such Company Pension Plan been amended
since the date of its most recent determination letter or application therefor
in any respect that would adversely affect its qualification. All Forms 5500
required to be filed with respect to Company Benefit Plans have been timely
filed.
(c) None of the Company, any Company Subsidiary, or any person that
is considered one employer with the Company under Section 4001 of ERISA or
Section 414 of the Code, has or could reasonably be expected to have any
liability under Title IV of ERISA with respect to any "employee benefit plan"
(as defined in Section 3(3) of ERISA) other than for payment of premiums to the
Pension Benefit Guaranty Corporation with respect to the defined benefit pension
plan disclosed in the Company Disclosure Letter. None of the Company Pension
Plans has an "accumulated funding deficiency" (as such term is defined in
Section 302 of ERISA or Section 412 of the Code), whether or not waived. None
of the Company, any Company Subsidiary, any officer of the Company or any of its
Company Subsidiary or any of the Company Benefit Plans that are subject to
ERISA, including the Company Pension Plans, and to the Knowledge of the Company,
any trusts created thereunder or any trustee or administrator thereof, have
engaged in a "prohibited transaction" (as defined in Section 406 of ERISA or
Section 4975 of the Code) or any other breach of fiduciary responsibility that
could subject the Company, any Company Subsidiary or any officer of the Company
or any Company Subsidiary to the Tax or penalty on prohibited transactions
imposed by such Section 4975 in any material amount or to any material liability
under Section 502(i) or 502(1) of ERISA.
(d) With respect to any Company Benefit Plan that is an employee
welfare benefit plan, except as disclosed in the Company Disclosure Letter, (i)
no such Company Benefit Plan is unfunded or funded through a "welfare benefits
fund" (as defined in Section 419(e) of the Code) and (ii) each such Company
Benefit Plan that is a "group health plan" (as defined in Section 5000(b)(1) of
the Code), complies with the applicable requirements of Section 4980B(f) of the
Code. Neither the Company nor any Company Subsidiary has any obligations for
retiree health and life benefits under any
<PAGE>
27
Company Benefit Plan with respect to U.S. Employees (other than as required
under Section 4980B(f) of the Code).
(e) The Company Disclosure Letter sets forth a complete and accurate
list of each individual who is a party to a change-in-control employment
agreement with the Company, together with such individual's current base salary
and target bonus.
SECTION 3.12. Labor Matters. There are no collective bargaining or
---------------
other labor union agreements to which the Company or any Company Subsidiary is a
party or by which any of them is bound. As of the date of this Agreement, to
the Knowledge of the Company, there is not any labor union organizing activity
or any actual or threatened employee strikes, work stoppages, slowdowns or
lockouts that, individually or in the aggregate, have had or would reasonably be
expected to have a Company Material Adverse Effect.
SECTION 3.13. Litigation. There is no suit, action or proceeding
-----------
pending or, to the Knowledge of the Company, threatened against or affecting the
Company or any Company Subsidiary (and the Company is not aware of any basis for
any such suit, action or proceeding) that, individually or in the aggregate, has
had or would reasonably be expected to have a Company Material Adverse Effect,
nor is there any Judgment outstanding against the Company or any Company
Subsidiary that has had or would reasonably be expected to have a Company
Material Adverse Effect. As of the date of this Agreement, there is no suit,
action or proceeding pending or, to the Knowledge of the Company, threatened
against or affecting the Company or any Company Subsidiary (and the Company is
not aware of any basis for any such suit, action or proceeding) that,
individually or in the aggregate, would reasonably be expected to have a
material adverse effect on the ability of the Company to consummate the
transactions contemplated by this Agreement, nor as of the date of this
Agreement is there any Judgment outstanding against the Company or any Company
Subsidiary that would reasonably be expected to have a material adverse effect
on the ability of the Company to consummate the transactions contemplated by
this Agreement.
SECTION 3.14. Compliance with Applicable Laws. The Company and the
--------------------------------
Company Subsidiaries are in compliance with all Applicable Laws, including those
relating to occupational health and safety, except for such instances of
<PAGE>
28
noncompliance that, individually or in the aggregate, have not had or would not
reasonably be expected to have a Company Material Adverse Effect. As of the
date of this Agreement, the Company and the Company Subsidiaries are in
compliance with all Applicable Laws, including those relating to occupational
health and safety, except for such instances of noncompliance that, individually
or in the aggregate, would not reasonably be expected to have a material adverse
effect on the ability of the Company to consummate the transactions contemplated
by this Agreement. To the Knowledge of the Company neither the Company nor any
Company Subsidiary has received any written communication during the past two
years from a Governmental Entity that alleges that the Company or a Company
Subsidiary is not in compliance with any Applicable Law, except with respect to
any alleged noncompliance that, individually or in the aggregate, would not
reasonably be expected to have a Company Material Adverse Effect. This Section
3.13 does not relate to matters with respect to Taxes, which are the subject of
Section 3.09, or environmental matters, which are the subject of Section 3.18.
SECTION 3.15. Brokers; Schedule of Fees and Expenses. No broker,
---------------------------------------
investment banker, financial advisor or other person, other than Goldman, Sachs
& Co., the fees and expenses of which will be paid by the Company, is entitled
to any brokers', finders', financial advisors' or other similar fee or
commission in connection with the Offer, the Merger and the other transactions
contemplated by this Agreement based upon arrangements made by or on behalf of
the Company. The Company has furnished to Parent the financial details of all
agreements between the Company and Goldman, Sachs & Co. relating to the Offer,
the Merger and the other transactions contemplated by this Agreement.
SECTION 3.16. Opinion of Financial Advisor. The Company has received
-----------------------------
the opinion of Goldman, Sachs & Co., dated the date of this Agreement, to the
effect that, as of such date, the consideration to be received in the Offer and
the Merger by the holders of Company Common Stock is fair to such holders from a
financial point of view, a signed copy of which opinion will promptly be
delivered to Parent upon receipt by the Company.
SECTION 3.17. Year 2000 Compliance. (a) To the Knowledge of the
---------------------
Company, the computer systems of the Company and the Company Subsidiaries are
Year 2000 Compliant (as defined below), except to the extent that such failures
<PAGE>
29
to be Year 2000 Compliant would not, individually or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect. All inventory
of the Company and the Company Subsidiaries that is, consists of, includes or
uses computer software is Year 2000 Compliant. Any failure on the part of the
customers of and suppliers to the Company and the Company Subsidiaries to be
Year 2000 Compliant by December 31, 1999, is not expected to have a Company
Material Adverse Effect. As of the date of this Agreement, the SAP project is
expected to be completed on schedule and within budget.
(b) The term "Year 2000 Compliant", with respect to a computer system
-------------------
or software program, means that such computer system or program: (i) is capable
of recognizing, processing, managing, representing, interpreting and
manipulating correctly date-related data for dates earlier and later than
January 1, 2000; (ii) has the ability to provide date recognition for any data
element without limitation for the purposes designed; (iii) has the ability to
function automatically into and beyond the year 2000 without human intervention
and without any change in operations associated with the advent of the year
2000; (iv) has the ability to interpret data, dates and time correctly into and
beyond the year 2000; (v) has the ability not to produce noncompliance in
existing data, nor otherwise corrupt such data, into and beyond the year 2000;
(vi) has the ability to process correctly after January 1, 2000, data containing
dates before that date; and (vii) has the ability to recognize all "leap year"
dates, including February 29, 2000.
SECTION 3.18. Environmental Matters. Neither the Company nor any
----------------------
Company Subsidiary has (x) to the Knowledge of the Company, placed, held,
located, released, transported or disposed of any Hazardous Substances (as
defined below) on, under, from or at any of the Company's or any of the Company
Subsidiaries' properties, other than in a manner that would not, in all such
cases taken individually or in the aggregate, reasonably be expected to result
in a Company Material Adverse Effect, or (y) any Knowledge or reason to know of
the presence of any Hazardous Substances on, under or at any of the Company's or
any of the Company Subsidiaries' properties, other than in a manner that would
not, in all such cases taken individually or in the aggregate, reasonably be
expected to result in a Company Material Adverse Effect. There are no claims,
investigations or administrative actions pending or, to the
<PAGE>
30
Knowledge of the Company, threatened against or affecting the Company or any
Company Subsidiary arising from or related to the harmful effects of, or the
removal or remediation of, Hazardous Substances that has had or would be
reasonably expected to have a Company Material Adverse Effect. For purposes of
this Agreement, "Environmental Law" means any Applicable Law or Judgment of any
-----------------
Governmental Entity relating to any matter of pollution, protection of the
environment, environmental regulation or control or regarding Hazardous
Substances on or under any of the Company's or any of the Company Subsidiary's
properties or any other properties. For purposes of this Agreement, the term
"Hazardous Substance" shall mean any toxic or hazardous materials or substances,
-------------------
including asbestos, buried contaminants, chemicals, flammable explosives,
radioactive materials, petroleum and petroleum products and any substances
defined as, or included in the definition of, "hazardous substances", "hazardous
wastes", "hazardous materials" or "toxic substances" under any Environmental
Law.
SECTION 3.19. Contracts; Debt Instruments. As of the date of this
----------------------------
Agreement, there are no contracts or agreements that are material to the conduct
of the business of the Company and the Company Subsidiaries taken as a whole
that are required to be filed as part of the Company SEC Documents. Neither the
Company nor any of the Company Subsidiaries is in violation of or in default
under (nor does there exist any condition which upon the passage of time or the
giving of notice would cause such a violation of or default under) any Contract
to which it is a party or by which it or any of its properties or assets is
bound that, individually or in the aggregate, has had or would reasonably be
expected to have a Company Material Adverse Effect.
SECTION 3.20. Intellectual Property. The Company and the Company
----------------------
Subsidiaries own, or are validly licensed or otherwise have the right to use,
all patents, patent rights, trademarks, trademark rights, trade names, trade
name rights, service marks, service mark rights, copyrights and other
proprietary intellectual property rights and computer programs (collectively,
"Intellectual Property Rights") which are material to the conduct of the
----------------------------
business of the Company and the Company Subsidiaries taken as a whole, in each
case, as currently conducted. No claims are pending or, to the Knowledge of the
Company, threatened that the Company or any of the Company Subsidiaries is
infringing or
<PAGE>
31
otherwise adversely affecting the rights of any person with regard
to any Intellectual Property Right, except for such claims that would not,
individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect. To the Knowledge of the Company, no person is
infringing the rights of the Company or any of the Company Subsidiaries with
respect to any Intellectual Property Right, except for such infringements that,
individually or in the aggregate, have not had and would not reasonably be
expected to have a Company Material Adverse Effect.
ARTICLE IV
Representations and Warranties of Parent and Sub
------------------------------------------------
Parent and Sub, jointly and severally, represent and warrant to the
Company as follows:
SECTION 4.01. Organization, Standing and Power. Each of Parent and
---------------------------------
Sub is duly organized, validly existing and in good standing under the laws of
the jurisdiction in which it is organized, and has full power and authority and
possesses all governmental franchises, licenses, permits, authorizations and
approvals necessary to enable it to own, lease or otherwise hold its properties
and assets and to conduct its businesses as presently conducted, except where
the failure to have such power or authority or to possess such franchises,
licenses, permits, authorizations and approvals, individually or in the
aggregate, has not had and would not reasonably be expected to have a material
adverse effect on Parent (a "Parent Material Adverse Effect") or a material
------------------------------
adverse effect on the ability of Parent to consummate the transactions
contemplated by this Agreement. Each of Parent and Sub is duly qualified to do
business in each jurisdiction where the nature of its business or its ownership
or leasing of its properties makes such qualification necessary other than such
failures to qualify that, individually or in the aggregate, have not had and
would not reasonably be expected to have a Parent Material Adverse Effect.
SECTION 4.02. Sub Actions. (a) Since the date of its incorporation,
------------
Sub has not carried on any business or conducted any operations other than the
execution of this Agreement, the performance of its obligations hereunder and
matters ancillary thereto.
<PAGE>
32
(b) The authorized capital stock of Sub consists of 1,000 shares of
common stock, par value $0.01 per share, all of which shares have been validly
issued, are fully paid and nonassessable and are owned by Parent free and clear
of any Lien.
SECTION 4.03. Authority; Execution and Delivery; Enforceability. (a)
--------------------------------------------------
Each of Parent and Sub has all requisite corporate power and authority to
execute and deliver this Agreement and to consummate the transactions
contemplated by this Agreement. The execution and delivery by each of Parent
and Sub of this Agreement and the consummation by it of the transactions
contemplated by this Agreement have been duly authorized by all necessary
corporate action as the part of Parent and Sub. Parent, as sole stockholder of
Sub, has approved this Agreement. Each of Parent and Sub has duly executed and
delivered this Agreement, and, assuming the due and valid authorization,
execution and delivery of this Agreement by the Company, this Agreement
constitutes a legal, valid and binding obligation of each of Parent and Sub,
enforceable against each of them in accordance with its terms.
(b) The Board of Directors of Parent (the "Parent Board"), at a
------------
meeting duly called and held duly and unanimously adopted resolutions approving
this Agreement.
SECTION 4.04. No Conflicts; Consents. (a) None of the execution and
-----------------------
delivery by each of Parent and Sub of this Agreement and the consummation of the
Offer, the Merger and the other transactions contemplated by this Agreement and
compliance with the terms hereof will (i) conflict with the certificate of
incorporation or by-laws of Parent or Sub or (ii) conflict with or result in any
violation of or default (with or without notice or lapse of time, or both)
under, or give rise to a right of termination, cancellation or acceleration of
any obligation or to loss of a material benefit under, or result in the creation
of any Lien upon any of the properties or assets of Parent or Sub under any
provision of, (A) any Contract to which Parent or Sub is a party or by which any
of their respective properties or assets is bound or (B) subject to the filings
and other matters referred to in Section 4.04(b), any Judgment or Applicable Law
applicable to Parent or Sub or their respective properties or assets, other
than, in the case of clauses (A) and (B) of this sentence, any such items that,
individually or in the aggregate, have not had and would not reasonably be
expected to have a Parent Material Adverse Effect.
<PAGE>
33
(b) No Consent of, or registration, declaration or filing with, or
permit from, any Governmental Entity is required to be obtained or made by or
with respect to Parent or any subsidiary of Parent in connection with the
execution, delivery and performance of this Agreement or the consummation of the
transactions contemplated by this Agreement, other than (i) compliance with and
filings under the HSR Act, (ii) expiration or earlier termination of the waiting
period under Part IX of the Competition Act (Canada) (the "Competition Act")
---------------
and/or receipt of an advance ruling certificate ("ARC") pursuant to the
---
Competition Act or, in the alternative of an ARC, a no-action letter from the
Commissioner of Competition, (iii) the filing with the SEC of (A) the Offer
Documents and (B) such reports under Sections 13 and 16 of the Exchange Act, as
may be required in connection with this Agreement, the Offer, the Merger and the
other transactions contemplated by this Agreement, (iv) the filing of the
Certificate of Merger with the Secretary of State of the State of Delaware, (v)
Consents the failure of which to be obtained or made would not, individually or
in the aggregate, reasonably be expected to have a Parent Material Adverse
Effect, (vi) such filings as may be required in connection with the Transfer
Taxes described in Section 6.09 and (vii) such other items (A) required solely
by reason of the participation of the Company (as opposed to any third party) in
the transactions contemplated by this Agreement or (B) that, individually or in
the aggregate, have not had and would not reasonably be expected to have a
Parent Material Adverse Effect.
SECTION 4.05. Information Supplied. None of the information supplied
---------------------
or to be supplied by Parent or Sub for inclusion or incorporation by reference
in (i) the Offer Documents, the Schedule 14D-9 or the Information Statement,
will, at the time such document is filed with the SEC, at any time it is amended
or supplemented or at the time it is first published, sent or given to the
Company's stockholders, contain an untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to make
the statements therein not misleading, or (ii) the Proxy Statement will, at the
date it is first mailed to the Company's stockholders or at the time of the
Company Stockholders Meeting, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they are made, not misleading. The Offer
<PAGE>
34
Documents will comply as to form in all material respects with the requirements
of the Securities Act and the rules and regulations thereunder, except that no
representation is made by Parent or Sub with respect to statements made or
incorporated by reference therein based on information supplied by the Company
for inclusion or incorporation by reference therein.
SECTION 4.06. Financing. Parent and Sub collectively will have at
----------
the expiration date of the Offer and at the Effective Time, and Parent will make
available to Sub, sufficient funds to enable Sub to pay for all outstanding
Company Capital Stock purchased pursuant to the Offer or converted into cash
pursuant to the Merger, to perform Parent and Sub's obligations under this
Agreement and to pay all fees and expenses related to the transactions
contemplated by this Agreement payable by them.
SECTION 4.07. Stock Ownership; Interested Stockholders. As of the
-----------------------------------------
date hereof, neither Parent nor Sub beneficially owns any Company Capital Stock
and neither Parent nor Sub is an "interested stockholder" of the Company, as
such term is defined in Section 203(c)(5) of the DGCL.
SECTION 4.08. Brokers. No broker, investment banker, financial
--------
advisor or other person, other than Morgan Stanley & Co. Incorporated, the fees
and expenses of which will be paid by Parent, is entitled to any brokers',
finders', financial advisors' or other similar fee or commission in connection
with the Offer, the Merger and the other transactions contemplated hereby based
upon arrangements made by or on behalf of Parent.
<PAGE>
35
ARTICLE V
Covenants Relating to Conduct of Business
-----------------------------------------
SECTION 5.01. Conduct of Business. (a) Conduct of Business by the
-------------------- --------------------------
Company. Except for matters set forth in the Company Disclosure Letter or
- --------
otherwise contemplated by this Agreement, from the date of this Agreement to the
Effective Time or earlier termination of this Agreement, the Company shall, and
shall cause each Company Subsidiary to, conduct its business in the usual and
ordinary course consistent with past practice, except as required to comply with
changes in Applicable Law occurring after the date hereof, and, to the extent
consistent therewith, use all reasonable efforts to preserve intact its current
business organization and keep available the services of its current officers
and employees to maintain its goodwill and ongoing business. In addition, and
without limiting the generality of the foregoing, except for matters set forth
in the Company Disclosure Letter or otherwise contemplated by this Agreement,
from the date of this Agreement to the Effective Time, the Company shall not,
and shall not permit any Company Subsidiary to, do any of the following without
the prior written consent of Parent:
(i) (A) declare, set aside or pay any dividends on, or make any
other distributions in respect of, any of its capital stock, other than (1)
dividends and distributions by a direct or indirect wholly owned subsidiary
of the Company to its parent, (2) regular quarterly cash dividends with
respect to the Company Common Stock, not in excess of $0.055 per share,
with usual declaration, record and payment dates and in accordance with the
Company's past dividend policy, (3) regular annual cash dividends, not in
excess of $1.065 per share, payable on outstanding Company Preferred Stock
in accordance with the current terms thereof and (4) any dividend or
distribution permitted by the terms of the Partnership Agreement (as
defined in Section 6.12(a)) or previously approved by the Board of
Directors of the Partnership, (B) split, combine or reclassify any of its
capital stock or issue or authorize the issuance of any other securities in
respect of, in lieu of or in substitution for shares of its capital stock,
or (C) except for the redemption of Company Preferred Stock as required by
paragraph (C) of Section 8 of the Company Preferred Certificate of
Designation by reason of this Agreement or pursuant to
<PAGE>
36
a request by Parent under Section 6.14, purchase, redeem or otherwise
acquire any shares of capital stock of the Company or any Company
Subsidiary or any other securities thereof or any rights, warrants or
options to acquire any such shares or other securities;
(ii) issue, deliver, sell or grant (A) any shares of its capital
stock, (B) any Voting Company Debt or other voting securities, (C) any
securities convertible into or exchangeable for, or any options, warrants
or rights to acquire, any such shares, Voting Company Debt, voting
securities or convertible or exchangeable securities or (D) any "phantom"
stock, "phantom" stock rights, stock appreciation rights or stock-based
performance units, other than (1) the issuance of Company Common Stock (and
associated Company Rights) upon the exercise of Company Employee Stock
Options outstanding on the date of this Agreement and in accordance with
their present terms, (2) the issuance of up to an additional 2,500 Company
Employee Stock Options, each of which shall have an exercise price not less
than the fair market value of Company Common Stock on the date of grant,
pursuant to the Company Stock Plans in accordance with their present terms
and the issuance of Company Common Stock (and associated Company Rights)
upon the exercise of such Company Employee Stock Options and (3) the
issuance of Junior Preferred Stock upon the exercise of Company Rights;
(iii) amend its certificate of incorporation, by-laws or other
comparable charter or organizational documents;
(iv) except in the ordinary course consistent with past practice,
acquire or agree to acquire (A) by merging or consolidating with, or by
purchasing a substantial portion of the assets of, or by any other manner,
any equity interest in or business or any corporation, partnership, joint
venture, association or other business organization or division thereof or
(B) any assets that are material, individually or in the aggregate, to the
Company and the Company Subsidiaries, taken as a whole;
(v) (A) grant to any officer or director of the Company or any
Company Subsidiary any increase in compensation, except in the ordinary
course consistent with prior practice or to the extent required under
<PAGE>
37
employment agreements in effect as of the date hereof, (B) grant to any
employee, officer or director of the Company or any Company Subsidiary any
increase in severance or termination pay, except to the extent required
under any agreement in effect as of the date hereof, (C) enter into any
employment, consulting, indemnification, severance or termination agreement
with any officer or director of the Company or any Company Subsidiary, (D)
establish, adopt, enter into or amend in any material respect any
collective bargaining agreement or Company Benefit Plan, except as may be
required by Applicable Law in effect as of the date hereof, (E) take any
action to accelerate any rights or benefits, or make any material
determinations not in the ordinary course consistent with prior practice,
under any collective bargaining agreement or Company Benefit Plan or (F)
enter into any agreement described in clause (C) hereof with (1) any other
employee of the Company or any Company Subsidiary employed in the United
States or Canada or (2) any such employee employed outside the United
States and Canada except for agreements required by Applicable Law in the
relevant jurisdiction; provided, however, that the Company shall be
-------- -------
permitted to adopt the amendment to its Severance Pay Plan set forth in the
Company Disclosure Letter;
(vi) make any change in financial accounting methods, principles or
practices materially affecting the reported consolidated assets,
liabilities or results of operations of the Company, except insofar as may
have been required by a change in GAAP or by operation of Applicable Law;
(vii) sell, lease (as lessor), license or otherwise dispose of or
subject to any Lien any properties or assets, except sales of inventory and
excess or obsolete assets or real property in the ordinary course
consistent with past practice;
(viii) (A) incur any indebtedness for borrowed money or guarantee any
such indebtedness of another person, issue or sell any debt securities or
warrants or other rights to acquire any debt securities of the Company or
any Company Subsidiary, guarantee any debt securities of another person,
enter into any "keep well" or other agreement to maintain any financial
statement condition of another person or enter into any arrangement having
<PAGE>
38
the economic effect of any of the foregoing, except for short-term
borrowings incurred in the ordinary course consistent with past practice,
or (B) make any loans, advances or capital contributions to, or investments
in, any other person, other than to or in the Company or any direct or
indirect wholly owned subsidiary of the Company or to or in the
Partnership;
(ix) make or agree to make any new capital expenditure or
expenditures (other than expenditures in the existing capital expenditure
budget, a copy of which is attached to the Company Disclosure Letter) that,
individually, is in excess of $5,000,000 or, in the aggregate, are in
excess of $9,000,000;
(x) make any material Tax election, except in the ordinary course
consistent with past practice or as required to comply with changes in
Applicable Law occurring after the date of this Agreement, or settle or
compromise any material Tax liability or refund;
(xi) (A) pay, discharge or satisfy any claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction, in the
ordinary course consistent with past practice or in accordance with their
terms or the terms of this Agreement, of liabilities reflected or reserved
against in, or contemplated by, the most recent consolidated financial
statements (or the notes thereto) of the Company included in the Filed
Company SEC Documents or incurred in the ordinary course consistent with
past practice, (B) cancel any material indebtedness (individually or in the
aggregate) or waive any claims or rights of substantial value or (C) waive
the benefits of, or agree to modify in any manner, any confidentiality,
standstill or similar agreement to which the Company or any Company
Subsidiary is a party, except, in the case of this clause (C), to the
extent necessary to comply with the fiduciary obligations of the Company
Board, as determined in good faith by it after consultation with outside
counsel;
(xii) exercise any rights (the "Buy Rights") it may have under
----------
Section 15.2 of the Partnership Agreement to exercise the "buy procedure",
as set out in Section 15.3 of the Partnership Agreement, as a result of the
MacMillan Bloedel Transaction; or
<PAGE>
39
(xiii) authorize any of, or commit or agree to take any of, the
foregoing actions.
(b) Other Actions. The Company and Parent shall not, and shall not
--------------
permit any of their respective subsidiaries to, take any action that would, or
that would reasonably be expected to, result in (i) any of the representations
and warranties of such party set forth in this Agreement that is qualified by
reference to a material adverse effect becoming untrue, (ii) any of such
representations and warranties that is not so qualified becoming untrue in any
material respect or (iii) except as otherwise permitted by Section 5.02, any
condition to the Merger set forth in Article VII not being satisfied.
SECTION 5.02. No Solicitation. (a) The Company shall not, nor shall
----------------
it permit any Company Subsidiary to, nor shall it authorize any officer,
director or employee of, or any investment banker, attorney or other advisor or
representative of, the Company or Company Subsidiary to, (i) solicit, initiate
or knowingly encourage the submission of, any Company Takeover Proposal (as
defined in Section 5.02(e)), (ii) enter into any agreement with respect to any
Company Takeover Proposal or (iii) participate in any discussions or
negotiations regarding, or furnish to any person any information with respect
to, or take any other action to knowingly facilitate any inquiries or the making
of any proposal that constitutes, or may reasonably be expected to lead to, any
Company Takeover Proposal; provided, however, that at any time during the period
-------- -------
following the execution of the Agreement and prior to the consummation of the
Offer (the "Company Applicable Period"), if the Company receives a proposal or
-------------------------
offer that was not solicited by the Company and that did not otherwise result
from a breach of this Section 5.02(a) and that the Company Board determines in
good faith (based on consultation with its outside counsel and a financial
advisor of nationally recognized reputation) could result in a third party
making a Superior Company Proposal (as defined in Section 5.02(e)), and subject
to compliance with Section 5.02(c), the Company may, to the extent necessary to
comply with the fiduciary obligations of the Company Board, as determined in
good faith by it after consultation with outside counsel, (A) furnish
information with respect to the Company to the person making such proposal or
offer pursuant to a customary confidentiality agreement, as determined by the
Company after consultation with its outside counsel, and
<PAGE>
40
(B) participate in discussions or negotiations with such person regarding such
proposal or offer. Without limiting the foregoing, it is agreed that any
violation of the restrictions set forth in the preceding sentence by any
executive officer of the Company or any Company Subsidiary or any affiliate,
director or investment banker, attorney or other advisor or representative of
the Company or any of the Company Subsidiaries, shall be deemed to be a breach
of this Section 5.02(a) by the Company. The Company shall, and shall cause its
officers and directors and any investment banker, attorney or other advisor or
representative of the Company or any Company Subsidiary, to, cease immediately
all discussions and negotiations regarding any proposal that constitutes, or may
reasonably be expected to lead to, a Company Takeover Proposal.
(b) Except as expressly permitted by this Section 5.02, neither the
Company Board nor any committee thereof shall approve any letter of intent,
agreement in principle, acquisition agreement or similar agreement relating to
any Company Takeover Proposal or approve or recommend, or propose to approve or
recommend, any Company Takeover Proposal. The Company may terminate this
Agreement pursuant to Section 8.01(f) only if (i) the Company Board has received
a Superior Company Proposal, (ii) in light of such Superior Company Proposal the
Company Board has determined in good faith, after consultation with outside
counsel, that it is necessary for the Company Board to withdraw or modify its
approval or recommendation of this Agreement, the Offer or the Merger in order
to comply with its fiduciary obligations, (iii) the Company has notified Parent
in writing of the determinations described in clause (ii) above, (iv) at least
three business days following receipt by Parent of the notice referred to in
clause (iii) above, and taking into account any revised proposal made by Parent
since receipt of the notice referred to in clause (iii) above, such Superior
Company Proposal remains a Superior Company Proposal and the Company Board has
again made the determinations referred to in clause (ii) above (although no
additional time period shall be required following such determinations), (v) the
Company is in compliance with this Section 5.02, (vi) the Company Board
concurrently approves, and the Company concurrently enters into, a definitive
agreement providing for the implementation of such Superior Company Proposal,
(vii) such definitive agreement contains the guarantee required by Section
6.12(b) and (viii) Parent is not at such time entitled to terminate this
Agreement pursuant to
<PAGE>
41
Section 8.01(c) solely as a result of a knowing and deliberate breach by the
Company of a representation or warranty in this Agreement or a material breach
by the Company of a covenant in this Agreement.
(c) The Company promptly shall advise Parent orally and in writing of
any Company Takeover Proposal or any inquiry with respect to or that could
reasonably be expected to lead to any Company Takeover Proposal, the identity of
the person making any such Company Takeover Proposal or inquiry and the material
terms of any such Company Takeover Proposal or inquiry. The Company shall (i)
keep Parent fully informed of the status of any such Company Takeover Proposal
or inquiry and (ii) provide to Parent as soon as practicable after receipt or
delivery thereof with copies of all correspondence and other written material
sent or provided to the Company from any third party in connection with any
Company Takeover Proposal; provided, however, that the Company shall not be
-------- -------
required to provide any nonpublic information specified in clause (ii) regarding
the business or financial condition or prospects of such third party if (A) the
Company is prohibited from disclosing such information pursuant to a legally
binding confidentiality agreement and (B) such Company Takeover Proposal
provides for consideration consisting solely of cash.
(d) Neither the Company nor the Company Board nor any committee
thereof shall withdraw or modify, or propose publicly to withdraw or modify, in
a manner adverse to Parent or Sub, the approval or recommendation of the Company
Board of this Agreement, the Offer or the Merger, or approve or recommend, or
propose publicly to approve or recommend, a Company Takeover Proposal, unless a
withdrawal or modification of such approval or recommendation is, in the good
faith judgment of the Company Board after consultation with its outside counsel,
necessary to comply with its fiduciary obligations. Nothing contained in this
Section 5.02 shall prohibit the Company from taking and disclosing to its
stockholders a position contemplated by Rule 14e-2(a) promulgated under the
Exchange Act or from making any required disclosure to the Company's
stockholders if, in the good faith judgment of the Company Board, based on the
opinion of outside counsel, failure so to disclose would be inconsistent with
its obligations under Applicable Law.
(e) For purposes of this Agreement:
<PAGE>
42
"Company Takeover Proposal" means any inquiry, proposal or offer for a
-------------------------
merger, consolidation, dissolution, liquidation, recapitalization or other
business combination involving the Company or Company Subsidiary, any
proposal or offer for the issuance by the Company of over 15% of its equity
securities as consideration for the assets or securities of any person or
any proposal or offer to acquire in any manner, directly or indirectly,
over 15% of the equity securities of consolidated total assets of the
Company, in each case, other than the transactions contemplated by this
Agreement.
"Superior Company Proposal" means any proposal made by a third party
-------------------------
to acquire all or substantially all of the equity securities or assets of
the Company, pursuant to a tender or exchange offer, a merger, a
consolidation, a liquidation or dissolution, a recapitalization, a sale of
its assets or otherwise, which a majority of the disinterested directors of
the Company determines in its good faith judgment (i) to be on terms
superior in value from a financial point of view to the holders of Company
Capital Stock than the transactions contemplated by this Agreement (based
on consultation with the Company's independent financial advisor), taking
into account all the terms and conditions of such proposal and this
Agreement (including any proposal by Parent to amend the terms of the
transactions contemplated by this Agreement) and (ii) reasonably capable of
being completed, taking into account all financial, regulatory, legal and
other aspects of such proposal.
ARTICLE VI
Additional Agreements
---------------------
<PAGE>
43
SECTION 6.01. Preparation of Proxy Statement; Stockholders Meetings.
------------------------------------------------------
(a) If the approval of this Agreement by the Company's stockholders is required
by Applicable Law, the Company shall, at Parent's request, as soon as
practicable following the expiration of the Offer, prepare and file with the SEC
the Proxy Statement in preliminary form, and the Company shall use its
reasonable efforts to respond as promptly as practicable to any comments of the
SEC with respect thereto. The Company shall notify Parent promptly of the
receipt of any comments from the SEC or its staff and of any request by the SEC
or its staff for amendments or supplements to the Proxy Statement or for
additional information, and shall supply Parent with copies of all
correspondence between the Company or any of its representatives, on the one
hand, and the SEC or its staff, on the other hand, with respect to the Proxy
Statement. If at any time prior to receipt of the Company Stockholder Approval,
there shall occur any event that should be set forth in an amendment or
supplement to the Proxy Statement, the Company shall promptly prepare and mail
to its stockholders such an amendment or supplement. The Company shall not mail
any Proxy Statement, or any amendment or supplement thereto, to which Parent
reasonably objects. The Company shall use its reasonable efforts to cause the
Proxy Statement to be mailed to the Company's stockholders as promptly as
practicable after filing with the SEC.
(b) If the approval of this Agreement by the Company's stockholders
is required by Applicable Law, the Company shall, as soon as practicable
following the expiration of the Offer, duly call, give notice of, convene and
hold a meeting of its stockholders (the "Company Stockholders Meeting") for the
----------------------------
purpose of seeking the Company Stockholder Approval. The Company shall, through
the Company Board, recommend to its stockholders that they give the Company
Stockholder Approval, except to the extent that the Company Board shall have
withdrawn or modified its approval or recommendation of this Agreement, the
Offer or the Merger as permitted by Section 5.02(b). Without limiting the
generality of the foregoing, the Company agrees that its obligations pursuant to
the first sentence of this Section 6.01(b) shall not be affected by the
commencement, public proposal, public disclosure or communication to the Company
of any Company Takeover Proposal. Notwithstanding the foregoing, if Parent, Sub
or any other subsidiary of Parent shall acquire at least 90% of the outstanding
shares of each outstanding class of capital stock of the Company entitled to
vote on the Merger, the parties shall, at the
<PAGE>
44
request of Parent, take all necessary and appropriate action to cause the Merger
to become effective as soon as practicable after the expiration of the Offer
without a stockholders meeting in accordance with Section 253 of the DGCL.
(c) Parent shall cause all shares of Company Capital Stock purchased
pursuant to the Offer and all other shares of Company Capital Stock owned by
Parent, Sub or any other subsidiary of Parent to be voted in favor of the
approval of this Agreement.
SECTION 6.02. Access to Information; Confidentiality. (a) The
---------------------------------------
Company shall, and shall cause each of the Company Subsidiaries to, afford to
Parent and to its officers, employees, accountants, counsel, financial advisors
and other representatives, reasonable access during normal business hours during
the period prior to the Effective Time to all of their properties, books,
contracts, commitments, personnel and records and, during such period, the
Company shall, and shall cause each of the Company Subsidiaries to, promptly
furnish to Parent (i) a copy of each report, schedule, registration statement
and other document filed by the Company or any of the Company Subsidiaries
during such period pursuant to the requirements of Federal or state securities
laws and (ii) all other information concerning its business, properties and
personnel as Parent may reasonably request, subject to legally binding
confidentiality restrictions with third parties in effect as of the date of this
Agreement. Without limiting the generality of the foregoing, in the event the
Company receives a Company Takeover Proposal, the Company shall, within two
business days of request therefor, provide to Parent the information described
in Rule 14a-7(a)(2)(ii) under the Exchange Act and any information to which a
holder of Company Capital Stock would be entitled under Section 220 of the DGCL
(assuming such holder met the requirements of such section). All information
exchanged pursuant to this Section 6.02 shall be subject to the Confidentiality
Agreement, dated November 16, 1999, between the Company and Parent (the
"Confidentiality Agreement").
-------------------------
(b) The Company and Parent shall cooperate in determining whether the
Company or any Company Subsidiary is or has been a United States real property
holding corporation within the meaning of Section 897(c)(2) of the Code at any
time during the five year period ending at the Effective Time.
<PAGE>
45
SECTION 6.03. Reasonable Efforts; Notification. (a) Upon the terms
---------------------------------
and subject to the conditions set forth in this Agreement, each of the parties
shall use all reasonable efforts to take, or cause to be taken, all actions, and
to do, or cause to be done, and to assist and cooperate with the other parties
in doing, all things necessary, proper or advisable to consummate and make
effective, in the most expeditious manner practicable, the Offer, the Merger and
the other transactions contemplated by this Agreement, including (i) the
obtaining of all necessary actions or nonactions, and Consents from Governmental
Entities and the making of all necessary registrations and filings (including
filings with Governmental Entities, if any) and the taking of all reasonable
steps as may be necessary to obtain an approval or waiver from, or to avoid an
action or proceeding by, any Governmental Entity, (ii) the obtaining of all
necessary Consents from third parties, (iii) the defending of any lawsuits or
other legal proceedings, whether judicial or administrative, challenging this
Agreement or the consummation of the transactions contemplated by this
Agreement, including seeking to have any stay or temporary restraining order
entered by any court or other Governmental Entity vacated or reversed and (iv)
the execution and delivery of any additional instruments necessary to consummate
the transactions contemplated by this Agreement and to fully carry out the
purposes of this Agreement. In connection with and without limiting the
foregoing, the Company and the Company Board shall, if any state takeover
statute or similar statute or regulation is or becomes applicable to any
transaction contemplated by this Agreement, take all action necessary to ensure
that the Offer, the Merger and the other transactions contemplated by this
Agreement may be consummated as promptly as practicable on the terms
contemplated by this Agreement. Notwithstanding the foregoing, (x) the Company
shall not be prohibited under this Section 6.03(a) from taking any action
permitted by Section 5.02(b) and (y) nothing in this Agreement shall be deemed
to require any party to take any action that would result in any of the
consequences referred to in paragraph (a) of Exhibit A.
(b) The Company shall give prompt notice to Parent, and Parent or Sub
shall give prompt notice to the Company, of (i) any representation or warranty
made by it contained in this Agreement that is qualified as to a material
adverse effect becoming untrue or inaccurate in any respect or any such
representation or warranty that is not
<PAGE>
46
so qualified becoming untrue or inaccurate in any material respect or (ii) the
failure by it to comply with or satisfy in any material respect any covenant,
condition or agreement to be complied with or satisfied by it under this
Agreement; provided, however, that no such notification shall affect the
-------- -------
representations, warranties, covenants or agreements of the parties or the
conditions to the obligations of the parties under this Agreement.
SECTION 6.04. Company Employee Stock Options. (a) As soon as
-------------------------------
practicable following the date of this Agreement, the Company Board (or, if
appropriate, any committee administering the Company Stock Plans) shall adopt
such resolutions or take such other actions as are required, subject to any
required consent of the holders, to adjust the terms of all outstanding Company
Employee Stock Options and all outstanding Company SARs heretofore granted under
any Company Stock Plan to provide that each Company Employee Stock Option (and
any Company SAR related thereto) outstanding immediately prior to the acceptance
for payment of shares of Company Common Stock pursuant to the Offer shall be
canceled in exchange for a cash payment by the Company at that time of an amount
equal to (i) the excess, if any, of (x) the Merger Consideration over (y) the
exercise price per share of Company Common Stock subject to such Company
Employee Stock Option, multiplied by (ii) the number of shares of Company Common
Stock for which such Company Employee Stock Option shall not theretofore have
been exercised. All amounts payable pursuant to this Section 6.04 shall be
subject to any required withholding of Taxes and shall be paid without interest.
(b) The Company shall use its reasonable best efforts to obtain all
consents of the holders of the Company Employee Stock Options as shall be
necessary to effectuate the foregoing and to ensure that following the Effective
Time no holder of a Company Employee Stock Option or Company SAR or any
participant in any Company Stock Plan or other Company Benefit Plan shall have
any right thereunder to acquire any capital stock of the Company or the
Surviving Corporation. Notwithstanding anything to the contrary contained in
this Agreement, payment shall, at Parent's request, be withheld in respect of a
Company Employee Stock Option until all necessary consents in respect of such
Company Employee Stock Option are obtained.
(c) The Company Stock Plans shall terminate as of the Effective Time,
and the provisions in any other Benefit
<PAGE>
47
Plan providing for the issuance, transfer or grant of any capital stock of the
Company or any interest in respect of any capital stock of the Company shall be
deleted as of the Effective Time.
(d) In this Agreement:
"Company Employee Stock Option" means any option to purchase Company
-----------------------------
Common Stock granted under any Company Stock Plan.
"Company SAR" means any stock appreciation right linked to the price
-----------
of Company Common Stock and granted under any Company Stock Plan.
"Company Stock Plans" means the Company's Key Employees' 1992 Stock
-------------------
Option Plan, Key Employees' 1993 Stock Option Plan, Amended and Restated
Restricted Stock Plan for Non-Employee Directors, Key Employees' 1982
Incentive Stock Option Plan, as amended, 1985 Incentive Stock Option Plan,
as amended, 1998 Stock Option Plan, as amended, Non-Employee Directors 1997
Stock Plan and 1996 Stock Option Plan.
SECTION 6.05. Existing Agreements, Plans and Policies. (a) From and
----------------------------------------
after the Effective Time, Parent shall, and shall cause the Surviving
Corporation to honor in accordance with their respective terms (as in effect on
the date of this Agreement), all the Company's employment, severance and
termination agreements, plans and policies disclosed in the Company Disclosure
Letter.
(b) If prior to the Effective Time Parent agrees to grant options to
acquire Parent Common Stock to any officer or director of the Company prior to
the Effective Time, the Board of Directors of Parent, or an appropriate
committee of non-employee directors thereof, shall if necessary adopt a
resolution consistent with the interpretive guidance of the SEC so that the
acquisition by any officer or director of the Company who may become a covered
person of Parent for purposes of Section 16 of the Exchange Act and the rules
and regulations thereunder ("Section 16") of options to acquire Parent Common
----------
Stock pursuant to this Agreement and the Merger shall be an exempt transaction
for purposes of Section 16.
(c) For a period of not less than one year following the Effective
Time, Parent shall provide, or shall
<PAGE>
48
cause to be provided, to current employees of the Company and the Company
Subsidiaries (the "Company Employees"), taken as a whole, employee benefits that
-----------------
are, in the aggregate, no less favorable than those provided from time to time
after the Effective Time to employees of Parent and its subsidiaries who are
similarly situated, in terms of positions and geographic locations, to such
Company Employees; provided, however, that nothing contained in this Section
-------- -------
6.05(c) shall require Parent to continue or cause to be continued any Company
Stock Plan. Without limiting the generality of the foregoing, all Company
Employees who are covered by the Company's Severance Pay Plan as in effect on
the date hereof and whose employment is terminated on or before the first
anniversary of the Effective Time shall be provided with severance pay and
benefits on a basis, and in amounts, not less favorable than those provided for
under the Company's Severance Pay Plan as in effect on the date hereof as
amended to reflect the amendment as described in the Company Disclosure Letter.
(d) For all purposes under the employee benefit plans of Parent and
its affiliates providing benefits to any Company Employees after the Effective
Time (the "New Plans"), each Company Employee shall be credited with his or her
---------
years of service with the Company and its affiliates before the Effective Time,
to the same extent as such Company Employee was entitled, before the Effective
Time, to credit for such service under any similar Company Benefit Plans, except
for purposes of benefit accrual under defined benefit pension plans. In
addition, and without limiting the generality of the foregoing: (i) each
Company Employee shall be immediately eligible to participate, without any
waiting time, in any and all New Plans to the extent coverage under such New
Plan replaces coverage under a comparable Company Benefit Plan in which such
Company Employee participated immediately before the Effective Time and
previously described to Parent (such plans, collectively, the "Old Plans"); and
---------
(ii) for purposes of each New Plan providing medical, dental, pharmaceutical
and/or vision benefits to any Company Employee, Parent shall cause all pre-
existing condition exclusions and actively-at-work requirements of such New Plan
to be waived for such employee and his or her covered dependents (other than
limitations or waiting periods that are already in effect with respect to such
employees and dependents and that have not been satisfied as of the Effective
Time), and Parent shall cause any eligible expenses incurred by such employee
and his or her covered dependents during the
<PAGE>
49
portion of the plan year of the Old Plan ending on the date such employee's
participation in the corresponding New Plan begins to be taken into account
under such New Plan for purposes of satisfying all deductible, coinsurance and
maximum out-of-pocket requirements applicable to such employee and his or her
covered dependents for the applicable plan year as if such amounts had been paid
in accordance with such New Plan.
(e) Parent agrees that for purposes of any of the Company Benefit
Plans conferring rights on a current or former employee, officer or director as
a result of a change of control of the Company, the consummation of the Merger
(or such earlier event contemplated hereby and specified in such Company Benefit
Plans) shall be deemed to constitute a "Change of Control" (as that term is
defined in such Company Benefit Plans).
(f) Subject to compliance by Parent with its obligations under
Sections 6.05(a) and 6.05(c), nothing contained in this Section 6.05 or
elsewhere in this Agreement shall be construed to prevent the termination of
employment of any individual Company Employee or any change in the employee
benefits available to any individual Company Employee or the amendment or
termination of any particular Company Benefit Plan to the extent permitted by
its terms as in effect immediately prior to the Effective Time.
SECTION 6.06. Indemnification. (a) Parent shall, to the fullest
----------------
extent permitted by Applicable Law, cause the Surviving Corporation to honor all
the Company's obligations to indemnify (including any obligations to advance
funds for expenses) the current or former directors or officers of the Company
and the Company Subsidiaries for acts or omissions by such directors and
officers occurring at or prior to the Effective Time to the extent that such
obligations of the Company exist on the date of this Agreement, whether pursuant
to the Company Charter, the Company By-laws, individual indemnity agreements or
otherwise, and such obligations shall survive the Merger and shall continue in
full force and effect in accordance with the terms of the Company Charter, the
Company By-laws and such individual indemnity agreements from the Effective Time
until the expiration of the applicable statute of limitations with respect to
any claims against such directors or officers arising out of such acts or
omissions.
<PAGE>
50
(b) For a period of six years after the Effective Time, Parent shall
cause to be maintained in effect the current policies of directors' and
officers' liability insurance maintained by the Company (provided that Parent
may substitute therefor policies with reputable and financially sound carriers
of at least the same coverage and amounts containing terms and conditions which
are no less advantageous) with respect to claims arising from or related to
facts or events which occurred at or before the Effective Time; provided,
--------
however, that Parent shall not be obligated to make annual premium payments for
- -------
such insurance to the extent such premiums exceed 300% of the annual premiums
paid as of the date hereof by the Company for such insurance (such 300% amount,
the "Maximum Premium"). If such insurance coverage cannot be obtained at all,
---------------
or can only be obtained at an annual premium in excess of the Maximum Premium,
Parent shall maintain the most advantageous policies of directors' and officers'
insurance obtainable for an annual premium equal to the Maximum Premium;
provided, however, if such insurance coverage cannot be obtained at all, Parent
- -------- -------
shall purchase all available extended reporting periods with respect to pre-
existing insurance in an amount which, together with all other insurance
purchased pursuant to this Section 6.06(b), does not exceed the Maximum Premium.
The Company represents to Parent that the Maximum Premium is $955,500. Parent
shall not, and shall cause the Company not to, take any action that would have
the effect of limiting the aggregate amount of insurance coverage required to be
maintained for the individuals referred to in this Section 6.06(b).
(c) From and after the consummation of the Offer, to the full extent
permitted by Applicable Law, Parent shall, and shall cause the Company (or any
successor to the Company) to, indemnify, defend and hold harmless the present
officers and directors of the Company and the Company Subsidiaries (each an
"Indemnified Party") against all losses, claims, damages, liabilities, fees and
-----------------
expenses (including attorneys' fees and disbursements), judgments, fines and
amounts paid in settlement (collectively, "Losses") arising out of actions or
------
omissions occurring at or prior to the Effective Time in connection with this
Agreement, the Offer, the Merger and the other transactions contemplated hereby;
provided, however, that an Indemnified Party shall not be entitled to
- -------- -------
indemnification under this Section 6.06(c) for Losses arising out of actions or
omissions by the Indemnified Party constituting (i) a breach of this Agreement,
(ii) criminal conduct or (iii) any
<PAGE>
51
violation of federal, state or foreign securities laws. In order to be entitled
to indemnification under this Section 6.06(c), an Indemnified Party must give
Parent and the Company written notice of any third party claim which may give
rise to any indemnity obligation under this Section 6.06(c), and Parent and the
Company shall have the right to assume the defense of any such claim through
counsel of their own choosing, subject to such counsel's reasonable judgment
that separate defenses that would create a conflict of interest on the part of
such counsel are not available. If Parent and the Company do not assume any such
defense, they shall be liable for all reasonable costs and expenses of defending
such claim incurred by the Indemnified Party, including reasonable fees and
disbursements of counsel and shall advance such reasonable costs and expenses to
the Indemnified Party; provided, however, that such advance shall be made only
-------- -------
after receiving an undertaking from the Indemnified Party that such advance
shall be repaid if it is determined that such Indemnified Party is not entitled
to indemnification therefor. Neither Parent nor the Company shall be liable
under this Section 6.06(c) for any Losses resulting from any settlement,
compromise or offer to settle or compromise any such claim or litigation or
other action, without the prior written consent of Parent or the Company.
(d) The Company shall not, and Parent shall not permit the Company
to, amend or repeal any provision of the certificate of incorporation or by-laws
of the Company after the consummation of the Offer if such action would
adversely affect the rights of individuals who on or prior to the consummation
of the Offer were entitled to advances, indemnification or exculpation
thereunder for actions or omissions by such individuals prior to the Effective
Time. The individuals referred to in the preceding sentence shall include any
individuals who served as of the Effective Time as directors or officers of any
Company Subsidiary at the Company's request, it being acknowledged by the
parties hereto that each director or officer of the Company who is currently
serving as a director or officer of a Company Subsidiary is doing so at such
request of the Company.
(e) In the event the Surviving Corporation or any successor to the
Surviving Corporation (i) consolidates with or merges into any other person and
shall not be the continuing or surviving corporation or entity in such
consolidation or merger or (ii) transfers all or substantially all its
properties and assets to any person,
<PAGE>
52
then, and in each case, proper provision shall be made so that the successors of
the Surviving Corporation honor the obligations of the Company set forth in this
Section 6.06.
SECTION 6.07. Fees and Expenses. (a) Except as provided below, all
------------------
fees and expenses incurred in connection with the Offer, the Merger and the
other transactions contemplated by this Agreement shall be paid by the party
incurring such fees or expenses, whether or not the Merger is consummated.
(b) The Company shall pay to Parent:
(i) a fee of $12,500,000 if this Agreement is terminated
pursuant to Section 8.01(f);
(ii) in addition to the fee paid under clause (i) above, a
fee of $12,500,000 if this Agreement is terminated in the
circumstances contemplated by clause (i) above and thereafter a
Company Takeover Proposal is consummated that involves the person
whose Superior Company Proposal resulted in such termination;
(iii) a fee of $12,500,000 if this Agreement is terminated
pursuant to Section 8.01(d);
(iv) in addition to the fee paid under clause (iii) above, a
fee of $12,500,000 if this Agreement is terminated in the
circumstances contemplated by clause (iii) above and within 12
months of such termination either (x) a Company Acquisition
Proposal (as defined below) is consummated or (y) the Company
enters into an agreement to consummate a Company Acquisition
Proposal and any Company Acquisition Proposal is thereafter
consummated that includes the person party to such agreement,
whether or not such consummation is within such 12 month period;
(v) a fee of $12,500,000 if (A) after the date of this
Agreement and prior to the termination of this Agreement, any
person
<PAGE>
53
makes a Company Takeover Proposal, (B) the Offer remains open
until the scheduled expiration date immediately following the
date such Company Takeover Proposal is made (or such later date
as the Offer may be extended at the Company's request pursuant to
Section 1.01(a)), (C) the Minimum Tender Condition is not
satisfied at the expiration of the Offer, (D) this Agreement is
terminated pursuant to Section 8.01(b)(iii) and (E) within 12
months of such termination the Company enters into an agreement
to consummate a Company Acquisition Proposal;
(vi) in addition to the fee paid under clause (v) above, a
fee of $12,500,000 if this Agreement is terminated in the
circumstances contemplated by clause (v) above and thereafter a
Company Acquisition Proposal is consummated that involves the
person party to the agreement referred to in Section
6.07(b)(v)(E); and
(vii) a fee of $25,000,000 if (A) after the date of this
Agreement and prior to the termination of this Agreement, any
person makes a Company Takeover Proposal, (B) the Offer remains
open until the scheduled expiration date immediately following
the date such Company Takeover Proposal is made (or such later
date as the Offer may be extended at the Company's request
pursuant to Section 1.01(a)), (C) the Minimum Tender Condition is
not satisfied at the expiration of the Offer, (D) this Agreement
is terminated pursuant to Section 8.01(b)(iii) and (E) within 12
months of such termination a Company Acquisition Proposal is
consummated.
(c) Any fee due under Section 6.07(b)(i) shall be paid simultaneously
with, and as a condition to, the termination of this Agreement. Any fee due
under Section 6.07(b)(ii), 6.07(b)(vi) or 6.07(b)(vii) shall be paid at or prior
to the consummation of the relevant transaction. Any fee due under Section
6.07(b)(iii) shall be paid on the business day following termination of this
Agreement. Any fee due under Section 6.07(b)(iv) or 6.07(b)(v) shall be at
<PAGE>
54
or prior to the consummation of the relevant transaction. All fees under due
Section 6.07(b) shall be paid by wire transfer of same-day funds. Under no
circumstances will the Company be obligated to pay fees pursuant to this Section
6.07 in excess of $25,000,000 in the aggregate.
(d) "Company Acquisition Proposal" shall mean a Company Takeover
----------------------------
Proposal, provided that for the purpose of this definition, each reference to
--------
"15%" in the definition of Company Takeover Proposal shall be deemed a reference
to "50%".
SECTION 6.08. Public Announcements. Parent and Sub, on the one hand,
---------------------
and the Company, on the other hand, shall consult with each other before
issuing, and provide each other the opportunity to review and comment upon, any
press release or other public statements with respect to the Offer, the Merger
and the other transactions contemplated by this Agreement and shall not issue
any such press release or make any such public statement prior to such
consultation, except as may be required by Applicable Law, court process or by
obligations pursuant to any listing agreement with any national securities
exchange or The Nasdaq Stock Market, Inc.
SECTION 6.09. Transfer Taxes. All stock transfer, real estate
---------------
transfer, documentary, stamp, recording and other similar Taxes (including
interest, penalties and additions to any such Taxes) ("Transfer Taxes") incurred
--------------
in connection with the transactions contemplated by this Agreement shall be paid
by either Parent, Sub or Surviving Corporation, and Parent, Sub and the
Surviving Corporation shall hold all other persons and entities (including the
Company prior to the Merger) harmless from and against any losses in connection
with such Transfer Taxes, and the Company shall cooperate with Sub or Parent in
preparing, executing and filing any Tax Returns with respect to such Transfer
Taxes, including supplying in a timely manner a complete list of all real
property interests held by the Company that are located in New York State and
any information with respect to such property that is reasonably necessary to
complete such Tax Returns. The portion of the consideration to be received by
holders of Company Capital Stock in connection with the Merger that is allocable
to the real property of the Company and the Company Subsidiaries in New York
State shall be determined by Sub in its reasonable discretion.
<PAGE>
55
SECTION 6.10. Rights Agreements; Consequences if Rights Triggered.
----------------------------------------------------
Except as approved in writing by Parent, the Company Board shall not (i) amend
the Company Rights Agreement, (ii) redeem the Company Rights or (iii) take any
action with respect to, or make any determination under, the Company Rights
Agreement, except, in each case, to the extent necessary to comply with the
fiduciary obligations of the Company Board, as determined by it in good faith
after consultation with outside counsel. If any "Distribution Date" or "Share
Acquisition Date" occurs under the Company Rights Agreement at any time during
the period from the date of this Agreement to the Effective Time, the Company
and Parent shall make such adjustment to the Offer Price as the Company and
Parent shall mutually agree so as to preserve the economic benefits that the
Company and Parent each reasonably expected on the date of this Agreement to
receive as a result of the consummation of the Offer and the Merger.
SECTION 6.11. Directors. (a) Promptly upon the acceptance for
----------
payment of, and payment by Sub for, any shares of Company Capital Stock pursuant
to the Offer, Sub shall be entitled to designate such number of directors on the
Company Board as will give Sub, subject to compliance with Section 14(f) of the
Exchange Act, representation on the Company Board equal to at least that number
of directors, rounded up to the next whole number, which is the product of (A)
the total number of directors on the Company Board (giving effect to the
directors elected pursuant to this sentence) multiplied by (B) the percentage
that (i) such number of shares of Company Capital Stock so accepted for payment
and paid for by Sub plus the number of shares of Company Capital Stock otherwise
owned by Sub or any other subsidiary of Parent bears to (ii) the number of Fully
Diluted Shares (as defined in Exhibit A), and the Company shall, at such time,
cause Sub's designees to be so elected; provided, however, that, in the event
-------- -------
that Sub's designees are appointed or elected to the Company Board, until the
Effective Time, the Company Board shall have at least three directors who are
directors on the date of this Agreement and who are not officers of the Company
(the "Independent Directors"); and provided further, however, that, in such
--------------------- -------- ------- -------
event, if the number of Independent Directors shall be reduced below three for
any reason whatsoever, any remaining Independent Directors (or Independent
Director, if there shall be only one remaining) shall be entitled to designate
persons to fill such vacancies who shall be deemed to be Independent Directors
for purposes of this Agreement or, if no Independent Directors then remain, the
other
<PAGE>
56
directors shall designate three persons to fill such vacancies who are not
officers, stockholders or affiliates of the Company, Parent or Sub, and such
persons shall be deemed to be Independent Directors for purposes of this
Agreement. Subject to Applicable Law, the Company shall take all action
requested by Parent necessary to effect any such election, including mailing to
its stockholders the Information Statement containing the information required
by Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder, and
the Company shall make such mailing with the mailing of the Schedule 14D-9
(provided that Sub shall have provided to the Company on a timely basis all
--------
information required to be included in the Information Statement with respect to
Sub's designees). In connection with the foregoing, the Company promptly
shall, at the option of Sub, use all reasonable efforts to either increase the
size of the Company Board or obtain the resignation of such number of its
current directors as is necessary to enable Sub's designees to be elected or
appointed to the Company Board as provided above.
(b) Following the election or appointment of Sub's designees pursuant
to Section 6.11(a) and prior to the Effective Time, any amendment or termination
of this Agreement approved by the Company, extension for the performance or
waiver of the obligations of Parent or Sub or waiver of the Company's rights
hereunder shall require the concurrence of a majority of the Independent
Directors.
SECTION 6.12. TJM Partnership Agreement. (a) The Company hereby
--------------------------
waives, and will cause any Company Subsidiary with a partnership interest under
the Partnership Agreement to waive, any rights it may have under Section 15.2 of
the Partnership Agreement to exercise (x) the "sell procedure" as set out in
Section 15.4 of the Partnership Agreement or (y) the "mandatory buy/sell
procedure" set out in Section 15.5 of the Partnership Agreement (the rights
referred to in clauses (x) and (y), together with the Buy Rights, are referred
to as the "Buy/Sell Rights"), in each case, as result of the consummation of the
---------------
transactions contemplated by the Amended and Restated Merger Agreement, made as
of June 20, 1999, between Parent, Weyerhaeuser Canada Limited and MacMillan
Bloedel Limited (the "MacMillan Bloedel Transaction"). The Company acknowledges
-----------------------------
that Parent does not agree that the Company is entitled to exercise any of the
Buy/Sell Rights as a result of the MacMillan Bloedel Transaction and that the
inclusion of this Section 6.12 and Section 5.01(a)(xii) in this Agreement does
not constitute
<PAGE>
57
an admission or the acceptance by Parent that any of such Buy/Sell Rights have
been triggered by the MacMillan Bloedel Transaction, and Parent acknowledges
that the Company believes that it is entitled to exercise the Buy/Sell Rights as
a result of the MacMillan Bloedel Transaction and that the inclusion of this
Section 6.12 and Section 5.01(a)(xii) in this Agreement does not constitute an
admission or the acceptance by the Company that any of such Buy/Sell Rights have
not been triggered by the MacMillan Bloedel Transaction. "Partnership Agreement"
---------------------
means the Limited Partnership Agreement between the Company and MacMillan
Bloedel of America Inc. dated as of September 30, 1991, as amended by the
Amendment to Limited Partnership Agreement dated as of February 14, 1992.
(b) If this Agreement is terminated pursuant to Section 8.01(f), the
Company shall, subject to the next sentence, purchase the entire partnership
interest (the "Parent Interest") of Parent and its subsidiaries in Trus Joist
---------------
MacMillan A Limited Partnership (the "Partnership") held under the Partnership
-----------
Agreement, and Parent shall, and shall cause its subsidiaries to, in each case,
subject to the next sentence, sell the Parent Interest to the Company, for
$700,000,000 in cash. Such purchase and sale shall be consummated simultaneously
with, and as a condition to, the consummation of the transactions contemplated
by any Company Takeover Proposal made by the person who made the Superior
Company Proposal that gave rise to such termination. In the agreement entered
into by the Company with such person in connection with such termination, such
person must unconditionally guarantee (for the benefit of Parent and its
subsidiaries) the obligations of the Company under this Section 6.12(b).
(c) If (i) after the date of this Agreement, any person makes a
Company Takeover Proposal or amends a Company Takeover Proposal made prior to
the date of this Agreement, (ii) the Offer remains open until the scheduled
expiration date immediately following the date such Company Takeover Proposal is
made (or such later date as the Offer may be extended to at the Company's
request pursuant to Section 1.01(a)), (iii) the Minimum Tender Condition is not
satisfied at the expiration of the Offer and (iv) this Agreement is terminated
pursuant to Section 8.01(b)(iii), then the Buy Rights, if any, resulting from
the MacMillan Bloedel Transaction shall terminate; provided, however,
-------- -------
notwithstanding anything in the Partnership Agreement to the contrary:
<PAGE>
58
(A) the Company may exercise the Buy Rights within the 10 day period
beginning with the date of termination of this Agreement for a "Buy Price"
of $700,000,000 in cash and otherwise pursuant to the terms of Section 15.3
of the Partnership Agreement; and
(B) if the Company does not exercise its right under clause (A) above
and within 12 months following the date of such termination the Company
enters into an agreement to consummate a Company Acquisition Proposal, or a
Company Acquisition Proposal is consummated, the Company shall purchase the
Parent Interest, and Parent shall, and shall cause its subsidiaries, to
sell the Parent Interest to the Company, for $700,000,000 in cash, such
purchase and sale to be consummated simultaneously with, and as a condition
to, the consummation of such Company Acquisition Proposal.
(d) Notwithstanding anything contained in the Partnership Agreement
to the contrary, but subject to this Section 6.12, the Company may not exercise
the Buy Rights as a result of the MacMillan Bloedel Transaction if this
Agreement is terminated prior to the acceptance for payment of shares pursuant
to the Offer:
(i) in the circumstances contemplated by Section 6.12(b) or
6.12(c);
(ii) pursuant to Section 8.01(d) or pursuant to Section
8.01(b)(iii) following the failure of the condition in paragraph (f)
of Exhibit A; or
(iii) pursuant to Section 8.01(c) or pursuant to Section
8.01(b)(iii) following the failure of the condition in paragraph (e)
of Exhibit A because, in either case, (A) other than as disclosed in
the Filed Company SEC Documents or the Company Disclosure Letter,
since the date of the most recent audited financial statements
included in the Filed Company SEC Documents and prior to the date of
this Agreement, there shall have occurred any event, change, effect or
development that, individually or in the aggregate, has had or is
reasonably likely to have a Company Material Adverse Effect or (B)(1)
any representation or warranty of the Company in this Agreement that
is qualified as to Company Material Adverse Effect shall not be true
and correct as of
<PAGE>
59
the date of this Agreement or (2) the representations and warranties
of the Company that are not qualified as to Company Material Adverse
Effect shall not be true and correct in all respects as of the date of
this Agreement if the failure of all such representations and
warranties in this clause (2) to be true and correct, individually or
in the aggregate, is materially adverse to the transactions
contemplated by this Agreement, taken as a whole.
(e) Notwithstanding any provision to the contrary in the Partnership
Agreement, if this Agreement is terminated in accordance with the terms hereof
and none of Sections 6.12(b), 6.12(c) and 6.12(d) is applicable, the 90-day
period under the Partnership Agreement during which the Company may exercise its
Buy Rights, if any, in connection with the MacMillan Bloedel Transaction shall
be deemed to begin to run from the date of such termination of this Agreement.
Except with respect to the running of the 90-day period, the procedures
governing the Buy Rights as set forth in the Partnership Agreement, to the
extent applicable, shall apply.
(f) Except as provided above, the Partnership Agreement shall continue
in full force and effect in accordance with its terms.
SECTION 6.13. Grant of Option. (a) The Company hereby grants to
-----------------
Sub an irrevocable option (the "Option") to purchase for a price of $42.00 per
------
share (the "Per Share Price") in cash a number of shares of Company Common Stock
---------------
(the "Optioned Shares") equal to the Applicable Amount. The "Applicable Amount"
--------------- -----------------
shall be the number of shares of Company Common Stock which, when added to the
number of shares of Company Common Stock owned by Parent and Sub immediately
prior to its exercise of the Option, would result in Sub owning immediately
after its exercise of the Option 90% of the then-outstanding shares of Company
Common Stock. Sub may exercise the Option only if, at the time of exercise,
Parent, Sub and any other subsidiary of Parent shall have acquired at least
50.1% of the Fully Diluted Shares pursuant to the Offer. The Option shall
expire if not exercised prior to the Effective Time. The Per Share Price may,
at the election of Sub, be paid either (i) in cash or (ii) a combination of
$1.00 in cash and a promissory note of Parent in a principal amount equal to
$41.00, which promissory note shall mature in 12 months (and be prepayable at
any time by
<PAGE>
60
Parent without penalty) and shall bear interest at an annual rate of 6.50%
payable at maturity.
(b) In the event that Sub wishes to exercise the Option, Sub shall
give written notice (the date of such notice, the "Notice Date") to the Company
-----------
specifying the number of Optioned Shares it will purchase pursuant to such
exercise and a place and date (not later than 10 business days from the Notice
Date) for the closing of such purchase.
(c) At any closing hereunder, (i) Sub will make payment to the
Company of the full purchase price for the Optioned Shares by (A) certified or
official bank check payable to the order to Company or by wire transfer to the
Company, in an amount equal to the product of the cash portion of the Per Share
Price (determined in accordance with the last sentence of Section 6.13(a))
multiplied by the number of Optioned Shares being purchased at such closing, and
(B) delivery of the promissory note described in the last sentence of Section
6.13(a), and (ii) the Company will deliver to Sub a duly executed certificate or
certificates representing the number of Optioned Shares so purchased, registered
in the name of Sub or its nominee in the denominations designated by Sub in its
notice of exercise.
(d) Parent and Sub represent that any Optioned Shares purchased by
Sub will be acquired for investment only and not with a view to any public
distribution thereof and Sub will not offer to sell or otherwise dispose of any
Optioned Shares so acquired by it in violation of the registration requirements
of the Securities Act. The certificate(s) representing the shares of Company
Common Stock acquired pursuant to the exercise of the Option will bear a legend
indicating that such shares of Company Common Stock were sold without
registration under the Securities Act.
(e) In the event of any change in the number of outstanding shares of
Company Common Stock by reason of any stock dividend, stock split,
recapitalization, combination, exchange of shares, merger, consolidation,
reorganization or the like or any other change in the corporate or capital
structure of the Company that would have the effect of diluting Sub's rights
hereunder, the number of Optioned Shares and the Per Share Price shall be
adjusted appropriately so as to restore Sub to its rights hereunder with respect
to the Option; provided, however, that nothing in this Section 6.13(e) shall be
-------- -------
construed as permitting the
<PAGE>
61
Company to take any action or enter into any transaction prohibited by this
Merger Agreement.
SECTION 6.14. Termination/Amendment of ESOP; Redemption of Company
----------------------------------------------------
Preferred Stock; Repayment of ESOP Loan. If upon consummation of the Offer,
- ----------------------------------------
Sub owns a number of shares of Company Common Stock that, together with the
shares of Company Common Stock that Sub has the Option to purchase pursuant to
Section 6.13, equals at least 90% of the then-outstanding Company Common Stock
(after giving effect to the exercise of such Option), then the Company shall
take such action as requested by Parent and permitted by the terms of the
Company Preferred Certificate of Designation and Applicable Law to terminate
and/or amend the ESOP and to call for redemption all the then-outstanding
Company Preferred Stock as promptly as practicable after such request by Parent.
As soon as practicable following the date of this Agreement, the Company shall
direct the Trustee to use any cash proceeds resulting from the redemption of the
Company Preferred Stock or resulting from the purchase or exchange of Company
Common Stock (into which Company Preferred Stock was converted) for cash
pursuant to the Offer or the Merger, in each case, with respect to shares that
have not been allocated to participants or beneficiaries under the Company's
Investment Plan, to repay any outstanding amounts under the ESOP Loan and shall
use its best efforts to take or cause to be taken such other actions consistent
with Applicable Law to cause the Trustee to comply with such direction, and the
parties hereto agree that any remaining cash proceeds shall be allocated to
participants and beneficiaries under the Company's Investment Plan in accordance
with Applicable Law.
ARTICLE VII
Conditions Precedent
--------------------
SECTION 7.01. Conditions to Each Party's Obligation To Effect the
---------------------------------------------------
Merger. The respective obligation of each party to effect the Merger is subject
- -------
to the satisfaction or waiver on or prior to the Closing Date of the following
conditions:
(a) Stockholder Approval. The Company shall have obtained the
---------------------
Company Stockholder Approval if required by Applicable Law.
<PAGE>
62
(b) No Injunctions or Restraints. No temporary restraining order,
-----------------------------
preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal restraint or prohibition preventing the
consummation of the Merger shall be in effect; provided, however, that each of
-------- -------
the parties shall have used its reasonable efforts to prevent the entry of any
such injunction or other order and to appeal as promptly as possible any such
injunction or other order that may be entered.
(c) Purchase of Shares. Sub shall have previously accepted for
-------------------
payment and paid for Company Capital Stock pursuant to the Offer.
ARTICLE VIII
Termination, Amendment and Waiver
---------------------------------
SECTION 8.01. Termination. This Agreement may be terminated at any
------------
time prior to the Effective Time, whether before or after receipt of the Company
Stockholder Approval:
(a) by mutual written consent of Parent, Sub and the Company; provided
--------
that, any such consent shall require the concurrence of a majority of the
Independent Directors if it occurs after the purchase by Sub of shares of
Company Capital Stock pursuant to the Offer;
(b) by either Parent or the Company:
(i) if the Offer is not consummated on or before April 3, 2000
(the "Outside Date"), unless the failure to consummate the Offer is
------------
the result of a material breach of this Agreement by the party seeking
to terminate this Agreement; provided, however, that the passage of
-------- -------
such period shall be tolled for any part thereof during which any
party shall be subject to a nonfinal order, decree, ruling or action
restraining, enjoining or otherwise prohibiting the consummation of
the Offer and the Outside Date shall be extended day-by-day for each
day tolled; provided further, however, that the Outside Date shall not
-------- ------- -------
be extended past May 18, 2000;
<PAGE>
63
(ii) if any Governmental Entity issues an order, decree or
ruling or takes any other action permanently enjoining, restraining or
otherwise prohibiting the Merger and such order, decree, ruling or
other action shall have become final and nonappealable; or
(iii) if as the result of the failure of any of the conditions
set forth in Exhibit A to this Agreement, the Offer shall have
terminated or expired in accordance with its terms and the
requirements of Section 1.01(a) without Sub having purchased any
shares of Company Capital Stock pursuant to the Offer; provided,
--------
however that the right to terminate this Agreement pursuant to this
-------
clause (iii) shall not be available to any party whose failure to
fulfill any of its obligations under this Agreement results in the
failure of any such condition;
(c) by Parent, if, prior to the consummation of the Offer, the Company
breaches or fails to perform in any material respect any of its
representations, warranties or covenants contained in this Agreement, which
breach or failure to perform (i) would give rise to the failure of a
condition set forth in Exhibit A, and (ii) cannot be or has not been cured
within 30 days after the giving of written notice to the Company of such
breach (provided that Parent may not terminate this Agreement pursuant to
--------
this Section 8.01(c) if it is then in material breach of any
representation, warranty or covenant contained in this Agreement);
(d) by Parent:
(i) if the Company Board or any committee thereof withdraws or
modifies, or publicly proposes to withdraw or modify, in a manner
adverse to Parent or Sub, its approval or recommendation of this
Agreement, the Offer or the Merger or fails to recommend to the
Company's stockholders that they give the Company Stockholder Approval
or approves or recommends, or publicly proposes to approve or
recommend, any Company Takeover Proposal; or
(ii) if the Company Board fails to reaffirm publicly and
unconditionally its recommendation to
<PAGE>
64
the Company's stockholders that they give the Company Stockholder
Approval, which public reaffirmation must be made within 10 business
days after Parent's written request to do so (which request may be
made at any time that a Company Takeover Proposal is pending and not
withdrawn) and must also include the unconditional rejection of such
Company Takeover Proposal (to the extent not previously withdrawn);
provided, however, that, Parent may not request the Company Board to
-------- -------
make more than one such reaffirmation in respect of any Company
Takeover Proposal unless such Company Takeover Proposal has been
materially amended or modified (and not withdrawn);
(e) by the Company, if prior to the acceptance of shares of Company
Capital Stock for payment pursuant to the Offer, Parent breaches or fails
to perform in any material respect of any of its representations,
warranties or covenants contained in this Agreement, which breach or
failure to perform cannot be or has not been cured within 30 days after the
giving of written notice to Parent of such breach (provided that the
Company may not terminate this Agreement pursuant to this Section 8.01(e)
if it is not then in material breach of any representation, warranty or
covenant in this Agreement);
(f) by the Company prior to the acceptance of shares of Company
Capital Stock for payment pursuant to the Offer in accordance with all the
requirements of Section 5.02(b), including the notice provisions therein;
(g) by the Company if the Offer has not been commenced within seven
business days after the date of this Agreement; or
(h) by the Company if any event occurs which would result in the
condition set forth in paragraph (d) of Exhibit A not being satisfied, and
five business days have elapsed since such occurrence, unless Parent shall
have waived its right to terminate this Agreement and its right not to
consummate the Offer for the failure of such condition resulting from such
event, in each case in accordance with Section 8.04.
<PAGE>
65
SECTION 8.02. Effect of Termination. In the event of termination of
----------------------
this Agreement by either the Company or Parent as provided in Section 8.01, this
Agreement shall forthwith become void and have no effect, without any liability
or obligation on the part of Parent, Sub or the Company, other than the first
sentence of Section 3.15, Section 4.08, the last sentence of Section 6.02(a),
Section 6.07, Section 6.12, this Section 8.02 and Article IX, which provisions
shall survive such termination, and except for any liability arising from the
material breach by a party of any representation, warranty or covenant set forth
in this Agreement.
SECTION 8.03. Amendment. Subject to the requirements of Section
----------
6.11(b), this Agreement may be amended by the parties at any time before or
after receipt of the Company Stockholder Approval; provided, however, that,
-------- -------
after receipt of the Company Stockholder Approval, there shall be made no
amendment that by Applicable Law requires further approval by the stockholders
of the Company without the further approval of such stockholders. This
Agreement may not be amended except by an instrument in writing signed on behalf
of each of the parties.
SECTION 8.04. Extension; Waiver. Subject to the requirements of
------------------
Section 6.11(b), at any time prior to the Effective Time, the parties may (a)
extend the time for the performance of any of the obligations or other acts of
the other parties, (b) waive any inaccuracies in the representations and
warranties contained in this Agreement or in any document delivered pursuant to
this Agreement or (c) subject to the proviso of Section 8.03, waive compliance
with any of the agreements or conditions contained in this Agreement. Any
agreement on the part of a party to any such extension or waiver shall be valid
only if set forth in an instrument in writing signed on behalf of such party.
The failure of any party to this Agreement to assert any of its rights under
this Agreement or otherwise shall not constitute a waiver of such rights.
SECTION 8.05. Procedure for Termination, Amendment, Extension or
--------------------------------------------------
Waiver. A termination of this Agreement pursuant to Section 8.01, an amendment
- -------
of this Agreement pursuant to Section 8.03 or an extension or waiver pursuant to
Section 8.04 shall, in order to be effective, require (x) in the case of Parent,
Sub or the Company, action by its Board of Directors or the duly authorized
designee of its Board of Directors and (y) if applicable,
<PAGE>
66
satisfaction of the requirements set forth in Section 6.11(b).
ARTICLE IX
General Provisions
------------------
SECTION 9.01. Nonsurvival of Representations and Warranties. None of
----------------------------------------------
the representations and warranties in this Agreement or in any instrument
delivered pursuant to this Agreement shall survive the Effective Time. This
Section 9.01 shall not limit any covenant or agreement of the parties which by
its terms contemplates performance after the Effective Time.
SECTION 9.02. Notices. All notices, requests, claims, demands and
--------
other communications under this Agreement shall be in writing and shall be
deemed given upon receipt by the parties at the following addresses (or at such
other address for a party as shall be specified by like notice):
(a) if to Parent or Sub, to
Weyerhaeuser Company
33663 Weyerhaeuser Way South
Federal Way, WA 98003
Attention: General Counsel
Telecopy: (253) 924-3353
with a copy to:
Cravath, Swaine & Moore
825 Eighth Avenue
New York, New York 10019
Attention: Richard Hall
Telecopy: (212) 474-3700
<PAGE>
67
(b) if to the Company, to
TJ International, Inc.
200 E. Mallard Drive
Boise, Idaho 83706
Attention: Thomas H. Denig
Telecopy: (208) 364-3760
with a copy to:
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
Attention: David A. Katz
Telecopy: (212) 403-2000
SECTION 9.03. Definitions. For purposes of this Agreement:
------------
An "affiliate" of any person means another person that directly or
---------
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such first person.
"Knowledge of the Company" or "Company's Knowledge" means, when used
------------------------ -------------------
in any representation, covenant or warranty of the Company contained herein, the
actual knowledge of, or what should reasonably have been known by, any officer
or director of the Company.
A "material adverse effect" on a party means a material adverse effect
-----------------------
on the business, financial condition or ongoing, longer-term profitability (but
not prospects) of such party and its subsidiaries, taken as a whole; provided,
--------
however, that any adverse effect that has resulted or may result from the
- -------
acquisition of MacMillan Bloedel Limited by Parent shall not be deemed a
material adverse effect for purposes of this Agreement. For the purposes of
Article III of this Agreement, in any provision qualified by reference to a
material adverse effect or Company Material Adverse Effect, the words "has had"
and "have had" shall be deemed to be followed by the words "since January 2,
1999".
A "person" means any individual, firm, corporation, partnership,
------
company, limited liability
<PAGE>
68
company, trust, joint venture, association, Governmental Entity or other entity.
A "subsidiary" of any person means another person, an amount of the
----------
voting securities, other voting ownership or voting partnership interests of
which is sufficient to elect at least a majority of its board of directors or
other governing body (or, if there are no such voting interests, 50% or more of
the equity interests of which) is owned directly or indirectly by such first
person.
SECTION 9.04. Interpretation; Disclosure Letters. When a reference
-----------------------------------
is made in this Agreement to a Section, such reference shall be to a Section of
this Agreement unless otherwise indicated. The table of contents and headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement. Whenever the words
"include", "includes" or "including" are used in this Agreement, they shall be
deemed to be followed by the words "without limitation". Any matter disclosed
in any section of the Company Disclosure Letter shall be deemed disclosed only
for the purposes of the specific Sections of this Agreement to which such
section relates or such other sections in which such disclosure may be
specifically cross-referenced.
SECTION 9.05. Severability. If any term or other provision of this
--------------
Agreement is invalid, illegal or incapable of being enforced by any rule or
Applicable Law, or public policy, all other conditions and provisions of this
Agreement shall nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated hereby is not
affected in any manner materially adverse to any party. Upon such determination
that any term or other provision is invalid, illegal or incapable of being
enforced, the parties hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner to the end that transactions contemplated
hereby are fulfilled to the extent possible.
SECTION 9.06. Counterparts. This Agreement may be executed in one or
-------------
more counterparts, all of which shall be considered one and the same agreement
and shall become effective when one or more counterparts have been signed by
each of the parties and delivered to the other parties.
<PAGE>
69
SECTION 9.07. Entire Agreement; No Third-Party Beneficiaries. This
-----------------------------------------------
Agreement, taken together with the Company Disclosure Letter and the
Confidentiality Agreement, (a) constitute the entire agreement, and supersede
all prior agreements and understandings, both written and oral, among the
parties with respect to the transactions contemplated hereby and (b) except for
the provisions of Article II and Sections 6.04, 6.06 and 6.12, are not intended
to confer upon any person other than the parties any rights or remedies.
SECTION 9.08. Governing Law. This Agreement shall be governed by,
--------------
and construed in accordance with, the laws of the State of Delaware, regardless
of the laws that might otherwise govern under applicable principles of conflicts
of laws thereof.
SECTION 9.09. Assignment. Neither this Agreement nor any of the
-----------
rights, interests or obligations under this Agreement shall be assigned, in
whole or in part, by operation of law or otherwise by any of the parties without
the prior written consent of the other parties, except that Sub may assign, in
its sole discretion, any of or all its rights, interests and obligations under
this Agreement to Parent or to any direct or indirect wholly owned subsidiary of
Parent, but no such assignment shall relieve Parent or Sub of any of its
obligations under this Agreement. Any purported assignment without such consent
shall be void. Subject to the preceding sentences, this Agreement will be
binding upon, inure to the benefit of, and be enforceable by, the parties and
their respective successors and assigns.
SECTION 9.10. Enforcement. The parties agree that irreparable damage
------------
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with its specific terms or were otherwise breached. It
is agreed that the parties shall be entitled to an injunction or injunctions to
prevent breaches of this Agreement and to enforce specifically the terms and
provisions of this Agreement in any Delaware state court or any Federal court
located in the State of Delaware, this being in addition to any other remedy to
which they are entitled at law or in equity. In addition, each of the parties
hereto (a) consents to submit itself to the personal jurisdiction of any
Delaware state court or any Federal
<PAGE>
court located in the State of Delaware in the event any dispute arises out of
this Agreement, (b) agrees that it will not attempt to deny or defeat such
personal jurisdiction by motion or other request for leave from any such court,
(c) agrees that it will not bring any action relating to this Agreement in any
court other than any Delaware state court or any Federal court sitting in the
State of Delaware and (d) waives any right to trial by jury with respect to any
action related to or arising out of this Agreement.
IN WITNESS WHEREOF, Parent, Sub and the Company have duly executed
this Agreement, all as of the date first written above.
WEYERHAEUSER COMPANY,
by
_______________________________
Name:
Title:
WTJ, INC.,
by
_______________________________
Name:
Title:
TJ INTERNATIONAL, INC.,
by
_______________________________
Name:
Title:
<PAGE>
EXHIBIT A
Conditions of the Offer
-----------------------
Notwithstanding any other term of the Offer or this Agreement, Sub
shall not be required to accept for payment or, subject to any applicable rules
and regulations of the SEC, including Rule 14e-l(c) under the Exchange Act
(relating to Sub's obligation to pay for or return tendered shares of Company
Capital Stock promptly after the termination or withdrawal of the Offer), to pay
for any shares of Company Capital Stock tendered pursuant to the Offer unless
(i) there shall have been validly tendered and not withdrawn prior to the
expiration of the Offer that number of shares of Company Capital Stock which
would represent at least 50.1% of the Fully Diluted Shares (the "Minimum Tender
--------------
Condition") and (ii)(A) any waiting period under the HSR Act applicable to the
- ---------
purchase of shares of Company Capital Stock pursuant to the Offer shall have
expired or been terminated, (B) any waiting period under the Competition Act
applicable to the purchase of shares of Company Capital Stock pursuant to the
Offer shall have expired or been terminated and/or an ARC pursuant to the
Competition Act or, in the alternative of an ARC, a no-action letter from the
Commissioner of Competition, related thereto shall have been received and (C)
any consents, approvals and filings under any foreign antitrust law, the absence
of which would prohibit the consummation of the Offer, shall have been obtained
or made. The term "Fully Diluted Shares" means all outstanding securities
--------------------
entitled generally to vote in the election of directors of the Company on a
fully diluted basis, after giving effect to the exercise or conversion of all
options, rights and securities exercisable or convertible into such voting
securities, other than potential dilution attributable to the Company Rights and
shares of Company Common Stock issuable pursuant to Section 6.13. Furthermore,
notwithstanding any other term of the Offer, Sub may, subject to the terms of
this Agreement, amend the Offer or postpone the acceptance for payment of or
payment for tendered Company Capital Stock, if, at any time on or after the date
of this Agreement and before the expiration of the Offer, any of the following
conditions exists:
(a) there shall be pending any suit, action or proceeding by any
Governmental Entity that has a reasonable likelihood of success, (i)
challenging the acquisition by Parent or Sub of any Company Capital
<PAGE>
2
Stock, seeking to restrain or prohibit the making or consummation of the
Offer or the Merger, or seeking to obtain from the Company, Parent or Sub
any damages that are material in relation to the Company and the Company
Subsidiaries taken as whole as a result of the transactions contemplated by
this Agreement, (ii) seeking to prohibit or limit in any material respect
the ownership or operation by the Company, Parent or any of their
respective subsidiaries of any material portion of the business or assets
of the Company, Parent or any of their respective subsidiaries, or to
compel the Company, Parent or any of their respective subsidiaries to
dispose of or hold separate any material portion of the business or assets
of the Company, Parent or any of their respective subsidiaries, as a result
of the Offer and the Merger, (iii) seeking to impose limitations on the
ability of Parent or Sub to acquire or hold, or exercise full rights of
ownership of, any shares of Company Capital Stock, including the right to
vote the Company Capital Stock purchased by it on all matters properly
presented to the stockholders of the Company or (iv) seeking to prohibit
Parent or any of its subsidiaries from controlling in any material respect
the business or operations of the Company and the Company Subsidiaries;
(b) any statute, rule, regulation, legislation, interpretation,
judgment, order or injunction shall be enacted, entered, enforced,
promulgated or issued with respect to, or deemed applicable to, or any
consent or approval withheld with respect to, (i) Parent, the Company or
any of their respective subsidiaries or (ii) the Offer, the Merger or any
other transaction contemplated by this Agreement, in each case, by any
Governmental Entity that is reasonably likely to result, directly or
indirectly, in any of the consequences referred to in paragraph (a) above;
(c) except as disclosed in the Filed Company SEC Documents or the
Company Disclosure Letter, since the date of this Agreement shall have
occurred any event, change, effect or development that, individually or in
the aggregate, has had or is reasonably likely to have, a Company Material
Adverse Effect;
(d) there shall have occurred and continued to exist (i) any general
suspension of trading in, or limitation on prices for, securities on any
national
<PAGE>
3
securities exchange or in the over-the-counter market in the United States
(excluding any suspension or limitations resulting from physical damage or
interference with such exchange not related to market conditions), (ii) a
decline of at least 30% in the Dow Jones Industrial Average, (iii) a
declaration of a banking moratorium or any suspension of payments in
respect of banks in the United States, (iv) any mandatory limitation by any
Governmental Entity on, or other event that materially and adversely
affects, the extension of credit by banks or other lending institutions in
the United States, (v) a commencement of a war or armed hostilities or
other national or international calamity directly or indirectly involving
the United States or (vi) in the case of any of the foregoing existing on
the date of this Agreement, a material acceleration or worsening thereof;
(e) (i) any representation and warranty of the Company in this
Agreement that is qualified as to Company Material Adverse Effect shall not
be true and correct as of the date of this Agreement or as of such time,
except to the extent such representation and warranty expressly relates to
an earlier date (in which case on and as of such earlier date), and (ii)
the representations and warranties of the Company that are not qualified as
to Company Material Adverse Effect shall not be true and correct in all
respects as of the date of this Agreement, or as of such time, except to
the extent such representations and warranties expressly relate to an
earlier date (in which case on and as of such earlier date) if the failure
of all such representations and warranties in this clause (ii) to be true
and correct, in aggregate, is materially adverse to the transactions
contemplated by this Agreement, taken as a whole;
(f) the Company shall have failed to perform in any material respect
any obligation or to comply in any material respect with any agreement or
covenant of the Company to be performed or complied with by it under this
Agreement; or
(g) this Agreement shall have been terminated in accordance with its
terms;
which, in the sole judgment of Sub or Parent, in any such case, and regardless
of the circumstances giving rise to any
<PAGE>
4
such condition (including any action or inaction by Parent or any of its
affiliates not otherwise required by the Merger Agreement), makes it inadvisable
to proceed with such acceptance for payment or payment.
The foregoing conditions are for the sole benefit of Sub and Parent
and may be asserted by Sub or Parent regardless of the circumstances giving rise
to such condition or may be waived by Sub and Parent in whole or in part at any
time and from time to time in their sole discretion. The failure by Parent, Sub
or any other affiliate of Parent at any time to exercise any of the foregoing
rights shall not be deemed a waiver of any such right, the waiver of any such
right with respect to particular facts and circumstances shall not be deemed a
waiver with respect to any other facts and circumstances and each such right
shall be deemed an ongoing right that may be asserted at any time and from time
to time.
<PAGE>
Exhibit (c)(2)
<PAGE>
EXECUTION COPY
--------------
TJ International, Inc.
200 East Mallard Drive
Boise, ID 83706
CONFIDENTIAL
- ------------
NOVEMBER 16, 1999
The Weyerhaeuser Company
P.O. Box 2999
Tacoma, Washington 98477-2999
Ladies and Gentlemen:
The Weyerhauser Company ("Weyerhauser") has requested information from
TJ International, Inc. (the "Company"), in connection with its consideration of
a possible transaction involving the acquisition of the Company by Weyerhauser
(a "Transaction"). As a condition to furnishing such information to you, the
Company requires that Weyerhauser agree, as set forth below, to treat
confidentially any information (whether prepared by the Company, its advisors or
otherwise, and whether oral or written) that the Company or its agents or
advisors, furnish to Weyerhauser or its representatives (which term, when used
herein with reference to Weyerhauser or the Company, shall include its
directors, officers, employees, affiliates, agents, advisors, representatives
and potential financing sources) (such information being collectively referred
to herein as the "Evaluation Material") and to take or abstain from taking
certain other actions set forth herein. The term "Evaluation Material" does not
include information that (i) is already in your possession, provided that such
information is not known by you to be subject to another confidentiality
agreement with or other obligation of secrecy to the Company or another party or
(ii) becomes generally available to the public other than as a result of a
disclosure by you or your representatives or (iii) becomes available to you on a
non-confidential basis from a source other than the Company or its advisors,
provided that such source is not known by you to be bound by a confidentiality
agreement with or other obligation of secrecy to the Company or another party.
You hereby agree that the Evaluation Material will be used by you or
your representatives solely for the purpose of evaluating a possible
Transaction, and will be kept confidential by you and your representatives;
provided, however, that any such information may be disclosed to your
representatives who need to know such information for the purpose of evaluating
any such possible Transaction and who agree to keep such information
confidential and to be bound by this agreement to the same extent as if they
were parties hereto. You will be responsible for any breach of this agreement by
your representatives and the Company shall be entitled to directly enforce such
agreements.
<PAGE>
You hereby acknowledge that you are aware, and that you will advise your
representatives who are informed as to the matters which are the subject of this
letter, that the United States securities laws prohibit any person who has
received from an issuer material, non-public information concerning the matters
which are the subject of this letter from purchasing or selling securities of
such issuer or from communicating such information to any other person under
circumstances in which it is reasonably foreseeable that such person is likely
to purchase or sell such securities.
In the event that you or your representatives receive a request to
disclose all or any part of the information contained in the Evaluation Material
by deposition, interrogatory, request for documents, subpoena, civil
investigative demand or similar process or an order issued by a court of
competent jurisdiction or by a governmental body, you agree to (i) promptly
notify the Company of the existence, terms and circumstances surrounding such a
request, so that it may seek an appropriate protective order and/or waive your
compliance with the provisions of this letter agreement (and, if the Company
seeks such an order, to provide such cooperation as the Company shall reasonably
request) and (ii) if disclosure of such information is required in the opinion
of your counsel, who shall be reasonably satisfactory to the Company, exercise
your best efforts to obtain an order or other reliable assurance that
confidential treatment will be accorded to such of the disclosed information
which the Company so designates. In addition, to the extent you are otherwise
required to disclose under applicable law all or any part of the information
contained in the Evaluation Material (whether such requirement arises from
action taken by you or otherwise), you will only disclose such information as is
required to be disclosed under applicable law in the opinion of your counsel,
who shall be reasonably satisfactory to the Company.
You also hereby agree that, for the period ending six months from the
date of this letter, you will not, without the Company's written consent,
directly or indirectly, solicit for employment (other than by means of a general
advertisement) any person who is currently employed in a management position
with the Company.
Each of Weyerhauser and the Company agrees that, except as required by
applicable law or the applicable rules of any stock exchange, it will not, and
will cause its representatives not to, disclose to any person either the fact
that discussions or negotiations are taking place concerning a possible
Transaction or any of the terms, conditions or other facts with respect to any
such possible Transaction, including the status thereof.
Although the Company has endeavored to include in the Evaluation
Material information which it believes to be relevant for the purpose of your
investigation, you understand that neither the Company nor any of its
representatives or advisors have made or make any representation or warranty as
to the accuracy or completeness of the Evaluation Material. You agree that
neither the Company nor its representatives or advisors shall have any liability
to you or any of your representatives resulting from the use or content of the
Evaluation Material or from any action taken or any inaction occurring in
reliance on the Evaluation Material, except as may be included in any definitive
agreement with respect to any Transaction.
At the request of the Company or in the event that you do not proceed
with a Transaction you and your representatives shall promptly redeliver to the
Company all written
-2-
<PAGE>
Evaluation Material and any other written material containing or reflecting any
information in the Evaluation Material (whether prepared by the Company, its
advisors, agents or otherwise)and will not retain any copies, extracts or other
reproductions in whole or in part of such written material. All documents,
memoranda, notes and other writings whatsoever prepared by you or your
representatives based on the information in the Evaluation Material shall be
destroyed, and such destruction shall be certified in writing to the Company by
an authorized officer supervising such destruction.
It is further understood and agreed that no failure or delay by either
party hereto in exercising any right, power or privilege it may have under this
letter shall operate as a waiver thereof, nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any right, power or privilege hereunder.
You and we agree that unless and until a definitive agreement between the
Company and you with respect to a Transaction has been executed and delivered,
neither the Company nor you will be under any legal obligation of any kind
whatsoever with respect to such a Transaction by virtue of this or any written
or oral expression with respect to such a Transaction by any of its directors,
officers, employees, agents or any other representatives or its advisors except
for the matters specifically agreed to in this letter. You and we further
acknowledge and agree that (i) neither party hereto shall have any obligation to
authorize or pursue with the other party any Transaction, and (ii) each party
reserves the right, in its sole and absolute discretion, to reject all proposals
and to terminate discussions and negotiations with the other party at any time.
You further acknowledge and agree that the Company has not, as of the date
hereof, authorized any Transaction and that the Company reserves the right to
discontinue the provision of Evaluation Material to you at any time.
The agreements set forth in this letter agreement may be modified or waived
only by a separate writing between the Company and you expressly so modifying or
waiving such agreements.
The parties hereto acknowledge that money damages are an inadequate remedy
for breach of this letter agreement because of the difficulty of ascertaining
the amount of damage that will be suffered by you or the Company in the event
that this agreement is breached. Therefore, each party hereto agrees that the
other party may obtain specific performance of this agreement and injunctive or
other equitable relief as a remedy for any such breach and further waives any
requirement for the securing or posting of any bond in connection with any
such remedy. Such remedy shall not be deemed to be the exclusive remedy for any
breach of this letter agreement, but shall be in addition to all other remedies
available at law or equity. If any term, provision, covenant or restriction of
this letter agreement is held by a court of competent jurisdiction to be
invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated.
This letter agreement shall be goverened by, and construed in accordance
with, the internal laws of the State of Delaware, without giving effect to the
principles of conflicts of laws thereof. Each party hereto consents to the
jurisdiction and venue for any action to enforce the provisions of this letter
agreement in any state or federal court in the State of Delaware.
- 3 -
<PAGE>
If you are in agreement with the foregoing, please so indicate by signing
and returning one copy of this letter agreement, which will constitute our
agreement with respect to the matters set forth herein.
Very truly yours,
TJ, INTERNATIONAL, Inc.
By: /s/ Thomas H. Denig
-------------------------------------
President and Chief Executive Officer
Confirmed and Agreed to:
The Weyerhaeuser Company
By: /s/ Robert A. Dowdy
------------------------------
Vice President &
General Counsel
-4-
