SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
WEYERHAEUSER COMPANY
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed: 3-7-01
Notice of
2001 Annual Meeting
of Shareholders
and Proxy Statement
[LOGO OF WEYERHAEUSER]
[LOGO OF WEYERHAEUSER]
Dear Shareholder:
You are cordially invited to attend your company's annual meeting of
shareholders at 9:00 a.m., Tuesday, April 17, 2001, at the Corporate
Headquarters Building, Federal Way, Washington. A map showing the
access route to the Building from Interstate Highway No. 5 is on the
back cover.
A notice of the annual meeting and the proxy statement follow. You
will also find enclosed a proxy card and an envelope in which to return
it. If you cannot attend or if you plan to be present but want the
proxy holders, Steven R. Rogel, Chairman of the Board, President and
Chief Executive Officer, William D. Ruckelshaus, Director, and Martha
R. Ingram, Director, to vote your shares, please sign, date and return
the proxy card at your earliest convenience.
Sincerely,
/s/ Steven R. Rogel
Steven R. Rogel
Chairman, President and Chief Executive Officer
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
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The annual meeting of the shareholders of Weyerhaeuser Company will
be held at the Corporate Headquarters Building, Federal Way, Washington
on Tuesday, April 17, 2001, at 9 a.m. for the following purposes:
1. To elect four directors for terms expiring in 2004, described on
page 2. This is item 1 on the proxy card.
2. To consider and act upon the following shareholder proposals if
properly presented:
. proposal relating to disclosure of environmental liabilities
described on page 18. This is item 2 on the proxy card.
. proposal relating to the phase-out of chlorine-based chemicals
described on page 20. This is item 3 on the proxy card.
. proposal relating to a classified board and environmental
stewardship described on page 22. This is item 4 on the proxy
card.
3. To transact such other business as may properly come before the
meeting.
All shareholders are cordially invited to attend the meeting,
although only those who held common shares of the Company or
exchangeable shares issued by Weyerhaeuser Company Limited and are
shareholders of record at the close of business on February 23, 2001
will be entitled to vote at the meeting. Those who are hearing impaired
or require other assistance should write the Corporate Secretary
regarding your requirements to participate in the meeting.
CLAIRE S. GRACE
Corporate Secretary
Federal Way, Washington
March 8, 2001
PROXY STATEMENT
WEYERHAEUSER COMPANY
P.O. Box 9777
Federal Way, Washington 98063-9777
(253) 924-2345
(First Mailed on or about March 8, 2001)
Weyerhaeuser Company (the "Company") will hold its annual meeting of
shareholders at its Corporate Headquarters Building, Federal Way
Washington on Tuesday, April 17, 2001 at 9 a.m. to consider the items
on the attached notice of shareholder meeting. All items on the
attached notice are more fully described in this proxy statement.
The only securities eligible to vote at the annual meeting are the
Company's common shares and a special share of voting stock issued in
connection with the Company's 1999 acquisition of MacMillan Bloedel
Limited.
A trustee, CIBC Mellon Trust Company, holds the special share of
voting stock under a trust agreement. Under that trust agreement, each
holder of exchangeable shares issued by Weyerhaeuser Company Limited, a
Canadian subsidiary of the Company, is entitled to instruct the trustee
how to vote at the Company's shareholder meeting. The trustee will cast
votes equal to the number of outstanding exchangeable shares as to
which the trustee has timely received voting instructions from the
holders. If the trustee does not receive voting instructions from
holders of exchangeable shares, such holder's votes will not be cast at
the shareholders meeting unless the shareholder attends the meeting in
person and votes the shares at the meeting as proxy for the trustee.
The holders of the Company's common shares and the trustee acting for
the exchangeable shareholders will vote together as a single class on
all matters. Proxy cards are enclosed for shareholders who hold common
shares and voting instruction cards are enclosed for shareholders who
hold exchangeable shares.
Only shareholders of record at the close of business on February 23,
2001, will be eligible to vote at the annual meeting. On that date,
214,581,063 common shares and 4,787,196 exchangeable shares entitled to
give voting instructions were outstanding. Each common share and each
exchangeable share not held by the Company or its affiliates entitles
the holder to one vote at the annual meeting. The enclosed form of
proxy is solicited by the Board of Directors of the Company. A proxy
may be revoked by notice in writing to the Secretary at any time before
it is voted. If not revoked, the proxy will be voted as directed by the
shareholder.
Under Washington law and the Company's Articles of Incorporation, if
a quorum is present at the meeting: (i) the four nominees for election
as directors who receive the greatest number of votes will be elected
directors and (ii) the shareholder proposals set forth in this proxy
statement will be approved if the number of votes cast in favor of the
matter exceeds the number of votes cast against it.
In the election of directors, any action other than a vote for a
nominee will have the practical effect of voting against the nominee.
In the vote on the shareholder proposals, if a shareholder or broker
abstains from voting or fails to vote it will have no effect on the
approval
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of the shareholder proposal because abstentions and broker non-votes do
not represent votes cast by shareholders.
The Company's annual report to shareholders for 2000 is being mailed
with this proxy statement to shareholders entitled to vote at the 2001
annual meeting.
Election of Directors
The Articles of Incorporation provide that the directors of the
Company are classified into three classes, each class to be as nearly
equal in number as possible. The classes relate to the director's term
of office. At each annual meeting of shareholders the successors to the
directors whose terms expire at that meeting are elected for terms
expiring at the third annual meeting after their election by the
shareholders. The Board of Directors is authorized to fix the number of
directors within the range of 9 to 13 members, and has fixed the number
at 12. The four persons identified below are nominated to be elected at
the 2001 annual meeting for three-year terms expiring at the 2004
annual meeting. All of the nominees currently are directors of the
Company elected by the shareholders.
Unless a shareholder instructs otherwise on the proxy card, it is
intended that the shares represented by properly signed proxies in the
accompanying form will be voted for the persons nominated by the Board
of Directors. The Board of Directors anticipates that the listed
nominees will be able to serve, but if at the time of the meeting any
nominee is unable or unwilling to serve, the proxy holders may vote
such shares at their discretion for a substitute nominee.
Nominees for Election--Terms to Expire in 2004
Steven R. Rogel, 58, a director of the company since 1997, has been
chairman of the board since 1999. He has been the company's president
and chief executive officer since 1997. Prior to joining the company,
he served as the president and chief executive officer of Willamette
Industries, Inc. from 1995 to 1997 and as its president and chief
operating officer from 1991 to 1995. He is also a director of the
Kroger Company, Union Pacific Corporation and the Twin Harbors Council
Boy Scouts of America. He is also on the boards of the American Forest
& Paper Association and the National Council of the Paper Industry for
Air and Stream Improvement, Inc. In addition, he is a trustee of
Pacific University.
William D. Ruckelshaus, 68, a director of the company since 1989, is a
principal in Madrona Investment Group, L.L.C. (an investment company
and a strategic partner in the Madrona Venture Fund, formed in 1999).
He was chairman of Browning-Ferris Industries from 1995 to 1999 and its
chairman and chief executive officer from 1988 to 1995. He was
administrator, Environmental Protection Agency, from 1983 to 1985 and a
senior vice president of the company from 1976 to 1983. He is also a
director of Cummins Engine Company, Inc.; Coinstar, Inc.; Pharmaca,
Inc.; Nordstrom, Inc.; and Solutia, Inc.
Richard H. Sinkfield, 58, a director of the company since 1993, is a
senior partner in the law firm of Rogers and Hardin and has been a
partner in the firm since 1976. He was a director of United Auto Group,
Inc. (automobile retailer) from 1993 to 1999 and its executive vice
president and chief administrative officer from 1997 to 1999. He is
also a director of Central Parking Corporation, the Metropolitan
Atlanta Community Foundation, Inc. and the Atlanta
2
College of Art. He is a trustee of Vanderbilt University, a member of
the executive board of the Atlanta Area Council of the Boy Scouts of
America and was a member of the board of governors of the State Bar of
Georgia from 1990 to 1998.
James N. Sullivan, 63, a director of the company since 1998, is the
retired vice chairman of the board of Chevron Corporation
(international oil company) where he was a director from 1988 to 2000.
He joined Chevron in 1961 as a process engineer, was elected a vice
president in 1983 and served as its vice chairman from 1989 to 2000. He
is a trustee of the San Francisco Asian Art Museum Foundation and a
director of the United Way of the Bay Area.
Continuing Directors--Terms Expire in 2002
Martha R. Ingram, 65, a director of the company since 1995, has been
chairman of Ingram Industries, Inc. (book distribution, inland barging
and insurance), since 1995 and a member of its board since 1981. She
was its director of public affairs from 1979 to 1995. She is also a
director of Ingram Micro, Inc.; Baxter International, Inc.; and AmSouth
Bancorporation. In addition, she serves on the board of Vassar College,
and is chairman of the Board of Trust of Vanderbilt University. She
also serves on the boards of the Nashville Symphony Association, the
Nashville Opera, the Nashville Ballet and the Tennessee Repertory
Theatre and is currently chairman of the board of the Tennessee
Performing Arts Center. Mrs. Ingram was also chairman of the 1996
Tennessee Bicentennial Commission.
John I. Kieckhefer, 56, a director of the company 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.
Arnold G. Langbo, 63, a director of the company since 1999, was
chairman of Kellogg Company (cereal products) from 1992 until his
retirement in 2000. He joined Kellogg Canada Inc. in 1956 and was
elected president, chief operating officer and a director of Kellogg
Company in 1990. He served as chief executive officer of Kellogg
Company from 1992 to 1999. He is also a director of Johnson & Johnson
and Whirlpool Corporation and serves on the board of the International
Youth Foundation.
Ambassador Clayton Yeutter, 70, a director of the company since 1999,
is Of Counsel to the law firm of Hogan & Hartson. From 1985 to 1988 he
served as U.S. Trade Representative. He has also served as Secretary of
Agriculture and National Chairman of the Republican Party. He is also a
director of Caterpillar, Inc.; ConAgra, Inc.; FMC Corporation;
Oppenheimer Funds; Texas Instruments; and Zurich Financial Services.
Continuing Directors--Terms Expire in 2003
John Driscoll, 71, a director of the company since 1979, was chairman
of Rock Island Company (private investment company) until his
retirement in 1994. Prior to becoming chairman, he was its president.
He is also a director of John Nuveen & Company; Lifetime Fitness, Inc.;
Green 2 Go Com, Inc.; and The St. Paul Companies, Inc.
Richard F. Haskayne, 66, a director of the company since 2000, is
chairman of TransCanada PipeLines Limited (gas transmission, marketing
and processing) and was chairman of NOVA
3
Corporation from 1991 to 1998 until the company merged with TransCanada
Pipelines. He was chairman of the board of MacMillan Bloedel Limited
from 1996 to 1999 and is also a director of Alberta Energy Company Ltd.
and Fording Inc. He was chairman, president and CEO of Interhome Energy
Inc., the parent company of Interprovincial Pipe Line and Home Oil from
1986 to 1991. In 1997, he was appointed an officer of the Order of
Canada. In addition, he was chair of the board of governors of the
University of Calgary from 1990 to 1996.
Robert J. Herbold, 58, a director of the company since 1999, is
executive vice president and chief operating officer of Microsoft
Corporation (software). He joined Microsoft in 1994 and was formerly
senior vice president, advertising and information services, at The
Proctor & Gamble Company. He is a director of the Internet Policy
Institute; Agilent Technologies; Terabeam Networks; and the Information
Technology Association of America. In addition, he is a member of the
Washington Roundtable, the James Madison Council of the Library of
Congress, the Executive Council of Technet and the board of trustees of
Case Western Reserve University.
Rt. Hon. Donald F. Mazankowski, 65, a director of the company since
1997, is a business consultant. He was a Member of Parliament,
Government of Canada, from 1968 to 1993, served as Deputy Prime
Minister from 1986 to 1993 and as Minister of Finance from 1991 to
1993. He is also a director of the Power Group of Companies; Shaw
Communications, Inc.; IMC Global Inc.; Gulf Canada Resources Ltd.; Gulf
Indonesia Resources Ltd.; Great West Life Assurance, Investors Group;
and Atco Ltd. He is a past member of the board of governors of the
University of Alberta and is chairman of the Institute of Health
Economic and of the Canadian Genetic Diseases Network.
Committees of the Board of Directors
The Company's Board of Directors has a number of committees that
perform certain functions for the Board. The current committees of the
Board of Directors include the Executive Committee, Audit Committee,
Compensation Committee, Nominating and Management Organization
Committee, and International Committee.
The Executive Committee has the powers and authority of the Board of
Directors in the interval between Board of Directors meetings, except
to the extent limited by law. Mrs. Ingram and Messrs. Rogel and
Ruckelshaus are members of the Executive Committee of which
Mr. Ruckelshaus is chairman. The Executive Committee met on five
occasions and acted by consent in lieu of meeting on two occasions in
2000.
The Audit Committee, through regular or special meetings with
management, the director of internal audit and the Company's
Independent Auditor, provides oversight on matters relating to
accounting, financial reporting, internal control, auditing, and
regulatory compliance activities and other matters as the Board or the
Committee chairperson deems appropriate. The Audit Committee charter,
which is included as Appendix A, describes in greater detail the roles
and responsibilities of the Audit Committee. Mrs. Ingram and Messrs.
Herbold, Mazankowski and Ruckelshaus are members of the Audit Committee
of which Mr. Ruckelshaus is chairman. The Audit Committee met on three
occasions in 2000.
The Compensation Committee has responsibility for reviewing the
compensation of the Company's directors and chief executive officer;
reviewing and approving salaries and incentive
4
compensation of Company officers and certain other position levels; and
administering the Company's stock option and incentive compensation
plans. Messrs. Driscoll, Kieckhefer, Langbo and Sullivan are members of
the Compensation Committee of which Mr. Sullivan is chairman. The
Compensation Committee met on five occasions in 2000.
The Nominating and Management Organization Committee has
responsibility for reviewing, advising and recommending candidates for
election to the Board of Directors and for senior management succession
planning. The Committee will consider nominees for the Board of
Director's recommended by shareholders. If a shareholder wishes to
recommend a nominee, he or she should write to the Corporate Secretary
of the Company specifying the name of the nominee and the nominee's
qualifications for membership on the Board of Directors. All such
recommendations will be brought to the attention of the Nominating and
Management Organization Committee. Messrs. Driscoll, Ruckelshaus,
Sinkfield and Yeutter are members of the Nominating and Management
Organization Committee of which Mr. Driscoll is chairman. The
Nominating and Management Organization Committee did not hold any
meetings in 2000.
The International Committee of the Board has the responsibility to
provide oversight on international issues that have a significant
effect on the Company and to act as a sounding board for the Board of
Directors, the Chief Executive Officer and his management team
concerning economic, political and social trends, and relations with
key stakeholders, in countries where the Company has international
operations; to advise on policy issues, investment and other commercial
opportunities outside the United States; and to advise on capital
expenditures and other business and financial management decisions with
respect to the Company's international operations. Messrs. Haskayne,
Kieckhefer, Langbo, Mazankowski and Yeutter are members of the
International Committee of which Mr. Mazankowski is chairman. The
International Committee met on two occasions in 2000.
The Board of Directors of the Company met on nine occasions in 2000.
Each of the directors attended at least 75% of the total meetings of
the Board and the committees on which he or she served in 2000.
Directors' Compensation
Each non-employee director receives for service as a director an
annual fee of $55,000, fees of $1,500 for attending Board of Directors
meetings and $1,000 for attending board committee meetings. Committee
chairmen receive an additional annual fee of $5,000. In 2000,
Mr. Mazankowski received fees of Cdn. $3,914 as a non-employee director
of Weyerhaeuser Canada Ltd., a wholly owned subsidiary of the Company
which was subsequently amalgamated with Weyerhaeuser Company Limited.
Directors are also reimbursed for travel expenses in connection with
meetings.
The Board of Directors has designated that $30,000 of the $55,000
annual fee paid to non-employee directors will be automatically placed
into a common share equivalents account under the Fee Deferral Plan for
Directors. The value of the common share equivalents account is
measured from time to time by the value of the Company's common shares
and is payable to a director in cash at a time selected in advance by
the director, which must be on or after the director's termination of
service as a director. The share equivalents account is credited on
each dividend payment date for common shares with the number of share
equivalents that are
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equal in value to the amount of the quarterly dividend on common
shares. The Fee Deferral Plan for Directors provides that non-employee
directors may defer receipt of all or a portion of the remaining fees
for services as a director and elect between interest bearing and
common share equivalent accounts as the investment vehicle for the
deferred fees. The Fee Deferral Plan for Directors is administered by
the Compensation Committee.
Beneficial Ownership of Common Shares
Directors and Executive Officers
The following table shows as of January 17, 2001 the numbers of
common and exchangeable shares of the Company that each director, each
named executive officer and the directors and executive officers as a
group, have the power to vote or cause disposition of the shares. On
all matters submitted for shareholder vote, the common shares vote
together with the special voting stock held by the trustee. Under the
trust agreement, the trustee is entitled to cast a number of votes
equal to the number of outstanding exchangeable shares not owned by the
Company or its affiliates and as to which the trustee has timely
received voting instructions from the exchangeable shareholders.
Accordingly, percentages of total beneficial ownership have been
calculated based upon the total number of common shares and non-
affiliated exchangeable shares outstanding as of December 31, 2000.
Voting and/or
Dispositive Powers
(number of common and Percent of Class
Name of Individual or exchangeable shares) (common and Common Share
Identity of Group (1)(2)(3) exchangeable shares) Equivalents(4)
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William R. Corbin....... 148,537 * 14,141
W. John Driscoll........ 3,899,564 1.7 2,107
Richard C. Gozon........ 174,893 * 14,894
Richard F. Haskayne..... 7,629 * 1,082
Richard E. Hanson....... 47,895 * 10,690
Robert J. Herbold....... 200 * 1,272
Martha R. Ingram........ 262,569 * 1,460
John I. Kieckhefer...... 4,491,798 2.0 11,034
Arnold G. Langbo........ 200 * 1,701
Donald F. Mazankowski... 800 * 3,329
Steven R. Rogel......... 283,562 * 56,977
William D. Ruckelshaus.. 1,600 * 5,633
Richard H. Sinkfield.... 500 * 3,222
William C. Stivers...... 92,200 * 11,977
James N. Sullivan....... 1,000 * 2,864
Clayton K. Yeutter...... 500 * 1,635
Directors and executive
officers as a group
(21 individuals)....... 9,841,250 4.5 171,873
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* Denotes amount is less than 1%
(1) Includes the number of shares that could be acquired within
60 days after January 17, 2001 pursuant to outstanding stock
options, as follows: Mr. Corbin 144,446 common shares; Mr.
Gozon, 144,446 common shares; Mr. Haskayne 4,629 common
shares; Mr. Hanson, 43,109 common shares; Mr. Rogel, 282,500
common shares, Mr. Stivers, 76,800 common shares, and of the
group 964,511 common shares.
(2) Includes shares for which certain of the directors and
nominees share voting and dispositive powers with one or
more other persons as follows: Mr. Driscoll, 2,777,568
shares; Mrs. Ingram, 1,688 shares; Mr. Kieckhefer, 4,490,540
shares and of the group 109,887 shares.
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(3) Beneficial ownership of some of the common shares is
disclaimed by certain of the individuals listed as follows:
Mr. Driscoll, 3,825,777 shares; Mrs. Ingram, 1,688 shares;
Mr. Kieckhefer, 4,127,930 shares and of the group
102,999 shares.
(4) Common share equivalents held as of December 29, 2000 under
the Fee Deferral Plan for Directors or under the Incentive
Compensation Plan for Executive Officers.
Owners Of More Than 5%
The following table sets forth the number of common shares held by
the only person known to the Company to beneficially own more than five
percent of common shares.
Name and Address of Amount and Nature Percent of Class
Beneficial Owner of Beneficial Ownership (common shares)
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Capital Research and Manage-
ment Company................ 23,095,900(1) 10.9
333 South Hope Street
Los Angeles, CA 90071
The Vanguard Group........... 11,779,506(2) 5.4
PO Box 2600
Valley Forge PA 19482-2600
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(1) Based on a Schedule 13G dated February 9, 2001 in which Capital
Research and Management Company reported that, as of December 29,
2000, it had voting power over none of such shares and sole
dispositive power over all 23,095,900 of such shares. Capital
Research and Management Company disclaims beneficial ownership of
all such shares.
(2) As of January 17, 2001 The Vanguard Group as trustee held such
shares in a trust fund for employee savings (401(k)) and profit
sharing plans.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and certain of its officers to send reports of
their ownership of Weyerhaeuser stock and of changes in such ownership
to the Securities and Exchange Commission (the "SEC") and the New York
Stock Exchange. Based solely on the Company's review of the copies of
such reports it has received, the Company believes that all of its
directors and officers filed all such reports on a timely basis with
respect to transactions during 2000.
Compensation Committee Report On Executive Management Compensation
Compensation Committee Report On Executive Management Compensation
The Compensation Committee of the Board of Directors is composed
entirely of directors who are not employees of the Company. The
Committee is responsible for establishing and overseeing the Company's
executive compensation programs.
7
Compensation Philosophy
The Committee bases compensation for executive officers on the same
guiding principles used for all Weyerhaeuser employees:
. Pay that allows the Company to (1) attract and retain people with
the skills critical to long-term success of the Company, and (2)
maintain compensation costs that are competitive.
. Pay for performance to motivate and reward individual and team
performance in attaining business objectives and maximizing
shareholder value.
Executive Officer Compensation Practices
Compensation for executive officers includes three components: Base
salary, annual incentive and long-term incentive. Base salaries, for
the executives as a group, are set at competitive levels. The cash-
based annual incentive and the long-term incentive (stock options) are
based on Company performance.
The Committee primarily uses an industry group for compensation
comparison purposes. The comparison group consists of companies with
similar characteristics that compete with Weyerhaeuser for executive
talent. All companies in the S&P Paper and Forest Products Group used
for the performance graph on page 13 are in this comparison group along
with other forest product companies. In addition, the Committee reviews
general industry compensation data from other surveys to ensure that
the Company's compensation levels are sufficient to attract and retain
executives.
Annual Cash Compensation
Base Salary. The Company assigns a salary range for each executive
officer position. The salary range midpoints are targeted at the 50th
percentile using all the competitive data discussed above.
The Committee reviews and approves all salary ranges and salary
changes for executive officers. In determining individual salary
changes, the Committee uses its discretion after considering these
factors: (1) individual performance of the executive (using a variety
of measures), (2) position of the executive in the assigned pay range,
(3) experience, and (4) the salary budget for the Company. Salaries of
the executive officers on average are currently slightly above the
median of the competitive data.
Annual Incentive. The Company uses an annual incentive plan to focus
management on leading the industry in financial performance and returns
to shareholders. Each executive position is assigned a target bonus
amount based on the competitive data. The targets vary by position, and
range from 45 to 85 percent of base pay.
The measures of performance used for annual incentives are total
return to shareholders (compared to selected industry competitors and
the Standard & Poor's 500) and return on net assets compared to
selected competitors.
At the end of each year, the Committee determines a preliminary bonus
pool for the executive group based on Company results against the
performance measures. The Committee then uses its discretion to
determine the final bonus pool and each individual executive officer's
8
bonus. For 2000, the Committee established a funding pool of 217
percent of target based on results compared to the performance
measures.
Executives may defer all or a portion of their 2000 bonus into
Weyerhaeuser share equivalents, with a 15 percent premium applied if
they delay payment for at least 5 years. The deferred account grows or
declines based on the performance of Weyerhaeuser stock (plus
dividends). The purpose of the program is to further align executive
interests with those of shareholders by providing an incentive linked
to the performance of Weyerhaeuser stock.
Long-Term Incentive
Stock Options. The primary purpose of the long-term incentive plan is
to link management pay with the long-term interests of shareholders.
The Committee is currently using stock options to achieve that link.
The issuance of options at 100 percent of the fair market value assures
that executives will receive a benefit only when the stock price
increases.
The Committee establishes a target level of stock options for each
executive position. The target level is based on competitive data
indicating the estimated median value of long-term compensation. In
determining annual stock option grants, the Committee uses its
discretion to make an award above or below target based on evaluation
of the individual's performance, the individual's potential to improve
shareholder value and the number of shares granted to the individual in
the previous three years.
Stock Ownership Requirements
During 1996, the Company and the Committee established guidelines for
executive stock ownership. The guidelines require executive officers to
acquire, over a five-year period, a multiple of their base salary in
shares of Weyerhaeuser stock. Minimum ownership levels are based on the
executive's salary level, and range from one to three times base
salary. Ownership is based on common shares held, stock equivalents
(through the bonus deferral program described under "Annual Incentive"
above) and shares held via the Company's qualified benefit plans.
Deductibility of Compensation
The Committee has considered the provisions of Section 162(m) of the
Internal Revenue Code, which limit the deductibility of compensation
paid to each named executive to $1 million. To the extent possible, the
Committee intends to preserve deductibility but may choose to provide
compensation that is not deductible in order to attract, retain and
reward high-performing executives.
CEO Compensation
The chief executive officer's compensation is determined based on the
principles described above. Mr. Rogel's annual base salary is
$1,000,000. This level is 100 percent of the median salary for CEOs of
companies in the industry comparison group.
The target annual bonus award for the chief executive officer
position is 85 percent of base salary. The Board determines Mr. Rogel's
annual bonus award based on three factors. The factors are the
Company's annual return on net assets compared to industry competitors,
total
9
shareholder return compared to industry competitors and the S&P 500,
and the Board's evaluation of his performance in relation to annual
goals agreed to in advance with the Compensation Committee. Mr. Rogel
received an annual cash award for 2000 of $1,900,000, which represents
224 percent of his target award under the annual incentive plan,
reflecting the exceptional performance Weyerhaeuser had in the year
2000.
For the long-term component of compensation, an award of 175,000
stock options was granted to Mr. Rogel in 2000. Based on competitive
market data, this grant is within the competitive range of long-term
incentive grants for CEOs in the forest products industry.
James N. Sullivan W. John Driscoll
Chairman
John I. Kieckhefer Arnold G. Langbo
Audit Committee Report
The Audit Committee is composed of independent directors as defined
by the rules of the New York Stock Exchange and acts under a written
charter revised by the Committee in 2000. The charter is attached as
Appendix A.
Management is responsible for the Company's internal controls and the
financial reporting process. Arthur Andersen LLP, the Company's
independent accountants, is responsible for performing an independent
audit of the Company's consolidated financial statements in accordance
with generally accepted auditing standards and to issue a report
thereon. The Committee's responsibility is to monitor and oversee these
processes on behalf of the Board of Directors.
In this context, the Committee has discussed with Arthur Andersen LLP
the matters required to be discussed by Statement on Auditing Standards
No. 61, Communications with Audit Committees, as amended. In addition,
the Committee has received the written disclosures and the letter from
the independent auditors required by Independence Standards Board
Standard No. 1 and has reviewed, evaluated and discussed the written
report with that firm and its independence from the Company.
The Committee discussed with the Company's internal and independent
auditors the overall scope and plans for their respective audits. The
Committee meets with the internal and independent auditors, with and
without management present, to discuss the results of their
examinations, the evaluations of the Company's internal controls, and
the overall quality of the Company's financial reporting.
Based on the review and discussions referred to above, the Committee
recommended to the Board of Directors that the audited financial
statements be included in the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 2000. The Committee has also
10
recommended the selection of Arthur Andersen LLP as the Company's
independent auditors for 2001.
William D. Ruckelshaus Robert J. Herbold
Chairman
Martha R. Ingram Donald F. Mazankowski
Compensation Committee Interlocks and Insider Participation
Messers. Driscoll, Kieckhefer, Langbo and Sullivan served as members
of the Compensation Committee during 2000. None of the members of the
Compensation Committee was an officer of the Company or any of its
subsidiaries during 2000 or any prior period. No executive officer of
the Company served as a member of the compensation committee or as a
director of any company where an executive officer of such company is a
member of the Compensation Committee or is a director of the Company.
Trusts for the benefit of Mr. Kieckhefer and members of his immediate
family have associated themselves with trusts for the benefit of his
extended family into two family partnerships that owned limited
partnership interests in Weyerhaeuser Windemere Partners, a real estate
investment partnership. Weyerhaeuser Windemere Partners was managed by
Weyerhaeuser Venture Company, a wholly-owned subsidiary of the Company.
During 2000, the investment entities of which Weyerhaeuser Windemere
Partners was the General Partner and Weyerhaeuser Windemere Partners
itself liquidated their assets and were dissolved. As a result of the
liquidations, each of the two partnerships in which trusts for the
benefit of Mr. Kieckhefer and members of his family had ownership
interests received distributions of capital and residual profits in the
aggregate amount of approximately $6,561,200.
11
Summary Compensation Table
Annual Compensation Long-Term Compensation
-------------------------------- ---------------------------
Awards Payouts
------------------- -------
Other Restricted All Other
Annual Stock Options/ LTIP Compen-
Name and Salary Bonus Compensation Award(s) SARs Payouts sation
Principal Position Year ($) ($) ($)(1) ($) (#) ($) ($)(2)
------------------------------------------------------------------------------------------------
S. R. Rogel 2000 1,000,000 1,900,000 291 None 175,000 None 234,430
Chairman/ 1999 987,019 1,500,000 -- None 125,000 None 115,862
President/CEO 1998 960,578 750,000 -- None 85,000 None 6,724
R.C. Gozon 2000 512,788 721,952 487 None 38,000 None 9,430
Executive VP 1999 446,058 523,085 -- None 38,000 None 7,800
1998 445,231 280,800 -- None 36,890 None 7,000
W.R. Corbin 2000 512,788 721,952 -- None 38,000 None 32,969
Executive VP 1999 446,058 523,085 -- None 38,000 None 7,800
1998 445,231 280,800 -- None 36,890 None 7,000
W.C. Stivers 2000 453,677 595,012 340 None 31,000 None 9,430
Executive 1999 402,745 424,643 3,797 None 31,000 None 7,800
VP/CFO 1998 402,866 228,700 -- None 30,600 None 7,000
R.E. Hanson 2000 402,106 480,224 -- None 20,500 None 52,209
Senior VP 1999 269,908 285,192 -- None 20,500 None 28,779
1998 230,155 139,859 -- None 12,568 None 9,100
------------------------------------------------------------------------------------------------
(1) Amounts in this column are: (a) that portion of interest above
market rates (as defined by the SEC) paid on that compensation
voluntarily deferred by the individuals; and (b) tax gross-up
payments.
(2) Amounts in this column are: (a) the Company contribution to
qualified 401(k) and profit sharing plan accounts; (b) the premium
amount credited to the executive's deferred compensation account
based on the bonus amount deferred as common share equivalents.
12
Comparison of Five-Year Cumulative Total Return
Weyerhaeuser Company, S&P 500, and S&P Paper and Forest Products Group
[PERFORMANCE CHART]
Measurement Period S&P S&P
(Fiscal Year Covered) WEYERHAEUSER 500 INDEX PAPER & FOREST
------------------- ------------ --------- --------------
Measurement
Pt-12/95 $100.00 $100.00 $100.00
FYE 12/96 $113.44 $122.89 $110.58
FYE 12/97 $121.23 $163.85 $118.59
FYE 12/98 $129.76 $210.58 $120.90
FYE 12/99 $188.12 $254.83 $168.92
FYE 12/00 $137.54 $231.62 $138.40
Assumes $100 invested on December 31, 1995 in Weyerhaeuser
common stock, S&P 500, and S&P's Paper and Forest Products
Group
- Total return assumes dividends are reinvested quarterly
- Market returns are adjusted for spinoffs and/or any other
special dividends
- Measurement dates are the last trading day of the calendar
year shown
- S&P's Paper and Forest Products Group: Boise Cascade,
Georgia-Pacific, International Paper, Louisiana-Pacific,
Mead, Potlatch, Westvaco, Weyerhaeuser and Willamette
13
Option/SAR Grants In Last Fiscal Year
Individual Grants
---------------------------------------------------------------------
% of Total
No. of Options/SARs
Securities Granted to
Underlying Employees in Exercise or Grant Date
Name Options/SARs Fiscal Year Base Price Expiration Present Value(2)
(A) Granted(1)(#)(B) (%)(C) ($)(D) Date (E) ($)(F)
----------------------------------------------------------------------------------------------
S. R. Rogel............. 175,000 9.00 53.03125 02/09/10 3,598,000
R. C. Gozon............. 38,000 1.95 53.03125 02/09/10 781,280
W. R. Corbin............ 38,000 1.95 53.03125 02/09/10 781,280
W. C. Stivers........... 31,000 1.59 53.03125 02/09/10 637,360
R. E. Hanson............ 20,500 1.05 53.03125 02/09/10 421,480
----------------------------------------------------------------------------------------------
(1) Options granted in 2000 are exercisable starting 12 months after the
grant date, with 25 percent of the shares covered thereby becoming
exercisable at that time and with an additional 25 percent of the
option shares becoming exercisable on each successive anniversary
date, with full vesting occurring on the fourth anniversary date.
The options were granted for a term of 10 years, subject to earlier
termination in certain events related to termination of employment.
(2) The estimated grant date present value reflected in the above table
is determined using the Black-Scholes model. The material
assumptions and adjustments incorporated in the Black-Scholes model
in estimating the value of the options reflected in the above table
include the following:
. An exercise price on the option of $53.03125 equal to the fair
market value of the underlying stock on the grant date.
. An option term of ten years.
. An interest rate of 6.52 percent that represents the interest rate
on a U.S. Treasury security with a maturity date corresponding to
that of the option term.
. Volatility of 35.20 percent calculated using daily stock prices
for the three-year period prior to the grant date.
. Dividends at the rate of $1.60 per share representing the
annualized dividends paid with respect to a share of common stock
at the date of grant.
The ultimate values of the options will depend on the future market
price of the Company's stock, which cannot be forecast with reasonable
accuracy. The actual value, if any, an optionee will realize upon
exercise of an option will depend on the excess of the market value of
the Company's common stock over the exercise price on the date the
option is exercised.
Aggregated Option/SAR Exercises in Last Fiscal Year
and Fiscal Year-End Option/SAR Values
Number of Securities Value of Unexercised
Underlying Unexercised in-the-Money Options/SARs
Options/SARs at FY-End at FY-End(2)
------------------------- -------------------------
Shares Acquired Value
on Exercise(1) Realized Exercisable Unexercisable Exercisable Unexercisable
Name (#) ($) (#) (#) ($) ($)
-----------------------------------------------------------------------------------------------------
S.R. Rogel.............. -- -- 42,500 492,500 11,953 11,953
R.C. Gozon.............. -- -- 97,500 105,390 650,157 46,407
W.R. Corbin............. -- -- 97,500 105,390 391,407 46,407
W.C. Stivers............ -- -- 38,250 86,350 147,048 38,672
R.E. Hanson............. -- -- 22,050 50,618 102,397 11,166
-----------------------------------------------------------------------------------------------------
(1) Number of securities underlying options/SARs exercised.
(2) Based on a fair market value at fiscal year end of $51.375.
14
Pension Plan Table
Estimated Annual Retirement Benefit(1)
-----------------------------------------------------------------------------
Average Annual Years of Service
Compensation during -------------------------------------------------------
Highest 5 Years 15 20 25 30 35 40
-----------------------------------------------------------------------------
$ 400,000 87,209 116,279 145,349 174,418 203,858 223,488
500,000 109,709 146,279 182,849 219,418 255,358 280,988
600,000 132,209 176,279 220,349 264,418 308,858 338,488
700,000 154,709 206,279 257,849 309,418 360,358 395,988
900,000 199,709 266,279 332,849 399,418 465,358 510,988
1,000,000 222,209 296,279 370,349 444,418 518,858 568,488
1,300,000 289,709 386,279 482,849 579,418 675,358 740,988
1,400,000 312,209 416,279 520,349 624,418 728,858 798,488
2,000,000 447,209 596,279 745,349 894,418 1,043,858 1,143,488
2,500,000 559,709 746,279 932,849 1,119,418 1,305,358 1,430,988
3,000,000 672,209 896,279 1,120,349 1,344,418 1,568,488 1,718,488
-----------------------------------------------------------------------------
(1) Estimated annual benefits payable upon retirement at age 65 (before
giving effect to applicable Social Security benefits) under the
Retirement Plan and Supplemental Retirement Plan to individuals
having the specified years of credited service and the indicated
average annual salaries.
The Company's Retirement Plan for Salaried Employees (the "Retirement
Plan") is a noncontributory, defined benefit pension plan for salaried
employees under which normal retirement is at age 65 and early
retirement can be elected by any participant who has reached age 55 and
has at least 10 years of vesting service. The annual retirement benefit
payable upon normal retirement is equal to (i) 1% of the participant's
average annual salary for the highest five consecutive years during the
ten calendar years before retirement multiplied by years of credited
service, plus (ii) .5% of such highest average annual salary in excess
of the participant's Social Security wage base (as such term is defined
in the Retirement Plan), multiplied by the number of years of credited
service (limited to 35 years). The benefit payable upon early
retirement is a percentage of the benefit that would be payable upon
normal retirement and ranges from 72% at age 55 with less than 30 years
of vesting service, to 100% at age 62. The number of years of credited
service is limited to 35. Joint and survivor elections may be made
under the Retirement Plan. A participant in a defined benefit pension
plan is generally limited under the Internal Revenue Code to an annual
benefit at Social Security normal retirement age of the lesser of (i)
$135,000 (subject to adjustment) or (ii) 100% of the participant's
average compensation during the consecutive three-year period in which
he received the highest compensation. Further reduction may be required
for retirement prior to the Social Security normal retirement age.
Salary used in calculating retirement benefits is average annual salary
for the highest five consecutive years during the ten calendar years
before retirement.
Employees nominated by the Chief Executive Officer and approved by
the Compensation Committee are eligible to participate in the
Supplemental Retirement Plan (the "Supplemental Plan"). Supplemental
Plan benefits, which are paid outside the Retirement Plan from the
general funds of the Company, are determined by applying to incentive
compensation paid in the five highest consecutive calendar years during
the ten calendar years before retirement of total compensation (base
salary plus any award under the Company's incentive compensation plans)
the formula for determining Retirement Plan benefits. The Supplemental
Plan also includes benefits which exceed the Internal Revenue Code
limitations described above.
If each of the executive officers named in the Summary Compensation
table had retired in 2000, the five-year average compensation used to
calculate retirement benefits would average
15
57% of total compensation set forth in such table and the final average
compensation used to calculate retirement benefits for the named
individuals in the table would have been, respectively, S.R. Rogel,
$1,732,532, R.C. Gozon, $711,899, W.R. Corbin, $711,899, W.C. Stivers,
$614,975, and R.E. Hanson, $367,291. The credited years of service for
those individuals in the table are, respectively, 28.6, 6.6, 13.5, 30.2
and 31.7 years.
Change in Control and Severance Agreements
The Company has agreements with each of its executive officers
providing for specified payments and other benefits if, within the six
full calendar month period prior to or 24 calendar months following the
effective date of a change in control of the Company, the officer's
employment is terminated (i) by the Company or its successor for
reasons other than cause, mandatory retirement, disability or death, or
(ii) by the officer if there has been (a) a material reduction in the
officer's position existing prior to the change in control; (b) a
requirement that the officer be based in a location which is at least
50 miles farther from the company's headquarters than was the officer's
primary residence immediately prior to the change in control; (c) a
reduction by the company in the officer's base salary as of the
effective date; or (d) a material reduction in the officer's level of
participation in any of the company's short- or long-term incentive
compensation plans. In these circumstances, the officer will receive
(a) an amount equal to three times the highest rate of the officer's
annualized base salary rate in effect prior to the change in control;
(b) three times the officer's target annual bonus established for the
bonus plan year in which the officer's date of termination occurs;
(c) an amount equal to the officer's unpaid base salary and accrued
vacation pay through the effective date of termination; (d) the
officer's unpaid targeted annual bonus prorated for the number of days
in the fiscal year through the date of the officer's termination; (e)
continuation of the group term life insurance for the officer for six
months, (f) full vesting of the officer's benefits under any and all
supplemental retirement plans in which the officer participates,
calculated under the assumption that the officer's employment continues
following the officer's termination date for three full years; (g) an
amount equal to the value of any premiums on share equivalents
forfeited under the Comprehensive Incentive Compensation Plan in
connection with the officer's termination, and (h) an amount necessary
to offset any federal excise and related income taxes payable by the
officer on all payments received under the agreement, unless such
amount is less than $50,000 in which case the officer's benefits under
the agreement are capped at the maximum amount that may be paid without
incurring such excise taxes. In addition, in accordance with the terms
of the company's long term incentive plans, in the event of a change in
control of the Company all outstanding stock options held by the
officer shall become exercisable.
The agreements with each of the Company's executive officers provide
for severance benefits if the executive's employment is terminated when
there is no change in control unless the termination is for cause,
death, disability or voluntary termination of employment by the
executive. The severance benefit payable is an amount equal to (a) one
and one-half times the highest base salary rate paid to the executive
prior to termination; (b) one and one-half times the target annual
bonus established for the bonus plan year in which the termination
occurs; (c) the amount of the executives unpaid base salary and accrued
vacation pay through the date of termination; and (d) the officer's
unpaid targeted annual bonus prorated for the number of days in the
fiscal year through the date of the officer's termination. The
severance benefit payable to Mr. Rogel where there is no change in
control is the same as described above except
16
that the amount in (a) is two times the highest base salary rate and
the amount in (b) is two times the target annual bonus.
Pursuant to an agreement with Mr. Corbin, the Company's Executive
Vice President, Timberlands & Distribution, who joined the Company in
1992, he will be paid a non-qualified supplemental retirement benefit
calculated under the terms of the Retirement Plan but providing that
during the first five years of service with the Company, he will
receive two years of service credit for vesting and benefit calculation
for each year of service with the Company. Prior to joining the
Company, Mr. Corbin had been employed with International Paper Company
as vice president and general manager of land and timber and president
of IP Timberlands, Ltd.
Pursuant to an agreement with Mr. Gozon, who became the Company's
Executive Vice President, Pulp, Paper & Packaging in 1994, his pension
and post-retirement health benefits will be calculated based on at
least ten years of service if he leaves the Company after age 65. Prior
to joining the Company, Mr. Gozon had been employed by Alco Standard
Corporation, most recently in the position of president and chief
operating officer.
Pursuant to an agreement with Mr. Rogel, who became the Company's
President and Chief Executive Officer on December 1, 1997, his initial
annual salary was $925,000 and he is a participant in the incentive
compensation plan for the Company's senior executives. His bonus is
determined in three components, each to be given equal weight. The
first component is a short-term incentive calculated based on the
Company's annual return on net assets compared to industry competitors.
The second is an intermediate-term incentive calculated based on total
shareholder return compared to industry competitors and the S&P 500.
The third component is based on the Board's evaluation of his
performance as chief executive officer in relation to annual goals
agreed to in advance with the Compensation Committee. The agreement
provided that his 2000 bonus would be calculated as described above,
but would not be less than $550,000. He received $503,944 to compensate
for stock options and restricted stock forfeited upon leaving his prior
employment, the entire amount of which was deferred into common share
equivalents under the Company's deferred compensation plan. As he chose
to defer payment for at least five years, he was entitled to a 15%
premium on the amount deferred into common share equivalents. He
received a stock option grant of 150,000 shares on his first day of
employment with the Company and he is a participant in the Company's
Long-Term Incentive Compensation Plan. He is also entitled to other
benefits generally available to the Company's top management team and
is subject to the share ownership guidelines for those employees.
Pursuant to the agreement with Mr. Rogel, he will be paid a non-
qualified supplemental retirement benefit calculated under the terms of
the Company's Salaried and Supplemental Retirement Plans using his
original hire date with his prior employer in 1972, less benefits paid
to him under the Company's Retirement Plans and his prior employer's
retirement plan. He received relocation benefits under the company's
employee relocation programs. Prior to joining the Company, Mr. Rogel
was President and Chief Executive Officer of Willamette Industries,
Inc.
17
Item 2. -- Shareholder Proposal Relating to Disclosure of Environmental
Liabilities
The Sisters of the Humility of Mary, Villa Maria Community Center,
Villa Maria, Pennsylvania, 16155, a shareholder, have stated their
intention to present a proposal at the 2001 annual meeting. In
accordance with applicable rules of the Securities and Exchange
Commission, the proposal of such shareholder (for which neither the
Company or its Board of Directors has any responsibility) is set forth
below:
WHEREAS:
Our company has environmental policies and programs designed both to
comply with environmental laws and to protect the company from
environmental liability;
The World Resources Institute published a report entitled Pure
Profit: the Financial Implications of Environmental Performance which
analyzed 13 pulp and paper companies (including Weyerhaeuser);
The World Resources Institute (WRI) is an Independent, non-profit
research center. WRI's Chairman is William D. Ruckelshaus, former head
of the Environmental Protection Agency under presidents Richard Nixon
and Ronald Reagan, and for 10 years Senior Vice President of Corporate
Affairs for Weyerhaeuser Corporation;
The Pure Profit report won the Moskowitz Prize, a juried award for
papers of academic excellence, and was chosen for presentation at the
University of North Carolina Kenan-Flagier Business School Greening of
Industry conference. It was funded in part by the Environmental
Protection Agency (EPA), the MacArthur Foundation, and the Heinz
Endowment;
The American Forest & Paper Association (AF&PA) and leading pulp and
paper companies cooperated on the Pure Profit report by helping to
identify environmental risks, their potential significance and
likelihood. In addition, published literature was researched, the EPA
and other governmental agencies were consulted, and numerous
environmental scientists, industry consultants, academics, and non-
governmental organizations gave input;
The Pure Profit report used forward-looking financial analysis and
standard investment decision-making techniques to measure financial
exposure to environmental risk. These established methodologies were
pioneered in the 1970's and have since become valuable corporate
decision-making tools;
The realization of environmental risks can affect revenues, cash
flows, or asset values of most companies in the pulp and paper
industry. The present value of these future costs and liabilities
(discounted at average industry capital costs) was for most of the 13
companies analyzed over 5%--and for three companies over 10%--of then-
current market capitalization;
Although Pure Profit states that Weyerhaeuser was included, the
report does not identify by name of company the rankings of the 13
companies analyzed, and therefore does not disclose the magnitude of
the investment risk specifically related to our company;
Liabilities of the magnitude identified and discussed by the Pure
Profit report could, we believe, have major impacts on corporate
earnings and dividends, cause the company's insurance rates to
escalate, and jeopardize that company's bond credit ratings, thereby
significantly increasing borrowing costs for any company so affected;
Our company, even though it must be aware of the exposures suggested
by the Pure Profit report, has not comprehensively disclosed or
discussed them with shareholders;
18
THEREFORE, be it resolved, shareholders request the Board to prepare
by six months after the stockholders meeting (at reasonable expense and
excluding proprietary information) a report on the current status of
the issues raised in the Pure Profit report as they affect our company.
Included in this report should be a description of Weyerhaeuser's own
liability projection methodology (if different) and an assessment of
other major environmental risks, such as those created by climate
change.
The Company's Response to the Shareholder Proposal--Item 2
The Company takes seriously its obligation to disclose environmental
liabilities known to management that are reasonably likely to have a
material effect on the Company's operating results or financial
condition. To that end, the Company has made a concerted effort to
develop reliable methodologies for determining potential liabilities,
including environmental liabilities. Based on these methodologies, the
Company regularly evaluates potential liabilities arising from
remediation activity and the sufficiency of the reserves established
for them, consistent with standard accounting procedures and SEC
requirements. The results of that evaluation and the amounts reserved
are disclosed in the Company's periodic reports to shareholders.
Additionally, the Company reports on legal proceedings arising from
environmental compliance-related matters involving local, state or
federal governments. The Company also evaluates, and routinely
discloses to shareholders, environmental matters that could
significantly affect the company's operating costs or operations,
including significant changes in environmental laws, regulation or
government policy. Examples of recent discussions include the Cluster
Rule, endangered species regulations and forest practices regulations.
The Company is confident that its analysis of financial risk from
changes in environmental laws, regulations and public policy and its
assessment of potential environmental liabilities provide a solid basis
for its disclosure to its shareholders. Changes to government policies,
particularly in the environmental area, are subject to intense debate
involving a variety of stakeholders and the analysis of the likelihood
and the potential economic effect of such changes varies significantly
as the government considers differing stakeholders responses.
Evaluations of potential environmental and financial effects before a
specific law, regulation or change in government policy is close to
being finalized are highly speculative.
The Company has already disclosed in its periodic reports to
shareholders many of the potential environmental exposures discussed by
the report referenced in the shareholder proposal. The company also
presents its position on many of these issues in publications such as
Weyerhaeuser Fact Sheets and the Annual Environmental Performance
Report, both of which are publicly available on the Company's web site.
The Company believes that its current disclosure of environmental
liabilities meets not only the technical requirements of the SEC
disclosure rules, but also the spirit in which these rules were
promulgated. The Company believes that the report requested in the
shareholder proposal would not add any incremental value to the
methodology already used or the information already furnished to
shareholders.
The Board recommends a vote AGAINST this proposal.
19
Item 3--Shareholder Proposal Relating to the Phase-out of Chlorine-based
Chemicals
The Adrian Dominican Sisters, 1257 East Siena Heights Drive, Adrian,
Michigan, 49221-1793, a shareholder, have stated their intention to
present a proposal at the 2001 annual meeting. Five groups, whose names
and addresses will be supplied upon oral or written request to the
Corporate Secretary of the Company, have co-sponsored the proposal. In
accordance with applicable rules of the Securities and Exchange
Commission, the proposal of such shareholders (for which neither the
Company or its Board of Directors has any responsibility) is set forth
below:
REPORT on PHASE-OUT of CHLORINE-BASED CHEMICALS
WHEREAS: Our company is a noted leader in pulp production, and has
historically taken significant steps to reduce the discharges of
unwanted toxins such as dioxin, furans and other chemicals that are
dangerous to human and environmental health;
The continued use of chlorine-dioxide creates dangerous and
unnecessary chlorine-based pollution. Just in 1998 (the most recent
figures available), Weyerhaeuser released over 900,000 pounds of
chlorine, chlorine-dioxide, chloroform and hydrochloric acid into the
environment from its pulp mills in the U.S. alone;
Dangerous chlorine-based pollutants accumulate in humans and other
living organisms--their concentrations increasing each step up the food
chain. The young of every species--including our children--are
especially threatened due to their smaller size, habits, and bodily
development. Minute exposures lead to: Cancer, Birth Defects, Learning
Impairment, Reproductive Failure, Hormone Disruption.
Scientific Developments
In Dioxin: Draft Reassessment (2000) the Environmental Protection
Agency (EPA) reports (emphases added):
. Dioxin and related compounds are considered "likely" to present a
cancer hazard to humans;
. Humans and their offspring "......respond with a broad spectrum of
negative effects from exposure to dioxins and related compounds.
.....There is reason to infer that these effects may occur for all
dioxin-like compounds;"
. "Potentially adverse effects have been reported .... from exposure to
dioxin and related compounds in human populations at or near average
current background population levels . . .;"
. ". . . the biological system responds to the cumulative exposure to
other dioxin-like chemicals instead of exposure to any single dioxin-
like compound;"
. EPA's cancer risk estimate for dioxin is now as high as 1-in-100,
increased ten-fold from 1-in-1000 just six years ago;
. Dioxin exposure to infants from breast-feeding is 100 times higher
than the average adult's exposure, equivalent to 10% of an adult's
entire lifetime intake.
The EPA's findings indicate there is no margin of safety for
continued exposure to the types of chemicals our company's mills
produce, and we believe that no more of these toxins should be released
when alternatives exist.
20
Dioxin, dioxin-like compounds and other chlorinated compounds are
unwanted by-products of our company's chlorine-dioxide based bleaching
and combustion processes. Totally chlorine free (TCF) technologies
eliminate all chlorinated bleaching agents, thus preventing chlorine
atoms from forming dioxin-like pollutants.
RESOLVED: Shareholders request that the Board of Directors report by
the 2002 annual meeting on a review of our company's bleach processes,
detailing the steps required to phase out the use of all chlorinated
bleaching agents.
Supporting Statement
Proponents request that the report: list the bleaching processes used
at our company's mills; detail what alternate bleaching processes have
been evaluated; highlight the savings to our company and shareholders
that will be derived from avoiding toxic pollution and related
pollution prevention and monitoring costs; and include an action plan
and timetable for implementing a phase-out of all chlorinated bleaching
within 10 years.
The Company's Response to the Shareholder Proposal--Item 3
The Company's core value of citizenship requires us to support the
communities where we do business, valuing human health, holding
ourselves to the highest standards of ethical conduct and environmental
responsibility, and communicating openly with employees and the public.
This value is reflected in the Company's Environmental Core Policy in
which the Company commits to "to continuously improve our environmental
performance wherever we do business." One of the Company's three
environmental goals is to reduce pollution, which will be achieved by
"continuously improving our processes for reducing wastes and emissions
to the environment."
The company is aware of concerns about the use of chlorine in
bleaching and the subsequent pollution by-products. The Company
believes the process technology it uses at this time achieves the
environmental objectives of our environmental policy. Changes to
fundamental process technology must be considered carefully and the
optimum solution must be based on an evaluation of: safety, business
strategic objectives, customer requirements, and environmental effects.
After considering all these factors, the Company eliminated elemental
chlorine for pulp and paper bleaching throughout its mills in the
United States and Canada, completing the move to elemental chlorine
free ("ECF") technology by 1998. The Company has installed advanced
technology such as oxygen delignification and extended cooking of pulp
chips in the digester at most of its bleached mills.
ECF technology, by substituting chlorine dioxide as a bleaching agent
for elemental chlorine, greatly reduces the incidental creation of
unwanted by-products such as dioxin, furan, and other chlorinated
organic compounds. After years of study, in 1998, the Environmental
Protection Agency ("EPA"), designated ECF technology as the "best
available technology" for bleached kraft pulp manufacturers,
determining that ECF technology "achieves greater environmental
benefits than any other economically achievable technology considered
by EPA . . . ."
The Company believes, on the other hand, that totally chlorine free
("TCF") technology does not fit either its business strategic
objectives or its customers' requirements at its bleached
21
kraft mills. The market for ECF pulp is much larger than for TCF pulp
and continues to grow. According to the Alliance for Environmental
Technology ("AET"), by the end of 1999, global ECF production totaled
more than 62% of the world market share and was growing at an annual
rate of approximately 15% a year, while TCF remained steady at
approximately 6% of world bleached chemical pulp production. In North
American markets, ECF represents over 70% of bleached chemical pulp
production and there is no growth in TCF production. In addition, a
recent life cycle assessment cited by AET concluded that "TCF products
had inferior reinforcing properties (i 10%) "which required an
additional 10% softwood kraft pulp when running TCF (to compensate for
loss of strength)." Moreover, TCF technology generally costs more per
ton to produce pulp than ECF technology. Finally, use of TCF technology
does not achieve significantly greater environmental benefits.
Weyerhaeuser is proud of its environmental performance. The advanced
bleaching technologies used by the Company further reduce the
generation of dioxin, furan and other chlorinated compounds. In this
way, the Company provides pollution reduction benefits that go beyond
ECF bleaching. The Company makes competitive pulp products while
significantly reducing environmental effects by its use of ECF and
advanced pulping and bleaching technologies.
The Board recommends a vote AGAINST this proposal.
Item 4. -- Shareholder Proposal Relating to a Classified Board
Bartlett Naylor, 1255 North Buchanan, Arlington, VA 22205, a
shareholder, has stated his intention to present a proposal at the 2001
annual meeting. In accordance with applicable rules of the Securities
and Exchange Commission, the proposal of such shareholders (for which
neither the Company nor its Board of Directors has any responsibility)
is set forth below:
RESOLVED: That Weyerhaeuser stockholders urge the Board of Directors
take the necessary steps, in compliance with state law, to declassify
the Board for the purpose of director elections. The board
declassification shall be completed in a manner that does not affect
the unexpired terms of directors previously elected."
SUPPORTING STATEMENT: Our company's board is divided into three
classes of directors serving staggered three-year terms. This means an
individual director faces election only once every three years, and
shareholders only vote on roughly a third of the board each year.
Last year, a clear majority of voting Weyerhaeuser shareholders
supported this resolution. The board not only failed to adopt it, it
failed to respond to a letter from the Council of Institutional
Investors asking Weyerhaeuser's intentions. In justifying its current
board structure, Weyerhaeuser has pointed to supportive votes in 1985
and 1996. It is ironic that shareholders of 1985 enjoy more say over
our company's governance than current shareholders.
It is further ironic that our company should apply such obligation to
history, given that the core of Weyerhaeuser's assets derive from land
granted as subsidies to build the transcontinental railroads. Those
railroad lands were intended to be sold to homesteaders.
Indeed, Weyerhaeuser seems to live in the Old Economy that survived
on seemingly endless natural resources, government subsidy, etc. The
New Economy, including an
22
increasingly "green" public and its elected officials, have grown
restive with Weyerhaeuser. "Weyerhaeuser gets forested land, but what
do taxpayers end up with?" declared a major series by the Seattle Times
in 1998. This land exchange involves 30,000 acres of our company's
mostly cut over lands for 4,300 acres of public lands with trees in the
Green River watershed near Tacoma and Seattle. When our attorneys
defended the Huckleberry land exchange before the federal courts, they
acknowledged that Weyerhaeuser had already "certainly destroyed"
forests recently received from the U.S. Forest Service in the swap. Our
company lost this law suit, and suffered adverse publicity.
A General Accounting Office report released in July, 2000 that
revealed corrupted trading practices, highlighted the Huckleberry land
exchange. This placed Weyerhaeuser on the front page of the Washington
Post, further damaging our company's reputation over the matter of land
exchanges with the federal government.
The New Economy has proven that shareholder value must be generated
by an enlightened view of the environment. In 1985, Weyerhaeuser stood
tall on the corporate horizon of the Northwest. Now it casts a pale
shadow among other Seattle companies that hardly existed in 1985. Or
consider Home Depot, which went public that year, and has since created
ten times the market value of Weyerhaeuser: This company has pledged to
sell no wood products from old growth trees.
Many companies insulated themselves from New Economy with a
classified board. Those with annual elections boast about their
accountability. I urge you to vote FOR this resolution.
The Company's Response to the Shareholder Proposal--Item 4
At the Company's April 2000 annual shareholder meeting, we stated
that we recognized that many shareholders, particularly institutional
shareholders, would prefer that we institute a different structure for
director terms and because we take these shareholder concerns seriously
the Weyerhaeuser Board of Directors would review the classified board
structure before the next annual shareholder meeting. At its December
2000 meeting the Board of Directors reviewed the structure in detail
and, after careful consideration, determined that retention of the
classified board is in the best interest of the Company and its
collective shareholders.
The Weyerhaeuser Board believes that a classified board structure
provides an effective balance between ensuring continuity of knowledge
and experience on the Board and the need for director accountability.
Continuity of knowledge and experience have a stabilizing and
beneficial effect on the management of the business and affairs of the
Company and contribute to more effective long-term planning and
strategic thinking. At the same time, electing directors to three-year
terms does not reduce director accountability to the shareholders
because the Company's shareholders would be able to replace at least a
third of the directors at any annual meeting and the entire board in
slightly over two years. The Board also fosters director accountability
by aligning the directors' own interests with the interests of the
shareholders through the directors' compensation program. A majority of
each director's compensation is automatically placed in a common share
equivalents account under a fee deferral plan, and is payable, based on
the value of the Company's common stock, only after termination of the
director's board service. This equity-based compensation provides a
continuing incentive to the directors to promote the Company's long-
term success.
23
The Board also understands, based on a report from the Company's
financial advisors, that a classified board does not decrease
shareholder value. In fact, it can increase shareholder value because a
classified board structure can reduce a third party's ability to
accomplish sudden or surprise changes in corporate direction without
negotiating. This encourages any person who might seek to acquire
control of the Company to negotiate with the Board and would help give
the Board the necessary time to evaluate any proposal, study
alternatives and seek the best result for all shareholders.
Although the proposal addresses the mechanics of electing directors,
the statement in support of the proposal takes issue with land
purchases by Weyerhaeuser 100 years ago, focuses on poor publicity
Weyerhaeuser received over two years ago and implies that Weyerhaeuser
survives only as a result of "seemingly endless natural resources,
government subsidies, etc."
Weyerhaeuser is proud of its long history as a leader in sustainable
management of timberlands and of its environmentally responsive
practices. The company adheres to the Sustainable Forestry Initiative
of the American Forest & Paper Association ("AF&PA"). In addition,
since 1900 the Company has led many important developments in
sustainable forestry, including long-term forest ownership, cooperative
wild fire prevention, prompt reforestation, high yield practices and
protection of water, wildlife and other natural resources. Our Company
was among the first forest products companies to adopt an environmental
policy in 1970. More recently, we have made a commitment to ensure all
of our operations, including timberlands, have implemented
environmental management systems.
The Huckleberry Land Exchange was negotiated over 12 years between
Weyerhaeuser, government agencies, and various interest groups,
including environmental groups. It provided an opportunity for improved
public land management, allowed public access to prime recreational
areas, such as the 2,000 acres donated to the Alpine Lakes Wilderness
area, and added thousands of scenic acres and several mountain lakes to
lands owned by the public. This exchange earned the support of the
Sierra Club, the Alpine Lakes Protection Society, The Mountaineers,
North Cascades Conservation Council and the Washington Environmental
Council. The Company believes the Exchange was a win-win for the
Company and the public.
Weyerhaeuser's environmental stewardship practices have resulted in
the Company being the only North American forest products company named
to the Dow Jones Sustainability Group Index this year, noted as the top
North American company in Innovest's Forest Product's Industry Ecovalue
21TM March 2000 report, and the Company's selection as a major supplier
to The Home Depot, whose good judgment and performance is praised in
the written supporting statement for this shareholder proposal. The
Company takes environmental stewardship seriously, and the examples
cited above provide validation of that commitment.
The Board recommends a vote AGAINST this proposal.
Policy On Confidential Proxy Voting and Independent Tabulation and Inspection
of Elections
The Board of Directors, on February 12, 1991, adopted a Confidential
Voting Policy the text of which is as follows:
It is the policy of this corporation that all shareholder proxies,
ballots and voting materials that identify the votes of specific
shareholders shall be kept permanently confidential and shall
24
not be disclosed to this corporation, its affiliates, directors,
officers and employees or to any third parties except (i) where
disclosure is required by applicable law, (ii) where a shareholder
expressly requests disclosure, (iii) where the corporation concludes in
good faith that a bona fide dispute exists as to the authenticity of
one or more proxies, ballots or votes, or as to the accuracy of any
tabulation of such proxies, ballots or votes and (iv) that aggregate
vote totals may be disclosed to the corporation from time to time and
publicly announced at the meeting of shareholders at which they are
relevant.
Proxy cards and other voting materials that identify shareholders
shall be returned to the bank or other financial services entity with
which this corporation has contractual arrangements to provide stock
transfer services in respect to its common shares or any other
independent business entity of which this corporation is not an
affiliate.
The tabulation process and results of shareholder votes shall be
inspected by the bank or other financial services entity with which
this corporation has contractual arrangements to provide stock transfer
services in respect to its common shares or any other independent
business entity of which this corporation is not an affiliate. Such
inspectors shall certify in writing to this corporation's Board of
Directors (and in the circumstances described in the fifth paragraph of
this policy, the proponent) that the election and tabulation was, to
the best of the inspectors' knowledge after diligent inquiry, carried
out in compliance with this policy.
The tabulators and inspectors of election and any authorized agents
or other persons engaged in the receipt, count and tabulation of
proxies shall be advised of this policy and instructed to comply
therewith, and shall sign a statement certifying such compliance.
In the event of any solicitation of a proxy (a "proxy contest") with
respect to any of the securities of this corporation by a person (the
"proponent") other than this corporation of which solicitation this
corporation has actual notice, this corporation shall request in
writing that the proponent and all agents and other persons engaged by
the proponent agree to the procedures for return of proxies,
tabulation, inspection and certification set forth in the second, third
and fourth paragraphs of this policy; and this corporation shall not be
bound to comply with this policy during the course of such proxy
contest in the event that the proponent is not willing so to agree.
This policy shall not operate to prohibit shareholders from
disclosing the nature of their votes to this corporation or the Board
of Directors if any shareholder so chooses or to impair free and
voluntary communication between this corporation and its shareholders.
Transactions and Relationships
Trusts for the benefit of Mr. Kieckhefer and members of his immediate
family have associated themselves with trusts for the benefit of his
extended family into two family partnerships that owned limited
partnership interests in Weyerhaeuser Windemere Partners, a real estate
investment partnership. Weyerhaeuser Windemere Partners was managed by
Weyerhaeuser Venture Company, a wholly-owned subsidiary of the Company.
During 2000, the investment entities of which Weyerhaeuser Windemere
Partners was the General Partner and Weyerhaeuser Windemere Partners
itself liquidated their assets and were dissolved. As a result of the
liquidations, each of the two partnerships in which trusts for the
benefit of Mr. Kieckhefer and members of his family had ownership
interests received distributions of capital and residual profits in the
aggregate amount of approximately $6,561,200.
25
The Estate of E. Bronson Ingram, in which Mrs. Ingram has a
beneficial interest, also owned limited partnership interests in
Weyerhaeuser Windemere Partners and, upon the dissolution of the entity
received distributions of capital and residual profits in the aggregate
amount of approximately $816,500.
Relationships with Independent Public Accountants
The firm of Arthur Andersen LLP, independent public accountants, has
audited the accounts of the Company and subsidiaries for a number of
years and has been selected to do so for 2001. Representatives of
Arthur Andersen LLP are expected to be present at the annual
shareholder meeting with the opportunity to make a statement if they
desire to do so and to be available to respond to appropriate
questions.
The Company was billed for professional services provided during
fiscal year 2000 by Arthur Andersen LLP in the amounts set out in the
following table. The Audit Committee of the Board of Directors has
considered the services rendered by Arthur Andersen LLP for services
other than the audit of the Company's financial statements and has
determined that the provision of these services is compatible with
maintaining the firm's independence.
Services Provided Fee Amount
----------------------------------------------------------------------
Audit Fees................................................. $2,619,955
Financial Information Systems Design and Implementation
Fees...................................................... 4,827,766
All Other Fees............................................. 1,523,110
----------
Total.................................................... $8,970,831
----------------------------------------------------------------------
Expenses of Solicitation
All expenses of soliciting proxies, including clerical work, printing
and postage, will be paid by the Company. Proxies may be solicited
personally, or by telephone, by employees of the Company, but the
Company will not pay any compensation for such solicitations. The
Company expects to pay fees of approximately $16,500 for assistance by
Georgeson Shareholder Communications, Inc. in the solicitation of
proxies. In addition, the Company will reimburse brokers, banks and
other persons holding shares in their names or in the names of nominees
for their expenses for sending material to principals and obtaining
their proxies.
Other Business
The Board of Directors knows of no other matters to be presented at
the meeting. If any other matters come before the meeting, the proxy
holders intend to vote on such matters in accordance with their best
judgment.
Future Shareholder Proposals and Nominations
Shareholder proposals intended to be presented at the Company's 2002
annual meeting of shareholders pursuant to Rule 14a-8 promulgated by
the Securities and Exchange Commission must be received by the Company
at its executive offices, P.O. Box 9777, Federal Way, WA 98063-9777,
attention of the Corporate Secretary, on or before November 5, 2001.
26
The bylaws of the Company establish procedures for shareholder
nominations for elections of directors of the Company and bringing
business before any annual meeting of shareholders of the Company. Any
shareholder entitled to vote generally in the election of directors may
nominate one or more persons for election as directors at a meeting
only if written notice of such shareholder's intent to make such
nomination or nominations has been given, either by personal delivery
or by United States mail, postage prepaid, to the Secretary of the
Company, not less than 90 days nor more than 120 days prior to the
meeting; provided, however, that in the event that less than 100 days'
notice or prior public disclosure of the date of the meeting is given
or made to shareholders, notice by the shareholder to be timely must be
so received no later than the close of business on the tenth day
following the day on which the notice of meeting date was mailed or
publicly disclosed, whichever first occurs. Any notice to the Secretary
must include: (i) the name and address of record of the shareholder who
intends to make the nomination; (ii) a representation that the
shareholder is a holder of record of shares of the Company entitled to
vote at such meeting and intends to appear in person or by proxy at the
meeting to nominate the person or persons specified in the notice;
(iii) the name, age, business and residence addresses, and principal
occupation or employment of each nominee; (iv) a description of all
arrangements or understandings between the shareholder and each nominee
and any other person or persons (naming such person or persons)
pursuant to which the nomination or nominations are to be made by the
shareholder; (v) such other information regarding each nominee proposed
by such shareholder as would be required to be included in a proxy
statement filed pursuant to the proxy rules of the Securities and
Exchange Commission; and (vi) the consent of each nominee to serve as a
director of the Company if so elected. The Company may require any
proposed nominee to furnish such other information as may reasonably be
required by the Company to determine the eligibility of such proposed
nominee to serve as a director of the Company. The presiding officer of
the meeting may, if the facts warrant, determine that a nomination was
not made in accordance with the foregoing procedure, in which event,
the officer will announce that determination to the meeting and the
defective nomination will be disregarded.
To be brought before an annual meeting by a shareholder, business
must be appropriate for consideration at an annual meeting and must be
properly brought before the meeting. Business will have been properly
brought before the annual meeting by a shareholder if the shareholder
has given timely notice thereof in writing to the Secretary of the
Company and has complied with any other applicable requirements. To be
timely, each such notice must be given, either by personal delivery or
by United States mail, postage prepaid, to the Secretary of the
Company, not less than 90 days nor more than 120 days prior to the
meeting; provided, however, that in the event that less than 100 days'
notice or prior public disclosure of the date of the meeting is given
or made to shareholders, notice by the shareholder to be timely must be
so received no later than the close of business on the tenth day
following the day on which notice of the meeting date was mailed or
publicly disclosed was made, whichever first occurs. Any notice to the
Secretary must include as to each matter the shareholder proposes to
bring before the annual meeting (w) a brief description of the business
desired to be brought before the annual meeting and the reasons for
conducting such business at the annual meeting, (x) the name and
address of record of the shareholder proposing such business, (y) the
name, class or series and number of shares of the Company that are
owned by the shareholder, and (z) any material interest of the
shareholder in such business. Public disclosure of the date of the 2001
annual meeting of shareholders was made in the enclosure with the
dividend, which was mailed
27
to shareholders in November, 2000. The date of the next annual meeting
of shareholders of Weyerhaeuser Company after the 2001 annual meeting
is April 16, 2002.
For the Board of Directors
CLAIRE S. GRACE
Corporate Secretary
Federal Way, Washington,
March 8, 2001
A copy of the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 2000, as filed with the Securities and Exchange
Commission, excluding certain exhibits thereto, may be obtained without
charge, by writing to Investor Relations, Weyerhaeuser Company, CH
1K35C, P.O. Box 9777, Federal Way, WA 98063-9777.
28
APPENDIX A
Weyerhaeuser Company
Audit Committee Charter
--------------------------------------------------------------------------------
Organization
The Committee shall consist of at least three Directors including a
Chairperson. The Committee shall include only independent Directors as
defined by the New York Stock Exchange. Each member of the Committee
shall be financially literate and at least one member of the Committee
must have accounting or related financial management expertise as the
foregoing qualifications are interpreted by the Board of Directors
("Board") in its business judgment.
Statement of Policy
The Committee shall, through regular or special meetings with
management, the Director of Internal Audit and the Company's
independent auditor, provide oversight on matters relating to
accounting, financial reporting, internal control, auditing, and
regulatory compliance activities and other matters as the Board or the
Committee Chairperson deems appropriate.
Responsibilities
The Committee shall be responsible for the oversight of the Company's
independent auditor, who is accountable to the Committee and the Board.
The Committee shall recommend to the Board the appointment of the
Company's independent auditor, shall evaluate, review and report to the
Board on the activities and independence of the independent auditor;
and, if appropriate, shall recommend the replacement of the independent
auditor. The Committee shall: (1) ensure that the independent auditor
provides annually to the Committee a formal written statement
disclosing all relationships between the independent auditor and the
Company, (2) actively engage in a dialogue with the independent auditor
with respect to any disclosed relationships or services that may impact
the objectivity and independence of the independent auditor, and (3)
recommend that the Board take appropriate actions in response to the
independent auditor's report to satisfy itself of the independent
auditor's independence.
The Committee shall review:
1. annual audit plans of the Director of Internal Audit and the
independent auditor;
2. the results of the internal and the independent auditors' activities
including their conclusions, significant findings, and
recommendations, and related management responses;
3. the Company's accounting and financial reporting practices, annual
report to shareholders and significant SEC filings;
4. adequacy and effectiveness of internal controls;
5. compliance with legal business policies and regulatory requirements;
6. the continued adequacy of this Audit Committee Charter on an annual
basis; and
7. such other matters as the Board or the Committee considers
appropriate.
A-1
The Committee's job is one of oversight and it recognizes that the
Company's management is responsible for preparing the Company's
financial statements and that the outside auditors are responsible for
the independent audit of those financial statements. Additionally, the
Committee recognizes that financial management including the internal
audit staff, as well as the outside auditors, have more time, knowledge
and more detailed information on the Company than do Committee members;
consequently, in carrying out its oversight responsibilities, the
Committee is not providing any expert or special assurance as to the
Company's financial statements or any professional certification as to
the outside auditor's work.
With regard to the SEC Form 10-K, prior to its filing, the Committee
Chairperson and/or his or her Committee designee(s), in addition to the
assessment of the independent auditor's independence, shall review and
discuss the audited financial statements with management, and discuss
with the independent auditors the matters required to be discussed by
relevant auditing standards, including the quality, not just the
acceptability, of the accounting principles and underlying estimates
used in the audited financial statements. The Committee shall report to
the Board and to the shareholders whether, based on such reviews and
discussions, it recommends to the Board that the most recent year's
audited financial statements be included in the Company's SEC Form 10-K
to be filed with the SEC.
With regard to the SEC Form 10-Q, the Chairperson and/or his or her
Committee designee(s) shall review the document with management and the
independent auditor prior to its filing.
The Committee shall meet privately (without members of management
present) and separately with the Director of Internal Audit and the
independent auditor at least once each year and, when requested, with
the Company's General Counsel.
The Committee may cause an investigation to be made into any matter
within the scope of its responsibility. The Committee may engage
independent resources to assist in its investigations, as it deems
necessary.
The Committee Chairperson shall make regular reports to the Board on
the Committee's activities.
A-2
This proxy statement was printed on Weyerhaeuser
Cougar Opaque 40-pound. The entire report can be
recycled. Thank you for recycling.
[LOGO OF RECYCLE]
[MAP TO CORPORATE HEADQUARTERS]
TO REACH CORPORATE HEADQUARTERS
From Seattle: Drive south on Interstate 5, approximately 24 miles from city
center, following the "Tacoma/Portland" signs. Go 1/10 mile past Exit 142-B to
Exit 142-A. Take this exit and stay to your right, heading east. Stay in the
right-hand lane and take the Weyerhaeuser Way South exit. Turn left at the
light, cross the overpass, and go through the traffic circle. Turn left again
at the East Entrance sign and follow the directions for parking.
From Seattle: Drive approximately 24 miles south from city center on
Interstate 5, following the "Tacoma/Portland" signs and take Exit 143
(Federal Way/S. 320th St.). Turn left onto S. 320th, cross over the freeway,
go past two streets on the right to the light at Weyerhaeuser Way South. Turn
right and proceed past the Technology Center to the light at S. 336th. Turn
left, drive approximately 1 block, and turn right into the East Entrance and
follow the directions for parking.
From Tacoma: Drive north on Interstate 5, approximately 8 miles from city
center, and take Exit 142A (Auburn, Hiway 18, North Bend). Stay in the far
right lane. Take the exit to Weyerhaeuser Way South. Turn left at the light,
cross the overpass, and go through the traffic circle. Turn left again at the
East Entrance sign and follow the directions for parking.
[WEYERHAEUSER LOGO]
ANNUAL MEETING OF SHAREHOLDERS
APRIL 17, 2001
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints Steven R. Rogel, William D. Ruckelshaus and
Martha R. Ingram, and each of them, with full power to act without the other and
with full power of substitution, as proxies to represent and to vote, as
directed herein, all shares not held in Benefit Plan accounts the undersigned is
entitled to vote at the annual meeting of the shareholders of Weyerhaeuser
Company to be held at the Corporate Headquarters Building, Federal Way,
Washington, on Tuesday, April 17, 2001 at 9 a.m., and all adjournments thereof.
Shares will be voted as directed on the reverse side of this Proxy card. If the
card is signed and returned without specific instructions for voting, the shares
will be voted in accordance with the recommendations of the Board of Directors.
If there are shares allocated to the undersigned in the Weyerhaeuser Company
401(k), Weyerhaeuser Company Ltd. Investment Growth, or Performance Share Plans,
the undersigned hereby directs the Trustee to vote all full and fractional
shares as indicated on the reverse side of this card. If the card is signed and
returned without specific instructions for voting, the shares will be voted in
accordance with the recommendations of the Board of Directors. Shares for which
no voting instructions are received will be voted as provided by the Plans.
(Continued, and to be marked, dated and signed on the other side)
. FOLD AND DETACH HERE .
You can now access your Weyerhaeuser account online.
Access your Weyerhaeuser shareholder account online via Investor
ServiceDirect/SM/ (ISD).
Mellon Investor Services, agent for Weyerhaeuser Shareholder Services, now makes
it easy and convenient to get current information on your shareholder account.
After a simple, and secure process of establishing a Personal Identification
Number (PIN), you are ready to log in and access your account to:
. View account status
. View certificate history
. View book-entry information
. View payment history for dividends
. Make address changes
. Obtain a duplicate 1099 tax form
. Establish/change your PIN
Visit us on the web at http://www.mellon-investor.com
and follow the instructions shown on this page.
Step 1: FIRST TIME USERS - Establish a PIN
You must first establish a Personal Identification Number (PIN) online by
following the directions provided in the upper right portion of the web screen
as follows. You will also need your Social Security Number (SSN) available to
establish a PIN.
Investor ServiceDirect/SM/ is currently only available for domestic individual
and joint accounts.
. SSN
. PIN
. Then click on the Establish PIN button
Please be sure to remember your PIN, or maintain it in a secure place for future
reference.
Step 2: Log in for Account Access
You are now ready to log in. To access your account please enter your:
. SSN
. PIN
. Then click on the Submit button
If you have more than one account, you will now be asked to select the
appropriate account.
Step 3: Account Status Screen
You are now ready to access your account information. Click on the appropriate
button to view or initiate transactions.
. Certificate History
. Book-Entry Information
. Issue Certificate
. Payment History
. Address Change
. Duplicate 1099
For Technical Assistance Call 1-877-978-7778 between
9am-7pm Monday-Friday Eastern Time
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Please mark
your votes as [X]
indicated in
this example
The Board of Directors recommends a vote "FOR" all nominees in Item 1.
ITEM 1 - Election of Directors
Nominees:
01. Steven R. Rogel
02. William D. Ruckelshaus
03. Richard H. Sinkfield
04. James N. Sullivan
WITHHELD
FOR FOR ALL
[ ] [ ]
WITHHELD FOR: (Write that nominee's name in the space provided below.)
----------------------------------------------------------------------
The Board of Directors recommends a vote "AGAINST" Items 2, 3 and 4.
ITEM 2 - SHAREHOLDER PROPOSAL - DISCLOSURE OF ENVIRONMENTAL LIABILITIES
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
ITEM 3 - SHAREHOLDER PROPOSAL - PHASE-OUT OF CHLORINE-BASED CHEMICALS
[ ] [ ] [ ]
ITEM 4 - SHAREHOLDER PROPOSAL - CLASSIFIED BOARD
[ ] [ ] [ ]
The proxies are authorized to vote in their discretion upon such other matters
that may properly come before the meeting.
"By checking the box to the right, [ ]
I consent to future access to the
Annual Reports, Proxy Statements,
prospectuses and other communications
electronically via the Internet. I
understand that the Company may no
longer distribute printed materials
to me for any future shareholder
meeting until such consent is
revoked. I understand that I may
revoke this consent at any time by
contacting the Company's transfer
agent, Mellon Investor Services,
Ridgefield Park, NJ and that costs
normally associated with electronic
access, such as usage and telephone
charges, will be my responsibility."
(Please disregard if you have
previously provided your consent
decision.)
Signature Signature Date
--------------------- --------------------- ----------------
NOTE: Please sign as name appears hereon. Joint owners should each sign. When
signing as attorney, executor, administrator, trustee or guardian, please
give full title as such.
. FOLD AND DETACH HERE .
Vote by Internet or Telephone or Mail
24 Hours a Day, 7 Days a Week
Your telephone or Internet vote authorizes the named proxies to vote your shares
in the same manner as if you marked, signed and returned your proxy card.
Internet
http://www.proxyvoting.com/WY
Use the Internet to vote your proxy. Have your proxy card in hand when you
access the web site. You will be prompted to enter your control number, located
in the box below, to create and submit an electronic ballot.
OR
Telephone
1-800-840-1208
Use any touch-tone telephone to vote your proxy. Have your proxy card in hand
when you call. You will be prompted to enter your control number, located in the
box below, and then follow the directions given.
OR
Mail
Mark, sign and date
your proxy card
and
return it in the
enclosed postage-paid
envelope.
If you vote your proxy by Internet or by telephone,
you do NOT need to mail back your proxy card.