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Willamette Industries Inc – ‘PREC14A’ on 3/9/01 re: Willamette Industries Inc

On: Friday, 3/9/01, at 5:25pm ET · Accession #: 950130-1-1239 · File #: 1-12545

  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 3/09/01  Willamette Industries Inc         PREC14A                1:149K Willamette Industries Inc         Donnelley R R & S… 02/FA

Preliminary Proxy Solicitation Material — Contested Solicitation — Schedule 14A
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: PREC14A     Preliminary Proxy Statement                           43    210K

Document Table of Contents

Page	(sequential)	\|	(alphabetic)	Top
			Alternative Formats (Word, et al.) Audit Fees Board Declassification Proposal Compensation Committee Compensation Committee Proposal Holders of Willamette Common Stock Option Grants in Last Fiscal Year Performance Graph Proxy Statement Termination of Employment and Change in Control Arrangements and Related Matters
1	1st Page - Filing Submission
6	Proxy Statement
14	Item No. 2. Board Declassification Proposal
16	Item No. 3. Compensation Committee Proposal
19	Holders of Willamette Common Stock
22	Option Grants in Last Fiscal Year
24	Compensation Committee
26	Performance Graph
27	Termination of Employment and Change in Control Arrangements and Related Matters
30	Audit Fees

PREC14A 1st Page of 43 TOC ↑Top Previous Next ↓Bottom Just 1st
PRELIMINARY COPY - SUBJECT TO COMPLETION - DATED MARCH 9, 2001

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934

Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[X] Preliminary Proxy Statement [_] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Rule 14a-12

Willamette Industries, Inc.
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[X] 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:

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(2) Aggregate number of securities to which transaction applies:

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(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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(4) Proposed maximum aggregate value of transaction:

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(5) Total fee paid:

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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.:

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(3) Filing Party:

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(4) Date Filed:

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Notes:

PREC14A 2nd Page of 43 TOC 1st Previous Next ↓Bottom Just 2nd
PRELIMINARY COPY
SUBJECT TO COMPLETION

[Willamette Industries, Inc. Letterhead]

______, 2001

Dear Fellow Shareholder:

It is our pleasure to invite you to attend the 2001 annual meeting of
shareholders of Willamette Industries, Inc. to be held at the Portland Art
Museum, Grand Ballroom, 1119 S.W. Park Avenue, Portland, Oregon, on Thursday,
June 7, 2001, at 11 a.m.

We urge you to participate in the business of the annual meeting by
completing and returning the enclosed GREEN proxy card as promptly as possible.
This annual meeting is of particular importance to all Willamette shareholders
because of the ongoing, hostile attempt to take over your company by
Weyerhaeuser Company.

As you know, Weyerhaeuser has commenced a hostile offer to acquire your
shares in Willamette for $48 per share in cash. At the annual meeting,
Weyerhaeuser is seeking to replace the three Willamette directors up for
reelection at the annual meeting from the existing Board of Directors of
Willamette, with its own partisan nominees. Additionally, you will be asked to
vote upon two shareholder proposals unrelated to Weyerhaeuser's offer.

THE BOARD'S UNANIMOUS VIEW HAS BEEN AND CONTINUES TO BE THAT THE
WEYERHAEUSER OFFER IS INADEQUATE AND NOT IN THE BEST INTERESTS OF WILLAMETTE,
ITS SHAREHOLDERS AND OTHER CONSTITUENCIES.

Weyerhaeuser's offer dramatically undervalues the premier forest
products franchise

We believe our strategic plan will deliver greater long-term value than
Weyerhaeuser's offer

Willamette's nominees are highly qualified and will act in your best
interests

Weyerhaeuser's nominees have strong ties to Weyerhaeuser and lack
experience as directors

ACCORDINGLY, THE BOARD UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE WILLAMETTE
NOMINEES FOR DIRECTOR AND "AGAINST" THE SHAREHOLDER PROPOSALS.

Your Board is acutely aware of its fiduciary duties and will at all times
continue to act in a manner consistent with those duties. Unlike the former
Weyerhaeuser officers and Weyerhaeuser's former outside attorney who
Weyerhaeuser wants to put on your Board, our sole obligation is to protect the
interests of Willamette, its shareholders and other constituencies.

We have a history of delivering value to our shareholders: the average
annual return (including re-invested dividends) of Willamette's common stock has
been more than double that of the Industry Composite (defined herein) over the
period 1991 to November 10, 2000, and has almost matched the S&P 500 performance
over that period. We remain committed to enhancing our long-term value by
actively pursuing our strategic plan.

A GREEN proxy card is enclosed for your use. THE BOARD URGES YOU TO
COMPLETE, SIGN, DATE AND RETURN THE GREEN PROXY CARD IN THE ACCOMPANYING
ENVELOPE, which is postage-paid if mailed in the United States, Canada or the
United Kingdom.

Your Board urges you NOT to sign or return any gold proxy card sent to you
by Weyerhaeuser. If you have previously signed a gold proxy card sent by
Weyerhaeuser, your Board urges you to sign, date and promptly mail the enclosed
GREEN proxy card, which will revoke any earlier dated proxy cards solicited by
Weyerhaeuser,

PREC14A 3rd Page of 43 TOC 1st Previous Next ↓Bottom Just 3rd
which you may have signed. The best way for you to support your Board is to vote
"FOR" the Willamette nominees for director and "AGAINST" the Shareholder
Proposals on the GREEN proxy card sent to you by your Board.

On behalf of everyone at Willamette, we thank you for your continued
support. We remain committed to acting in your best interests. If you have any
questions with respect to voting, please feel free to call our proxy solicitor,
MacKenzie Partners, Inc. at (800) 322-2885 (toll-free) or (212) 929-5500
(collect).

Sincerely yours,

/s/ Duane C. McDougall /s/ William Swindells
DUANE C. MCDOUGALL WILLIAM SWINDELLS
Chief Executive Officer Chairman of the Board

Your vote is extremely important to us. Please sign, date and promptly
mail your GREEN proxy card in the postage-paid envelope provided. Remember, do
not return any gold proxy card sent to you by Weyerhaeuser.

If your shares are registered in the name of a broker, only your broker can
execute a proxy and vote your shares and only after receiving your specific
instructions. Please sign, date and promptly mail the GREEN proxy card in the
envelope provided by your broker. Remember, your shares cannot be voted unless
you return a signed and executed proxy card to your broker. If you have any
questions or need further assistance in voting, please contact the firm
assisting us in the solicitation of proxies:

MacKenzie Partners, Inc.

Call (800) 322-2885 (toll-free in the United States)

or (212) 929-5500 (collect)

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[LOGO OF WILLAMETTE INDUSTRIES, INC.]

WILLAMETTE INDUSTRIES, INC.
1300 S.W. Fifth Avenue, Suite 3800
Portland, Oregon 97201
____________________

Notice of Annual Meeting of Shareholders
June 7, 2001
____________________

The annual meeting of shareholders of Willamette Industries, Inc. (the
"Company"), will be held at the Portland Art Museum, Grand Ballroom, 1119 S.W.
Park Avenue, Portland, Oregon, on Thursday, June 7, 2001, at 11 a.m., to
consider and vote on the following matters:

1. The election of three Class A directors. THE BOARD OF DIRECTORS
RECOMMENDS A VOTE "FOR" THE ELECTION OF THE WILLAMETTE DIRECTOR NOMINEES.

2. A shareholder proposal concerning the classification of the Board of
Directors. THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" THIS PROPOSAL.

3. A shareholder proposal concerning the compensation committee of the
Board of Directors. THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" THIS
PROPOSAL.

4. Such other business as may properly come before the meeting or any
adjournment thereof.

Only shareholders of record as of the close of business on April 16, 2001
will be entitled to notice of and to vote at the meeting.

SHAREHOLDERS ARE URGED TO PROMPTLY COMPLETE, SIGN, DATE, AND RETURN THE
ENCLOSED GREEN PROXY CARD IN THE SELF-ADDRESSED ENVELOPE (WHICH IS POSTAGE-PAID
FOR SHAREHOLDERS IN THE UNITED STATES, CANADA AND THE UNITED KINGDOM) WHETHER OR
NOT THEY EXPECT TO ATTEND THE MEETING. A SHAREHOLDER ATTENDING THE MEETING MAY
NEVERTHELESS VOTE IN PERSON.

By Order of the Board of Directors

/s/ G. W. Hawley

G. W. Hawley
Secretary

Portland, Oregon
________, 2001

THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY URGES YOU TO REJECT THE
PROXY SOLICITATION OF WEYERHAEUSER COMPANY AND NEITHER SIGN NOR RETURN ANY GOLD
PROXY CARD SENT TO YOU BY WEYERHAEUSER. EVEN IF YOU HAVE PREVIOUSLY SIGNED A
PROXY CARD SENT TO YOU BY WEYERHAEUSER, YOU CAN REVOKE THAT EARLIER PROXY BY
SIGNING, DATING AND MAILING THE ENCLOSED GREEN PROXY CARD IN THE ENVELOPE
PROVIDED.

PREC14A 5th Page of 43 TOC 1st Previous Next ↓Bottom Just 5th
IF YOU HAVE ANY QUESTIONS OR NEED ASSISTANCE, PLEASE CALL THE COMPANY AT
(503) 227-5581 OR OUR PROXY SOLICITOR, MACKENZIE PARTNERS, INC. AT (800)
322-2885 (toll-free) or (212) 929-5500 (collect).

Printed on Willamette's 40# Clearfield Opaque/(R) / Recycled, Vellum Finish

PREC14A 6th Page of 43 TOC 1st Previous Next ↓Bottom Just 6th
PROXY STATEMENT
_______________________

INTRODUCTION

This Proxy Statement is being furnished in connection with the solicitation
of proxies by the Board of Directors (the "Board") of Willamette Industries,
Inc. ("Willamette" or the "Company") to be voted at the Annual Meeting of
Shareholders of Willamette to be held on June 7, 2001, and at any and all
adjournments or postponements thereof (the "Annual Meeting"). The Board has
fixed the close of business on April 16, 2001 as the record date for determining
the shareholders entitled to notice of, and to vote at, the Annual Meeting.
This proxy statement (the "Proxy Statement") and the accompanying GREEN proxy
card are first being mailed to shareholders on or about ______, 2001.

At the Annual Meeting, shareholders will consider and vote upon the
election of three Class A directors to hold office for three years. The Board
has nominated Kenneth W. Hergenhan, Duane C. McDougall and Robert M. Smelick
(together, the "Willamette Nominees") to serve as Class A directors. As you
know, Weyerhaeuser Company ("Weyerhaeuser"), a Washington corporation, and
Company Holdings, Inc. ("CHI"), a Washington corporation and a wholly owned
subsidiary of Weyerhaeuser, have commenced a proxy solicitation to replace the
three current directors standing for reelection with persons nominated to the
Board by Weyerhaeuser (the "Weyerhaeuser Nominees"), who have indicated
their intention to support the Weyerhaeuser Offer (as defined below) and the
Second-Step Merger (as defined below).

Weyerhaeuser's nomination of an opposition slate of directors is solely
designed to further Weyerhaeuser's attempt to take over the Company by means of
a hostile tender offer (the "Weyerhaeuser Offer") to purchase (i) all of the
outstanding common stock, par value $0.50 per share (the "Willamette Common
Stock") of the Company, and (ii) unless validly redeemed by the Board, the
associated rights to purchase shares of Series B Junior Participating Preferred
Stock (the "Rights" and, together with the Willamette Common Stock, the
"Shares"), at a price of $48 per Share, net to the seller in cash, without
interest thereon (the "Offer Price"). Weyerhaeuser has announced that the
purpose of the Weyerhaeuser Offer is for Weyerhaeuser to acquire control of, and
ultimately the entire equity interest in, the Company. Weyerhaeuser has also
announced that, if the Weyerhaeuser Offer succeeds, Weyerhaeuser intends,
promptly following consummation of the Weyerhaeuser Offer, to seek to have the
Company consummate a second-step merger or similar business combination with CHI
or another direct or indirect wholly owned subsidiary of Weyerhaeuser (the
"Second-Step Merger"). At the Annual Meeting, shareholders will also consider
and vote upon two shareholder proposals unrelated to the Weyerhaeuser Offer (the
"Shareholder Proposals").

WHY YOU SHOULD VOTE FOR THE WILLAMETTE NOMINEES

The Board has unanimously concluded that the Weyerhaeuser Offer is
inadequate and not in the best interests of the Company, its shareholders and
other constituencies. We are confident we can deliver more value to our
shareholders over time than what Weyerhaeuser has offered. At the same time, the
hand-picked Weyerhaeuser Nominees, all of whom are being compensated by
Weyerhaeuser to run for election to the Board, and all of whom have past
affiliations and present financial affiliations with Weyerhaeuser, have
indicated their intention to support the sale of the Company to Weyerhaeuser at
the Offer Price. Accordingly, the Board unanimously recommends a vote "FOR" the
Willamette Nominees. Set forth below are the principal reasons to vote "FOR" the
Willamette Nominees.

THE WEYERHAEUSER OFFER IS INADEQUATE AND DRAMATICALLY UNDERVALUES THE PREMIER
FOREST PRODUCTS FRANCHISE:

. The Board has received the opinion of Goldman, Sachs & Co., financial
advisor to the Company ("Goldman Sachs"), that, as of December 11,
2000, the Offer Price is inadequate, from a financial point of view,
to the Company's shareholders.

. The premiums and multiples implied by the Weyerhaeuser Offer are well
below those paid in recent comparable industry transactions. For
instance, in its acquisition of Consolidated Papers (another highly
regarded company in the sector), Stora Enso paid premiums of 69%
relative to

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the day prior to the announcement, 34% relative to the 52-week high,
and 28% relative to the all-time high. The Weyerhaeuser Offer implies
a 38% premium relative to the day prior to the public announcement of
Weyerhaeuser's hostile proposal, and discounts of 1% to its 52-week
high and 6% to Willamette's all-time high.

. Since the public announcement of Weyerhaeuser's hostile proposal, the
market value of a composite of shares of comparable companies in the
industry (the "Industry Composite") (1) has appreciated by 26%,
suggesting that the premium implied by the Weyerhaeuser Offer is
significantly lower than the 38% premium implied at the time of the
public announcement of Weyerhaeuser's hostile proposal. In addition,
over the same period of time, the value of Weyerhaeuser's common stock
has appreciated by 35%. According to Weyerhaeuser, Willamette "is a
unique fit with Weyerhaeuser's core products portfolio" and therefore,
by their logic, Weyerhaeuser is the best proxy for Willamette.
Assuming Willamette had appreciated by 35%, the implied premium would
be only 3%.

. Although the Company is not for sale, the Board believes that based on
the $300 million in synergies that Weyerhaeuser has publicly stated
(and the $330 to $645 million synergy range provided by Weyerhaeuser
to the Company in a meeting in September 1998), and Wall Street
research analysts' consensus earnings and cash flow estimates for
Weyerhaeuser and the Company, Weyerhaeuser could pay significantly in
excess of the Offer Price for Willamette. In November Weyerhaeuser
referred to their proposed transaction as "strongly accretive to cash
flow and earnings per share" which the Board believes is further
evidence that the Weyerhaeuser Offer is in the best interests of
Weyerhaeuser's shareholders, not Willamette's.

. Please refer to Annex A for a more detailed list of factors considered
by the Board, at a meeting held on December 11, 2000, in concluding
that the Weyerhaeuser Offer is inadequate.

WE BELIEVE OUR STRATEGIC PLAN WILL CONTINUE TO DELIVER GREATER VALUE THAN THE
WEYERHAEUSER OFFER:

. Willamette has historically generated superior returns for its
shareholders. The average annual return (including re-invested
dividends) of the Willamette Common Stock has been more than double
that of the Industry Composite over the period 1991 through November
10, 2000, and has almost matched the Standard & Poors ("S&P") 500
performance over that period (despite a very difficult decade for the
industry and an extraordinarily good performance for the S&P 500).

. Over the last ten years, the Company's average annual earnings per
share ("EPS") growth rate has been over 9%, while the EPS growth rate
of the Industry Composite was approximately zero, on average.
Willamette's EPS growth rate over this period was three times that of a
large cap composite comprised of International Paper, Georgia-Pacific
and Weyerhaeuser.

. Willamette has developed and executed a sound, proven strategy of
increasing earnings through sales growth, operating efficiency and
cost-reduction. The Company believes it is the low-cost integrated
producer in its brown and white paper segments and highly competitive
in its building products segment. Willamette has consistently led the
industry by most key financial metrics, such as operating margins and
returns. Willamette is well-positioned to continue this outperformance,
which should ultimately be reflected in the Company's share price.

--------------------------------------------------------------------------------
(1) The "Industry Composite" includes Boise Cascade Corporation, Georgia-
Pacific Corporation, International Paper Company, Louisiana-Pacific
Corporation, Smurfit-Stone Container Corporation, Temple Inland, Inc. and
Weyerhaeuser. Willamette believes the companies included in the Industry
Composite are most representative of Willamette's business mix.

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. Willamette has undertaken significant value-enhancing initiatives over
the last few years aimed at reducing costs, growing market
opportunities and, most importantly, increasing EPS growth; management
believes that, based on the current pricing environment, these
initiatives will add in excess of $340 million to annual earnings
before interest, taxes, depreciation and amortization by 2004. The
Board believes that this additional cash flow and earnings stream has
not yet been reflected in the Company's share price (nor in the
Weyerhaeuser Offer) and should result in higher long-term market
value.

. The Board believes that continuing the Company's strategic plan
provides the flexibility to consider potential strategic transactions
at a time that is more opportune for the Company's shareholders, not
for Weyerhaeuser.

THE WILLAMETTE NOMINEES ARE HIGHLY QUALIFIED AND WILL ACT IN THE BEST INTERESTS
OF THE COMPANY'S SHAREHOLDERS:

. The Willamette Nominees collectively have been associated with
Willamette for over 70 years.

. The Willamette Nominees are intimately familiar with the business,
financial condition, prospects and current business strategy of the
Company as well as the nature of the industries in which the Company
operates.

. As of February 28, 2001, the Willamette Nominees collectively held
28,893 shares of Willamette Common Stock and options to purchase
209,080 shares of Willamette Common Stock; their interests are aligned
with the Company's shareholders and they are committed to protecting
the best interests of all shareholders of the Company and enhancing
the long-term value of the Company.

WEYERHAEUSER'S NOMINEES HAVE STRONG TIES TO WEYERHAEUSER AND LACK EXPERIENCE AS
DIRECTORS:

. Each of the Weyerhaeuser Nominees is being paid $25,000 by
Weyerhaeuser to run for election to the Board.

. Three of the Weyerhaeuser Nominees, Messrs. Creighton, Luthy and Lane,
are former officers of, and, we believe, received pension and
retirement benefits from, Weyerhaeuser. The remaining Weyerhaeuser
Nominee, Ms. Cruz-Stroufe, was a partner at Weyerhaeuser's outside
legal advisor. The Board believes that the interests of the
Weyerhaeuser Nominees are aligned with those of Weyerhaeuser and its
shareholders, and not with Willamette or its shareholders.

. Mr. Creighton recruited and hired Mr. Rogel, Weyerhaeuser's Chairman,
President and Chief Executive Officer at a time when Mr. Rogel was
Chief Executive Officer of Willamette.

. Only one of the Weyerhaeuser Nominees (Mr. Creighton) was ever
selected to serve on Weyerhaeuser's own Board of Directors. The
remaining Weyerhaeuser Nominees, Messrs. Luthy and Lane and Ms. Cruz-
Stroufe, have no public company director experience at all.

. The Company and Weyerhaeuser are direct competitors that vie for many
of the same customers and contracts. Your Board believes that
installing directors on the Board that are loyal to Weyerhaeuser and
its takeover attempt may seriously compromise the business and
prospects of the Company and distract the Board from protecting your
best interests.

. Given that it is in Weyerhaeuser's interest to acquire Willamette by
paying the lowest possible price for your shares, the Board believes
that Weyerhaeuser's nominees would have no incentive to develop other
alternatives that create more value for Willamette shareholders.

GIVEN THESE REASONS, YOUR BOARD STRONGLY RECOMMENDS THAT YOU SUPPORT
WILLAMETTE'S HIGHLY QUALIFIED NOMINEES WHO ARE RESPONSIBLE FOR WILLAMETTE'S
SUPERIOR FINANCIAL PERFORMANCE BY VOTING "FOR" THE WILLAMETTE NOMINEES.

YOUR BOARD URGES YOU TO REJECT WEYERHAEUSER'S NOMINEES, WHO ARE LOYAL TO
WEYERHAEUSER AND WERE HAND-PICKED TO ACHIEVE WEYERHAEUSER'S GOAL OF ACQUIRING
YOUR COMPANY AT THE LOWEST POSSIBLE PRICE.

EVEN IF YOU HAVE PREVIOUSLY SIGNED A PROXY CARD SENT TO YOU BY
WEYERHAEUSER, YOU CAN REVOKE THAT EARLIER PROXY BY SIGNING, DATING AND MAILING
THE ENCLOSED GREEN PROXY CARD IN THE ENVELOPE PROVIDED.

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Your vote is important, regardless of how many shares you own. Please sign
and date the accompanying GREEN proxy card and mail it in the enclosed self-
addressed envelope (which is postage-paid for shareholders in the United States,
Canada and the United Kingdom) as promptly as possible, whether or not you
expect to attend the meeting.

Whether or not you have previously signed a gold proxy card sent by
Weyerhaeuser, your Board urges you to show your support for the Board by
signing, dating and promptly mailing the enclosed GREEN proxy card. By signing
and dating the GREEN proxy card, you will revoke any earlier dated gold proxy
card solicited by Weyerhaeuser which you may have signed. Do not return any gold
proxy card sent to you by Weyerhaeuser. THE BEST WAY TO SUPPORT THE WILLAMETTE
NOMINEES AND DETERMINATIONS IS TO VOTE "FOR" THE WILLAMETTE NOMINEES AND
"AGAINST" THE SHAREHOLDER PROPOSALS ON THE GREEN PROXY CARD.

IF YOUR SHARES ARE HELD IN THE NAME OF A BROKER, ONLY YOUR BROKER CAN
EXECUTE A PROXY AND VOTE YOUR SHARES AND ONLY AFTER RECEIVING YOUR SPECIFIC
INSTRUCTIONS. PLEASE SIGN, DATE AND PROMPTLY MAIL THE GREEN PROXY CARD IN THE
ENVELOPE PROVIDED BY YOUR BROKER. REMEMBER, YOUR SHARES CANNOT BE VOTED UNLESS
YOU RETURN A SIGNED AND EXECUTED PROXY CARD TO YOUR BROKER.

A proxy given pursuant to this solicitation may be revoked by the person
giving the proxy at any time prior to its exercise (i) by delivering written
notice of revocation to the Secretary of the Company, (ii) by executing a
subsequent proxy relating to the same shares which is delivered to the Secretary
or (iii) by attending the Annual Meeting and voting in person (although
attendance at the meeting in itself will not constitute revocation of a proxy).

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VOTING PROCEDURES

The Board has fixed the close of business on April 16, 2001 as the record
date (the "Record Date") for determining the shareholders entitled to notice of,
and to vote at, the Annual Meeting. As of ____, 2001 there were _____ shares of
Willamette Common Stock outstanding and entitled to vote at the Annual Meeting.
The holders of the Willamette Common Stock are entitled to one vote per share on
each matter submitted to a vote at the Annual Meeting. Shareholders do not have
the right to cumulate votes in the election of directors. All such shares
entitled to vote at the Annual Meeting are referred to herein as "Record
Shares." The presence in person or by proxy of shareholders holding a majority
of the Record Shares will constitute a quorum for the transaction of business at
the Annual Meeting. Shares represented by proxies that are marked "abstain" will
be counted as Record Shares present for purposes of determining the presence of
a quorum on all matters. Proxies relating to "street name" shares that are voted
by brokers on some but not all of the matters will be treated as Record Shares
present for purposes of determining the presence of a quorum on all matters, but
they will not be treated as shares entitled to vote at the Annual Meeting on
those matters as to which authority to vote is withheld by the broker ("broker
non-votes").

Whether or not you plan to attend the meeting, you are urged to vote by
submitting the GREEN proxy card. Duly executed and unrevoked proxies received by
the Company prior to the Annual Meeting will be voted in accordance with the
shareholder's specifications marked thereon. If no specifications are marked
thereon, the GREEN proxies distributed by the Board will be voted "FOR" the
election of the Willamette Nominees and "AGAINST" the Shareholder Proposals. Any
shareholder giving a proxy may revoke it at any time prior to voting at the
Annual Meeting by filing with the Secretary of Willamette a duly executed
revocation, by submitting a later-dated proxy with respect to the same shares or
by attending the Annual Meeting and voting in person (although attendance at the
Annual Meeting will not in and of itself constitute a revocation of your proxy).

A shareholder may, with respect to the election of directors, (i) vote for
the election of all three director nominees proposed by the Board, (ii) withhold
authority to vote for all such director nominees or (iii) withhold authority to
vote for any of the Willamette Nominees by so indicating in the appropriate
space on the proxy. Shareholders who have received Weyerhaeuser's proxy
statement or who attend the Annual Meeting will also have each of the foregoing
options in respect of the Weyerhaeuser Nominees. The Company's Bylaws provide
that at each meeting of shareholders at which a quorum is present, directors
shall be elected by a plurality of votes cast by shareholders holding shares
entitled to vote in the election at a meeting. The three nominees receiving the
highest vote totals will be elected as directors of the Company. Consequently,
votes that are withheld in the election of directors and broker non-votes will
not be taken into account for purposes of determining the outcome of the
election. The only way to vote by proxy "FOR" the Willamette Nominees is to
complete and return the GREEN proxy card. In that event, do not sign or return
any gold proxy card sent to you by Weyerhaeuser. Withholding authority to vote
for the Weyerhaeuser Nominees on the gold Weyerhaeuser proxy card is not the
same as voting "FOR" the Willamette Nominees.

With respect to the Shareholder Proposals, a shareholder may vote for or
against such matters or abstain from voting. Approval of either Shareholder
Proposal would not, however, require that the action suggested by such proposal
be taken since both Shareholder Proposals are precatory rather than mandatory,
requesting rather than mandating action by the Board. Pursuant to the Company's
Bylaws, each Shareholder Proposal will be approved if the votes cast favoring a
Shareholder Proposal exceed the votes cast opposing such Shareholder Proposal
(assuming a quorum is present). Consequently, an abstention or a broker non-vote
on either Shareholder Proposal will not be taken into account for purposes of
determining the outcome of the vote on such Shareholder Proposal. Accordingly,
if you are opposed to either or both of the Shareholder Proposals, you should
vote "AGAINST" such proposals on the GREEN proxy card.

No dissenters' rights apply to any matter to be acted upon at this meeting.

The accompanying GREEN proxy card represents all of the shares you are
entitled to vote at the meeting. If you are a participant in Willamette's Stock
Purchase Plan, the trustee under the plan will provide you with a proxy card
representing the shares you are entitled to vote under the plan.

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ITEM NO.1

ELECTION OF DIRECTORS

The Company's Bylaws provide for three classes of directors, with the term
of one class expiring at each annual meeting of shareholders. Pursuant to the
authority granted to the Board in Article VI of the Company's Restated Articles
of Incorporation, the Board has determined that effective on the date of the
Annual Meeting, the number of directors shall be fixed at nine, three in the
class whose term expires in 2002, three in the class whose term expires in 2003
and three in the class whose term expires in 2004. In connection with the
reduction in the number of directors from ten to nine, it is expected that
Benjamin R. Whiteley will resign as a Class A director effective on the date of
the Annual Meeting. Pursuant to the Company's Bylaws, Mr. Whiteley, who turns 72
on July 13, 2001, would have been required to resign from the Board no later
than the subsequent quarterly meeting of directors. In addition, pursuant to the
Company's Bylaws, Duane C. McDougall's term as an interim Class C director will
expire on the date of the Annual Meeting. The Board has nominated Messrs.
Kenneth W. Hergenhan, Duane C. McDougall and Robert M. Smelick to serve as Class
A directors until the annual meeting in 2004. Each nominee has consented to
serve for the specified term. It is intended that the shares represented by the
accompanying proxy will be voted for the election of Messrs. Hergenhan, Smelick
and McDougall. The three Class B directors, Messrs. Winslow H. Buxton, G. Joseph
Prendergast and William Swindells, and the three Class C directors, Messrs.
Gerard K. Drummond, Stuart J. Shelk and Michael G. Thorne, will continue to
serve as directors until the annual meetings in 2002 and 2003, respectively.

If for any reason any of the nominees named below should become unavailable
for election (an event that the Board does not anticipate), the proxy will be
voted for the election of such substitute nominee as may be designated by the
Board. Information with respect to each person nominated for election as a
director and each other person whose term of office as a director will continue
after the meeting is set forth below. Ages shown are as of December 31, 2000.

THE BOARD STRONGLY RECOMMENDS THAT YOU VOTE "FOR" THE WILLAMETTE NOMINEES
AS DIRECTORS OF THE COMPANY.

Weyerhaeuser is seeking the election of a slate of directors that is
committed to supporting Weyerhaeuser's hostile takeover attempt. The Board
believes that the election of Weyerhaeuser's hand-picked representatives to the
Board would conflict with the best interests of the Company's shareholders. The
Board opposes the Weyerhaeuser Nominees for several reasons.

First, the Board, with the advice of the Company's financial advisor,
Goldman Sachs, has determined that the Weyerhaeuser Offer is inadequate and not
in the best interests of the Company, its shareholders and other constituencies.
In addition, since the date the Board unanimously rejected the Weyerhaeuser
Offer, the market value of the Industry Composite has appreciated by 26%,
suggesting that the premium implied by the Weyerhaeuser Offer is significantly
lower than the 38% premium implied at the time of the public announcement of
Weyerhaeuser's hostile proposal. In addition, over the same period of time, the
value of Weyerhaeuser's common stock has appreciated by 35%. According to
Weyerhaeuser, Willamette "is a unique fit with Weyerhaeuser's core products
portfolio" and therefore, by their logic, Weyerhaeuser is the best proxy for
Willamette. If Willamette had appreciated by 35%, the implied premium would be
only 3%.

Second, the Board has also determined that, in light of the terms of the
Weyerhaeuser Offer, the Company's inherent earnings power and long-term
strategic plan, the interests of the Company, its shareholders and other
constituencies would be best served by the Company continuing as an independent
entity. The Weyerhaeuser Nominees, having presumably determined that $48 is an
adequate price for the Willamette Common Stock and indicating their support for
the sale of the Company, would be hindered in objectively considering value-
enhancing opportunities other than selling the Company at $48 per Share.

Third, the Board, with the significant contributions of the Willamette
Nominees, has guided the Company to its coveted position as the premier forest
products franchise. Over the last ten years, the Company's EPS growth rate has
been over 9%, while the EPS growth of the Industry Composite was approximately
zero, on average. Willamette's EPS growth rate over the period was three times
that of a large cap composite comprised of International Paper, Georgia-Pacific
and Weyerhaeuser. The Board urges shareholders not to remove the very directors
who are responsible for Willamette's superior performance.

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Fourth, even if the Weyerhaeuser Nominees were elected, they could not by
themselves bring about the sale of the Company unless a majority of the Board
approved the transaction. The Board has unanimously determined that the Company
is not for sale, and that the Weyerhaeuser Offer does not reflect the long-term
value inherent in the Company or the significant value-enhancing initiatives
taken by the Company over the last few years. As a result, the election of the
Weyerhaeuser Nominees would only serve to disrupt the management of the Company
and divert the Board from its pursuit of Willamette's current successful
business strategy.

Fifth, the Board believes that independence is a key qualification for a
director of the Company and that the Weyerhaeuser Nominees lack this quality.
Each of the Weyerhaeuser Nominees has a strong tie to Weyerhaeuser. This is best
exemplified by Mr. Creighton, who recruited and hired Mr. Rogel, Weyerhaeuser's
Chairman, President and Chief Executive Officer at a time when Mr. Rogel was
Chief Executive Officer of Willamette. In addition, three of the Weyerhaeuser
Nominees, Messrs. Creighton, Luthy and Lane, are former officers of, and
continue to receive pension and retirement benefits from, Weyerhaeuser. Ms.
Cruz-Stroufe, the fourth Weyerhaeuser Nominee, is a former partner at
Weyerhaeuser's outside legal advisor. Further, according to Weyerhaeuser's proxy
statement, each of the four Weyerhaeuser Nominees is being paid $25,000 by
Weyerhaeuser to run for election to the Board. The Board believes the
Weyerhaeuser Nominees would be committed first and foremost to furthering
Weyerhaeuser's interests by virtue of their past affiliations and present
financial affiliations with Weyerhaeuser, rather than your interests. On the
other hand, the interests of the Willamette Nominees are closely aligned with
those of Willamette's shareholders - as of February 28, 2001 they collectively
held 28,893 shares of Willamette Common Stock and options to purchase 209,080
shares of Willamette Common Stock and are committed to protecting the best
interests of all shareholders of the Company and enhancing the long-term value
of the Company.

Sixth, the Board believes that the Weyerhaeuser Nominees do not have the
requisite experience to merit entrusting them with the premier forest products
franchise. Only one of the Weyerhaeuser Nominees (Mr. Creighton) was selected to
serve on Weyerhaeuser's Board of Directors. The remaining Weyerhaeuser Nominees,
Messrs. Luthy and Lane and Ms. Cruz-Stroufe, have no public company director
experience at all. Conversely, the Willamette Nominees collectively have been
associated with Willamette for over 70 years. With such experience, the
Willamette Nominees are familiar with the business, financial condition,
prospects and current business strategy of the Company.

Finally, the Company and Weyerhaeuser are direct competitors that vie for
many of the same customers and contracts. The Board believes that installing
directors on the Board that are loyal to Weyerhaeuser and its takeover attempt
may jeopardize the confidentiality of the Company's business plans and seriously
compromise the business and prospects of the Company.

FOR THESE REASONS, YOUR BOARD BELIEVES YOU WOULD BE FAR BETTER SERVED BY
ELECTING THE WILLAMETTE NOMINEES - KENNETH W. HERGENHAN, DUANE C. MCDOUGALL AND
ROBERT M. SMELICK - TO THE BOARD, AND YOU ARE URGED TO VOTE FOR THESE
INDIVIDUALS ON THE ENCLOSED GREEN PROXY CARD. THE BOARD URGES YOU NOT TO SIGN
ANY PROXY SENT TO YOU BY WEYERHAEUSER.

THE COMPANY NEEDS A QUALIFIED, EXPERIENCED, INDEPENDENT AND COHESIVE BOARD
- NOT A CONTENTIOUS BOARD WITH DIVIDED LOYALTIES.

The following information relates to the Company's nominees for re-election
at the Annual Meeting as well as the other directors of the Company. There are
no family relationships among the directors and executive officers of the
Company. The Board held eight meetings during 2000. Each director attended at
least 75 percent of the total of (i) the meetings of the Board and (ii) the
meetings held by all committees of the Board on which he served.

Class A (Nominees whose terms of office will expire in 2004)

Kenneth W. Hergenhan, age 69, has been a director of the Company since 1997
and has been associated with Willamette since 1967. Mr. Hergenhan was a partner
in the law firm of Miller Nash LLP, and chair of the firm's business practice
group prior to his retirement in December 1996. He served as Chair of the Oregon
State Bar Association's business law and securities law committees. He is a
graduate of Lehigh University and Harvard Law School.(1)(2)

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Duane C. McDougall, age 49, has been a director of the Company since 2000.
Mr. McDougall is President and Chief Executive Officer of the Company, a
position he has held since December 1998. Prior to becoming President and Chief
Executive Officer, he served as Chief Operating Officer, Executive Vice
President, and has worked for Willamette in a variety of positions for 21 years.
Mr. McDougall also serves as a board member for several non-profit and
educational organizations, including the Oregon State University Foundation,
Nature Conservancy of Oregon, Portland Art Museum, American Forest & Paper
Association and Sustainable Forestry Board. Mr. McDougall earned a bachelor's
degree in business administration from Oregon State University. Pursuant to the
Company's Bylaws, Mr. McDougall's term as a Class C director will expire as of
the date of the Annual Meeting. (1)

Robert M. Smelick, age 58, has been a director of the Company since 1990
and has been associated with Willamette since 1983. Mr. Smelick has been the
managing principal of Sterling Payot Company, an investment company, since
1989. Prior to forming Sterling Payot, he was Managing Director in charge of
First Boston's Investment Banking activities in the Western United States,
where he had been since 1979. Mr. Smelick serves as Chairman of the Board of
Accrue Software, Inc. He is a Trustee of the Hamlin School, and is a board
member of the San Francisco Ballet. Mr. Smelick holds an AB from Stanford
University and an MBA from Harvard Business School.(3)

Class B (Directors whose terms of office will expire in 2002)

Winslow H. Buxton, age 61, has been a director of the Company since
February 1999. Mr. Buxton is Chairman and a director of Pentair, Inc., a
diversified manufacturing company that sells general industrial equipment and
specialty products. He is also a director of Bemis Company, Inc. and The Toro
Company. He retired in December 2000 as Chief Executive Officer of Pentair,
Inc. (3)

G. Joseph Prendergast, age 55, has been a director of the Company since
1996. Mr. Prendergast served as President and Chief Operating Officer of
Wachovia Corporation, a bank holding company, from April 1999 until his
retirement in January 2001. Prior to becoming President and Chief Operating
Officer, he was Senior Executive Vice President of Wachovia Corporation from
October 1997 until April 1999 and Executive Vice President from October 1988
until October 1997. Mr Prendergast served as a director of Wachovia Corporation
and Wachovia Bank N.A. from April 1999 until his retirement in January 2001. He
also served as a director of Wachovia Bank of Georgia, Wachovia Bank of South
Carolina and Wachovia Bank of North Carolina from April 1994 until April 1999.
Mr. Prendergast is also a director of The Georgia Power Company.(3)

William Swindells, age 70, has been a director of the Company since 1964.
For more than the past five years, Mr. Swindells has served as Chairman of the
Board. He served as Chief Executive Officer of the Company from November 1997
until December 1998, as well as for more than five years prior to September
1995. Mr. Swindells is also a director of Oregon Steel Mills, Inc., StanCorp
Financial Group, Inc., and Airborne, Inc.(1)

Class C (Directors whose terms of office will expire in 2003)

Gerard K. Drummond, age 63, has been a director of the Company since 1991.
From July 1993 to June 1998, Mr. Drummond was of counsel to the law firm of
Stoel Rives LLP. Previously, he was Chairman of the Board of NERCO, Inc., a
natural resources company, its Chief Executive Officer (except during the period
February 1992 to November 1992), and Executive Vice President of PacifiCorp, a
public utility company.(1)(2)

Stuart J. Shelk, Jr., age 56, has been a director of the Company since
1983. Mr. Shelk is Managing Director of Ochoco Management, Inc., which is the
managing general partner of Ochoco Lumber Company, a lumber manufacturer. Mr.
Shelk has been responsible for managing Ochoco Lumber Company for more than five
years. Mr. Shelk is also a director of Prineville Bancorp. (3)

Michael G. Thorne, age 60, has been a director of the Company since
February 2000. Since 1991, Mr. Thorne has been executive director of the Port of
Portland, a public corporation whose primary purpose is providing facilities and
services to move cargo and people. Mr. Thorne is also a director of StanCorp
Financial Group, Inc. (2)

Other Current Director

Benjamin R. Whiteley, age 71, has been a director of the Company since
1990. Mr. Whiteley retired as chairman of the board of Standard Insurance
Company, a life insurance company, of which he is also a director, in March
1998. He served as chairman and chief executive officer of Standard Insurance
Company from January 1993 until August 1994 and, prior to that time, as
president and Chief Exective Officer. Mr. Whiteley is also a director of
Northwest Natural Gas Company, The Greenbrier Companies, Inc., and StanCorp
Financial Group, Inc. Mr. Whiteley is expected to resign from the Board
effective as of the date of the Annual Meeting. (1) (2)
____________
(1) Member of the Company's executive committee.

(2) Member of the Company's compensation and nomination committee ("Compensation
Committee"). The Compensation Committee, which met four times during 2000,
reviews the compensation of the Company's directors and officers prior to
consideration of such matters by the Board as a whole and administers the
Company's 1986 Stock Option and Stock Appreciation Rights Plan (the "1986
Plan"). A separate committee consisting of Messrs. Drummond and Whiteley is
responsible for administration of the 1995 Long-Term

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Incentive Compensation Plan (the "1995 Plan") and met three times during
2000. The Compensation Committee also makes recommendations to the Board
concerning nominations of directors and selection of executive personnel.
The Compensation Committee will consider shareholder suggestions as to
nominees for directors; such suggestions should be addressed to the
secretary of the Company at its principal executive offices. In order to be
considered prior to next year's annual meeting, such suggestions should be
received by December 31 of this year.

(3) Member of the Company's audit committee (the "Audit Committee"). The Audit
Committee, which met twice during 2000, is responsible for: (i)
recommending independent auditors annually for selection by the Board, (ii)
reviewing the effect of changes in accounting standards, policies and
practices and the scope of audit proposed to be performed, (iii) reviewing
the results of the past year's audit and independence issues with the
independent auditors, and (iv) reviewing the independent auditors'
suggestions and comments with respect to internal financial and operational
controls, including monitoring the steps taken to implement suggestions by
the independent auditors.

ITEM NO. 2

BOARD DECLASSIFICATION PROPOSAL

The following proposal (the "Board Declassification Proposal") was
submitted by Glen D. Heck. Mr. Heck has informed the Company that his address
is 139 Allen Dam Road, Natchitoches, LA 71457, and that he is the owner of 278
shares of Willamette Common Stock.

BE IT RESOLVED: That the shareholders of Willamette Industries Inc. ("Company")
urge that the Board of Directors take the necessary steps to declassify the
Board of Directors for purpose of director elections. The Board
declassification shall be done in a manner that does not affect the unexpired
terms of directors previously elected.

SUPPORTING STATEMENT

The Board of Directors of the Company is divided into three classes serving
staggered three-year terms. It is my belief that the classification of the
Board of Directors is not in the best interest of the Company and its
shareholders.

The elimination of the staggered Board would require each director to stand
for election annually. This procedure would allow shareholders an opportunity
to annually register their views of the performance of the Board collectively
and each director individually. Concern that the annual election of all
directors would leave the company without experienced board members in the event
that all incumbents are voted out is unfounded. If the owners should choose to
replace the entire Board, it would be obvious that the incumbent directors'
contributions were not valued.

Under the Bylaws of the Company, shareholders are only permitted to remove
a director by the affirmative vote of the holders of not less than 80 percent of
the outstanding shares. The Company's super-majority director removal provision
and its classified Board of Directors have the combined effect of increasing the
likelihood that directors will serve long tenures regardless of the views of
shareholders. The National Association of Corporate Directors' Blue Ribbon
Commission on Director Professionalism's Report has explicitly rejected "the
notion of directorships as lifetime sinecures....[C]ircumstances change, and
boards should anticipate and respond to company changes."

A classified board of directors protects the incumbency of the Board and
current management, which in turn limits accountability to shareholders. It is
my belief that this protection for incumbents, by reducing management's
accountability to shareholders, may negatively impact the Company's financial
performance. We [SIC] urge your support for this proposal.

PREC14A 15th Page of 43 TOC 1st Previous Next ↓Bottom Just 15th
STATEMENT OF BOARD OF DIRECTORS RECOMMENDING A VOTE AGAINST THE BOARD
DECLASSIFICATION PROPOSAL

The Board believes that the present system of electing directors of the
Company in three classes is in the best interests of the Company and its
shareholders and should not be changed.

A classified board offers important advantages to shareholders and is the
preferred method of governance for the majority of Fortune 500 companies.
Moreover, a classified board protects shareholders against potentially coercive
takeover tactics, similar to those currently being employed by Weyerhaeuser,
whereby a party attempts to acquire control on terms that do not offer the
greatest value to all shareholders. With this protection, the Board gains the
time necessary to evaluate any proposal, study alternatives and seek the best
result for all shareholders.

The Board believes that a classified board enhances continuity and
stability in the Company's management and policies since a majority of the
directors at any given time will have had prior experience and familiarity with
the business of the Company. This continuity and stability facilitates more
effective long-term planning and is integral to increasing the Company's value
to shareholders. Moreover, such continuity helps the Company attract and retain
qualified individuals willing to commit the time and dedication necessary to
understand the Company, its operations and competitive environment.

The Board is committed to corporate accountability and does not accept the
proposition that a classified board insulates directors from responsibility. A
classified board permits shareholders to annually change one-third of the
directors and thereby substantially change the Board's composition and
character. Corporate accountability depends on the selection of responsible and
experienced individuals, not on whether they serve terms of one year or three.

The Company understands that the Board should be responsive to shareholders
and has taken steps to assure corporate accountability through such measures as
maintaining a majority of outside directors (seven of nine). In addition, to
encourage the alignment of the interests of the members of the Board with those
of the shareholders, on the date of each annual meeting of shareholders an
option for 2,000 shares of Willamette Common Stock is granted to each person who
is then a non-employee director and who is to continue to serve as a director.

Your Board also believes that a director's performance and contribution is
best measured over a longer period such as the current three-year terms for
directors, rather than the short-term focus inherent in annual elections. The
longer terms permit the Board to avoid the temptation or compulsion to sell the
businesses or assets of the Company at times when highest valuations are less
achievable due to market conditions and is consistent with the Board's role in
making decisions that have a long-term impact.

Shareholders should also be aware that adoption of the Board
Declassification Proposal would not, by itself, eliminate board classification
and institute the annual election of directors, but would merely constitute a
recommendation by the shareholders that the Board consider enacting such a
change. Furthermore, even if the Board were to adopt the Board Declassification
Proposal, it would not have the effect of fully declassifying the Board until
the annual meeting in 2004 because, by its terms, the proposal suggests that the
declassification be done in a manner that does not affect the unexpired terms of
directors previously elected.

For the reasons outlined above, the Board has concluded that a classified
board is in the best interests of the Company and its shareholders and thus is
opposed to the Board Declassification Proposal.

FOR THE FOREGOING REASONS, THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT
SHAREHOLDERS VOTE AGAINST THE BOARD DECLASSIFICATION PROPOSAL.

PREC14A 16th Page of 43 TOC 1st Previous Next ↓Bottom Just 16th
ITEM NO. 3

COMPENSATION COMMITTEE PROPOSAL

The following proposal (the "Compensation Committee Proposal") was
submitted on behalf of the Central Laborers' Pension, Welfare & Annuity Funds.
They have informed the Company that its address is P.O. Box 1267, Jacksonville,
IL 62651, and that it is the owner of 1,100 shares of Willamette Common Stock.

RESOLVED, that the shareholders of Willamette Industries, Inc. ("Company")
hereby request that the Company's Board of Directors take the necessary steps to
ensure that the Board's Executive Compensation Committee is composed entirely of
"independent" directors. For purposes of this resolution, a director would not
be considered independent if he or she is currently or during the past five
years has been:

. Employed by the company or an affiliate in an executive capacity;

. Employed by a firm that is one of the Company's paid advisors or
consultants;

. Employed by a significant customer or supplier;

. Employed by a tax-exempt organization that receives significant
contributions from the Company;

. Paid by the Company pursuant to any personal services contract with
the Company;

. Serving in an executive capacity or as a director of a corporation on
which the Company's chairman or chief executive officer is a board
member; or

. Related to a member of management of the Company.

SUPPORTING STATEMENT

The role of a board of director's executive compensation committee is
critically important to the long term success of the corporation. The executive
compensation committee establishes compensation policies and practices that
focus senior management on the development and implementation of corporate
strategies designed to maximize long-term corporate value.

Unfortunately, in recent years corporate executive compensation practices
and policies have drawn considerable public and shareholder attention for all
the wrong reasons. Excessive executive compensation levels highlight the
tendency of most compensation programs to provide handsome rewards for ordinary
or less than ordinary performance. Current executive compensation plans often
present a system of pay for performance, but they lack challenging performance
benchmarks by which executives' performance can be judged.

In order to ensure the integrity of the executive compensation process and
the effectiveness of a corporation's executive compensation policies and
practices, the Board's Executive Compensation Committee should be composed
entirely of directors independent of management. The definition of
"independent" director advanced in this resolution will ensure that those
members of the Executive Compensation Committee will be totally independent of
management and best able to undertake their responsibilities to develop fair and
understandable compensation policies and practices that focus management on
achieving long-term corporate success.

At present, the Company's Compensation Committee includes directors that do
not meet the "independent" director standard outlined in the resolution. Paul
N. McCracken and Samuel C. Wheeler both serve on the Compensation Committee.
Mr. McCracken is chairman of Tumac Lumber Co., Inc., a wood products broker,
which purchases building materials products from, and sells such products to,
the Company. During 1999, such transactions amounted to approximately
$6,087,000. Samuel C. Wheeler is vice president of Barclay Logging

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Company, which performs contract logging services for the Company. During 1999,
such transactions amounted to approximately $643,000.

As long-term shareholders, we urge your support of this important corporate
governance reform that we believe will contribute to the Company's long-term
success.

STATEMENT OF BOARD OF DIRECTORS RECOMMENDING A VOTE AGAINST THE COMPENSATION
COMMITTEE PROPOSAL

In common with the shareholders of the Company, the Board appreciates the
critical importance of the role played by the members of the Board's
Compensation Committee. The Board, however, believes that the proposal is not
the best means of ensuring that this role is performed properly. It is true that
the members of such a committee must be free from bias, but they must also have
the experience and business knowledge necessary to make informed decisions and
form realistic assessments of an executive's performance.

All of the members of the Compensation Committee also serve as members
of the Board. As directors, these individuals are required to oversee the
management of our Company and determine its future direction. Accordingly, it is
vital to the continued success of our Company that these individuals have the
necessary skills to perform this role as well as their role on the Compensation
Committee.

The Board as a whole cannot adequately govern the Company without the
proper balance of independence, experience, and expertise. Achieving this
balance is always a challenge. The Company must be free to select future
members of the Board from a variety of sources, taking into consideration
potential biases or other circumstances that might influence an individual
candidate's decisions.

The Compensation Committee Proposal would inhibit the Company's
ability to choose future members of the Board based on their experience and
ability to contribute to the future success of the Company. Rather, the Company
would be compelled to focus on whether the candidates satisfy the proposal's
definition of "independence." Under the proposal's extremely restrictive
independence criteria, the majority of qualified candidates for membership on
our Company's Board could be ineligible as having some type of relationship with
our Company. It is through these very connections that such individuals have
gained sufficient knowledge about our Company's businesses and the nature of the
industry in which it operates to enable them to effectively contribute to the
decisions reached by the Board.

The Company does favor some restrictions on Compensation Committee
membership. No member of the Compensation Committee is an employee or officer
of the Company. The Company also complies with the proxy rules promulgated by
the Securities and Exchange Commission (the "SEC") requiring disclosure of
specific connections between the Company and members of the Compensation
Committee to the shareholders. With regard to the specific individuals named in
the proponent's supporting statement as not satisfying the proposal's definition
of independence, both Mr. McCracken and Mr. Wheeler have retired from our Board
and no longer serve on the Compensation Committee.

There is a common sense element that is missing from the proposal.
For example, it proscribes not only present relationships, but also
relationships arising from specified transactions or positions occurring as far
back as five years ago. It also lacks a minimum dollar threshold for
transactions; in contrast, the SEC's disclosure rules do not relate to
transactions below $60,000. Additionally, the proposal would not even allow a
member of the Compensation Committee to serve (or have served during the past
five years) on another corporation's board of directors with the Company's
Chairman or Chief Executive Officer.

If the proposal is adopted, the Company's ability to select directors
(and potential members of the Compensation Committee) based on their knowledge,
business judgment, experience, and talents would be severely circumscribed. As
a result, the Board and management might no longer be able to offer for the
shareholders' approval individuals that they believe would be the best
candidates for membership on the Board.

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Shareholders should also be aware that approval of the Compensation
Committee Proposal would not, by itself, ensure that the Compensation Committee
be comprised solely of "independent" directors but would merely constitute a
recommendation by the shareholders that the Board consider enacting such a
change.

FOR THE FOREGOING REASONS, THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THE
COMPENSATION COMMITTEE PROPOSAL.

OTHER MATTERS

Management knows of no matters to be brought before the meeting other than
those described above. However, should any other matters properly come before
the meeting, the persons named in the accompanying form of proxy will vote or
refrain from voting thereon in accordance with their judgment.

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HOLDERS OF WILLAMETTE COMMON STOCK

The following tables give certain information concerning the holdings
of Willamette Common Stock of (i) each person known to the Company to be the
beneficial owner of more than 5 percent of the outstanding Willamette Common
Stock and (ii) each of the directors and nominees, each of the named executive
officers referred to in the Summary Compensation Table below, and the Company's
current directors and executive officers as a group. The information as to
beneficial stock ownership is based on data furnished by the persons concerning
whom such information is given.

Five Percent Beneficial Owners

[Enlarge/Download Table]

Shares of Willamette
Common Stock Nature of Percent of
Beneficially Beneficial Outstanding Willamette
Name and Address Owned Ownership (a) Common Stock
--------------------------------------- -------------------- ------------------------------ -----------------------

Maurie D. Clark*....................... 3,386,110 Sole Voting and Disposition 3.09%
Suite 600 4,705,307 Shared Voting and Disposition 4.30%
1211 S.W. Fifth Avenue 8,091,417 Total 7.39%
Portland, Oregon 97204

Wells Fargo & Company**................ 1,567,066 Sole Voting 1.43%
420 Montgomery Street 6,411,095 Shared Voting 5.86%
San Francisco, California 94104 77,590 Sole Disposition 0.07%
13,421,280 Shared Disposition 12.27%
13,554,523 Total 12.39%

______________

* As of February 28, 2001
** As of December 31, 2000

Directors and Executive Officers

[Enlarge/Download Table]

Shares of Willamette Common Stock Percent of
Beneficially Owned Outstanding Willamette
Name At February 28, 2001(a) Common Stock
---- ------------------------ ------------

Winslow H. Buxton............................. 4,865 (b)(d) 0.00%
Marvin D. Cooper.............................. 114,868 (b)(c) 0.10%
Gerard K. Drummond............................ 10,800 (d) 0.01%
Kenneth W. Hergenhan.......................... 7,972 (d) 0.01%
William P. Kinnune............................ 171,031 (c)(e) 0.16%
Duane C. McDougall............................ 146,515 (b)(c) 0.13%
J. E. McMillan................................ 78,086 (c) 0.07%
Michael R. Onustock........................... 151,176 (c)(e) 0.14%
G. Joseph Prendergast......................... 8,100 (d) 0.01%
Stuart J. Shelk, Jr........................... 1,685,715 (b)(d) 1.54%
Robert M. Smelick............................. 10,800 (d) 0.01%
William Swindells............................. 3,972,476 (b)(d) 3.62%
Michael G. Thorne............................. 1,867 (d) 0.00%
Benjamin R. Whiteley.......................... 14,300 (d) 0.01%
All directors and executive officers as a 6,400,612 (b)(c)(d)(e) 5.80%
group (15 persons)

PREC14A 20th Page of 43 TOC 1st Previous Next ↓Bottom Just 20th
(a) Shares are included in the table as "beneficially owned" if the person named
has or shares the right to vote or direct the voting of or the right to
dispose or direct the disposition of such shares. Inclusion of shares in the
table does not necessarily imply that the persons named receive the economic
benefits of the shares so listed.

(b) Includes shares as to which the individual shares voting and dispositive
power as follows: Mr. Buxton, 1,000 shares; Mr. Cooper, 1,400 shares; Mr.
McDougall, 32 shares; Mr. Shelk, 18,120 shares; and Mr. Swindells, 1,905,788
shares.

(c) Includes shares subject to employee stock options exercisable within 60 days
after February 28, 2001, under the Company's 1995 Plan and 1986 Plan as
follows: Mr. Cooper, 82,610 shares; Mr. Kinnune, 112,117 shares; Mr.
McDougall, 123,994 shares; Mr. McMillan, 44,987 shares; Mr. Onustock, 98,717
shares; and all executive officers as a group, 482,959 shares.

(d) Includes shares subject to options exercisable within 60 days after February
28, 2001, under the non-employee director provisions of the 1995 Plan as
follows: Mr. Buxton, 2,533 shares; Messrs. Drummond, Shelk, Smelick, and
Whiteley, 6,800 shares each; Messrs. Hergenhan and Prendergast, 5,600 shares
each; Mr. Swindells, 3,600 shares; Mr. Thorne, 1,067 shares; and all non-
employee directors as a group, 45,600 shares.

(e) Includes restricted shares of Willamette Common Stock awarded pursuant to
the 1995 Plan, as to which the individual has sole voting and shared
dispositive power, as follows: Mr. Kinnune, 705 shares; Mr. Onustock, 585
shares; and all executive officers as a group, 1,290 shares.

REPORT OF THE AUDIT COMMITTEE

The Audit Committee of the Board assists the Board in the discharge of its
fiduciary obligations to the Company's shareholders relating to the quality and
integrity of the Company's financial statements, its accounting and reporting
practices, and the independence and performance of the Company's outside auditor
and performance of its internal accounting staff. The Audit Committee is
comprised of four directors, each of whom has been determined by the Board to
meet the independence and financial literacy requirements set forth in the
corporate governance listing standards of the New York Stock Exchange, on which
the Willamette Common Stock is listed. A written charter revised by the Board
on February 8, 2001 governs the Audit Committee's activities. A copy of the
Audit Committee charter is attached to this Proxy Statement as Annex B.

In discharging its responsibilities, the Audit Committee and its individual
members have met with management, the internal auditor, and the Company's
outside auditor, KPMG LLP ("KPMG"), to review the Company's accounting functions
and the audit process and to discuss the Company's audited financial statements
for the year ended December 31, 2000. The Audit Committee discussed and reviewed
with its outside auditing firm all matters that the firm was required to
communicate and discuss with the Audit Committee under applicable auditing
standards, including those described in Statement on Auditing Standards No. 61,
as amended, regarding communications with audit committees. The Audit Committee
has also received from its outside auditor a formal written statement relating
to independence consistent with Independence Standards Board Standard No. 1,
"Independence Discussions with Audit Committees," and discussed with the outside
auditor any relationships that may adversely affect its objectivity and
independence.

Based on its review and discussions with management and the Company's outside
auditor, the Audit Committee recommended to the Board that the Company's audited
financial statements for the year ended December 31, 2000, be included in the
Company's Annual Report on Form 10-K filed with the SEC.

Submitted by the Audit Committee of the Board of Directors:

Stuart J. Shelk, Jr., Chair
Winslow H. Buxton
G. Joseph Prendergast
Robert M. Smelick

PREC14A 21st Page of 43 TOC 1st Previous Next ↓Bottom Just 21st
EXECUTIVE COMPENSATION

Summary Compensation Table

The following table sets forth certain information concerning the compensation
of the Company's chief executive officer and each of its four other most highly
compensated executive officers (the "named executive officers") for each of the
years in the three-year period ended December 31, 2000.

[Enlarge/Download Table]

Long-Term Compensation Awards
-------------------------------------
Restricted Number of
Name and Annual Stock Securities
Principal Compensation Awards Underlying All Other
Position (1) Year Salary (2) Options (#) Compensation(3)
------------ ---- ------ --- ----------- ---------------

Duane C. McDougall 2000 $1,033,333 $ - 80,030 $25,807
President and Chief Executive 1999 866,667 - 50,800 26,936
Officer 1998 525,000 - 23,690 18,142

William P. Kinnune 2000 528,000 - 32,010 30,390
Executive Vice President 1999 498,333 - 20,620 32,401
1998 481,333 - 22,840 29,180

Michael R. Onustock 2000 528,000 - 32,010 23,493
Executive Vice President 1999 497,667 - 20,530 24,607
1998 465,000 - 20,660 22,115

Marvin D. Cooper (4) 2000 453,333 - 25,410 21,729
Executive Vice President 1999 383,333 - 14,820 20,728
1998 333,333 - 14,580 20,373

J. E. McMillan (4) 2000 416,667 - 22,230 20,891
Executive Vice President 1999 333,333 - 12,700 21,751
1998 257,000 - 8,310 17,991

-----------------------

(1) Includes principal capacities in which each officer served during 2000.

(2) The aggregate number of restricted shares of Willamette Common Stock held by
each named executive officer and the value of such shares on December 29,
2000 (based on the closing sale price of the Willamette Common Stock,
$46.9375, reported on the New York Stock Exchange), are as follows:

Name No. of Shares Value
---- ------------- -----

Duane C. McDougall - $ -
William P. Kinnune 705 33,091
Michael R. Onustock 585 27,458
Marvin D. Cooper - -
J. E. McMillan - -

Dividends are paid on the restricted shares at the same rate as on other
shares of Willamette Common Stock.

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(3) The amounts shown for 2000 represent (i) Company contributions to its Stock
Purchase Plan ("401(k) Plan"), a qualified plan under Section 401(a) of the
Internal Revenue Code of 1986, as amended (the "Internal Revenue Code"), for
the benefit of each of the named executive officers and to its 1993 Deferred
Compensation Plan for the benefit of such officers to the extent
contributions would have been made to the 401(k) Plan had compensation
subject to such plan included deferred compensation and had the Internal
Revenue Code limits not been applicable and (ii) the imputed value to the
named executives of a portion of the premiums paid for life insurance
policies under which they are to receive an interest in the cash surrender
value. The amounts attributable to (i) 401(k) Plan and 1993 Deferred
Compensation Plan contributions and (ii) the imputed value of premiums,
respectively, for each of the named executives for 2000 are as follows: Mr.
McDougall, $15,000, $10,807; Mr. Kinnune, $15,000, $15,390; Mr. Onustock,
$15,000, $8,493; Mr. Cooper, $15,000, $6,729; and Mr. McMillan, $15,000,
$5,891.

(4) Both Mr. Cooper and Mr. McMillan became executive officers of the Company on
April 21, 1998; the table reflects their compensation for all of 1998.

Option Grants in Last Fiscal Year

The following table provides information as to options to purchase Willamette
Common Stock granted to the named executive officers during 2000 pursuant to the
Company's 1995 Plan. No stock appreciation rights ("SARs") were granted to any
named executive officers during 2000.

[Enlarge/Download Table]

--------------------------------------------------------
Individual Grants
--------------------------------------------------------
Potential Realizable Value
Number of Percent of at Assumed Annual Rates
Securities Total Options of Stock Price Appreciation
Underlying Granted to Exercise for Option Term (3)
Options Employees Price Expiration ---------------------------
Name Granted(1) in Fiscal Year Per Share(2) Date 5% 10%
-------------------------- ---------- -------------- --------- ---------- ---------- -----------

Duane C. McDougall 80,030 10.29% $37.00 April 2010 $1,862,226 $4,719,247
William P. Kinnune 32,010 4.12% 37.00 April 2010 744,844 1,887,581
Michael R. Onustock 32,010 4.12% 37.00 April 2010 744,844 1,887,581
Marvin D. Cooper 25,410 3.27% 37.00 April 2010 591,268 1,498,389
J. E. McMillan 22,230 2.86% 37.00 April 2010 517,272 1,310,869

--------------------

(1) Options were granted for the numbers of shares indicated at an exercise
price equal to the fair market value of the Willamette Common Stock on the
date of grant. The options, which have terms of ten years and two days,
become exercisable as follows: 33 1/3 percent after one year, an additional
33 1/3 percent after two years, and the remainder after three years;
provided that the options will become exercisable in full upon the officer's
death, disability or retirement.

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(2) Subject to certain conditions, the exercise price and tax withholding
obligations related to exercise may be paid by delivery of previously
acquired shares of Willamette Common Stock.

(3) The amounts shown are hypothetical gains based on the indicated assumed
rates of appreciation of the Willamette Common Stock compounded annually
over the full term of the options. There can be no assurance that the
Willamette Common Stock will appreciate at any particular rate or at all.

Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option
Values

Information regarding exercises of stock options by the named executive
officers during 2000 and unexercised options held by them as of December 31,
2000, is summarized in the table set forth below. The named executives did not
exercise any SARs during 2000 and did not hold any in-the-money SARs at year-
end.

[Enlarge/Download Table]

Number of Shares Value of Unexercised
Underlying Unexercised In-the-Money
Number of Options at Options
Shares December 31, 2000 at December 31, 2000(2)
Acquired on Value ----------------- -----------------------
Name Exercise Realized(1) Exercisable Unexercisable Exercisable Unexercisable
---- -------- ----------- ----------- ------------- ----------- -------------

Duane C. McDougall - $ - 72,487 121,793 $ 863,197 $ 860,439
William P. Kinnune - $ - 86,961 53,369 1,275,584 380,903
Michael R. Onustock - $ - 74,317 52,583 1,065,429 374,909
Marvin D. Cooper - $ - 64,340 40,150 1,126,137 292,603
J. E. McMillan - $ - 30,574 33,466 481,907 243,761

(1) Represents the difference between the fair market value of the shares of
Willamette Common Stock received on exercise of stock options at the date of
exercise and the option exercise price.

(2) Calculated based on the difference between the closing sale price of the
Willamette Common Stock, $46.9375, reported on the New York Stock Exchange
on December 29, 2000, and the aggregate exercise price of the unexercised
options. All options reflected in the table were granted at an exercise
price equal to the fair market value of a share of Willamette Common Stock
on the date of grant.

Pension Plan

The retirement plan ("Retirement Plan") that the Company maintains for its
salaried employees (including officers) provides for payment of retirement
benefits generally based upon an employee's years of service with the Company
and compensation level. Funding of the Retirement Plan is actuarially
determined. The Company also maintains a supplemental retirement plan
("Supplemental Plan") under which salaried employees (including officers)
receive retirement benefits substantially equal to those the Retirement Plan
would have provided but for certain limitations required by the Internal Revenue
Code.

The following table shows the aggregate estimated annual benefits payable
under the Retirement Plan and the Supplemental Plan upon retirement (assuming
normal retirement at age 65) for unmarried employees at specified compensation
levels (based upon the highest average of five consecutive years) with various
years of service (assuming continuous full-time employment with the Company from
date of hire to date of retirement):

[Enlarge/Download Table]

Years of Service
----------------------------------------------
Remuneration 15 20 25 30 35 40
-------------------------- ------- ------- ------- ------- ------- -------

$300,000 71,459 95,279 119,099 142,918 166,738 189,238
400,000 96,209 128,279 160,349 192,418 224,488 254,488
500,000 120,959 161,279 201,599 241,918 282,238 319,738

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[Enlarge/Download Table]

Years of Service
----------------------------------------------
Remuneration 15 20 25 30 35 40
-------------------------- ------- ------- ------- ------- ------- -------

600,000 145,709 194,279 242,849 291,418 339,988 384,988
700,000 170,459 227,279 284,099 340,918 397,738 450,238
800,000 195,209 260,279 325,349 390,418 455,488 515,488
900,000 219,959 293,279 366,599 439,918 513,238 580,738
1,000,000 244,709 326,279 407,849 489,418 570,988 645,988
1,100,000 269,459 359,279 449,099 538,918 628,738 711,238
1,200,000 294,209 392,279 490,349 588,418 686,488 776,488
1,300,000 318,959 425,279 531,599 637,918 744,238 841,738

Compensation used in determining retirement benefits consists of the
employee's regular fixed salary, including amounts deferred at the election of
the employee and contributed to the Company's 401(k) Plan. With respect to the
named executive officers, such compensation is the amount shown for the officers
under "Salary" in the Summary Compensation Table above.

The credited years of service for each of the named executive officers is
as follows: Mr. McDougall, 21; Mr. Kinnune, 39; Mr. Onustock, 28; Mr. Cooper,
21; and Mr. McMillan, 29.

The benefits payable upon retirement are single-life annuity amounts and
are not subject to any deduction for Social Security or other offset amounts.
The level of benefits is based in part upon the average of the Social Security
wage bases for the 35 years ending with Social Security retirement age. Amounts
shown in the table are based upon the Social Security covered compensation for
an employee attaining age 65 in 2000. Retirement benefits may be reduced from
the amounts shown in the case of early retirement (or other early termination of
employment), in the case of a married employee whose benefits are paid in the
form of a joint and survivor annuity and in the case of an employee whose
employment with the Company has not been continuous. Special provisions in the
Retirement Plan may apply in the case of death or disability or upon a change in
control of the Company; there are also provisions relating to the computation of
years of service for vesting or benefit purposes in the case of service with
certain employers acquired by the Company at various times in the past.

COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION

Compensation Committee

During 2000, Messrs. Drummond, Hergenhan, Thorne, and Whiteley served on
the Company's Compensation Committee, as well as now retired directors Paul N.
McCracken (retired August 2000) and Samuel C. Wheeler (retired February 2000).

Paul N. McCracken is chairman of Tumac Lumber Co., Inc., a wood products
broker, which purchases building materials products from, and sells such
products to, the Company in the ordinary course of business at prevailing market
prices. During 2000, such transactions amounted to approximately $3,479,000.

Samuel C. Wheeler is vice president of Barclay Logging Company, which
performs contract logging services for the Company in the ordinary course of
business at prevailing market prices. During 2000, such transactions amounted to
approximately $627,000. Mr. Wheeler served as a vice president of the Company
until his resignation in 1973.

Other Transactions and Relationships

Ochoco Lumber Co. sells wood products to, and purchases such products from,
the Company in the ordinary course of business at prevailing market prices.
During 2000, such transactions amounted to approximately $1,106,000. Mr. Shelk
is managing director of the managing general partner of Ochoco Lumber Co.

PREC14A 25th Page of 43 TOC 1st Previous Next ↓Bottom Just 25th
In the ordinary course of business at prevailing market prices, the Company
has sold paper products to, and obtained credit and other banking and financial
services from, Wachovia Corporation. For the year 2000, such paper sales
amounted to approximately $76,000, and the financial services amounted to
approximately $230,000. Mr. Prendergast retired from his position as president
and chief operating officer of Wachovia Corporation last year.

REPORT OF THE COMPENSATION COMMITTEE

It is the responsibility of the Compensation Committee to oversee the
compensation of officers of the Company (25 persons). The Compensation
Committee's salary recommendations, when approved by the Board, set the levels
of compensation for all officers. In addition, the Compensation Committee hears
reports from the Company's chief executive officer, and considers the
performance of individual officers, planned succession and related matters. In
1996, responsibility for the administration of the 1995 Plan, including
selecting the officers and other key employees to receive awards and for
determining types, amounts and terms of such awards, was assigned to the Long-
Term Incentive Compensation Committee (the "Awards Committee"), presently
consisting of Messrs. Drummond and Whiteley.

The compensation policy of the Company recognizes that the Company's
business is the conversion of timber and wood fiber into products which are
largely of a commodity nature and that the Company is integrated "from the stump
to the customer" with only the chief executive officer responsible for all
operations. For these two reasons--little control of sales prices in commodity
markets and little individual control over material costs and transfer prices of
specific business segments--the Company does not ordinarily compensate employees
with cash bonuses or other forms of short-term incentive compensation. The
Company's policy is to pay salaried employees, including all officers, base
salaries only with incentive compensation coming in the form of longer-term
programs such as stock options, stock appreciation rights or restricted stock.

From time to time, including in 2000, the Compensation Committee receives
reports from compensation consultants regarding competitive industry salaries
and long-term incentive compensation programs. The Company also participates in
industry-wide salary surveys and conducts its own annual review of compensation
information in proxy statements of competing companies. From these sources, the
Compensation Committee evaluates compensation levels of a peer group of thirteen
other forest products companies which the Compensation Committee, based on its
general knowledge of the forest products industry, believes are comparable to
the Company. The Company uses these evaluations when reviewing and approving
management's recommendations regarding compensation. The thirteen companies
constituting the peer group include the other eight companies in the S&P Paper &
Forest Products Index referred to under "Performance Graph" below and five other
forest products companies.

In arriving at salary recommendations to the Board for individual officers
effective May 1, 2000, the Compensation Committee considered cash compensation
paid by the peer group to officers in comparable positions and taking into
account available information concerning comparable levels of responsibility,
recommendations by the Company's chief executive officer, relative
responsibilities compared to other officers and employees in the Company, and
various other factors including experience and performance. Each recommended
salary was intended to be within the range of and competitive with the cash
compensation paid to positions within the comparable industry. In formulating
its salary recommendations, the Compensation Committee did not consider stock
options and other non-cash compensation programs of the peer group companies or
the stock options granted to Company officers.

Effective May 1, 2000, based on the recommendation of the Compensation
Committee, the Board increased Mr. McDougall's annual salary level by 22.2
percent to $1,100,000. In recommending the increase in Mr. McDougall's salary,
the Compensation Committee considered salary levels of chief executive officers
in the Company's peer group, the responsibilities of the position, and Mr.
McDougall's performance and expectations.

As an incentive to stock ownership by employees and as a form of long-term
incentive compensation, annual grants of stock options are awarded to selected
key employees. During 2000, stock options were granted by the Awards Committee
based on a formula relating to base salary and the Company's return on
shareholders' equity ("ROE"). The formula does not take into account the number
of stock options previously granted to an officer. Under the formula, a target
number of options for each officer is determined by dividing a percentage of the

PREC14A 26th Page of 43 TOC 1st Previous Next ↓Bottom Just 26th
officer's salary (ranging, based on level of responsibility, from 140 percent
for vice presidents to 350 percent for the chief executive officer) by the
market price of the Willamette Common Stock at the date of grant. The target
number is subject to downward adjustment based on the Company's ROE for its most
recent fiscal year. No adjustment is made if the Company's ROE exceeds the
weighted average ROE of eighteen forest products companies by 5 percentage
points as determined from published financial reports. If the specified margin
is not achieved, the options are reduced proportionately by up to 30 percent of
the target number. The Company's 1999 ROE exceeded the published industry
composite by four percentage points. Accordingly, option grants in 2000 were
reduced by 6 percent of the target number.

Restricted stock has been awarded in past years to executive officers based
upon the Compensation Committee's subjective evaluation of the Company's
performance. No restricted stock awards were granted during 2000.

Section 162(m) of the Internal Revenue Code generally disallows a federal
income tax deduction to the Company for compensation over $1 million paid to the
Company's chief executive officer or any of its four other most highly
compensated executive officers unless such compensation is payable only on
account of the attainment of one or more performance goals as determined by a
Board committee comprised solely of two or more outside directors and otherwise
qualifies as performance based pursuant to Section 162(m). The Company does not
have a policy favoring awards to executive officers that qualify as performance
based pursuant to Section 162(m). However, responsibility for the administration
of the 1995 Plan was assigned to the Awards Committee, which is comprised solely
of outside directors, so that stock options granted under the 1995 Plan may
qualify as performance based within the meaning of Section 162(m).

Compensation Committee

Gerard K. Drummond, Chairman
Kenneth W. Hergenhan
Michael G. Thorne
Benjamin R. Whiteley

PERFORMANCE GRAPH

The following two graphs compare the annual change in the cumulative total
shareholder return on the Willamette Common Stock with the cumulative total
return of the S&P 500 Stock Index and the cumulative total return of the S&P
Paper & Forest Products Index. The first graph assumes investment of $100 on
December 31, 1995, and reinvestment of dividends. The second graph assumes
investment of $100 on December 31, 1990, and reinvestment of dividends.

[Enlarge/Download Table]

Cumulative Total Return
--------------------------------------------------------

12/95 12/96 12/97 12/98 12/99 12/00

WILLAMETTE INDUSTRIES, INC. 100.00 126.27 118.90 126.16 177.90 184.08
S&P 500 100.00 122.96 163.98 210.84 255.22 231.98
S&P PAPER & FOREST PRODUCTS 100.00 110.62 118.61 120.96 169.13 138.50

[Enlarge/Download Table]

Cumulative Total Return
------------------------------------------------------------------------------------------------

12/90 12/91 12/92 12/93 12/94 12/95 12/96 12/97 12/98 12/99 12/00

WILLAMETTE INDUSTRIES, INC. 100.00 142.65 202.45 248.01 242.84 293.38 370.46 348.84 370.14 521.91 540.07
S&P 500 100.00 130.47 140.41 154.56 156.60 215.46 264.93 353.31 454.28 549.88 499.81
S&P PAPER & FOREST PRODUCTS 100.00 126.84 145.03 159.84 166.55 183.38 202.85 217.51 221.82 310.16 253.99

COMPENSATION OF DIRECTORS

Fees

Each director of the Company who is not also an employee of the Company or a
subsidiary (a "non-employee director") receives a retainer fee of $30,000 per
year. Committee chairs receive an additional retainer of

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$2,500 per year. In addition, each non-employee director receives a fee of
$1,500 for each Board meeting attended and $1,000 for each committee meeting
attended.

In November 1999, the Company adopted the 1999 Deferred Compensation Plan
for non-employee directors pursuant to which they may elect to defer directors'
fees. The plan, which is unfunded, replaced a prior deferred compensation plan;
amounts deferred under the prior plan have been transferred to accounts under
the new plan. Deferred amounts accrue increases or decreases as if they were
invested in one or more of the investment funds available under the Company's
401(k) Plan as specified by a participating director.

In conjunction with the adoption of the 1999 Deferred Compensation Plan,
the Company terminated its retirement plan for non-employee directors. For
active directors, effective January 1, 2000, the present value of the benefits
accrued under the prior retirement plan was transferred to accounts under the
deferred compensation plan and are treated as invested as described above.

Stock Options

Under the 1995 Plan, each person who was a non-employee director at the
date of the 1995 annual meeting of shareholders was granted an option to
purchase 2,000 shares of Willamette Common Stock (an "Initial Option") and each
person who subsequently becomes a non-employee director, other than a former
officer of the Company or a subsidiary, is also granted an Initial Option. In
addition, on the date of each subsequent annual meeting of shareholders, an
option for 1,200 shares of Willamette Common Stock (2,000 shares commencing with
the 2001 annual meeting) (an "Annual Option") is granted to each person who is
then a non-employee director and who is to continue to serve as a director,
including former officers of the Company or its subsidiaries.

Options granted to non-employee directors under the 1995 Plan are granted
at an exercise price equal to the fair market value of the Willamette Common
Stock on the date of grant, have terms of ten years and two days, and are
exercisable as specified (i) in note (1) to the table under "Option Grants in
Last Fiscal Year" above and (ii) under the heading "Termination of Employment
and Change in Control Arrangements and Related Matters" below. Accordingly, the
Annual Options granted to the non-employee directors on the date of the 2000
annual meeting were granted at an exercise price of $37.00 per share, the fair
market value of the Willamette Common Stock on that date. The Initial Option
granted to Mr. Thorne in February 2000 was granted at an exercise price of
$38.125, the fair market value of the Willamette Common Stock on the date of
grant.

Consulting Agreement

The Company entered into a consulting agreement with Mr. Swindells
effective upon his ceasing to be chief executive officer of the Company under
which Mr. Swindells agreed to provide consulting services to the Company. Under
the consulting agreement, Mr. Swindells received consulting fees equal to
$120,000 during 2000 as well as certain secretarial services and office space,
and was reimbursed for certain expenses including dues for a business club. The
consulting agreement provides that, while Mr. Swindells receives fees under the
agreement, he will not receive the annual retainer fees payable to other non-
employee directors of the Company. The consulting agreement was renewed in
December 2000 and is renewable for two additional one-year periods unless
terminated by either party upon 30 days' notice prior to renewal.

TERMINATION OF EMPLOYMENT AND CHANGE IN CONTROL
ARRANGEMENTS AND RELATED MATTERS

Change in Control Agreements

The Company has agreements (the "CIC Agreements") with certain of its key
employees, including the named executive officers, two officers who may assist
in soliciting proxies from the Company's shareholders in connection with the
Annual Meeting, all other officers, and the Senior Employees (defined below),
that provide for severance compensation for the employees in the event their
employment with the Company is terminated subsequent to a Change in Control
(defined below) of the Company under the circumstances set forth in the CIC
Agreements. Pursuant to the CIC Agreements, each employee has agreed to remain
in the Company's employ following a tender offer or exchange offer for more than
20 percent of the Company's outstanding voting securities until such offer has
been abandoned or terminated or a Change in Control has occurred and unless the
Company reduces the employee's compensation.

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If, within 36 months following a Change in Control, the employee's
employment with the Company is terminated by the Company without Cause (defined
below) and other than by reason of disability or death or by the employee with
Good Reason (defined below), then the Company shall pay to the employee, upon
demand, his full base salary through the date of termination at the rate in
effect on the date of the Change in Control, plus severance compensation in an
amount equal to the Applicable Percentage (defined below) multiplied by the sum
of (a) his annual base salary at the above-specified rate, plus (b) the average
of the two most recent annual incentive compensation grants (if any) paid or
accrued for his benefit (prior to any deferrals) prior to the date on which the
Change in Control occurs, including compensation attributable to the value of
stock options or SARs (based on the Black-Scholes option pricing model) and
restricted stock granted during those two grant periods, plus (c) the average
annual matching contributions made by the Company on his behalf to the Company's
Stock Purchase Plan and 1993 Deferred Compensation Plan in respect of the two
fiscal years of the Company last ended prior to the fiscal year in which the
Change in Control occurs. The employee will also be entitled to a cash payment
equal to the sum of (A) the excess of the Change in Control Price (defined
below) over the option price for each share covered by outstanding unexercised
options (whether or not then exercisable) to purchase Willamette Common Stock
held by the employee on the date the Change in Control occurs (unless exercised
before the payment is made) plus (B) the product of the Change in Control Price
and the number of shares covered by outstanding restricted stock awards. Any
severance payments otherwise payable under the CIC Agreements will be reduced by
amounts payable under other Company plans or employment agreements providing for
severance benefits. Special payment provisions apply in the event of the
employee's death or disability.

The CIC Agreements further provide for the continuation of all employee
benefit plans and arrangements, with certain exceptions, until the earlier of
the expiration of the Benefit Term (defined below) or attaining the age of 65
following termination of employment after a Change in Control except by death,
by the Company for Cause or disability or by the employee other than for Good
Reason. All employees party to a CIC Agreement are also entitled to be
reimbursed for reasonable amounts incurred for outplacement services and for any
reasonable legal fees and expenses he may incur in enforcing his rights under
the CIC Agreement. The CIC Agreements also provide for reimbursement for any
excise tax imposed on such benefits plus any related federal, state, and local
income and excise taxes imposed on such reimbursement payments.

The CIC Agreements will continue in effect until December 31, 2002, and
will be extended for an additional year on each January 1 thereafter unless
either the Company or the employee gives 90 days' prior notice that the CIC
Agreement shall not be extended. In the event of a Change in Control while the
CIC Agreements are in effect, the CIC Agreements are automatically extended for
three calendar years beyond the calendar year in which the Change in Control
occurs. The CIC Agreements terminate upon termination of employment prior to a
Change in Control and will not extend beyond an employee's normal retirement
date under the Retirement Plan.

The total amount that may be payable to employees of the Company covered
by CIC Agreements if, within 36 months following a Change in Control, all of
such employees' employment is terminated without Cause or with Good Reason, is
$60 milllion plus additional payments that may be necessary to reimburse the
employees for any excise tax liabilities on such benefits and any related income
and excise taxes imposed on such reimbursement payments.

Complete definitions of Applicable Percentage, Cause, Change in Control,
Change in Control Price and Good Reason are included in the CIC Agreements.
Summaries of those definitions, which are necessarily incomplete, as well as the
definitions of Benefit Term and Senior Employees, are set forth below.

"Applicable Percentage" means (i) in the case of 25 key employees, 300
percent, (ii) in the case of the Senior Employees, 200 percent and (iii) in
the case of one additional employee, 100 percent, in each case reduced (if the
employee is age 62 or older as of the date of termination of employment) by 8.33
percent for each full month that his age exceeds 62 at that date.

"Benefit Term" means (i) in the case of 25 employees, 36 months, (ii) in
the case of the Senior Employees, 24 months and (iii) in the case of one
additional employee, 12 months.

"Cause" with respect to the termination of an employee's employment by the
Company means termination because, and only because, the employee committed an
act of fraud, embezzlement or theft constituting a felony, or an act
intentionally against the interest of the Company which causes it material harm,
or because of his repeated failure, after written notice, to perform his
responsibilities under the CIC Agreement.

"Change in Control" means, (a) subject to certain exceptions, the
acquisition by a person or group of beneficial ownership of 20 percent or more
of the combined voting power of the Company's outstanding voting securities, (b)
a change in the composition of the Board such that the directors at the date of
the CIC Agreement cease to constitute at least a majority of the Board, unless
the election or nomination of each new director was approved by two-thirds of
the directors then in office other than directors whose initial assumption of
office occurs as the result of an actual or threatened election contest or
solicitation of proxies other than on behalf of the Board of

PREC14A 29th Page of 43 TOC 1st Previous Next ↓Bottom Just 29th
Directors, (c) with certain exceptions, any reorganization, consolidation or
merger of the Company or any sale or other transfer of substantially all its
assets or (d) approval by the shareholders of the Company of a plan or proposal
for its liquidation or dissolution.

"Change in Control Price" means the greater of (a) the highest per share
sale price for the Willamette Common Stock as traded on the New York Stock
Exchange on the date of the Change in Control or (b) the total market value of
the highest amount of consideration to be received for a share of Willamette
Common Stock by any shareholder of the Company in connection with the Change in
Control.

"Good Reason" with respect to the termination by an employee of his
employment with the Company means (a) subject to certain exceptions, any change
in the employee's status or position with the Company which in his reasonable
judgment represents a demotion, (b) a reduction in the employee's base salary,
(c) the failure by the Company to continue in effect for the employee certain
benefit plans and policies or a material reduction in the employee's future
benefits thereunder, (d) the failure of the Company to credit the number of paid
vacation days to which the employee is entitled under the Company's normal
vacation policy, (e) the transfer of the employee to a different location, (f)
the failure of any successor to the Company to expressly assume the Company's
obligations under the CIC Agreement, (g) a purported termination by the Company
of the employee's employment which is not effected in accordance with the CIC
Agreement, (h) a refusal by the Company to continue to allow the employee to
engage in certain activities not related to the Company's business, or (i) (with
respect to 11 employees only, including the named executive officers, and Greg
W. Hawley, Executive Vice President and Chief Financial Officer and Catherine
A. Dunn, Vice President of Communications, two officers who may assist in
soliciting proxies from the Company's shareholders) the employee's voluntary
termination of employment during the 30-day period commencing with the first
anniversary of the Change in Control.

"Senior Employees" means 37 non-officer employees of the Company that
receive an annual salary equal to or greater than $144,000 and certain other
employees deemed advisable by the Board.

1995 Long-Term Incentive Compensation Plan

Upon a change in control, whether or not it is approved by the Board, all
options outstanding under the 1995 Plan will become exercisable in full.
However, the Awards Committee may, in its discretion (except with respect to
certain changes in control that have not been approved by the Board), condition
such acceleration of vesting on the option holder's agreement to receive a cash
payment (based on the amount being received by the Company's shareholders in
connection with the change in control) in exchange for cancellation of the
option holder's option. With respect to a change in control approved by the
Board, such acceleration of exercisability will only occur if it would not
jeopardize the availability of "pooling of interests" accounting treatment. If
an optionee's employment terminates for any reason within two years following a
change in control (other than on account of conduct which constitutes a felony),
the options will expire upon the earlier of three years after termination of
employment or the expiration of their original terms. In addition, upon a change
in control that has not been approved by the Board, each holder of an option
granted prior to December 21, 2000, may make a "cash exercise" of all or any
portion of his or her options. Upon a cash exercise, the option holder will be
entitled to receive an amount in cash equal to the excess of the fair market
value of a share of Willamette Common Stock on the date of exercise over the
exercise price per share multiplied by the number of options surrendered. A cash
exercise may be made only during a 45-day period beginning on the first day
following the date on which the Company has knowledge of an actual change in
control. For purposes of the 1995 Plan, a change in control is defined to
include (i) a change in composition of the Board following December 21, 2000,
such that the directors in office on that date, together with any additional
directors elected thereafter with the approval of two-thirds of the then
directors, cease to constitute at least a majority of the Board, (ii) a merger,
reorganization or sale of substantially all the assets of the Company, with
certain exceptions, (iii) the acquisition by a person or group (other than
certain affiliates of the Company) of 20 percent or more of the combined voting
power of the Company's outstanding securities or (iv) the approval by the
shareholders of a plan of liquidation or dissolution of the Company.

Employee Retention Plans

The Company maintains two employee retention plans, a Management Retention
Benefits Plan and a Broad-Based Retention Benefits Plan for Salaried Employees,
that provide enhanced change in control severance benefits to Willamette's
salaried employees other than officers and top management personnel. Under these
plans a covered employee would be provided severance protection, continuation of
medical benefits, and outplacement assistance if the employee's employment ends
(due to involuntary termination without "cause" or resignation for "good
reason," as those terms are defined in the plans) after a change in control of
Willamette. Severance benefits under the two new plans range from three weeks
pay per year of service (with a minimum of nine weeks) to six weeks pay per year
of service (with a maximum of 104 weeks).

Stock Purchase Plan

The 401(k) Plan provides that upon a change in control of the Company, all
participants' accounts under the 401(k) Plan become immediately and fully
vested.

Indemnification

Pursuant to the provisions of the Company's Restated Articles of
Incorporation and the provisions of indemnification agreements between the
Company and each of its directors and officers, the Company is obligated
(subject to certain conditions) to hold harmless and indemnify its directors and
officers, to the fullest extent authorized under the Oregon Business Corporation
Act, against all expenses (including attorneys' fees), judgments, fines and
amounts paid in settlements actually and reasonably incurred by such indemnified
person. In addition, as permitted by its Restated Articles of Incorporation, the
Company maintains director and officer liability insurance coverage for its
directors and officers. The premiums thereon, which aggregate $225,000 for a
twelve-month period, are paid by the Company.

In November 2000, two Willamette shareholders filed derivative actions in
the Circuit Court of the State of Oregon for Multnomah County against Willamette
and each of its directors. The two actions were consolidated by order of the
court in December 2000. In their amended complaint filed on January 4, 2001, the
plaintiffs asserted derivative claims against the Board for breach of fiduciary
duty, breach of control, waste and unjust enrichment stemming from the Board's
rejection of Weyerhaeuser's hostile offer. On January 25, 2001, the court
entered an order staying discovery until such time as the court determines that
the plaintiffs have stated a claim for relief. The plaintiffs have stated their
intention to file a second amended complaint. Willamette has paid a total of
$_________ as an advance of the Willamette directors' expenses in defending the
shareholder litigation through ________________,2001.

Under the provisions of the Company's Restated Articles of Incorporation,
no director of the Company shall have any personal liability to the Company or
its shareholders for monetary damages for conduct as a director, except that the
liability of a director for monetary damages is not eliminated or limited for
any breach of the director's duty of loyalty to the Company or its shareholders,
for acts or omissions not in good faith or that involve intentional misconduct
or a knowing violation of law, for any distributions that are unlawful under the
Oregon Business Corporation Act, for any transaction from which the director
derived an improper personal benefit, or for any act or omission that occurred
prior to April 21, 1988.

ANNUAL REPORT

The Company's Annual Report to Shareholders for the year ended December 31,
2000, which is not a part of this Proxy Statement, was previously distributed to
shareholders on March ____, 2001. A copy of the annual report will be provided
by first-class mail without charge to any shareholder, including any beneficial
owner, upon oral or written request. Requests should be directed to the
Secretary of the Company at the Company's address set forth herein or by phoning
(503) 227-5581.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Under Section 16 of the Exchange Act, holders of more than 10 percent of the
Willamette Common Stock and directors and certain officers of the Company are
required to file reports ("Section 16 Statements") of beneficial ownership of
Willamette Common Stock and changes in such ownership with the SEC and the New
York Stock Exchange. The Company is required to identify in its proxy statements
those persons who to the Company's knowledge were required to file Section 16
Statements and did not do so on a timely basis. Based solely on a review of
copies of Section 16 Statements furnished to the Company during and with respect
to its most recent fiscal year and on written representations from reporting
persons, the Company believes that each person who at any time during the most
recent fiscal year was a reporting person filed all required Section 16
Statements on a timely basis.

RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS

The firm of KPMG, independent public accountants, has audited the
accounts of the Company for a number of years and has been selected to do so for
2001. Representatives of KPMG are expected to

PREC14A 30th Page of 43 TOC 1st Previous Next ↓Bottom Just 30th
be present at the annual shareholders meeting with the opportunity to make a
statement if they desire to do so and to be available to respond to appropriate
questions.

Audit Fees

The aggregate fees billed by KPMG for professional services rendered for
the audit of the Company's annual financial statements for 2000 and their review
of the financial statements included in the Company's quarterly reports on Form
10-Q filed during 2000 were $506,699.

Financial Information Systems Design and Implementation Fees

During 2000, KPMG did not provide any professional services to the Company
with regard to financial information systems design and implementation.

All Other Fees

Fees billed for services provided to the Company by KPMG during 2000, other
than the services described above under "Audit Fees," were $68,294. The Audit
Committee has determined that the provision of these services to the Company is
compatible with maintaining KPMG's independence.

SHAREHOLDER PROPOSALS FOR ANNUAL MEETING IN 2002

Shareholder proposals intended to be presented at the next annual meeting
of shareholders of the Company must be received by the Company no later than
_____ and must contain the information required by the Company's Bylaws in order
to be included in the proxy statement and proxy card for such meeting.

Under the Company's Bylaws, notice of any other matter intended to be
presented by a shareholder for action at next year's annual meeting must be
addressed to the principal executive offices of Willamette Industries, Inc.,
1300 S.W. Fifth Avenue, Suite 3800, Portland, Oregon 97201, marked for the
attention of the Secretary, and must contain the information required by the
Bylaws. The notice must be received at the Company's principal executive offices
during the period from February 7, 2002 through March 11, 2002, unless the date
of the annual meeting is advanced by more than 20 days or delayed by more than
70 days from the anniversary date of this year's annual meeting, in which case
notice must be delivered not earlier than the 120th day prior to such annual
meeting and not later than the close of business on the later of the 90th day
prior to such annual meeting or the 10th day following the day on which public
announcement of the date of such meeting is first made.

A copy of the Company's Bylaws may be obtained by writing to the Secretary
of the Company at 1300 S.W. Fifth Avenue, Suite 3800, Portland, Oregon 97201 and
is filed with the SEC as an exhibit to the Schedule 14D-9 Amendment filed by the
Company on December 12, 2000.

PREC14A 31st Page of 43 TOC 1st Previous Next ↓Bottom Just 31st
PARTICIPANTS IN THE SOLICITATION

Under applicable regulations of the SEC, each member of the Board, certain
officers of Willamette and certain other persons may be deemed to be a
"participant" in Willamette's solicitations of proxies in connection with the
Annual Meeting. For information with respect to each participant in the
Company's solicitation of proxies in connection with the Annual Meeting please
refer to (i) the table of security ownership of directors and executive officers
under the heading "Holders of Willamette Common Stock", (ii) the discussion
under the heading "Termination of Employment and Change in Control Arrangements
and Related Matters" and (iii) Schedules I, II and III to this Proxy Statement.

GENERAL

In addition to the matters described above, there will be an address by the
Chairman and Chief Executive Officer at the Annual Meeting of Shareholders and a
general discussion period during which shareholders will have an opportunity to
ask questions about the business and operations of Willamette.

SOLICITATION OF PROXIES

Proxies may be solicited by mail, advertisement, telephone or other methods
and in person. Solicitations may be made by directors, officers, investor
relations personnel and other employees of the Company, none of whom will
receive additional compensation for such solicitations.

The Company has retained MacKenzie Partners, Inc. ("MacKenzie") to provide
solicitation and advisory services in connection with the proxy solicitation,
for which MacKenzie is to receive a fee estimated at $325,000, together with
reimbursement for its reasonable out-of-pocket expenses and for payments made to
brokers and other nominees for their expenses in forwarding soliciting material.
MacKenzie will distribute proxy materials to beneficial owners and solicit
proxies by personal interview, mail, telephone and telegram, and will request
brokerage houses and other custodians, nominees and fiduciaries to forward
soliciting material to the beneficial owners of Willamette Common Stock. The
Company has also agreed to indemnify MacKenzie against certain liabilities and
expenses. It is anticipated that MacKenzie will employ approximately 75 persons
to solicit shareholders for the Annual Meeting. MacKenzie is also acting to
assist the Company in connection with the Weyerhaeuser Offer, for which
MacKenzie will be paid customary compensation in addition to reimbursement for
reasonable out-of-pocket expenses.

Pursuant to a letter agreement dated September 4, 2000, Willamette retained
Goldman Sachs to render financial advisory services to the Company in connection
with the Weyerhaeuser Offer and certain related matters. Willamette has agreed
to pay Goldman Sachs a fee equal to 0.40% of the aggregate value of any
transaction in the event (i) at least 15% of the outstanding stock of Willamette
is acquired by a third party or (ii) all or substantially all of the assets of
Willamette are sold. If no transaction has been completed by September 1, 2001,
Willamette has agreed to pay Goldman Sachs a fee of $30,000,000 upon the
occurrence of certain triggering events. A triggering event has occurred, and
the first of five equal quarterly installments will be paid on September 1, 2001
if no transaction has been consummated as of that date. In addition, Willamette
has agreed to reimburse Goldman Sachs for its reasonable out-of-pocket expenses.

Costs incidental to these solicitations of proxies will be borne by the
Company and include expenditures for printing, postage, legal, accounting,
public relations, soliciting, advertising and related expenses and are expected
to be approximately $1,700,000 in addition to the fees of MacKenzie described
above (excluding the amount normally expended by the Company for the
solicitation of proxies at its annual meetings). Total costs incurred to date
for, in furtherance of, or in connection with these solicitations of proxies are
approximately $_______.

Certain information about the directors and executive officers of the
Company and certain employees and other representatives of the Company who may
also solicit proxies is set forth in the attached Schedule I. Schedule II sets
forth certain information relating to shares of Willamette Common Stock owned by
such parties and certain transactions between any of them and the Company.
Schedule III sets forth certain information with respect to Goldman Sachs.

All expenses of solicitation of proxies will be borne by Willamette.

PREC14A 32nd Page of 43 TOC 1st Previous Next ↓Bottom Just 32nd
By Order of the Board of Directors

/s/ G.W. Hawley

G. W. Hawley
Secretary

Portland, Oregon
______, 2001

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SCHEDULE I

INFORMATION CONCERNING THE DIRECTORS AND CERTAIN EXECUTIVE OFFICERS
AND EMPLOYEES OF THE COMPANY

The following table sets forth the name and present principal occupation or
employment (except with respect to directors, whose principal occupation is set
forth in the Proxy Statement), and the name, principal business and address of
any corporation or other organization in which such employment is carried on, of
(1) the directors of the Company and (2) certain executive officers and other
employees of the Company who may assist in soliciting proxies from shareholders
of the Company. Unless otherwise indicated, the principal business address of
each such person is 1300 S.W. Fifth Avenue, Suite 3800, Portland, Oregon 97201.
Directors are indicated with a single asterisk.

[Enlarge/Download Table]

NAME AND PRINCIPAL BUSINESS ADDRESS PRESENT OFFICE OR OTHER PRINCIPAL
OCCUPATION OR EMPLOYMENT
--------------------------------------------------------------------------------------------------

Winslow Buxton*......................................... Pentair, Inc.
Waters Edge Plaza
1500 Country Road B2 West
St. Paul, MN 55113
--------------------------------------------------------------------------------------------------
Gerard K. Drummond*.....................................

--------------------------------------------------------------------------------------------------
Kenneth W. Hergenhan*...................................

--------------------------------------------------------------------------------------------------
Duane C. McDougall*.....................................

--------------------------------------------------------------------------------------------------
G. Joseph Prendergast*..................................

--------------------------------------------------------------------------------------------------
Stuart J. Shelk, Jr*.................................... Ochoco Management, Inc.
P.O. Box 668
Prineville, OR 97754
--------------------------------------------------------------------------------------------------
Robert M. Smelick*..................................... Sterling Payot Company
222 Sutter Street, 8th Floor
San Francisco, CA 94108
--------------------------------------------------------------------------------------------------
William Swindells*.....................................

--------------------------------------------------------------------------------------------------
Michael G. Thorne*...................................... Port of Portland
121 N.W. Everett Street
Portland, OR 97201
--------------------------------------------------------------------------------------------------
Benjamin R. Whiteley*................................... Standard Insurance Company
1100 S.W. Sixth Avenue, 17th Floor
Portland, OR 97204
--------------------------------------------------------------------------------------------------

CERTAIN EXECUTIVE OFFICERS AND EMPLOYEES OF THE COMPANY

WHO MAY ALSO SOLICIT PROXIES

[Enlarge/Download Table]

--------------------------------------------------------------------------------------------------
Greg W. Hawley (age 40)................................. Mr. Hawley is Executive Vice President
and Chief Financial Officer of
Willamette.
--------------------------------------------------------------------------------------------------
Cathy Dunn (age 53)........................................ Ms. Dunn is Vice President of
Communications of Willamette.
-------------------------------------------------------------------------------------------------

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SCHEDULE II

INFORMATION REGARDING OWNERSHIP OF THE COMPANY'S
SECURITIES BY PARTICIPANTS

The number of shares of Willamette Common Stock held by directors is set
forth on pages ___ and ___ of this Proxy Statement. The number of shares of
Willamette Common Stock held by the remaining participants as of February 28,
2001 is set forth below.

[Enlarge/Download Table]

NAME OF BENEFICIAL OWNER SHARES OF WILLAMETTE COMMON STOCK BENEFICIALLY OWNED (1)
------------------------------------------------------------------------------------------------------------------

Greg W. Hawley 22,040(2)
------------------------------------------------------------------------------------------------------------------
Cathy Dunn 66,679 (2)(3)
------------------------------------------------------------------------------------------------------------------

---------------

(1) Shares and options are included in the table as "beneficially owned" if the
person named has or shares the right to vote or direct the voting of or the
right to dispose or direct the disposition of such shares or options.
(2) Includes shares subject to employee stock options exercisable within 60
days after February 28, 2001 under the Company's 1995 Plan and 1986 Plan as
follows: Mr. Hawley, 20,534 shares; and Ms. Dunn 19,810 shares.
(3) Includes 11,761 shares and 19,100 options as to which Mrs. Dunn shares
voting and dispositive power.

PURCHASES AND SALES OF SECURITIES

The following table sets forth information concerning all purchases and
sales of securities of the Company by the participants listed below during the
past two years.

[Enlarge/Download Table]

------------------------------------------------------------------------------------------------------------
NAME DATE OF NATURE OF NUMBER OF SHARES OF
TRANSACTION TRANSACTION WILLAMETTE COMMON STOCK
------------------------------------------------------------------------------------------------------------

Winslow H. Buxton August 9, 1999 Purchase 500
------------------------------------------------------------------------------------------------------------
May 30, 2000 Purchase 1,000
------------------------------------------------------------------------------------------------------------
Kenneth W. Hergenhan May 5, 2000 Purchase 300
------------------------------------------------------------------------------------------------------------
June 19, 2000 Purchase 300
------------------------------------------------------------------------------------------------------------
Stuart J. Shelk, Jr. April 18, 2000 Purchase 200
------------------------------------------------------------------------------------------------------------
April 18, 2000 Purchase 500
------------------------------------------------------------------------------------------------------------
April 18, 2000 Purchase 300
------------------------------------------------------------------------------------------------------------
May 30, 2000 Purchase 3,000
------------------------------------------------------------------------------------------------------------
June 27, 2000 Purchase 6,000
------------------------------------------------------------------------------------------------------------
June 27, 2000 Purchase 3,000
------------------------------------------------------------------------------------------------------------
June 27, 2000 Purchase 2,000
------------------------------------------------------------------------------------------------------------
June 29, 2000 Purchase 5,000
------------------------------------------------------------------------------------------------------------
June 29, 2000 Purchase 3,500
------------------------------------------------------------------------------------------------------------
William Swindells June 4, 1999 Sale 7,700
------------------------------------------------------------------------------------------------------------
July 23, 1999 Sale 2,000
------------------------------------------------------------------------------------------------------------
July 26, 1999 Sale 8,200
------------------------------------------------------------------------------------------------------------
August 17, 1999 Sale 13,300
------------------------------------------------------------------------------------------------------------
September 30, 1999 Sale 7,100
------------------------------------------------------------------------------------------------------------
December 17, 1999 Sale 7,700
------------------------------------------------------------------------------------------------------------
February 22, 2000 Sale 3,588
------------------------------------------------------------------------------------------------------------
April 6, 2000 Sale 10,800
------------------------------------------------------------------------------------------------------------
April 12, 2000 Sale 7,735

PREC14A 35th Page of 43 TOC 1st Previous Next ↓Bottom Just 35th
[Enlarge/Download Table]

--------------------------------------------------------------------------------------------------------

Michael G. Thorne June 8, 2000 Purchase 200
--------------------------------------------------------------------------------------------------------
June 27, 2000 Purchase 200
--------------------------------------------------------------------------------------------------------
August 24, 2000 Purchase 200
--------------------------------------------------------------------------------------------------------
August 30, 2000 Purchase 200
--------------------------------------------------------------------------------------------------------
Benjamin R. Whiteley June 19, 2000 Purchase 1,000
--------------------------------------------------------------------------------------------------------

William Swindells, Duane C. McDougall and Greg W. Hawley have agreed to
serve as the proxies on the Company's GREEN proxy card.

Other than as disclosed in this Schedule or in the Proxy Statement, none of
the Company, any of its directors, executive officers or the employees of the
Company named in Schedule I owns any securities of the Company or any subsidiary
of the Company, beneficially or of record, has purchased or sold any of such
securities within the past two years or is or was within the past year a party
to any contract, arrangement or understanding with any person with respect to
any such securities. Except as disclosed in this Schedule or in the Proxy
Statement, to the best knowledge of the Company, its directors and executive
officers or the employees of the Company named in Schedule I, none of their
associates beneficially owns, directly or indirectly, any securities of the
Company.

Other than as disclosed in this Schedule or in the Proxy Statement, to the
knowledge of the Company, none of the Company, any of its directors, executive
officers or the employees of the Company named in Schedule I has any substantial
interest, direct or indirect, by security holdings or otherwise, in any matter
to be acted upon at the Annual Meeting.

Other than as disclosed in this Schedule or in the Proxy Statement, to the
knowledge of the Company none of the Company, any of its directors, executive
officers or the employees of the Company named in Schedule I is, or has been
within the past year, a party to any contract, arrangement or understanding with
any person with respect to any securities of the Company, including, but not
limited to, joint ventures, loan or option arrangements, puts or calls,
guarantees against loss or guarantees of profit, division of losses or profits,
or the giving or withholding of proxies.

Other than as set forth in this Schedule or in the Proxy Statement, to the
knowledge of the Company, none of the Company, any of its directors, executive
officers or the employees of the Company named in Schedule I, or any of their
associates, has had or will have a direct or indirect material interest in any
transaction or series of similar transactions since the beginning of the
Company's last fiscal year or any currently proposed transactions, or series of
similar transactions, to which the Company or any of its subsidiaries was or is
to be a party in which the amount involved exceeds $60,000.

Other than as set forth in this Schedule or in the Proxy Statement, to the
knowledge of the Company, none of the Company, any of its directors, executive
officers or the employees of the Company named in Schedule I, or any of their
associates, has any arrangements or understandings with any person with respect
to any future employment by the Company or its affiliates or with respect to any
future transactions to which the Company or any of its affiliates will or may be
a party.

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SCHEDULE III

INFORMATION CONCERNING GOLDMAN, SACHS & CO.

In connection with the engagement of Goldman Sachs as financial advisor,
the Company anticipates that employees of Goldman Sachs may communicate in
person, by telephone or otherwise with certain institutions, brokers or other
persons who are shareholders for the purpose of assisting in the solicitation of
proxies. Although Goldman Sachs does not admit that it or any of its directors,
officers, employees or affiliates is a "participant," as defined in Schedule 14A
promulgated under the Securities Exchange Act of 1934, as amended, by the SEC,
or that Schedule 14A requires the disclosure of certain information concerning
them, Robert Pace (Managing Director), Ravi Sinha (Managing Director), Kirk
Pulley (Vice President), Kevin Guidotti (Vice President), Pauline An (Associate)
and Kevin Sofield (Associate), in each case of Goldman Sachs (collectively, the
"Financial Advisor Participants"), may assist the Company in the solicitation of
proxies for the annual meeting. The principal business address of Messrs. Pace,
Guidotti, and Sofield, and Ms. An is 555 California Street, Suite 4500, San
Francisco, CA 94101. The principal business address of Mr. Sinha is 85 Broad
Street, New York, NY 10004 and the principal business address of Mr. Pulley is
2121 Avenue of the Stars, Suite 2600, Los Angeles, CA 90067.

Goldman Sachs has provided financial advisory and investment banking
services to the Company from time to time for which they have received customary
compensation. In addition, Goldman Sachs has provided financial advisory and
investment banking services to Weyerhaeuser in the past for which it has
received customary compensation. Goldman Sachs engages in a full range of
investment banking, securities trading, market-making and brokerage services for
institutional and individual clients. In the ordinary course of its business,
Goldman Sachs may actively trade securities of the Company for its own account
and the account of its customers and, accordingly, may at any time hold a long
or short position in such securities. Goldman Sachs has advised the Company that
as of March 8, 2001, Goldman Sachs held a net long position of approximately
42,944 shares of Willamette Common Stock. Except as set forth above, to the
Company's knowledge, none of Goldman Sachs, or any of the Financial Advisor
Participants, has any interest, direct or indirect, by security holdings or
otherwise, in the Company.

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IMPORTANT

Your proxy is important. No matter how many shares of Willamette Common Stock
you own, please give the Company your proxy "FOR" the election of your Board's
nominees for director and "AGAINST" the Shareholder Proposals by signing, dating
and returning the Company's GREEN proxy card today in the postage prepaid
envelope provided.

DO NOT RETURN ANY GOLD PROXY CARDS

YOU MAY HAVE RECEIVED FROM WEYERHAEUSER.

If you have already submitted a proxy to Weyerhaeuser for the Annual Meeting,
you may change your vote to a vote "FOR" the election of your Board's nominees
and "AGAINST" the Shareholder Proposals by signing, dating and returning the
Company's GREEN proxy card, which must be dated after any proxy you may have
submitted to Weyerhaeuser. Only your last dated proxy for the Annual Meeting
will count at the meeting.

If any of your shares of Willamette Common Stock are held in the name of a
brokerage firm, bank, nominee or other institution, only it can vote such shares
and only upon receipt of your specific instructions. Please sign, date and
promptly mail the GREEN proxy card in the envelope provided by your broker.
Remember, your shares cannot be voted unless you return a signed and executed
proxy card to your broker.

If you have any questions or require any additional information or assistance,
please call our proxy solicitor, MacKenzie Partners, at either number set forth
below.

MACKENZIE PARTNERS, INC.
156 Fifth Avenue
New York, New York 10010
CALL (800) 322-2885 (TOLL FREE IN THE UNITED STATES)
OR (212) 929-5500 (COLLECT)

PREC14A 38th Page of 43 TOC 1st Previous Next ↓Bottom Just 38th
WILLAMETTE INDUSTRIES, INC.

PROXY SOLICITED ON BEHALF OF BOARD OF DIRECTORS
FOR ANNUAL MEETING ON JUNE 7, 2001

The undersigned hereby appoints William Swindells, Duane C. McDougall and
G.W. Hawley, and each of them, proxies with power of substitution, to represent
and vote the common stock of Willamette Industries, Inc. (the "Company"), which
the undersigned may be entitled to vote at the annual meeting of the Company's
shareholders on June 7, 2001, or at any adjournment thereof, with all powers the
undersigned would possess if personally present. The proxies, or if only one
proxy is present, then that one, shall have all the powers granted herein.

By signing on the reverse, the undersigned acknowledges receipt of the
Notice of Annual Meeting (to be held June 7, 2001), and accompanying proxy
statement, and revokes all prior proxies for said meeting.

(Continued, and to be marked, dated and signed, on the other side)

_________________________________________________
FOLD AND DETACH HERE

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[x] Please mark your vote as indicated in this example

This proxy when properly executed will be voted in accordance with the choices
specified, or, if no choice is specified, will be voted FOR Item 1 and AGAINST
Items 2 and 3. If any other business properly comes before the meeting, this
proxy will be voted thereon in the discretion of the proxies named herein.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEM 1.

1. ELECTION OF DIRECTORS: [ ] FOR [ ] WITHHELD [ ] FOR ALL EXCEPT:

Kenneth W. Hergenhan, Robert M. Smelick, Duane C. McDougall. (If you do not
wish your shares to be voted "FOR" a particular nominee or nominees, mark the
"For All Except" box and strike a line through the nominee's name(s). Your
shares will be voted for the remaining nominee(s).)

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" ITEMS 2 AND 3.

2. The Board Declassification Proposal

[ ] FOR [ ] AGAINST [ ] ABSTAIN

3. The Compensation Committee Proposal

[ ] FOR [ ] AGAINST [ ] ABSTAIN

Date______________________, 2001 Signature(s)__________________________________

Title or authority ___________________________

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

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Annex A

WHY THE WEYERHAEUSER OFFER IS INADEQUATE

FOR THE REASONS DESCRIBED BELOW, THE BOARD UNANIMOUSLY CONCLUDED THAT
THE WEYERHAEUSER OFFER IS INADEQUATE AND NOT IN THE BEST INTERESTS OF THE
COMPANY, ITS SHAREHOLDERS AND OTHER CONSTITUENCIES. ACCORDINGLY, THE BOARD
UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE WILLAMETTE NOMINEES FOR
DIRECTOR./1/

In reaching its conclusion with respect to the Weyerhaeuser Offer, the
Board considered a number of factors, including the following:

. The Board's belief, based on the factors further described below, that the
Offer Price is inadequate and that the Weyerhaeuser Offer does not reflect
the long-term value inherent in the Company;

. The Board's familiarity with the business, financial condition, prospects
and current business strategy of the Company, the nature of the industries
in which the Company operates and the Company's strong position in these
industries;

. The Board's belief that the Offer Price does not reflect the significant
value-enhancing initiatives taken by the Company over the last few years
aimed at cost reductions, growing market opportunities and, most
importantly, increasing earnings per share growth; and management's belief
that, based on the current pricing environment and the approximate $950
million cost (excluding the Cavenham acquisition) of implementing these
initiatives, if all of the value-enhancing initiatives were complete, they
would add in excess of $340 million to annual earnings before interest,
taxes, depreciation and amortization;

. The opinion of the Company's management as to the Company's prospects for
future growth and profitability, based on its knowledge of the Company's
businesses, its views as to the Company's long-term strategic plan, the
various value-enhancing opportunities available to the Company in the
future and recent trends and developments in the industry;

. The disruptive effect consummation of the Weyerhaeuser Offer
would have on the Company's employees, suppliers and customers and the
communities and geographical areas where the Company operates;

. The fact that over the last ten years, the Company's earnings per share
growth has been more than five times the Industry Composite and nearly
three times a large cap composite comprised of International Paper,
Georgia-Pacific and Weyerhaeuser;

. The fact that over the last two years ending November 10, 2000 (the last
trading day prior to the public announcement of Weyerhaeuser's $48 per
share "bear hug" proposal dated November 6, 2000 (the "November 6
Proposal")), the performance of the Willamette Common Stock has exceeded
both the Standard & Poors ("S&P") Paper and Forest Products Index and the
S&P 500;

. The fact that the stock price performance of the Willamette Common Stock
has been double that of the S&P Paper and Forest Products Index over the
period 1991 to 2000 (through November 10, 2000), and has almost matched the
S&P 500 performance over that period (despite a very difficult decade for
the industry and an extraordinarily good performance for the S&P 500);

. The fact that, prior to the public announcement of the November 6 Proposal,
the Willamette Common Stock traded at a 52-week high of $50.50 in January
2000 and an all-time high of $52.13 in July 1999;

. The Board's belief, in light of the terms of the Weyerhaeuser Offer, the
Company's inherent earnings power and long-term strategic plan, that the
interests of the Company, its shareholders and other constituencies would
best be served by the Company continuing as an independent entity;

. The Board's view that the Weyerhaeuser Offer is an opportunistic attempt to
acquire one of the industry's leading franchises when stock prices are
depressed;

. The fact that the Company is not for sale, but that if it were for sale,
the Board noted the following factors that indicated that Weyerhaeuser or
another party should be willing to pay significantly in excess of the Offer
Price:

. The Board's belief that based on the $300 million in synergies that
Weyerhaeuser has publicly projected (and the $330 to $645 million
synergy range provided by Weyerhaeuser to the Company in a private
meeting in September 1998) and the analysts' consensus earnings, cash
flow estimates and earnings accretion for Weyerhaeuser and the Company,
Weyerhaeuser could pay significantly in excess of the Offer Price;

. The fact that premiums and multiples paid in recent comparable industry
transactions exceed the premiums and multiples implied by the
Weyerhaeuser Offer; for instance, Stora Enso paid a 69% premium
(relative to the day prior to the announcement) for Consolidated
Papers, a 34% premium to Consolidated Papers' 52-week high, and a 28%
premium to its all time high while the Weyerhaeuser Offer values the
Willamette Common Stock at a 38% premium relative to the day prior to
the public announcement of the November 6 Proposal, a 1% discount to
its 52-week high and a 6% discount to its all time high; and

. The Board's belief that, based on the increased stock prices of
comparable companies in the industry since November 10, 2000, the
premium implied by the Weyerhaeuser Offer (relative to the day prior to
the public announcement of the November 6 Proposal) is significantly
lower than 38%;

. The significant uncertainties and contingencies associated with the
Weyerhaeuser Offer, including conditions which are (a) in the sole
discretion of Weyerhaeuser, (b) subject to external events not directly
related to the Company or (c) not within the control of the Company or
Weyerhaeuser;

. The opinion of Goldman Sachs, financial advisor to the Company, after
reviewing with the Board many of the factors referred to herein and other
financial criteria used in assessing an offer, that, as of December 11,
2000, the Offer Price is inadequate, from a financial point of view, to the
Company's shareholders (other than Weyerhaeuser and its affiliates); and

. The Board's and management's commitment to protecting the best interests of
the shareholders of the Company and enhancing the long-term value of the
Company.

In light of the above factors, the Board unanimously concluded that the
Weyerhaeuser Offer is inadequate and not in the best interests of the Company,
its shareholders and other constituencies. ACCORDINGLY, THE BOARD UNANIMOUSLY
RECOMMENDS A VOTE "FOR" THE WILLAMETTE NOMINEES FOR DIRECTOR.

The foregoing discussion of the information and factors considered by the
Board is not intended to be exhaustive but includes all material factors
considered by the Board. In reaching its determination to reject the
Weyerhaeuser Offer, the Board did not assign any relative or specific weights to
the foregoing factors, and individual directors may have given differing weights
to different factors. Throughout its deliberations, the Board received the
advice of its legal and financial advisors.

/1/ These factors were included in the Company's Solicitation/Recommendation
Statement on Schedule 14D-9 mailed to shareholders on December 12, 2000.

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Annex B

WILLAMETTE INDUSTRIES, INC.
AUDIT COMMITTEE CHARTER

PRIMARY PURPOSE: The primary function of the Audit Committee is to
---------------
assist the Board of Directors in the discharge of its fiduciary obligations to
the Company's shareholders relating to the quality and integrity of the
Company's financial statements, its accounting and reporting practices, and the
independence and performance of the Company's outside auditor and performance of
its internal accounting staff. The Board, pursuant to the Audit Committee's
recommendation, has the ultimate authority and responsibility to select,
evaluate and, where appropriate, replace the Company's outside auditor.

COMPOSITION: The members of the Audit Committee shall be appointed by
-----------
resolution adopted by a majority of the full Board. The Audit Committee shall
have three or more members, each of whom is a director and meets the
independence and experience requirements specified in the corporate governance
listing standards of the New York Stock Exchange. The Board shall designate one
of the members of the Audit Committee to serve as chairman.

POWERS: The Audit Committee shall have the authority to retain, at
------
the Company's expense, outside legal, accounting or other consultants or experts
to advise the Company, which may or may not provide regular services to the
Company. The Audit Committee may request any officer or employee of the Company
or the Company's outside counsel or auditor to attend a committee meeting or to
meet with any members of, or consultants to, the Audit Committee.

MEETINGS: The Audit Committee shall meet on a regular basis as needed
--------
to perform its duties. Special meetings will be called as circumstances
require. Written minutes will be kept for all regular and special meetings. In
addition, the chairman of the committee will review, with management and the
outside auditor, the company's quarterly financial results prior to the release
of earnings and filing of Form 10-Q. Attendance by other committee members is
optional at these reviews.

REPORTS TO THE BOARD: The Audit Committee shall report its activities
--------------------
to the full Board on a regular basis.

DUTIES: The Audit Committee shall perform the following duties:
------

1. Review and reassess the adequacy of this charter annually and
recommend any proposed changes to the Board for approval.

2. Prepare a report of the committee in compliance with the SEC's
proxy rules for inclusion in the Company's proxy statement for its annual
shareholders meeting each year.

3. Annually recommend to the Board the appointment of the outside
auditor to perform the audit of the Company's annual financial statements,
review of interim financial statements, and other services for which it is
engaged, which firm is ultimately accountable to the Audit Committee and the
Board. As part of this review and recommendation process, the Audit Committee
should consider the following:

(a) Opinions on the performance of the outside auditor expressed by
appropriate Company management personnel.

(b) The proposed audit fee and explanation of fee changes.

(c) The professional competency of the firm through inquiry about its most
recent peer review and any significant recent litigation or
disciplinary actions brought by the SEC or other parties.

4. Ensure that the outside auditor submits, on a periodic basis to the
Audit Committee, a formal written statement delineating all relationships
between the auditor and the Company, discuss with the outside

PREC14A 42nd Page of 43 TOC 1st Previous Next ↓Bottom Just 42nd
auditor pursuant to Independence Standards Board Standard No. 1 any disclosed
relationships or services that may adversely affect the auditor's objectivity
and independence and, if deemed advisable by the Audit Committee, take, or
recommend that the Board take, appropriate action to satisfy itself of the
auditor's independence.

5. Ensure that the outside auditor submits a formal written statement
detailing total fees billed for each of the following categories of services by
February 25 each year:

(a) Audit of the Company's annual financial statements for the most recent
fiscal year and reviews of the financial statements included in the
Company's reports on Form 10-Q for that fiscal year.

(b) Information technology consulting services during the most recent
fiscal year separately identifying fees for such services relating to
financial information systems design and implementation.

6. Meet with management, the outside auditor and the chief internal
auditor prior to commencement of the annual audit to review the planning and
staffing of the audit, including the degree of coordination between the internal
and external plans and how the planned scope of the audit addresses the
Company's particular issues.

7. Review and recommend to the Board that the Company's audited
financial statements, including footnotes, be included in the Company's annual
report on Form 10-K for the applicable fiscal year. In connection with this
review, the Audit Committee shall discuss the financial statements with
management and discuss with the outside auditor the matters required to be
discussed by Statement on Auditing Standards (SAS) No. 61 relating to the
conduct of the audit. The Audit Committee shall inquire of management and the
outside auditor regarding the effects of significant changes or proposed changes
in accounting standards, policies or practices and whether any significant
financial reporting issues were discussed during the audit and, if so, how they
were resolved.

8. Review with the outside auditor any problems the auditor may have
encountered in the course of the audit and any management letter provided by the
auditor and the Company's response to that letter.

9. Review a draft of the financial section of the annual report to
shareholders and management's discussion and analysis of results of operations
for completeness and consistency with the financial statements and other
portions of the annual report to shareholders.

10. Review the adequacy of the Company's internal financial and
operational controls with both the internal accounting staff and the outside
auditor. Obtain copies of significant reports to management by the internal
accounting staff and management's responses. Obtain from the outside auditor
assurance that no information requiring disclosure under Section 10A of the
Securities Exchange Act of 1934 has been discovered and a written summary of any
significant weaknesses in or breaches of internal controls discovered during the
audit.

11. Meet with management periodically to review the Company's major
financial risk exposures and the steps management has taken to monitor and
control such exposures, including significant tax items that are or may be in
dispute and the status of tax reserves and interest accruals, as well as any
significant issues raised by outside counsel concerning litigation,
contingencies and other claims and how such issues may affect the Company's
financial statements.

12. Meet at least annually in separate executive sessions with the
chief financial officer, the chief internal auditor, and the outside auditor.
Discuss with the outside auditor the quality of the Company's financial and
accounting personnel and internal audit staff and submit recommendations to the
Board as to any replacements within the Board's purview as the Audit Committee
deems appropriate.

Revised February 8, 2001.

PREC14A Last Page of 43 TOC 1st Previous Next ↓Bottom Just 43rd
About This Paper

This notice and proxy statement is printed on Willamette's 40 lb.
Clearfield Opaque/(R)/ Recycled, Vellum Finish.

Clearfield Opaque/(R)/ is a multi-purpose product that is ideal for a
variety of end uses, including financial documents, catalogs, inserts, manuals,
brochures and books.

Its basis weight range is 27 - 70 lb., in both smooth and vellum finishes.
Clearfield Opaque/(R)/ features 87 brightness and an attractive blue-white shade
that has a consistent appearance in both fluorescent and natural light. It is
known for its outstanding print surface and excellent performance in the
bindery.

Please contact us for samples or additional information:

Sample Department (800) 446-3847
sample@wii.com
Printing & Publishing Sales Service (800) 458-4640

[LOGO OF WILLAMETTE INDUSTRIES, INC.]

Willamette Industries, Inc.

[RECYCLE LOGO]

This notice and proxy statement is printed on 40# Clearfield
Opaque/(R)/ Recycled, Vellum Finish produced by
|Willamette at its Johnsonburg, Pennsylvania, mill.

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Dates Referenced Herein and Documents Incorporated by Reference

		Referenced-On Page
This ‘PREC14A’ Filing	Date	First	Last	Other Filings

	12/31/02	28
	3/11/02	30
	2/7/02	30
	9/1/01	31
	7/13/01	11
	6/7/01	2	38	DFAN14A, SC 14D9/A, SC TO-T/A
	4/16/01	4	10	DEFA14A, SC 14D9/A
Filed on:	3/9/01	1		DEFA14A, SC 14D9/A
	3/8/01	36		DEFA14A, DFAN14A, SC 14D9/A, SC TO-T/A
	2/28/01	8	34	DFAN14A, SC TO-T/A
	2/8/01	20	42	SC TO-T/A
	1/25/01	29
	1/4/01	29		DFAN14A, SC TO-T/A
	12/31/00	11	29	10-K
	12/29/00	21	23	SC 14D9/A, SC TO-T/A
	12/21/00	29		DFAN14A, PREC14A, SC TO-T/A
	12/12/00	30	40	SC 14D9/A
	12/11/00	6	40
	11/10/00	2	40
	11/6/00	40
	9/4/00	31
	8/30/00	35
	8/24/00	35
	6/29/00	34
	6/27/00	34	35	11-K
	6/19/00	34	35
	6/8/00	35
	5/30/00	34
	5/5/00	34
	5/1/00	25
	4/18/00	34		DEF 14A
	4/12/00	34
	4/6/00	34
	2/22/00	34
	1/1/00	27
	12/17/99	34
	9/30/99	34		10-Q
	8/17/99	34
	8/9/99	34
	7/26/99	34
	7/23/99	34
	6/4/99	34
	4/21/98	22		DEF 14A
	12/31/95	26		10-K
				List all Filings

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Filing Submission 0000950130-01-001239 – Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)

Willamette Industries Inc – ‘PREC14A’ on 3/9/01 re: Willamette Industries Inc

On: Friday, 3/9/01, at 5:25pm ET · Accession #: 950130-1-1239 · File #: 1-12545

Preliminary Proxy Solicitation Material — Contested Solicitation — Schedule 14AFiling Table of Contents

Document Table of Contents

Dates Referenced Herein and Documents Incorporated by Reference

Preliminary Proxy Solicitation Material — Contested Solicitation — Schedule 14A
Filing Table of Contents