-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MAqeVX0wiePtHeMzDz3WKsfdJrYPnoECVqCtWpmr1Dys3bD5CbHi7fdXFESQZe/A 9dqeFom48EL1609NLZkNyw== 0000950130-99-006796.txt : 19991201 0000950130-99-006796.hdr.sgml : 19991201 ACCESSION NUMBER: 0000950130-99-006796 CONFORMED SUBMISSION TYPE: SC 14D1 PUBLIC DOCUMENT COUNT: 11 FILED AS OF DATE: 19991130 GROUP MEMBERS: WEYERHAEUSER CO GROUP MEMBERS: WTJ, INC. SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: TJ INTERNATIONAL INC CENTRAL INDEX KEY: 0000099974 STANDARD INDUSTRIAL CLASSIFICATION: MILLWOOD, VENEER, PLYWOOD & STRUCTURAL WOOD MEMBERS [2430] IRS NUMBER: 820250992 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 14D1 SEC ACT: SEC FILE NUMBER: 005-08226 FILM NUMBER: 99766777 BUSINESS ADDRESS: STREET 1: 200E MALLARD DRIVE CITY: BOISE STATE: ID ZIP: 83706 BUSINESS PHONE: 2083643300 MAIL ADDRESS: STREET 1: 200E MALLARD DRIVE CITY: BOISE STATE: ID ZIP: 83706 FORMER COMPANY: FORMER CONFORMED NAME: TRUS JOIST CORP DATE OF NAME CHANGE: 19880927 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: WEYERHAEUSER CO CENTRAL INDEX KEY: 0000106535 STANDARD INDUSTRIAL CLASSIFICATION: LUMBER & WOOD PRODUCTS (NO FURNITURE) [2400] IRS NUMBER: 910470860 STATE OF INCORPORATION: WA FISCAL YEAR END: 1228 FILING VALUES: FORM TYPE: SC 14D1 BUSINESS ADDRESS: STREET 1: 33663 WEYERHAEUSER WAY SOUTH CITY: FEDERAL WAY STATE: WA ZIP: 98003 BUSINESS PHONE: 2539242345 MAIL ADDRESS: STREET 1: 33663 WEYERHAEUSER WAY SOUTH CITY: FEDERAL WAY STATE: WA ZIP: 98003 SC 14D1 1 SCHEDULE 14D-1 - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------------- SCHEDULE 14D-1 Tender Offer Statement Pursuant to Section 14(d)(1) of the Securities Exchange Act of 1934 ---------------- TJ INTERNATIONAL, INC. (Name of Subject Company) WTJ, INC. WEYERHAEUSER COMPANY (Bidders) ---------------- Common Stock, Par Value $1.00 Per Share (including the associated Preferred Share Purchase Rights) (Title of Class of Securities) ---------------- 872534102 (CUSIP Number of Class of Securities) ---------------- Robert A. Dowdy Vice President & General Counsel Weyerhaeuser Company 33663 Weyerhaeuser Way South Federal Way, WA 98003 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications on Behalf of Bidders) ---------------- Copy To: Richard Hall, Esq. Cravath, Swaine & Moore Worldwide Plaza 825 Eighth Avenue New York, NY 10019 (212) 474-1000 ---------------- CALCULATION OF FILING FEE - -------------------------------------------------------------------------------- - --------------------------------------------------------------------------------
Amount of Transaction Valuation* Filing Fee - -------------------------------------------------------------------------------- $861,416,892....................................................... $172,283.38 - -------------------------------------------------------------------------------- - --------------------------------------------------------------------------------
* For purposes of calculating amount of filing fee only. The amount assumes the purchase of 20,509,926 shares of common stock of the subject company, par value $1.00 per share (the "Shares"), at a price per Share of $42.00 in cash. Such number of Shares represents all the Shares outstanding as of November 17, 1999, plus the number of Shares issuable upon the exercise of all outstanding options or other rights to acquire Shares, including the conversion of outstanding ESOP Convertible Preferred Stock into Shares. [_]Check box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. Amount Previously Paid: None Filing Party: N/A Form or Registration No.: N/A Date Filed: N/A - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- SCHEDULE 14D-1 CUSIP No. 872534102 Name of Reporting Person S.S. or I.R.S. Identification No. of Above Person 1. Weyerhaeuser Company - -------------------------------------------------------------------------------- I.R.S. No. 91-0470860 Check the Appropriate Box if a Member of a Group (a) [_] 2. (b) [_] - -------------------------------------------------------------------------------- 3. SEC Use Only - -------------------------------------------------------------------------------- Source of Funds WC 4. - -------------------------------------------------------------------------------- 5. Check Box if Disclosure of Legal Proceedings is Required Pursuant to Items 2(e) or 2(f) [_] - -------------------------------------------------------------------------------- Citizenship or Place of Organization Washington 6. - -------------------------------------------------------------------------------- Aggregate Amount Beneficially Owned by Each Reporting Person 7. 0 - -------------------------------------------------------------------------------- 8. Check Box if the Aggregate Amount in Row (7) Excludes Certain Shares [_] - -------------------------------------------------------------------------------- Percent of Class Represented by Amount in Row (7) 0% 9. - -------------------------------------------------------------------------------- Type of Reporting Person CO 10. - -------------------------------------------------------------------------------- 2 SCHEDULE 14D-1 CUSIP No. 872534102 Name of Reporting Person S.S. or I.R.S. Identification No. of Above Person 1. WTJ, Inc. - -------------------------------------------------------------------------------- I.R.S. No. Application pending Check the Appropriate Box if a Member of a Group (a) [_] 2. (b) [_] - -------------------------------------------------------------------------------- 3. SEC Use Only - -------------------------------------------------------------------------------- Sources of Funds AF 4. - -------------------------------------------------------------------------------- 5. Check Box if Disclosure of Legal Proceedings is Required Pursuant to Items 2(e) or 2(f) [_] - -------------------------------------------------------------------------------- Citizenship or Place of Organization Delaware 6. - -------------------------------------------------------------------------------- Aggregate Amount Beneficially Owned by Each Reporting Person 7. 0 - -------------------------------------------------------------------------------- 8. Check Box if the Aggregate Amount in Row (7) Excludes Certain Shares [_] - -------------------------------------------------------------------------------- Percent of Class Represented by Amount in Row (7) 0% 9. - -------------------------------------------------------------------------------- Type of Reporting Person CO 10. - -------------------------------------------------------------------------------- 3 Item 1. Security and Subject Company. (a) The name of the subject company is TJ International, Inc., a Delaware corporation (the "Company"), which has its principal executive offices at 200 East Mallard Drive, Boise, Idaho 83706. (b) This Schedule 14D-1 relates to the offer by WTJ, Inc. (the "Purchaser") to purchase all the outstanding shares of common stock of the Company (the "Common Shares") at a price of $42.00 per Common Share, net to the seller in cash (the "Offer Price"), upon the terms and subject to the conditions set forth in the Offer to Purchase and in the related Letter of Transmittal (which, together with any amendments or supplements thereto, collectively constitute the "Offer"), copies of which are filed as Exhibits (a)(1) and (a)(2) hereto, respectively. Information concerning the number of outstanding Common Shares is set forth in "Introduction" of the Offer to Purchase and is incorporated herein by reference. The Offer is also for all of the Company's outstanding shares of ESOP Convertible Preferred Stock (which shares are convertible into Common Shares on a one-for-one basis). The ESOP Convertible Preferred Stock is not registered under the Securities Exchange Act of 1934, as amended. (c) Information concerning the principal market in which the Common Shares are traded and the high and low sales prices of Shares for each quarterly period during the past two years is set forth in Section 6 ("Price Range of the Shares; Dividends on the Shares") of the Offer to Purchase and is incorporated herein by reference. Item 2. Identity and Background. (a)-(d) and (g) This Schedule 14D-1 is being filed by the Purchaser, a Delaware corporation, and Weyerhaeuser Company ("Weyerhaeuser"), a Washington corporation. The Purchaser is a wholly owned subsidiary of Weyerhaeuser. Information concerning the principal business and the address of the principal offices of the Purchaser and Weyerhaeuser is set forth in Section 9 ("Certain Information Concerning the Purchaser and Weyerhaeuser") of the Offer to Purchase and is incorporated herein by reference. Information regarding the names, business addresses, principal occupation and occupations, positions, offices or employments during the last five years as well as the other information required by Item 2 with respect to the directors and executive officers of the Purchaser and Weyerhaeuser is set forth in Schedule I to the Offer to Purchase and is incorporated herein by reference. (e) and (f) The information set forth in Section 9 ("Certain Information Concerning the Purchaser and Weyerhaeuser") and Section 15 ("Certain Legal Matters") of the Offer to Purchase is incorporated herein by reference. Item 3. Past Contacts, Transactions or Negotiations with the Subject Company. (a) and (b) The information set forth in Section 11 ("Contacts and Transactions with the Company; Background of the Offer") and Section 12 ("Purpose of the Offer; the Merger Agreement; the Partnership Agreement; Certain Other Agreements") of the Offer to Purchase is incorporated herein by reference. Item 4. Source and Amount of Funds or Other Consideration. (a) and (b) The information set forth in Section 10 ("Source and Amount of Funds") of the Offer to Purchase is incorporated herein by reference. Item 5. Purpose of the Tender Offer and Plans or Proposals of the Bidder. (a)-(e) The information set forth in Section 12 ("Purpose of the Offer; the Merger Agreement; the Partnership Agreement; Certain Other Agreements") of the Offer to Purchase is incorporated herein by reference. (f) and (g) The information set forth in Section 7 ("Effect of the Offer on the Market for Common Shares; Share Quotation; Exchange Act Registration; Margin Regulations") of the Offer to Purchase is incorporated herein by reference. 4 Item 6. Interest in Securities of the Subject Company. (a) and (b) The information set forth in "Introduction", Section 9 ("Certain Information Concerning the Purchaser and Weyerhaeuser") and Section 12 ("Purpose of the Offer; the Merger Agreement; the Partnership Agreement; Certain Other Agreements") of the Offer to Purchase is incorporated herein by reference. Item 7. Contracts, Arrangements, Understandings or Relationships with Respect to the Subject Company's Securities. The information set forth in "Introduction", Section 9 ("Certain Information Concerning the Purchaser and Weyerhaeuser"), Section 11 ("Contacts and Transactions with the Company; Background of the Offer") and Section 12 ("Purpose of the Offer; the Merger Agreement; the Partnership Agreement; Certain Other Agreements") of the Offer to Purchase is incorporated herein by reference. Item 8. Persons Retained, Employed or to Be Compensated. The information set forth in "Introduction" and in Section 16 ("Fees and Expenses") of the Offer to Purchase is incorporated herein by reference. Item 9. Financial Statements of Certain Bidders. Not applicable. Item 10. Additional Information. (a) Not applicable. (b) and (c) The information set forth in Section 15 ("Certain Legal Matters") of the Offer to Purchase is incorporated herein by reference. (d) The information set forth in Section 7 ("Effect of the Offer on the Market for the Common Shares; Share Quotation; Exchange Act Registration; Margin Regulations") of the Offer to Purchase is incorporated herein by reference. (e) Not applicable. (f) The information set forth in the Offer to Purchase, the Letter of Transmittal, the Agreement and Plan of Merger dated as of November 23, 1999, among the Purchaser, Weyerhaeuser and the Company, copies of which are filed as Exhibits (a)(1), (a)(2) and (c)(1) hereto, respectively, is incorporated herein by reference. Item 11. Materials to be Filed as Exhibits. (a)(1) Offer to Purchase. (a)(2) Letter of Transmittal. (a)(3) Notice of Guaranteed Delivery. (a)(4) Letter to Brokers, Dealers, Banks, Trust Companies and Other Nominees. (a)(5) Letter to Clients for use by Brokers, Dealers, Banks, Trust Companies and Other Nominees. (a)(6) Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9. (a)(7) Form of Summary Advertisement dated November 30, 1999. 5 (a)(8) Letter to Participants in the Company's Investment Plan.* (a)(9) Text of Press Release dated November 23, 1999, issued by the Company and Weyerhaeuser. (c)(1) Agreement and Plan of Merger dated as of November 23, 1999, among Weyerhaeuser, the Purchaser and the Company. (c)(2) Confidentiality Agreement dated as of November 16, 1999, between Weyerhaeuser and the Company. (d) None. (e) Not applicable. (f) None. - -------- * To be filed by amendment. SIGNATURE After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: November 30, 1999 WTJ, Inc. /s/ Robert A. Dowdy By___________________________________ Name: Robert A. Dowdy Title: Vice President Weyerhaeuser Company /s/ William R. Corbin By___________________________________ Name: William R. Corbin Title: Executive V.P. Wood Products 7 EXHIBIT INDEX
Exhibit Page Number Exhibit Name Number ------- ------------ ------ (a)(1) Offer to Purchase............................................. (a)(2) Letter of Transmittal......................................... (a)(3) Notice of Guaranteed Delivery................................. (a)(4) Letter to Brokers, Dealers, Banks, Trust Companies and Other Nominees...................................................... (a)(5) Letter to Clients for use by Brokers, Dealers, Banks, Trust Companies and Other Nominees.................................. (a)(6) Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9........................................ (a)(7) Form of Summary Advertisement dated November 30, 1999......... (a)(8) Letter to Participants in the Company's Investment Plan*...... (a)(9) Text of Press Release dated November 23, 1999, issued by the Company and Weyerhaeuser...................................... (c)(1) Agreement and Plan of Merger dated as of November 23, 1998, among Weyerhaeuser, the Purchaser and the Company............. (c)(2) Confidentiality Agreement dated as of November 16, 1999, between Weyerhaeuser and the Company..........................
- -------- * To be filed by amendment. EX-99.(A)(1) 2 OFFER TO PURCHASE Exhibit (a)(1) Offer to Purchase for Cash All Outstanding Shares of Common Stock (including the associated Preferred Share Purchase Rights) and All Outstanding Shares of ESOP Convertible Preferred Stock of TJ International, Inc. at $42.00 Net Per Share by WTJ, Inc., a wholly owned subsidiary of Weyerhaeuser Company --------------- THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 8:00 P.M., NEW YORK CITY TIME, ON JANUARY 5, 2000 UNLESS THE OFFER IS EXTENDED. --------------- THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER, THAT NUMBER OF SHARES THAT WOULD REPRESENT AT LEAST 50.1% OF ALL OUTSTANDING COMMON SHARES (AS DEFINED HEREIN) ON A FULLY DILUTED BASIS AND (2) ANY WAITING PERIOD UNDER THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED, APPLICABLE TO THE PURCHASE OF SHARES PURSUANT TO THE OFFER SHALL HAVE EXPIRED OR BEEN TERMINATED. --------------- THE BOARD OF DIRECTORS OF TJ INTERNATIONAL, INC. (THE "COMPANY") UNANIMOUSLY (1) APPROVED THE MERGER AGREEMENT, THE OFFER AND THE MERGER (EACH AS DEFINED HEREIN), (2) DETERMINED THAT THE TRANSACTIONS CONTEMPLATED BY THE MERGER AGREEMENT, INCLUDING EACH OF THE OFFER AND THE MERGER, ARE FAIR TO AND IN THE BEST INTERESTS OF THE COMPANY AND ITS STOCKHOLDERS AND (3) RECOMMENDS THAT THE STOCKHOLDERS OF THE COMPANY ACCEPT THE OFFER AND TENDER THEIR SHARES (AS DEFINED HEREIN) PURSUANT TO THE OFFER. --------------- IMPORTANT Any stockholder desiring to tender all or any portion of such stockholder's Common Shares should either (1) complete and sign the Letter of Transmittal (or a facsimile thereof) in accordance with the instructions in the Letter of Transmittal, have such stockholder's signature thereon guaranteed if required by Instruction 1 to the Letter of Transmittal, mail or deliver the Letter of Transmittal (or such facsimile), and any other required documents to the Depositary (as defined herein) and deliver the certificates for such Common Shares to the Depositary along with the Letter of Transmittal (or such facsimile) or, in the case of a book-entry transfer effected pursuant to the procedures described in Section 2, deliver an Agent's Message (as defined herein) and any other required documents to the Depositary and deliver such Common Shares pursuant to the procedures for book-entry transfer described in Section 2, in each case prior to the expiration of the Offer, or (2) request such stockholder's broker, dealer, bank, trust company or other nominee to effect the transaction for such stockholder. A stockholder having Common Shares registered in the name of a broker, dealer, bank, trust company or other nominee must contact such broker, dealer, bank, trust company or other nominee if such stockholder desires to tender such Common Shares. A stockholder who desires to tender Common Shares and whose certificates for such Common Shares are not immediately available or who cannot comply in a timely manner with the procedures for book-entry transfer, or who cannot deliver all required documents to the Depositary prior to the expiration of the Offer, may tender such Common Shares by following the procedures for guaranteed delivery described in Section 2. The Preferred Shares may be tendered only by the trustee for the Company's Investment Plan (as defined herein). Accordingly, holders of beneficial interests in the Preferred Shares who wish to tender such Shares should do so by delivering appropriate instructions to the trustee. Questions and requests for assistance or for additional copies of this Offer to Purchase, the Letter of Transmittal and the Notice of Guaranteed Delivery may be directed to Georgeson Shareholder Communications Inc. (the "Information Agent") or to Morgan Stanley & Co. Incorporated (the "Dealer Manager") at their respective addresses and telephone numbers set forth on the back cover of this Offer to Purchase. --------------- The Dealer Manager for the Offer is: MORGAN STANLEY DEAN WITTER November 30, 1999 TABLE OF CONTENTS INTRODUCTION.............................................................. 1 THE TENDER OFFER.......................................................... 3 1. Terms of the Offer................................................... 3 2. Procedure for Tendering Shares....................................... 4 3. Withdrawal Rights.................................................... 7 4. Acceptance for Payment and Payment................................... 8 5. Certain U.S. Federal Income Tax Consequences......................... 8 6. Price Range of the Common Shares; Dividends on the Shares............ 10 7. Effect of the Offer on the Market for the Common Shares; Share Quotation; Exchange Act Registration; Margin Regulations............. 10 8. Certain Information Concerning the Company........................... 11 9. Certain Information Concerning the Purchaser and Weyerhaeuser........ 13 10. Source and Amount of Funds........................................... 14 11. Contacts and Transactions with the Company; Background of the Offer.. 14 12. Purpose of the Offer; the Merger Agreement; the Partnership Agreement; Certain Other Agreements.................................. 20 13. Dividends and Distributions.......................................... 37 14. Certain Conditions of the Offer...................................... 37 15. Certain Legal Matters................................................ 39 16. Fees and Expenses.................................................... 42 17. Miscellaneous........................................................ 42
SCHEDULE I--Directors and Executive Officers of Weyerhaeuser and the Purchaser. To the Holders of Common Stock and ESOP Convertible Preferred Stock of TJ INTERNATIONAL, INC.: INTRODUCTION WTJ, Inc., a Delaware corporation (the "Purchaser"), which is a wholly owned subsidiary of Weyerhaeuser Company, a Washington corporation ("Weyerhaeuser"), hereby offers to purchase all the issued and outstanding (i) shares (the "Common Shares") of Common Stock, par value $1.00 per share (the "Common Stock"), of TJ International, Inc., a Delaware corporation (the "Company"), together with the associated Preferred Share Purchase Rights (the "Rights") issued pursuant to the Company's Rights Agreement dated August 26, 1999 (as amended from time to time, the "Rights Agreement"), at a price per Common Share (including the associated Rights) of $42.00 and (ii) shares (the "Preferred Shares" and, together with the Common Shares, the "Shares") of ESOP Convertible Preferred Stock (the "Preferred Stock" and, together with the Common Stock, the "Capital Stock") at a price per Preferred Share of $42.00, in each case, net to the seller in cash, without interest thereon (the "Offer Price"), upon the terms and subject to the conditions set forth in this Offer to Purchase and in the related Letter of Transmittal (which, together with amendments or supplements hereto or thereto, collectively constitute the "Offer"). Unless the context otherwise requires, all references to Common Shares include the associated Rights, and all references to the Rights include the benefits that may enure to holders of the Rights pursuant to the Rights Agreement. Tendering stockholders will not be obligated to pay brokerage fees or commissions or, except as set forth in Instruction 6 of the Letter of Transmittal, transfer taxes on the purchase of Shares pursuant to the Offer. The Purchaser will pay all fees and expenses of Morgan Stanley & Co. Incorporated ("Morgan Stanley"), which is acting as Dealer Manager, First Chicago Trust Company of New York, which is acting as the Depositary (the "Depositary"), and Georgeson Shareholder Communications Inc., which is acting as the Information Agent, incurred in connection with the Offer. See Section 16. The Offer is being made pursuant to the Agreement and Plan of Merger dated as of November 23, 1999 (the "Merger Agreement"), among Weyerhaeuser, the Purchaser and the Company pursuant to which, following the consummation of the Offer and the satisfaction or waiver of certain conditions, the Purchaser will be merged with and into the Company (the "Merger"), with the Company surviving the Merger as a subsidiary of Weyerhaeuser. At the election of Weyerhaeuser, any direct or indirect subsidiary of Weyerhaeuser may be substituted for the Purchaser as a constituent corporation in the Merger. The Board of Directors of the Company unanimously (i) approved the Merger Agreement, the Offer and the Merger, (ii) determined that the transactions contemplated by the Merger Agreement, including each of the Offer and the Merger, are fair to and in the best interests of the Company and its stockholders and (iii) recommends that stockholders of the Company accept the Offer and tender their Shares pursuant to the Offer. The factors considered by the Board of Directors of the Company in arriving at its decision to approve the Merger Agreement, the Offer and the Merger and recommending that stockholders of the Company accept the Offer and tender their Shares pursuant to the Offer, are described in the Company's Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule 14D-9"), which is being mailed to stockholders of the Company together with this Offer to Purchase. Goldman, Sachs & Co. ("Goldman Sachs") has acted as the Company's financial advisor. Goldman Sachs delivered its written opinion to the Board of Directors of the Company that, as of November 23, 1999, the $42.00 per share proposed to be paid by the Purchaser in the Offer and the Merger to the holders of Common Shares was fair from a financial point of view to such holders. The entire text of the opinion, which sets forth assumptions made, matters considered and limitations in connection with the opinion is attached as Annex B to the Schedule 14D-9 mailed to stockholders. The opinion of Goldman Sachs referred to herein does not constitute a recommendation as to whether or not any holder of Shares should tender such Shares in connection with the Offer. Stockholders are urged to, and should, read such opinion carefully in its entirety. 1 The Offer is conditioned upon, among other things, (1) there being validly tendered and not withdrawn prior to the Expiration Date (as defined in Section 1) that number of Shares that would represent at least 50.1% of the Fully Diluted Shares (as defined in Section 14) on the date of purchase (the "Minimum Condition"), and (2) any waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), applicable to the purchase of Shares pursuant to the Offer shall have expired or been terminated. See Sections 1, 12 and 14. In the Merger, each issued Share (other than Shares owned by Weyerhaeuser, the Purchaser or the Company or any wholly owned subsidiary of Weyerhaeuser, the Purchaser or the Company or by stockholders, if any, who are entitled to and properly exercise appraisal rights under Delaware law) will be converted into an amount in cash equal to the Offer Price, without interest thereon. Consummation of the Merger is subject to a number of conditions, including approval by stockholders of the Company if such approval is required under applicable law. In order to consummate the Merger without the approval of stockholders of the Company, Weyerhaeuser and the Purchaser will need to own at least 90% of the outstanding Common Shares and 90% of the outstanding Preferred Shares. Section 12 more fully describes the requirements for consummating a merger under Delaware law and the terms of the Merger Agreement. The Company has informed the Purchaser that, as of November 17, 1999, there were 18,351,054 Common Shares and 1,097,719 Preferred Shares issued and outstanding and 1,671,436 Common Shares reserved for issuance upon the exercise of outstanding options or other rights to purchase Shares from the Company. Based upon the foregoing and assuming that no Shares are otherwise issued after November 17, 1999 (except upon the exercise of such options or the conversion of the Preferred Shares), there will be 21,120,209 Fully Diluted Shares outstanding and the Minimum Condition will be satisfied if at least 10,771,306 Shares are validly tendered and not withdrawn prior to the Expiration Date. The actual number of Shares required to be tendered to satisfy the Minimum Condition will depend upon the actual number of Fully Diluted Shares outstanding on the date that the Purchaser accepts Shares for payment pursuant to the Offer. If the Minimum Condition is satisfied and the Purchaser accepts for payment Shares tendered pursuant to the Offer, the Purchaser will be able to elect a majority of the members of the Company's Board of Directors and to effect the Merger without the affirmative vote of any other stockholder of the Company. See Section 12. Certain U.S. federal income tax consequences of the sale of Shares pursuant to the Offer and the conversion of Shares pursuant to the Merger are described in Section 5. THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN IMPORTANT INFORMATION THAT SHOULD BE READ BEFORE ANY DECISION IS MADE WITH RESPECT TO THE OFFER. 2 THE TENDER OFFER 1. Terms of the Offer Upon the terms and subject to the conditions of the Offer, the Purchaser will accept for payment and pay for all Shares validly tendered prior to the Expiration Date and not theretofore withdrawn in accordance with Section 3. The term "Expiration Date" means 8:00 p.m., New York City time, on Wednesday, January 5, 2000, unless and until the Purchaser shall have extended the period of time during which the Offer is open, in which event the term "Expiration Date" shall mean the latest time and date on which the Offer, as so extended by the Purchaser, will expire. In the Merger Agreement, the Purchaser has agreed that, except as described below, it will not, without the consent of the Company, (a) reduce the number of Shares subject to the Offer, (b) reduce the Offer Price, (c) modify or add to the conditions to the Offer (which are set forth in Section 14), (d) extend the Offer, (e) change the form of consideration payable in the Offer or (f) otherwise amend the Offer in any manner materially adverse to the holders of Shares. However, the Merger Agreement provides that, without the consent of the Company, the Purchaser may (i) extend the Offer, if, at the Expiration Date, any of the conditions to the Purchaser's obligation to purchase Shares are not satisfied, until such time as such conditions are satisfied or waived, (ii) extend the Offer for any period required by any rule, regulation, interpretation or position of the Commission or the staff thereof applicable to the Offer and (iii) extend the Offer for any term for a period (a "Weyerhaeuser Extension Period") of not more than ten business days beyond the latest expiration date that would otherwise be permitted or required under the terms of the Merger Agreement; provided, however, that if the Purchaser extends the Offer pursuant to clause (iii) of this sentence, it must waive during any such Weyerhaeuser Extension Period all conditions of the Offer set forth in Section 14 other than (x) the Minimum Condition and (y) the condition in paragraph (b) of Section 14 solely to the extent Weyerhaeuser and the Purchaser would otherwise violate any law in purchasing Common Shares pursuant to the Offer. If any of the conditions of the Offer set forth in Section 14 (other than the Minimum Condition) is not satisfied or waived on the Expiration Date of the Offer, then, if requested by the Company, the Purchaser must extend the Offer one or more times (the period of each such extension to be determined by the Purchaser) for up to 30 days in the aggregate for all such extensions, provided that at the time of such extension any such condition is reasonably capable of being satisfied. As used in this Offer to Purchase, "business day" has the meaning set forth in Rule 14d-1 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Subject to the Merger Agreement (which, as described above, prohibits certain amendments to the Offer without the consent of the Company) and the applicable rules and regulations of the Commission, the Purchaser reserves the right (but is not obligated except as described below), at any time and from time to time, and regardless of whether or not any of the events or facts set forth in Section 14 have occurred, (a) to extend the period of time during which the Offer is open, and thereby delay acceptance for payment of and the payment for any Shares, by giving oral or written notice of such extension to the Depositary and (b) to amend the Offer in any other respect by giving oral or written notice of such amendment to the Depositary. Under no circumstances will interest be paid on the purchase price for tendered Shares, whether or not the Purchaser exercises its right to extend the Offer. If by 8:00 p.m., New York City time, on Wednesday, January 5, 2000 (or any date or time then set as the Expiration Date), any of or all the conditions to the Offer have not been satisfied or waived, the Purchaser reserves the right (but is not obligated except as described below), subject to the Merger Agreement and to the applicable rules and regulations of the Commission, (a) to terminate the Offer and not accept for payment or pay for any Shares and return all tendered Shares to tendering stockholders, (b) to waive all the unsatisfied conditions and accept for payment and pay for all Shares validly tendered prior to the Expiration Date and not theretofore withdrawn, (c) to extend the Offer and, subject to the right of stockholders to withdraw Shares until the Expiration Date, retain the Shares that have been tendered during the period or periods for which the Offer is extended or (d) to amend the Offer. 3 Any extension, waiver, amendment or termination will be followed as promptly as practicable by public announcement thereof. In the case of an extension, Rule 14e-l(d) under the Exchange Act requires that the announcement be issued no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled Expiration Date in accordance with the public announcement requirements of Rule 14d-3(c) under the Exchange Act. Subject to applicable law (including Rules 14d-4(c) and 14d-6(d) under the Exchange Act, which require that any material change in the information published, sent or given to stockholders in connection with the Offer be promptly disseminated to stockholders in a manner reasonably designed to inform stockholders of such change) and without limiting the manner in which the Purchaser may choose to make any public announcement, the Purchaser will not have any obligation to publish, advertise or otherwise communicate any such public announcement other than by making a release to the Dow Jones News Service. If the Purchaser extends the Offer or if the Purchaser is delayed in its acceptance for payment of or payment (whether before or after its acceptance for payment of Shares) for Shares or it is unable to pay for Shares pursuant to the Offer for any reason, then, without prejudice to the Purchaser's rights under the Offer, the Depositary may retain tendered Shares on behalf of the Purchaser, and such Shares may not be withdrawn except to the extent tendering stockholders are entitled to withdrawal rights as described in Section 3. However, the ability of the Purchaser to delay the payment for Shares that the Purchaser has accepted for payment is limited by Rule 14e-l(c) under the Exchange Act, which requires that a bidder pay the consideration offered or return the securities deposited by or on behalf of holders of securities promptly after the termination or withdrawal of such bidder's offer, and by the terms of the Merger Agreement, which require that the Purchaser pay for Shares accepted for payment as soon as practicable after the Expiration Date. If the Purchaser makes a material change in the terms of the Offer or the information concerning the Offer or waives a material condition of the Offer, the Purchaser will disseminate additional tender offer materials and extend the Offer to the extent required by Rules 14d-4(c), 14d-6(d) and 14e-1(b) and (d) under the Exchange Act. The minimum period during which an offer must remain open following material changes in the terms of such offer or information concerning such offer, other than a change in price or a change in the percentage of securities sought, will depend upon the facts and circumstances then existing, including the relative materiality of the changed terms or information. With respect to a change in price or a change in the percentage of securities sought, under Rule 14e-1(b) a minimum period of ten business days is generally required to allow for adequate dissemination to stockholders. The Company has provided the Purchaser with the Company's stockholder lists and security position listings for the purpose of disseminating the Offer to holders of Shares. This Offer to Purchase, the related Letter of Transmittal and other relevant materials will be mailed by the Purchaser to record holders of Shares, and will be furnished to brokers, dealers, banks, trust companies and similar persons whose names, or the names of whose nominees, appear on the stockholder lists, or, if applicable, who are listed as participants in a clearing agency's security position listing, for subsequent transmittal to beneficial owners of Shares. 2. Procedure for Tendering Shares Valid Tender. For a stockholder validly to tender Shares pursuant to the Offer, either (a) a Letter of Transmittal (or a facsimile thereof), properly completed and duly executed, together with any required signature guarantees, or, in the case of a book-entry transfer, an Agent's Message (as defined below), and any other required documents, must be received by the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase prior to the Expiration Date and either certificates for tendered Shares must be received by the Depositary at one of such addresses or such Shares must be delivered pursuant to the procedures for book-entry transfer set forth below (and a Book-Entry Confirmation (as defined below) received by the Depositary), in each case prior to the Expiration Date, or (b) the tendering stockholder must comply with the guaranteed delivery procedures described below. 4 Book-Entry Transfer. The Depositary will establish an account with respect to the Shares at The Depository Trust Company (the "Book-Entry Transfer Facility") for purposes of the Offer within two business days after the date of this Offer to Purchase. Any financial institution that is a participant in the Book-Entry Transfer Facility's system may make book-entry delivery of Shares by causing the Book-Entry Transfer Facility to transfer such Shares into the Depositary's account in accordance with the Book-Entry Transfer Facility's procedures for such transfer. However, although delivery of Shares may be effected through book-entry transfer into the Depositary's account at the Book-Entry Transfer Facility, the Letter of Transmittal (or a facsimile thereof), properly completed and duly executed, with any required signature guarantees, or an Agent's Message, and any other required documents, must, in any case, be transmitted to, and received by, the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase prior to the Expiration Date, or the tendering stockholder must comply with the guaranteed delivery procedures described below. The confirmation of a book-entry transfer of Shares into the Depositary's account at the Book-Entry Transfer Facility as described above is referred to herein as a "Book-Entry Confirmation". Delivery of documents to the Book-Entry Transfer Facility in accordance with the Book- Entry Transfer Facility's procedures does not constitute delivery to the Depositary. The term "Agent's Message" means a message transmitted by the Book-Entry Transfer Facility to, and received by, the Depositary and forming a part of a Book-Entry Confirmation, which states that the Book-Entry Transfer Facility has received an express acknowledgment from the participant in the Book-Entry Transfer Facility tendering the Shares that such participant has received and agrees to be bound by the terms of the Letter of Transmittal and that the Purchaser may enforce such agreement against the participant. The method of delivery of Shares, the Letter of Transmittal and all other required documents, including delivery through the Book-Entry Transfer Facility, is at the election and risk of the tendering stockholder. Shares will be deemed delivered only when actually received by the Depositary (including, in the case of a book-entry transfer, by Book-Entry Confirmation). If delivery is by mail, registered mail with return receipt requested, properly insured, is recommended. In all cases, sufficient time should be allowed to ensure timely delivery. Signature Guarantees. No signature guarantee is required on the Letter of Transmittal (a) if the Letter of Transmittal is signed by the registered holder(s) (which term, for purposes of this Section 2, includes any participant in the Book-Entry Transfer Facility's system whose name appears on a security position listing as the owner of the Shares) of Shares tendered therewith and such registered holder has not completed either the box entitled "Special Delivery Instructions" or the box entitled "Special Payment Instructions" on the Letter of Transmittal or (b) if such Shares are tendered for the account of a financial institution (including most commercial banks, savings and loan associations and brokerage houses) that is a participant in the Security Transfer Agents Medallion Program, the New York Stock Exchange Medallion Signature Guarantee Program or the Stock Exchange Medallion Program (such participant, an "Eligible Institution"). In all other cases, all signatures on the Letter of Transmittal must be guaranteed by an Eligible Institution. See Instructions 1 and 5 to the Letter of Transmittal. If the certificates for Shares are registered in the name of a person other than the signer of the Letter of Transmittal, or if payment is to be made or certificates for Shares not tendered or not accepted for payment are to be returned to a person other than the registered holder of the certificates surrendered, the tendered certificates must be endorsed or accompanied by appropriate stock powers, in either case signed exactly as the name or names of the registered holders or owners appear on the certificates, with the signatures on the certificates or stock powers guaranteed as aforesaid. See Instructions 1 and 5 to the Letter of Transmittal. Guaranteed Delivery. If a stockholder desires to tender Shares pursuant to the Offer and such stockholder's certificates for Shares are not immediately available or the procedures for book-entry transfer cannot be completed on a timely basis or time will not permit all required documents to reach the Depositary prior to the Expiration Date, such stockholder's tender may be effected if all the following conditions are met: (i) such tender is made by or through an Eligible Institution; (ii) a properly completed and duly executed Notice of Guaranteed Delivery, substantially in the form provided by the Purchaser, is received by the Depositary, as provided below, prior to the Expiration Date; and 5 (iii) the certificates for all tendered Shares, in proper form for transfer (or a Book-Entry Confirmation with respect to all such Shares), together with a Letter of Transmittal (or a facsimile thereof), properly completed and duly executed, with any required signature guarantees, or, in the case of a book-entry transfer, an Agent's Message, and any other required documents are received by the Depositary within three trading days after the date of execution of such Notice of Guaranteed Delivery. A "trading day" is any day on which the Nasdaq Stock Market ("Nasdaq") is open for business. The Notice of Guaranteed Delivery may be delivered to the Depositary and must include a guarantee by an Eligible Institution in the form set forth in such Notice of Guaranteed Delivery. The valid tender of Shares pursuant to one of the procedures described above will constitute a binding agreement between the tendering stockholder and the Purchaser upon the terms and subject to the conditions of the Offer. Distribution of Rights. Holders of Common Shares will be required to tender one Right for each Common Share tendered to effect a valid tender of such Common Share. Unless and until the Distribution Date (as defined in the Rights Agreement) occurs, the Rights are represented by and transferred with the Common Shares. Accordingly, if the Distribution Date does not occur prior to the Expiration Date of the Offer, a tender of Common Shares will constitute a tender of the associated Rights. If, however, pursuant to the Rights Agreement or otherwise, a Distribution Date does occur, certificates representing a number of Rights equal to the number of Common Shares being tendered must be delivered to the Depositary in order for such Common Shares to be validly tendered. If a Distribution Date has occurred, a tender of Common Shares without Rights constitutes an agreement by the tendering stockholder to deliver certificates representing a number of Rights equal to the number of Common Shares tendered pursuant to the Offer to the Depositary within three trading days after the date such certificates are distributed. The Purchaser reserves the right to require that it receive such certificates prior to accepting Common Shares for payment. Payment for Common Shares tendered and purchased pursuant to the Offer will be made only after timely receipt by the Depositary of, among other things, such certificates, if such certificates have been distributed to holders of Common Shares. The Purchaser will not pay any additional consideration for the Rights tendered pursuant to the Offer. The Rights Agreement has been amended as of November 23, 1999, to exempt the Merger Agreement, the Merger and the acquisition of Shares by Weyerhaeuser or the Purchaser pursuant to the Offer from the provisions of the Rights Agreement. Appointment. By executing a Letter of Transmittal (or a facsimile thereof), a tendering stockholder will irrevocably appoint designees of the Purchaser as such stockholder's attorneys-in-fact and proxies in the manner set forth in the Letter of Transmittal, each with full power of substitution, to the full extent of such stockholder's rights with respect to the Shares tendered by such stockholder and accepted for payment by the Purchaser and with respect to any and all other Shares or other securities or rights issued or issuable in respect of such Shares on or after November 23, 1999. All such proxies will be considered coupled with an interest in the tendered Shares. Such appointment will be effective when, and only to the extent that, the Purchaser accepts for payment Shares tendered by such stockholder as provided herein. Upon such appointment, all prior powers of attorney, proxies and consents given by such stockholder with respect to such Shares or other securities or rights will, without further action, be revoked and no subsequent powers of attorney, proxies, consents or revocations may be given (and, if given, will not be effective). The designees of the Purchaser will thereby be empowered to exercise all voting and other rights with respect to such Shares and other securities or rights in respect of any annual, special or adjourned meeting of the Company's stockholders, actions by written consent in lieu of any such meeting or otherwise, as they in their sole discretion deem proper. The Purchaser reserves the right to require that, in order for Shares to be deemed validly tendered, immediately upon the Purchaser's acceptance for payment of such Shares, the Purchaser must be able to exercise full voting, consent and other rights with respect to such Shares and other securities or rights, including voting at any meeting of stockholders. Determination of Validity. All questions as to the validity, form, eligibility (including time of receipt) and acceptance of any tender of Shares will be determined by the Purchaser in its sole discretion, which determination will be final and binding. The Purchaser reserves the absolute right to reject any or all tenders 6 determined by it not to be in proper form or the acceptance for payment of or payment for which may, in the opinion of the Purchaser's counsel, be unlawful. The Purchaser also reserves the absolute right to waive any defect or irregularity in the tender of any Shares of any particular stockholder whether or not similar defects or irregularities are waived in the case of other stockholders. No tender of Shares will be deemed to have been validly made until all defects or irregularities relating thereto have been cured or waived. None of the Purchaser, Weyerhaeuser, the Company, the Depositary, the Information Agent, the Dealer Manager or any other person will be under any duty to give notification of any defects or irregularities in tenders or incur any liability for failure to give any such notification. The Purchaser's interpretation of the terms and conditions of the Offer (including the Letter of Transmittal and the instructions thereto) will be final and binding. Backup Withholding. In order to avoid "backup withholding" of U.S. federal income tax on payments of cash pursuant to the Offer or the Merger, a stockholder surrendering Shares in the Offer or the Merger must, unless an exemption applies, provide the Depositary with such stockholder's correct taxpayer identification number ("TIN") on a Substitute Form W-9 and certify under penalties of perjury that such TIN is correct and that such stockholder is not subject to backup withholding. If a stockholder does not provide such stockholder's correct TIN or fails to provide the certifications described above, the Internal Revenue Service (the "IRS") may impose a penalty on such stockholder and payment of cash to such stockholder pursuant to the Offer or Merger may be subject to backup withholding of 31%. All stockholders surrendering Shares pursuant to the Offer or the Merger should complete and sign the main signature form and the Substitute Form W-9 included as part of the Letter of Transmittal to provide the information and certification necessary to avoid backup withholding (unless an applicable exemption exists and is proved in a manner satisfactory to the Purchaser and the Depositary). Certain stockholders (including, among others, all corporations and certain foreign individuals and entities) are not subject to backup withholding. Noncorporate foreign stockholders should complete and sign the main signature form and a Form W-8, Certificate of Foreign Status, a copy of which may be obtained from the Depositary, in order to avoid backup withholding. See Instruction 9 to the Letter of Transmittal. Preferred Shares. Preferred Shares may be tendered only by the trustee for the Company's Investment Plan. Accordingly, holders of beneficial interests in Preferred Shares who wish to tender such Shares should do so by delivering appropriate instructions to the trustee. 3. Withdrawal Rights Except as otherwise provided in this Section 3, tenders of Shares are irrevocable. Shares tendered pursuant to the Offer may be withdrawn pursuant to the procedures set forth below at any time prior to the Expiration Date and, unless theretofore accepted for payment and paid for by the Purchaser pursuant to the Offer, may also be withdrawn at any time after January 28, 2000. For a withdrawal to be effective, a written notice of withdrawal must be received by the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase and must specify the name of the person having tendered the Shares to be withdrawn, the number of Shares to be withdrawn and the name of the registered holder of the Shares to be withdrawn, if different from the name of the person who tendered the Shares. If certificates for Shares have been delivered or otherwise identified to the Depositary, then, prior to the physical release of such certificates, the serial numbers shown on such certificates must be submitted to the Depositary and, unless such Shares have been tendered by an Eligible Institution, the signatures on the notice of withdrawal must be guaranteed by an Eligible Institution. If Shares have been delivered pursuant to the procedures for book-entry transfer described in Section 2, any notice of withdrawal must also specify the name and number of the account at the Book-Entry Transfer Facility to be credited with the withdrawn Shares and otherwise comply with the Book-Entry Transfer Facility's procedures. Withdrawals of tenders of Shares may not be rescinded, and any Shares properly withdrawn will thereafter be deemed not validly tendered for purposes of the Offer. However, withdrawn Shares may be tendered by again following one of the procedures described in Section 2 at any time prior to the Expiration Date. 7 All questions as to the form and validity (including time of receipt) of notices of withdrawal will be determined by the Purchaser in its sole discretion, which determination will be final and binding. None of the Purchaser, Weyerhaeuser, the Company, the Depositary, the Information Agent, the Dealer Manager or any other person will be under any duty to give notification of any defects or irregularities in any notice of withdrawal or incur any liability for failure to give any such notification. 4. Acceptance for Payment and Payment Upon the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of any such extension or amendment), the Purchaser will accept for payment and will pay for all Shares validly tendered prior to the Expiration Date and not properly withdrawn in accordance with Section 3 promptly after the Expiration Date. The Purchaser expressly reserves the right to delay acceptance for payment of or payment for Shares in order to comply in whole or in part with any applicable law, including the HSR Act. Any such delays will be effected in compliance with Rule 14e-l(c) under the Exchange Act (relating to a bidder's obligation to pay for or return tendered securities promptly after the termination or withdrawal of such bidder's offer). In all cases, payment for Shares accepted for payment pursuant to the Offer will be made only after timely receipt by the Depositary of (a) certificates for (or a timely Book-Entry Confirmation with respect to) such Shares, (b) a Letter of Transmittal (or a facsimile thereof), properly completed and duty executed, with any required signature guarantees, or, in the case of a book- entry transfer, an Agent's Message, with respect to such Shares and (c) any other documents required by the Letter of Transmittal. The per Share consideration paid to any stockholder pursuant to the Offer will be the highest per Share consideration paid to any other stockholder pursuant to the Offer. Accordingly, tendering stockholders may be paid at different times depending upon when certificates for Shares or Book-Entry Confirmations with respect to Shares we are actually received by the Depositary. For purposes of the Offer, the Purchaser will be deemed to have accepted for payment, and thereby purchased, Shares properly tendered to the Purchaser and not withdrawn as, if and when the Purchaser gives oral or written notice to the Depositary of the Purchaser's acceptance for payment of such Shares. Payment for Shares accepted for payment pursuant to the Offer will be made by deposit of the purchase price therefor with the Depositary, which will act as an agent for tendering stockholders for the purpose of receiving payment from the Purchaser and transmitting payment to tendering stockholders. Under no circumstances will interest be paid on the purchase price of the Shares to be paid by the Purchaser, regardless of any extension of the Offer or any delay in making such payment. If any tendered Shares are not purchased pursuant to the Offer for any reason, certificates for any such Shares will be returned, without expense to the tendering stockholder (or, in the case of Shares delivered by book-entry transfer of such Shares into the Depositary's account at the Book-Entry Transfer Facility pursuant to the procedures described in Section 2, such Shares will be confirmed to an account maintained at the Book-Entry Transfer Facility), as promptly as practicable after the expiration or termination of the Offer. The Purchaser reserves the right to transfer or assign, in whole or from time to time in part, to Weyerhaeuser, or to one or more direct or indirect wholly owned subsidiaries of Weyerhaeuser, the right to purchase Shares tendered pursuant to the Offer, but any such transfer or assignment will not relieve the Purchaser of its obligations under the Offer and will in no way prejudice the rights of tendering stockholders to receive payment for Shares validly tendered and accepted for payment pursuant to the Offer. 5. Certain U.S. Federal Income Tax Consequences The receipt of cash pursuant to the Offer or the Merger will be a taxable transaction for U.S. federal income tax purposes under the Internal Revenue Code of 1986, as amended (the "Code"), and may also be a taxable transaction under applicable state, local or foreign income or other tax laws. Generally, for U.S. federal income 8 tax purposes, a stockholder will recognize gain or loss equal to the difference between the amount of cash received by the stockholder pursuant to the Offer or the Merger and the aggregate tax basis in the Shares tendered by the stockholder and purchased pursuant to the Offer or converted into cash in the Merger, as the case may be. Gain or loss will be calculated separately for each block of Shares tendered and purchased pursuant to the Offer or converted into cash in the Merger, as the case may be. If Shares are held by a stockholder as capital assets, gain or loss recognized by the stockholder will be capital gain or loss, and will be long- term capital gain or loss if the stockholder's holding period for the Shares exceeds one year. Certain noncorporate stockholders will be eligible for a maximum U.S. federal income tax rate of 20% on long-term capital gain. In addition, the deductibility of capital losses is subject to limitations for both individuals and corporations. A stockholder that tenders or converts Shares may be subject to 31% backup withholding unless the stockholder provides its TIN and certifies that such number is correct or properly certifies that it is awaiting a TIN, or unless an exemption applies. Exemptions are available for stockholders that are corporations and for certain foreign individuals and entities. A stockholder that does not furnish a required TIN may be subject to a penalty imposed by the IRS. See "Backup Withholding" under Section 2. If backup withholding applies to a stockholder, the Depositary is required to withhold 31% from payments to such stockholder. Backup withholding is not an additional tax. Rather, the amount of the backup withholding can be credited against the U.S. federal income tax liability of the person subject to the backup withholding, provided that the required information is given to the IRS. If backup withholding results in an overpayment of tax, a refund can be obtained by the stockholder by filing a federal income tax return. The foregoing discussion may not be applicable with respect to Shares received pursuant to the exercise of employee stock options or otherwise as compensation or with respect to holders of Shares who are subject to special tax treatment under the Code, such as non-U.S. persons, life insurance companies, tax-exempt organizations and financial institutions and may not apply to a holder of Shares in light of its individual circumstances. Stockholders are urged to consult their own tax advisors to determine the particular tax consequences to them (including the application and effect of any state, local or foreign income and other tax laws) of the Offer and the Merger. 9 6. Price Range of the Common Shares; Dividends on the Shares The Common Shares are traded on the Nasdaq under the symbol TJCO. The Preferred Shares are not listed for public trading on any market. The following table sets forth, for each quarter of the calendar years indicated, the high and low sales prices per Common Share on the Nasdaq and the amount of cash dividends paid per Common Share. TJ INTERNATIONAL, INC.
Common Stock High Low Cash Dividends ------ ------ -------------- 1997: First Quarter................................. $23.50 $18.00 $0.055 Second Quarter................................ 24.38 18.75 0.055 Third Quarter................................. 17.13 22.22 0.055 Fourth Quarter................................ 27.75 22.00 0.055 1998: First Quarter................................. 34.50 22.38 0.055 Second Quarter................................ 33.75 27.13 0.055 Third Quarter................................. 31.25 18.63 0.055 Fourth Quarter................................ 29.50 16.50 0.055 1999: First Quarter................................. 27.00 21.25 0.055 Second Quarter................................ 33.88 23.50 0.055 Third Quarter................................. 33.50 24.88 0.055 Fourth Quarter (through November 29, 1999).... 42.00 24.88 --
On November 22, 1999, the last full trading day before the public announcement of the execution of the Merger Agreement, the last reported sales price of the Common Shares on the Nasdaq was $32.25 per share. On November 29, 1999, the last full trading day before commencement of the Offer, the last reported sales price of the Common Shares on the Nasdaq was $41.63 per share. Stockholders are urged to obtain current market quotations for the Common Shares. All Preferred Shares are held by the trustee under the Company's Investment Plan for the benefit of participants in such plan and are not publicly traded. Each Preferred Share is entitled to receive an annual dividend of $1.065, and no dividends can be paid on Common Shares until all dividends then due and payable on Preferred Shares have been paid. The Merger Agreement permits the Company to continue to pay regular quarterly dividends on the Common Shares of not more than $0.055 per Share and regular annual cash dividends on the Preferred Shares of not more than $1.065 per share. The payment of dividends on the Common Shares is a matter for the discretion of the Board of Directors of the Company and is subject to customary restrictions thereon. 7. Effect of the Offer on the Market for the Common Shares; Share Quotation; Exchange Act Registration; Margin Regulations Market for the Shares. The purchase of Common Shares pursuant to the Offer will reduce the number of holders of Common Shares and the number of Common Shares that might otherwise trade publicly and could adversely affect the liquidity and market value of the remaining Common Shares held by the public. Share Quotation. Depending upon the number of Common Shares purchased pursuant to the Offer, the Common Shares may no longer meet the requirements of the Nasdaq for continued listing. According to the Nasdaq's published guidelines, the Nasdaq would consider delisting the Common Shares if, among other things, the total number of round-lot stockholders (including both holders of record and beneficial holders of stock) were to fall below 300, or the number of publicly held Common Shares (exclusive of management or other concerned holdings) were to fall below 500,000 or the aggregate market value of publicly held Common Shares were to not 10 exceed $1 million. According to the Company, as of November 24, 1999, there were approximately 1,712 holders of record of Common Shares and there were 18,351,048 Common Shares outstanding. If, as a result of the purchase of Common Shares pursuant to the Offer or otherwise, the Common Shares no longer meet the requirements of the Nasdaq for continued listing and the Common Shares are no longer listed, the market for Common Shares would be adversely affected. If the Nasdaq were to delist the Common Shares, it is possible that the Common Shares would continue to trade on other securities exchanges or in the over-the-counter market and that price quotations would be reported by such exchanges or through other sources. The extent of the public market for the Common Shares and the availability of such quotations would, however, depend upon the number of holders of Common Shares remaining at such time, the interests in maintaining a market in Common Shares on the part of securities firms, the possible termination of registration of the Common Shares under the Exchange Act, as described below, and other factors. Exchange Act Registration. The Common Shares are currently registered under the Exchange Act. Registration of the Common Shares under the Exchange Act may be terminated upon application of the Company to the Commission if the Common Shares are neither listed on a national securities exchange nor held by 300 or more holders of record. Termination of registration of the Common Shares under the Exchange Act would substantially reduce the information required to be furnished by the Company to its stockholders and to the Commission and would make certain provisions of the Exchange Act no longer applicable to the Company, such as the short-swing profit recovery provisions of Section 16(b) of the Exchange Act, the requirement of furnishing a proxy statement pursuant to Section 14(a) of the Exchange Act in connection with stockholders' meetings and the related requirement of furnishing an annual report to stockholders and the requirements of Rule 13e-3 under the Exchange Act with respect to "going private" transactions. Furthermore, the ability of "affiliates" of the Company and persons holding "restricted securities" of the Company to dispose of such securities pursuant to Rule 144 or 144A promulgated under the Securities Act of 1933, may be impaired or eliminated. The Purchaser intends to seek to cause the Company to apply for termination of registration of the Common Shares under the Exchange Act as soon after the completion of the Offer as the requirements for such termination are met. If registration of the Common Shares is not terminated prior to the Merger, then the Common Shares will be delisted from all stock exchanges and the registration of the Common Shares under the Exchange Act will be terminated following the consummation of the Merger. Margin Regulations. The Common Shares are currently "margin securities" under the regulations of the Board of Governors of the Federal Reserve System (the "Federal Reserve Board"), which has the effect, among other things, of allowing brokers to extend credit on the collateral of the Common Share. Depending upon factors similar to those described above regarding listing and market quotations, it is possible that, following the Offer, the Common Shares would no longer constitute "margin securities" for the purposes of the margin regulations of the Federal Reserve Board and therefore could no longer be used as collateral for loans made by brokers. 8. Certain Information Concerning the Company The Company is a Delaware corporation with its principal offices at 200 East Mallard Drive, Boise, Idaho 83706. The Company has a 51% partnership interest in, and is the general and managing partner of, Trus Joist MacMillan a Limited Partnership, a Delaware limited partnership (the "Partnership"), a manufacturer and marketer of engineered lumber products. Historical Financial Information. Set forth below is certain selected financial information with respect to the Company and its subsidiaries excerpted from the information contained in the Company's Annual Report on Form 10-K for the fiscal year ended January 2, 1999 (the "Company 1998 10-K") and the Company's Quarterly Report on Form 10-Q for the three fiscal quarters ended October 2, 1999 (the "Company 1999 10-Q"). More comprehensive financial information is included in the Company 1998 10-K, the Company 1999 10-Q and other documents filed by the Company with the Commission, and the following summary is qualified in its entirety by reference to the Company 1998 10-K, the Company 1999 10-Q and such other documents and all the financial 11 information (including any related notes) contained therein. The Company 1998 10-K, the Company 1999 10-Q and such other documents should be available for inspection and copies thereof should be obtainable in the manner set forth below under "Available Information". TJ INTERNATIONAL, INC. SELECTED CONSOLIDATED FINANCIAL INFORMATION (amounts in thousands except per share amounts and percentages)
Fiscal year ended and as Three fiscal quarters of ended and as of ---------------------------- --------------------- Jan 2 Jan 3 Dec 28 Oct 2 Oct 3 1999 1998 1996 1999 1998 -------- -------- -------- ---------- ---------- (unaudited) Sales..................... $778,063 $706,316 $ 57,166 $ 672,900 $ 601,613 Income from continuing operations............... 28,842 27,525 16,175 24,882 22,838 Net income................ 28,842 27,525 16,175 24,882 22,838 Net income from continuing operations per share Basic................... 1.69 1.55 0.88 1.56 1.32 Diluted................. 1.57 1.44 0.88 1.44 1.23 Weighted average number of shares outstanding Basic................... 16,464 17,156 17,277 15,511 16,711 Diluted................. 17,927 18,663 18,853 16,931 18,219 Cash dividends declared per common share......... $ 0.22 $ 0.22 $ 0.22 $ 0.165 $ 0.165 Working capital, excluding discontinued operations.. 241,843 219,205 116,862 225,797 223,350 Total assets.............. 730,939 712,104 599,815 749,077 727,951 Long term debt, excluding current portion.......... 142,390 142,390 88,140 142,390 142,390 Stockholders' equity...... 232,805 241,412 228,070 249,357 225,264 Net book value per share.. 14.78 14.16 13.03 -- -- Return from continuing operations on average stockholders' equity..... 12.2% 11.7% 7.4% -- --
Certain Forecast Information. During the course of due diligence discussions between representatives of Weyerhaeuser and the Company that were conducted after Weyerhaeuser had made its proposal of $42 per share, the Company provided Weyerhaeuser or its representatives with certain non-public business and financial information about the Company. The following is a summary of certain selected projected financial information provided by the Company (the "Projections"). The Company advised Weyerhaeuser that in preparing the Projections, the Company assumed, among other matters, (1) that the housing market would continue to be strong, with only mild declines in housing starts through 2001 with a significant recession assumed beginning in 2002, and recovery beginning in 2003; (2) that engineered lumber products would continue to replace regular lumber products and increase market penetration; (3) that the Company would continue its value-added marketing strategy; (4) a reduction of prices of raw materials (primarily oriented strand board and veneer) due to reduced demand as residential construction activity slows, with a more significant decline in 2002 due to the assumed recession; (5) a continuation of the trend in the reduction of manufacturing costs in new technology plants, combined with continued growth in acceptance of the Company's new technology products; (6) the leveraging of the Company's sales, general and administrative expenses over an increasing sales base, thus reducing those expenses as a percentage of sales; and (7) capital expenditures estimated to average approximately $90 million per year over the four-year period represented by the Projections. TRUS JOIST MACMILLAN TJ INTERNATIONAL, INC. SELECTED CONSOLIDATED PROJECTIONS (amounts in millions)
Fiscal year ----------------------- 2000 2001 2002 2003 ---- ------ ---- ------ Partnership net sales............................. $933 $1,019 $970 $1,189 Partnership net operating profit.................. 132 151 122 173 Partnership net income............................ 125 151 123 176 Company net income................................ 44 53 44 61
12 The Company has advised the Purchaser and Weyerhaeuser that it does not as a matter of course make public any projections as to future performance or earnings, and the Projections are included in this Offer to Purchase only because the information was provided to Weyerhaeuser. The Projections have not been adjusted to reflect the effects of the Offer or the Merger including, without limitation, the effect of the announcement of execution of the Merger Agreement on existing and future collaborations of the Company. The Projections should be read together with the other information contained in this Section 8. The Projections were prepared by the Company and were not prepared with a view to public disclosure or compliance with the published guidelines of the SEC or the guidelines established by the American Institute of Certified Public Accountants regarding projections or forecasts. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from the Projections. The Projections reflect numerous assumptions (not all of which were stated in the Projections and not all of which were provided to Weyerhaeuser), all made by management of the Company, with respect to industry performance, general business, economic, market and financial conditions and other matters, all of which are difficult to predict, many of which are beyond the Company's control and none of which were subject to approval by Weyerhaeuser or the Purchaser. Accordingly, there can be no assurance that the assumptions made in preparing the Projections will prove accurate, and actual results may be materially greater or less than those contained in the Projections. The inclusion of the Projections herein should not be regarded as an indication that any of Weyerhaeuser, the Purchaser or their respective representatives considered or consider the Projections to be a reliable prediction of future events, and the Projections should not be relied upon as such. None of Weyerhaeuser, the Purchaser or their respective representatives assumes any responsibility for the validity, reasonableness, accuracy or completeness of the Projections. None of Weyerhaeuser, the Purchaser or any of their representatives has made, or makes, any representation to any person regarding the information contained in the Projections, and none of them intends to update or otherwise revise the Projections to reflect circumstances existing after the date when made or to reflect the occurrence of future events even in the event that any or all of the assumptions underlying the Projections are shown to be in error. Available Information. The Company is subject to the informational requirements of the Exchange Act and, in accordance therewith, is required to file reports relating to its business, financial condition and other matters. Information as of particular dates concerning the Company's directors and officers, their remuneration, stock options and other matters, the principal holders of the Company's securities and any material interest of such persons in transactions with the Company is required to be disclosed in the Company's proxy statements distributed to the Company's stockholders and filed with the Commission. Such information should be available for inspection at the public reference facilities of the Commission at 450 Fifth Street, N.W., Washington, DC 20549, and at the regional offices of the Commission located at Seven World Trade Center, 13th Floor. New York, NY 10048 and Citicorp Center, 500 West Madison Street (Suite 1400), Chicago, IL 60661. Copies of such information should be obtainable, by mail, upon payment of the Commission's customary charges, by writing to the Commission's principal office at 450 Fifth Street, N.W., Washington, DC 20549. The Commission maintains a Web site that contains reports, proxy and information statements and other information regarding registrants that date file electronically with the Commission. Such reports, proxy and information statements and other information may be found on the Commission's Web site address, http://www.sec.gov. Except as otherwise stated in this Offer to Purchase, the information concerning the Company contained herein has been taken from or based upon publicly available documents on file with the Commission and other publicly available information. Although the Purchaser and Weyerhaeuser do not have any knowledge that any such information is untrue, neither the Purchaser nor Weyerhaeuser takes any responsibility for the accuracy or completeness of such information or for any failure by the Company to disclose events that may have occurred and may affect the significance or accuracy of any such information. 9. Certain Information Concerning the Purchaser and Weyerhaeuser The Purchaser, a Delaware corporation that is a wholly owned subsidiary of Weyerhaeuser, was organized to acquire the Company and has not conducted any unrelated activities since its organization. The principal office 13 of the Purchaser is located at the principal office of Weyerhaeuser. All outstanding shares of capital stock of the Purchaser are owned by Weyerhaeuser. Weyerhaeuser is a Washington corporation with its principal office located at 33663 Weyerhaeuser Way South, Federal Way, Washington 98003. Weyerhaeuser is one of the largest integrated forest products companies, engaged in the growing and harvesting of timber and the manufacture, distribution and sale of forest products, real estate development and construction and other real estate activities. Available Information. Weyerhaeuser is subject to the informational requirements of the Exchange Act and, in accordance therewith, files reports relating to its business, financial condition and other matters. Information, as of particular dates, concerning Weyerhaeuser's directors and officers, their remuneration, stock options and other matters, the principal holders of Weyerhaeuser's securities and any material interest of such persons in transactions with Weyerhaeuser is required to be disclosed in proxy statements distributed to Weyerhaeuser's stockholders and filed with the Commission. Such reports, proxy statements and other information should be available for inspection at the Commission and copies thereof should be obtainable from the Commission in the same manner as is set forth with respect to the Company in Section 8. 10. Source and Amount of Funds The Purchaser estimates that the total amount of funds required to purchase pursuant to the Offer the number of Shares that are outstanding on a fully diluted basis and to pay fees and expenses related to the Offer and the Merger will be approximately $780 million. The Purchaser plans to obtain all funds needed for the Offer and the Merger through a capital contribution or loan from Weyerhaeuser. Weyerhaeuser intends to fund this capital contribution or loan from existing cash on hand. 11. Contacts and Transactions with the Company; Background of the Offer Background of the Offer. On June 20, 1999, Weyerhaeuser, an indirect wholly owned subsidiary of Weyerhaeuser and MacMillan Bloedel Limited ("MB") entered into a merger agreement (the "MB Agreement") providing for a plan of arrangement under Canadian law involving MB in which MB would become an indirect wholly owned subsidiary of Weyerhaeuser (the "MB Transaction"). The MB Transaction was consummated on November 1, 1999. MB is now an indirect, wholly-owned subsidiary of Weyerhaeuser named Weyerhaeuser Company Limited ("WCL"). MacMillan Bloedel America Inc. ("MBA"), a wholly owned subsidiary of MB, holds a 49% limited partnership interest in the Partnership. The Company holds a 51% interest in the Partnership and is the general and managing partner of the Partnership. See Section 8 and Section 12--"Partnership Agreement". Weyerhaeuser is a principal supplier of material and products to, and Weyerhaeuser and WCL are principal distributors of products produced by, the Partnership. See "Transactions with the Company" below. On June 11, 1999, Mr. William R. Corbin, Executive Vice President of Weyerhaeuser, and Mr. Keith Purchase, Executive Vice President and Chief Operating Officer of MB, met with Mr. Thomas H. Denig, President and Chief Executive Officer of the Company, to inform him of the anticipated MB Transaction. At this meeting, Mr. Purchase proposed that the Company waive any right that it might have to purchase MBA's 49% partnership interest as a result of the MB Transaction. On June 13 and June 14, 1999, Mr. Steven R. Rogel, President and Chief Executive Officer of Weyerhaeuser, and Mr. Denig discussed the anticipated MB Transaction and its potential impact on the Partnership. Mr. Denig stated that the Company had retained financial and legal advisors to assist the Company in analyzing its options in light of the proposed MB Transaction. Mr. Rogel stated that Weyerhaeuser did not believe that the consummation of the MB Transaction would give rise to any rights of the Company under the Partnership Agreement. Mr. Denig, however, stated that the Company believed that the MB Transaction would give the Company the rights provided in the Partnership Agreement upon a change of control of a partner, 14 including the right to purchase MBA's interest in the Partnership. See Section 12--"Partnership Agreement". Messrs. Rogel and Denig agreed that they should meet with other senior officers of each of their respective companies to discuss the future of the Partnership after the MB Transaction. Mr. Denig suggested that the two companies enter into a confidentiality and standstill agreement before discussing the various options that might be available and sent a form of agreement to Mr. Rogel on June 14, 1999. This confidentiality and standstill agreement was never executed by Weyerhaeuser. Following the June 14 telephone conversation between Messrs. Rogel and Denig, there were conversations between Goldman Sachs, the Company's financial advisor, and Morgan Stanley & Co. ("Morgan Stanley"), Weyerhaeuser's financial advisor, regarding these matters. Messrs. Rogel and Denig spoke again by telephone on June 17, 1999, regarding the conversations between the financial advisors to the two companies and the confidentiality and standstill agreement proposed by the Company. Mr. Rogel stated that Weyerhaeuser was not willing to enter into such an agreement. Mr. Denig stated that, after consulting with members of the Board of Directors of the Company, he did not believe that consolidation with Weyerhaeuser was the Company's preferred alternative, but that he would take any compelling offer by Weyerhaeuser to acquire the Company to the Company's Board of Directors for consideration. In addition, Mr. Denig indicated that absent such a transaction, the Company would determine what alternatives to pursue under the Partnership Agreement (as defined below). On June 21, 1999, following execution of the MB Agreement the MB Transaction was publicly announced. On July 7, 1999, Messrs. Rogel and Denig met in Seattle, Washington, with Mr. Corbin and Mr. Jody B. Olson, Vice President of the Company, to discuss the future of the Partnership, strategies for growth of the Partnership's business and the future relationships between the Company and Weyerhaeuser and MB. Mr. Denig stated that although the Company was still reviewing its options and no decision had been reached, in his view there were three viable alternatives: the Company would purchase MBA's 49% partnership interest, Weyerhaeuser would acquire the Company or MBA would significantly reduce its interest in the Partnership and relinquish certain rights under the Partnership Agreement. On July 22, 1999, Messrs. Rogel, Denig and Olson and Mr. William C. Stivers, Executive Vice President and Chief Financial Officer of Weyerhaeuser, met in Seattle. The Weyerhaeuser representatives stated that an acquisition of the Company was Weyerhaeuser's strongly preferred alternative and indicated that Weyerhaeuser was considering a purchase price for the Shares in the mid-$30's range. The Weyerhaeuser representatives indicated that although Weyerhaeuser preferred a cash transaction, it would be willing to consider a tax-deferred transaction with the Company involving Weyerhaeuser stock. At this meeting, in addition to discussing other alternatives, Messrs. Denig and Olson proposed a structure in which the Company would acquire MBA's Partnership interest on a tax-advantaged basis. Subsequently Morgan Stanley informed Goldman Sachs that Weyerhaeuser had no interest in such a transaction. On September 3, 1999, Messrs. Rogel and Corbin met with Messrs. Denig and Olson in Boise, Idaho. Mr. Rogel stated that Weyerhaeuser did not agree with the Company's assessment of alternatives available to the parties and stated that continuation of the Partnership in its current form also should be considered. They again stated that Weyerhaeuser did not agree that the Company would have an option to purchase MBA's Partnership interest as a result of the MB Transaction. Mr. Rogel emphasized the strategic importance to Weyerhaeuser of the engineered wood products business and stated that Weyerhaeuser would be prepared to offer $36 per Share to acquire all the outstanding Shares of the Company. Mr. Denig stated that he did not view that offer as compelling compared to the other alternatives he believed were available to the Company and suggested that the respective financial advisors to the two companies meet to discuss the business and operational assumptions underlying their respective valuations of the Company. Mr. Denig also indicated that the Company would continue to work on the alternative of exercising its rights under the Partnership Agreement to acquire MBA's interest in the Partnership, but that he did not believe that the continuation of the Partnership in its then current 15 form following consummation of the MB Transaction would be an acceptable alternative for the Company and its stockholders given Weyerhaeuser's potential influence on the Company in such a circumstance. On September 21 and October 1, 1999, the financial advisors to the Company and Weyerhaeuser met to discuss their respective views on valuation. During this period, Goldman Sachs advised Morgan Stanley that the Company did not intend to pursue a transaction of $36 per Share in light of its other alternatives. On October 11, 1999, Morgan Stanley advised Goldman Sachs that Weyerhaeuser did not intend to discuss any changes in its proposal to acquire the Company until it received the Company's view as to an appropriate acquisition price. Morgan Stanley further stated that Weyerhaeuser wished to wait until after the MB Transaction was consummated to pursue further discussions with the Company. In a telephone conversation with Mr. Denig on October 19, 1999, Mr. Rogel reiterated these statements. The MB Transaction was consummated on November 1, 1999. That evening, Messrs. Rogel, Stivers and Corbin met with Messrs. Denig and Olson and Ms. Valerie A. Heusinkveld, Vice President and Chief Financial Officer of the Company, in Seattle, Washington. At this meeting the Company representatives discussed certain of the assumptions underlying Weyerhaeuser's $36 per Share proposal. The Company representatives presented reasons why they believed a higher price was justified for the Shares. At the end of this meeting, Messrs. Rogel and Denig met separately and Mr. Rogel proposed a $40 per Share price to acquire the Company. Mr. Denig indicated that he would not be willing to support such a proposal. On November 3, 1999, Mr. Denig invited Mr. Rogel to visit the Company's Deerwood, Minnesota, facility the following weekend. On November 7, 1999, during the visit to the Deerwood facility, Messrs. Rogel and Denig again discussed the acquisition of the Company by Weyerhaeuser, and Mr. Denig indicated that he might be prepared to support a transaction at $43 per Share. Mr. Rogel indicated that Weyerhaeuser was not prepared to raise its price above $40 per Share although Weyerhaeuser would be willing to consider using consideration consisting of 50% Weyerhaeuser stock. Mr. Denig indicated that the Company's Board of Directors would meet on November 11 and that he would inform the Board of Directors of his most recent discussions with Mr. Rogel. On November 10, 1999, Mr. Rogel sent the following letter to Mr. Denig: "November 10, 1999 Mr. Tom Denig TJ International 200 East Mallard Drive Boise, Idaho 83706 Dear Tom: Following our recent discussions regarding the combination of TJ International (TJI) and Weyerhaeuser Company (Weyerhaeuser), I wanted to reemphasize, on behalf of Weyerhaeuser and its board of directors, our strong interest in pursuing a transaction between our two companies. We believe that the combination of our companies is mutually beneficial for all of our shareholders. As we discussed, in order to avoid any miscommunication, I felt it important to commit to paper the proposal we are making. After carefully considering all of the information discussed in our various meetings and taking into account all of the potential synergies and operating improvements that are realistically achievable, we propose to purchase TJI for cash at a price of $40.00 for each share of TJI common stock. Alternatively, as you have indicated a preference for a stock component, we also would consider a transaction with one-half of the consideration in cash and one-half in Weyerhaeuser common stock. This alternative transaction would be structured as a cash tender at $40.00 for half of the outstanding TJI common stock followed by a second step merger of 0.6375 shares of Weyerhaeuser common stock for each remaining share of TJI common stock, based on Weyerhaeuser's closing price yesterday of $62.75. This proposal assumes there are approximately 18.3 million shares of TJI common stock outstanding on a fully diluted basis. 16 We believe this offer creates superior value for your shareholders versus other options available to TJI. This significant premium we are offering represents an up-front payment to your shareholders for the synergies and operating improvements we expect to achieve. Our proposal represents a 30% premium to the closing price of TJI common stock on November 9, 1999, and a 50% premium to TJI's stock price before the announcement of our merger with MacMillan Bloedel. In addition our offer represents substantial premiums of 50%, 52% and 81% to TJI's 1-, 2- and 5-year average stock prices, respectively, as well as a meaningful premium to the long-term price targets of research analysts who cover TJI. In addition to the premium, if a component of Weyerhaeuser common stock is included, TJI shareholders would have a tax-deferred transaction on the stock received, a currency with significant liquidity, and an enhanced dividend with pickup of more than 130%. TJI shareholders who choose to receive common stock will also benefit from the substantial upside in Weyerhaeuser common stock as we realize benefits from the pulp and paper cycle as well as the benefits from our recent merger with MacMillan Bloedel and a combination with TJI. In analyzing your business, we have adopted an aggressive view of the future prospects for engineered wood products and TJI's position in the market. We have projected operating parameters that exceed TJI's historical performance. Given the strategic alliance between Weyerhaeuser and TJI signed in 1993 and the close working relationship between our two companies, we believe we have fully accounted for all potential synergies. Furthermore, now that we have completed our transaction with MacMillan Bloedel, Weyerhaeuser is responsible for distributing and providing in- market support for products generating over 60% of your revenues, a system that would be time consuming and difficult to replicate. For these and other reasons, we are convinced that a combination of TJI and Weyerhaeuser will generate the highest value for TJI shareholders relative to any other alternative. As we indicated in recent meetings, and you and I discussed this past Monday, this price reflects our full valuation of TJI and is not negotiable. We are willing to proceed at this price only if we can achieve a prompt, negotiated transaction. We are prepared to negotiate a definitive merger agreement with you and to commence a tender offer quickly. To that end we are in position to promptly deliver the merger agreement once we hear back affirmatively from you after your board meeting. We could concurrently commence our confirmatory due diligence process which we expect could be completed within one week with your full cooperation. As part of the agreement, we will require the strong and full commitment of insiders to this transaction, customary no-shop provisions and a break-up fee of $30 million. We anticipate the transaction will be subject only to customary closing conditions, including regulatory approvals and clearances. Given the significance to TJI of our proposal, the premium to TJI's recent and historical trading prices and the strategic alternatives available to TJI, we expect that our proposal will be carefully considered by the TJI board. We look forward to hearing from you shortly. Very truly yours, Steven R. Rogel Chairman, President & CEO" On November 11, 1999, following a meeting of the Company's Board of Directors, Mr. Rogel received a call from Mr. Dan Nelson and Mr. J. L. Scott, two directors of the Company. They indicated that if Weyerhaeuser were prepared to increase the price in its proposal to $42 per Share, in their view, the Company's Board would support a transaction at $42 per Share. These directors did not discuss any of the other conditions set forth in this Weyerhaeuser letter of November 10, 1999. On November 12, 1999, Mr. Rogel called Mr. Scott to advise him that he would discuss a price of $42 per Share with the Board of Directors of Weyerhaeuser on November 15 and that he would be in a position to respond on November 16, 1999. Mr. Rogel stated that any increase by Weyerhaeuser above its proposed price of $40 per Share would have to be on an all-cash basis. On November 15, 1999, the Board of Directors of Weyerhaeuser approved a cash offer price of $42 per Share. 17 On November 16, 1999, Mr. Rogel called Mr. Scott and stated that Weyerhaeuser was willing to offer $42 per Share in an all-cash transaction subject to certain other terms. Mr. Rogel then called Mr. Denig and confirmed Weyerhaeuser's willingness to proceed with a transaction on this basis. Later on November 16, 1999, Mr. Rogel sent the following letter to Mr. Denig: "November 16, 1999 Mr. Tom Denig TJ International 200 East Mallard Drive Boise, Idaho 83706 Dear Tom: Following up on my conversation earlier today with Joe Scott, I wanted to reemphasize Weyerhaeuser Company's strong interest in pursuing a combination with TJ International (TJI). The Weyerhaeuser Company (Weyerhaeuser) board has unanimously authorized me to pursue a transaction between our two companies and is convinced that the union would further strengthen our combined leadership position in the engineered wood products market. After thorough consideration and based on the terms outlined below, we have agreed to meet your price for TJI of $42.00 per share, payable solely in cash. As we discussed on the phone this morning, this meets the price you provided me to receive strong and unanimous board support for a cash transaction on the terms we have proposed. We believe this represents an extremely compelling transaction for your shareholders based on its substantial premium to TJI's recent and historical share price. The transaction would be structured as a cash tender offer for all of the outstanding common and preferred shares, followed by a second step merger for the remaining shares. In order to move quickly to completion, the Weyerhaeuser team is in place and prepared to commence confirmatory due diligence immediately. We would expect that with TJI's full cooperation a definitive agreement could be signed and announced next Monday as you suggested. In consideration for increasing our bid to $42.00 per share, Weyerhaeuser expects to receive the following terms (all of which are detailed in the draft merger agreement): . Strong support from TJI's insiders including shareholder agreements locking up insider shares; . A break-up fee of $30 million payable under customary circumstances; . A customary no-shop provision; and . A waiver of any buy/sell rights TJI may have under the Partnership Agreement as a result of the MacMillan-Bloedel transaction. An important reason why our Board is willing to increase the price to $42.00 per share is the ability to complete the tender offer and merger in approximately six weeks versus the several month process to complete the second step merger if a stockholder vote is required. In order to ensure the acquisition of 90% of each class of TJI's stock, the draft merger agreement will require a "share top up" provision. In addition, we will need to obtain and review a copy of TJI's ESOP Plan, which is not publicly available. Furthermore we expect full cooperation from TJI in structuring the transaction so that the ESOP and the ESOP convertible preferred stock does not limit our ability to use the "short form" merger procedure. As soon as we have confirmation from you following your Board meeting this morning, we will deliver a draft merger agreement. We believe it is in the best interests of both our companies for our discussions to be kept on a strictly confidential basis. 18 We have been impressed by the strength of the management team and the significant steps you have taken to position the company for future growth. We are excited about the prospects of acquiring such an outstanding company with strong brand and product recognition. I believe a combination of TJI and Weyerhaeuser will create the leading engineered wood products company in the world. Very truly yours, Steven R. Rogel Chairman, President & CEO" Following a meeting of the Company's Board of Directors later that day, Mr. Denig informed Mr. Rogel that the Company was prepared to proceed with negotiation of a transaction at $42 per share assuming that the parties could agree to a mutually acceptable merger agreement. Later that evening, Weyerhaeuser and the Company entered into a confidentiality agreement covering non-public information to be provided to Weyerhaeuser by the Company on the evening of November 16. This agreement did not contain any standstill provisions restricting a unilateral offer by Weyerhaeuser. Counsel to Weyerhaeuser provided counsel to the Company with a draft form of Merger Agreement on November 16, 1999. During the period from November 17 until November 23, 1999, representatives of Weyerhaeuser and the Company and their respective financial and legal advisors negotiated the terms of the Merger Agreement, and Weyerhaeuser held meetings in Boise to conduct a due diligence investigation of the Company. On November 22, 1999, the Board of Directors of the Company met to approve the Merger Agreement. On November 23, the Merger Agreement was executed by Weyerhaeuser and the Company, and public announcement of the Merger Agreement was made prior to the opening of trading that day. Transactions with the Company. The Company holds a 51% partnership interest in and is the general and managing partner of, the Partnership. MBA, now a wholly owned subsidiary of Weyerhaeuser, owns the remaining 49% interest in the Partnership. The Partnership sells engineered lumber products to Weyerhaeuser and its subsidiaries (including WCL) in the ordinary course of business and on terms comparable to the Partnership's other customers. Sales to Weyerhaeuser and its subsidiaries (including WCL) were $418 million in the nine months ended September 30, 1999, $466 million in 1998, $424 million in 1997, and $357 million in 1996. Accounts receivable from Weyerhaeuser and its subsidiaries (including WCL) in connection with these transactions were $16.2 million at January 2, 1999, $17.4 million at January 3, 1998 and $16.7 million at December 28, 1996. A substantial portion of these transactions occurred pursuant to a strategic alliance between the Partnership and Weyerhaeuser's Building Materials Distribution Division pursuant to which the Partnership distributes its engineered wood products through Weyerhaeuser customer service centers and Weyerhaeuser has agreed not to actively market engineered wood products in direct competition with the Partnership's products. The distribution arrangement may be terminated by either party with two years' written notice. Pursuant to supply agreements, the Partnership purchases certain materials such as oriented strand board from Weyerhaeuser and its subsidiaries on terms comparable to other customers for such products. The supply agreements may be terminated by either party with two years' written notice. Purchases by the Partnership from Weyerhaeuser and its subsidiaries were $35 million in the nine months ended September 30, 1999, $36 million in 1998, $27 million in 1997, and $32 million in 1996. The Partnership makes quarterly cash distributions to its partners for payment of state and federal income taxes. These included distributions to MBA of $17.5 million in 1998, $13.4 million in 1997 and $7.96 million in 1996. Certain employees who perform services for the Company at facilities formerly owned by a subsidiary of Weyerhaeuser remain on such subsidiary's payroll. The Partnership Agreement provides that the Company must reimburse the Weyerhaeuser subsidiary for actual payroll and related benefit costs relating to those employees. Payroll reimbursements were $5.9 million for 1998, $5.9 million for 1997, and $5.8 million for 1996. Total 19 payables to Weyerhaeuser subsidiaries for such services and tax distributions were $3.8 million at January 2, 1999, $4.6 million at January 3, 1998, and $2.7 million at December 28, 1996. Except as described in this Offer to Purchase (including Schedule I hereto), none of the Purchaser, Weyerhaeuser or, to the best knowledge of the Purchaser and Weyerhaeuser, any of the persons listed in Schedule I hereto, or any associate or majority-owned subsidiary of the Purchaser, Weyerhaeuser or any of the persons so listed, beneficially owns any equity security of the Company, and none of the Purchaser, Weyerhaeuser or, to the best knowledge of the Purchaser and Weyerhaeuser, any of the other persons referred to above, has effected any transaction in any equity security of the Company during the past 60 days. The Purchaser and Weyerhaeuser disclaim beneficial ownership of any shares owned by any pension plan of Weyerhaeuser or any affiliate of Weyerhaeuser. Except as described in this Offer to Purchase, as of the date hereof (a) there have not been any contacts, transactions or negotiations between the Purchaser or Weyerhaeuser, any of their respective subsidiaries or, to the best knowledge of the Purchaser, any of the persons listed in Schedule I hereto, on the one hand, and the Company or any of its directors, officers or affiliates, on the other hand, that are required to be disclosed pursuant to the rules and regulations of the Commission and (b) none of the Purchaser, Weyerhaeuser or, to the best knowledge of the Purchaser and Weyerhaeuser, any of the person listed in Schedule I hereto has any contract, arrangement, understanding or relationship with any person with respect to any securities of the Company. During the Offer, the Purchaser and Weyerhaeuser intend to have ongoing contacts and negotiations with the Company and its directors, officers and stockholders. 12. Purpose of the Offer; the Merger Agreement; the Partnership Agreement; Certain Other Agreements Purpose The purpose of the Offer is to enable Weyerhaeuser to acquire control of the Company and to acquire all of the outstanding Shares. The Offer, as the first step in the acquisition of the Company, is intended to facilitate the acquisition of all of the outstanding Shares. The purpose of the Merger is to acquire all outstanding Shares not tendered and purchased pursuant to the Offer or otherwise. The Merger Agreement The Merger Agreement provides that following the satisfaction or waiver of the conditions described below under "Conditions to the Merger", the Purchaser will be merged with and into the Company, and each issued Share (other than Shares owned by Weyerhaeuser, the Purchaser or the Company or a wholly-owned subsidiary of Weyerhaeuser, the Purchaser or the Company or by stockholders, if any, who are entitled to and who properly exercise appraisal rights under Delaware law) will be converted into the right to receive an amount in cash equal to the price per Share paid pursuant to the Offer. Vote Required To Approve Merger. The Delaware General Corporation Law ("DGCL") requires, among other things, that the adoption of any plan of merger or consolidation of the Company must be approved by the Board of Directors, and, if the "short-form" merger procedure described below is not available, adopted by the Company's stockholders. The Board of Directors of the Company has approved the Offer, the Merger and the Merger Agreement; consequently, the only additional action of the Company that may be necessary to effect the Merger is adoption of the Merger Agreement by the Company's stockholders if such "short-form" merger procedure is not available. Under the DGCL, if stockholder adoption of the Merger Agreement is required in order to consummate the Merger, the vote required is the affirmative vote of the holders of a majority of the outstanding Shares (including any Shares owned by the Purchaser) voting together as a single class. If the Purchaser acquires, through the Offer, the Merger Agreement or otherwise, voting power with respect to at least a majority of the outstanding Shares (which would be the case if the Minimum Condition were satisfied and the Purchaser were to accept for payment Shares tendered pursuant to the Offer), it would have sufficient voting power to effect the Merger without the affirmative vote of any other stockholder of the Company. 20 The DGCL also provides that if a parent company owns at least 90% of the outstanding shares of each class of stock of a subsidiary, the parent company may merge that subsidiary into the parent company, or the parent company may merge itself into that subsidiary, pursuant to "short-form" merger procedures without prior notice to, or the approval of, the other stockholders of the subsidiary. In order to consummate the Merger pursuant to the provisions of the DGCL, the Purchaser would have to own at least 90% of the outstanding Common Shares and at least 90% of the outstanding Preferred Shares. All the outstanding Preferred Shares are held by the trustee for the Company's Investment Plan. Upon any transfer of Preferred Shares to the Purchaser or Weyerhaeuser pursuant to the Offer or otherwise, such Preferred Shares will automatically convert into Common Shares in accordance with their terms. Accordingly, unless all the outstanding Preferred Shares are tendered pursuant to the Offer and purchased by the Purchaser or otherwise acquired by the Purchaser or Weyerhaeuser, the Purchaser and Weyerhaeuser will not own 90% of the Preferred Shares remaining outstanding. The Merger Agreement provides that if, upon consummation of the Offer, the Purchaser owns a number of Common Shares that, together with the Common Shares that the Purchaser has the option to purchase pursuant to the provision described in the next paragraph, equals at least 90% of the then outstanding Common Shares (after giving effect to the exercise of such option) then the Company shall take such action as is requested by Weyerhaeuser and permitted by the certificate of designation for the Preferred Shares and applicable law to terminate and or amend the employee stock ownership portion of the Company's Investment Plan (the "ESOP") and to call for redemption all of the then-outstanding Preferred Shares as promptly as practicable after such request by Weyerhaeuser. Upon such redemption of the Preferred Shares, no Preferred Shares would remain outstanding and the Purchaser would own, or have the ability to own, 90% of the then outstanding Common Shares (after giving effect to the exercise of the option described in the next paragraph). As part of the Merger Agreement, the Company has granted to the Purchaser an option to purchase such number of Common Shares for a price of $42 per Common Share that, when added to the number of Common Shares owned by Weyerhaeuser and the Purchaser immediately prior to the exercise of the option, would result in the Purchaser owning immediately after the exercise 90% of the then outstanding Common Shares. The Purchaser may exercise the option only if, at the time of exercise of the option, Weyerhaeuser, the Purchaser and any other subsidiary of Weyerhaeuser own at least 50.1% of the Fully Diluted Shares (as defined in Section 14). See "Grant of Conditional Option" below. Although Weyerhaeuser and the Purchaser have the ability, through their rights to cause the Company to redeem the Preferred Shares and their option to purchase Common Shares, to obtain the ownership levels necessary to consummate the Merger using the "short-form" merger procedure, their ability to cause the redemption of the Preferred Shares and exercise the option for Common Shares is subject to certain contingencies and they cannot provide any assurance that they will be successful. In addition, Weyerhaeuser and the Purchaser are not obliged to do anything in this regard. Accordingly, no assurance can be given that the Merger can or will be consummated as a "short form" merger without approval by the stockholders of the Company. Conditions to the Merger. The Merger Agreement provides that the respective obligations of each party to effect the Merger are subject to the satisfaction or waiver of certain conditions, including the following: (a) if required by applicable law, the Merger Agreement having been approved and adopted by the affirmative vote of the holders of a majority of the Shares; (b) no temporary restraining order, preliminary or permanent injunction or other order issued by any court of competent jurisdiction or other legal restraint or prohibition preventing the consummation of the Merger being in effect; provided, however, that each of the Company, the Purchaser and Weyerhaeuser has used all reasonable efforts to prevent the entry of any such injunction or other order and to appeal as promptly as possible any such injunction or other order that may have been entered; and (c) the Purchaser having previously accepted for payment and paid for Shares pursuant to the Offer. 21 Termination of the Merger Agreement. The Merger Agreement may be terminated at any time prior to the effective time of the Merger, whether before or after adoption of the Merger Agreement by the stockholders of the Company: (1) by mutual written consent of Weyerhaeuser, the Purchaser and the Company; provided that, any such consent shall require the concurrence of a majority of the independent directors of the Company if it occurs after the purchase of Shares pursuant to the Offer; (2) by either Weyerhaeuser or the Company; (a) if the Offer is not consummated on or before April 3, 2000 (the "Outside Date"), unless the failure to consummate the Offer is the result of a material breach of the Merger Agreement by the party seeking to terminate the Merger Agreement; provided, however, that the passage of such period will be tolled for any part thereof during which any party is subject to a nonfinal order, decree, ruling or action restraining, enjoining or otherwise prohibiting the consummation of the Offer and the Outside Date shall be extended day-by-day for each day tolled: provided further, however, that the Outside Date shall not be extended past May 18, 2000; (b) if any federal, state, local or foreign government or any court of competent jurisdiction, administrative agency or commission or other governmental authority or instrumentality, domestic or foreign (a "Governmental Entity"), issues an order, decree or ruling or takes any other action permanently enjoining, restraining or otherwise prohibiting the Merger and such order, decree, ruling or other action has become final and nonappealable; or (c) if as the result of the failure of any of the conditions to the Offer set forth in Section 14, the Offer has terminated or expired in accordance with its terms and the terms of the Merger Agreement without the Purchaser having purchased any Shares pursuant to the Offer; provided, however, that the right to terminate the Merger Agreement pursuant to the terms of this clause (c) will not be available to any party whose failure to fulfill any of its obligations under the Merger Agreement results in the failure of such condition; (3) by Weyerhaeuser if, prior to the consummation of the Offer, the Company breaches or fails to perform in any material respect any of its representations, warranties or covenants contained in the Merger Agreement, which breach or failure to perform (a) would give rise to the failure of a condition set forth in Section 14 and (b) has not been or is not capable of being cured within 30 days of the giving of written notice to the Company of such breach, provided that Weyerhaeuser is not then in material breach of any representation, warranty or covenant in the Merger Agreement; (4) by Weyerhaeuser: (a) if the Board of Directors of the Company or any committee thereof withdraws or modifies, or publicly proposes to withdraw or modify, in a manner adverse to Weyerhaeuser or the Purchaser, its approval or recommendation of the Merger Agreement, the Offer or the Merger or fails to recommend to the Company's stockholders that they approve the Merger Agreement and the Merger (the "Stockholder Approval") or approves or recommends, or publicly proposes to approve or recommend, any Takeover Proposal (as defined below); or (b) if the Board of Directors of the Company fails to reaffirm publicly and unconditionally within ten business days after Weyerhaeuser's written request to do so (which request may be made at any time that a Takeover Proposal is pending and not withdrawn) and must also include the unconditional rejection of such Takeover Proposal (to the extent not previously withdrawn) its recommendation to the Company's stockholders that they give the Stockholder Approval; provided, however, that Weyerhaeuser may not request the Board of Directors of the Company to make more than one such reaffirmation in respect of any Takeover Proposal unless such Takeover Proposal has been materially amended or modified (and not withdrawn); (5) by the Company if, prior to the acceptance of Shares for payment pursuant to the Offer, Weyerhaeuser breaches or fails to perform in any material respect any of its representations, warranties or covenants contained in the Merger Agreement, which breach or failure to perform has not or is not capable 22 of being cured within 30 days after the giving of written notice to Weyerhaeuser of such breach provided that the Company is not then in material breach of any representation, warranty or covenant contained in the Merger Agreement); (6) by the Company prior to the acceptance of Shares for payment pursuant to the Offer in accordance with the terms of the Merger Agreement described in the second paragraph below under "Takeover Proposals", provided it has complied with all provisions described in the second paragraph under "Takeover Proposals", including the notice provisions therein; or (7) by the Company if the offer has not been commenced within seven business days after the date of the Merger Agreement (satisfied by the commencement of this Offer); or (8) by the Company if any event occurs which would result in the condition set forth in paragraph (d) of Section 14 not being satisfied, and five business days have elapsed since such occurrence, unless Weyerhaeuser shall have waived its right to terminate this Agreement and its right not to consummate the Offer for the failure of such condition resulting from such event. Takeover Proposals. The Merger Agreement provides that the Company will not, nor will it permit any of its subsidiaries to, nor will it authorize any officer, director or employee of, or any investment banker, attorney or other advisor or representative of, the Company or any of its subsidiaries to (1) solicit, initiate or knowingly encourage the submission of any Takeover Proposal, (2) enter into any agreement with respect to any Takeover Proposal or (3) participate in any discussions or negotiations regarding, or furnish to any person any information with respect to, or take any other action to knowingly facilitate any inquiries or the making of any proposal that constitutes, or may reasonably be expected to lead to, any Takeover Proposal; provided, however, that, at any time during the period following the execution of the Merger Agreement and prior to the consummation of the Offer (the "Applicable Period"), if the Company receives a proposal or offer that was not solicited by the Company and that did not otherwise result from a breach of these provisions and that the Board of Directors of the Company determines in good faith (based on consultation with its outside counsel and a financial advisor of nationally recognized reputation) could result in a third party making a Superior Proposal (as defined below, including the determination by the Board of Directors of the Company set forth in such definition), and subject to compliance with the notice provisions described in the second succeeding paragraph below, the Company may, to the extent necessary to comply with the fiduciary obligations of the Board of Directors of the Company, as determined in good faith by it after consultation with outside counsel, (A) furnish information with respect to the Company to the person making such proposal or offer pursuant to a customary confidentiality agreement as determined by the Company after consultation with its outside counsel, and (B) participate in discussions or negotiations with such person regarding such proposal or offer. The Merger Agreement provides that any action that is in violation of the restrictions set forth in the preceding sentence by any executive officer of the Company or any of its subsidiaries or any affiliate, director or investment banker, attorney or other advisor or representative of the Company or any of the Company's subsidiaries, shall be deemed to be a breach of the provisions described in this paragraph by the Company. The Merger Agreement provides that the Company shall, and shall cause its officers and directors, and any investment banker, attorney or other advisor or representative of the Company or any subsidiary of the Company, to cease immediately all discussions and negotiations regarding any proposal that constitutes, or may reasonably be expected to lead to, a Takeover Proposal. The Merger Agreement defines "Takeover Proposal" as any inquiry, proposal or offer for a merger, consolidation, dissolution, liquidation, recapitalization or other business combination involving the Company or any subsidiary of the Company, any proposal or offer for the issuance by the Company of over 15% of its equity securities as consideration for the assets or securities of any person or any proposal or offer to acquire in any manner, directly or indirectly, over 15% of the equity securities or consolidated total assets of the Company in each case, other than the transactions contemplated by the Merger Agreement. The Merger Agreement further provides that, except as described below, neither the Board of Directors of the Company nor any committee thereof may approve any letter of intent, agreement in principle (although no additional time period shall be required following such determinations), acquisition agreement or similar agreement (an "Acquisition Agreement") related to any Takeover Proposal or approve or recommend, or propose 23 to approve or recommend, any Takeover Proposal. The Company may terminate the Merger Agreement pursuant to clause (6) under "Termination of the Merger Agreement" only if (i) the Board of Directors of the Company has received a Superior Proposal (as defined below), (ii) in light of such Superior Proposal the Board of Directors of the Company has determined in good faith, after consultation with outside counsel, that it is necessary for the Board of Directors of the Company to withdraw or modify its approval or recommendation of the Merger Agreement, the Offer or the Merger in order to comply with its fiduciary obligations, (iii) the Company has notified Weyerhaeuser in writing of the determinations described in clause (ii) above, (iv) at least three business days following receipt by Weyerhaeuser of the notice referred to in clause (iii) above, and taking into account any revised proposal by Weyerhaeuser since the receipt of the notice referred to in clause (iii) above, such Superior Proposal remains a Superior Proposal and the Board of Directors of the Company has again made the determinations referred to in clause (ii) above (although no additional time period shall be required following such determinations), (v) the Company is in compliance with its obligations with respect to Takeover Proposals, (vi) the Board of Directors of the Company concurrently approves, and the Company concurrently enters into, a definitive agreement providing for the implementation of such Superior Proposal, (vii) such definitive agreement contains the guarantee described below under "Waiver Under Partnership Agreement" and (viii) Weyerhaeuser is not at such time entitled to terminate the Merger Agreement pursuant to clause (3) under "Termination of the Merger Agreement" above solely as a result of a knowing and deliberate breach by the Company of a representation or warranty in the Merger Agreement or a material breach by the Company of a covenant in the Merger Agreement. The Merger Agreement defines "Superior Proposal" as any proposal made by a third party to acquire all or substantially all of the equity securities or assets of the Company, pursuant to a tender or exchange offer, a merger, a consolidation, a liquidation or dissolution, a recapitalization, a sale of its assets or otherwise, which a majority of the disinterested directors of the Company determines in its good faith judgment to be (i) on terms superior from a financial point of view to the holders of Shares than the transactions contemplated by the Merger Agreement (based on consultation with the Company's independent financial advisor), taking into account all the terms and conditions of such proposal and the Merger Agreement (including any proposal by Weyerhaeuser to amend the terms of the transactions contemplated by the Merger Agreement) and (ii) reasonably capable of being completed, taking into account all financial, regulatory, legal and other aspects of such proposal. In addition to the obligations of the Company described in the preceding two paragraphs, the Merger Agreement provides that the Company will promptly advise Weyerhaeuser orally and in writing of any Takeover Proposal or any inquiry with respect to or that could reasonably be expected to lead to any Takeover Proposal, the identity of the person making any such Takeover Proposal or inquiry and the material terms of any such Takeover Proposal or inquiry. The Company is further required under the terms of the Merger Agreement to (i) keep Weyerhaeuser fully informed of the status of any such Takeover Proposal or inquiry and (ii) provide to Weyerhaeuser as soon as practicable after receipt or delivery thereof with copies of all correspondence and other written material sent or provided to the Company from any third party in connection with any Takeover Proposal; provided, however, that the Company shall not be required to provide any nonpublic information specified in this clause (ii) regarding the business or financial condition or prospects of such third party if (A) the Company is prohibited from disclosing such information pursuant to a legally binding confidentiality agreement and (B) such Takeover Proposal provides for consideration consisting solely of cash. The Merger Agreement provides that nothing contained in this section entitled "Takeover Proposals" will prohibit the Company from taking and disclosing to its stockholders a position contemplated by Rule 14e-2(a) promulgated under the Exchange Act or from making any disclosure to the Company's stockholders if, in the good faith judgment of the Board of Directors of the Company, after consultation with outside counsel, failure so to disclose would be inconsistent with applicable law; provided, however, that neither the Company nor its Board of Directors nor any committee thereof may withdraw or modify, or propose publicly to withdraw or modify, in a manner adverse to Weyerhaeuser or the Purchaser, the approval or recommendation of the Board of Directors of the Company of the Merger, the Offer or the Merger Agreement or approve or recommend, or propose publicly to approve or recommend, a Takeover Proposal unless a withdrawal or modification of such approval or recommendation is, in the good faith judgment of the Board of Directors of the Company after consultation with its outside counsel, necessary to comply with its fiduciary obligations. 24 Fees and Expenses; Termination Fee. The Merger Agreement provides that, except as described below, all fees and expenses incurred in connection with the Offer, the Merger and the other transactions contemplated by the Merger Agreement will be paid by the party incurring such fees or expenses, whether or not the Merger is consummated. The Merger Agreement further provides that the Company will pay in same-day funds to Weyerhaeuser (a) a fee of $12,500,000 if the Merger Agreement is terminated in accordance with the provisions described above in clause (6) under "Termination of the Merger Agreement"; (b) in addition to the fee paid under clause (a) above, a fee of $12,500,000 if the Merger Agreement is terminated in the circumstances contemplated in clause (a) above and thereafter a Takeover Proposal is consummated that involves the person whose Superior Proposal resulted in such termination; (c) a fee of $12,500,000 if the Merger Agreement is terminated in accordance with the provisions described above in clause (4) under "Termination of the Merger Agreement"; (d) in addition to the fee paid under clause (c), a fee of $12,500,000 if the Merger Agreement is terminated in the circumstances contemplated by clause (c) and within 12 months of such termination either (x) an Acquisition Proposal (as defined below) is consummated or (y) the Company enters into an agreement to consummate an Acquisition Proposal and any Acquisition Proposal is thereafter consummated that includes the person party to such agreement, whether or not such consummation is within such 12 month period; (e) a fee of $12,500,000 if (i) after the date of the Merger Agreement and prior to the termination of the Merger Agreement, any person makes a Takeover Proposal, (ii) the Offer remains open until the scheduled expiration date immediately following the date such Takeover Proposal is made (or such later date as the Offer may be extended at the Company's request pursuant to the Merger Agreement), (iii) the Minimum Condition is not satisfied at the expiration of the Offer, (iv) the Merger Agreement is terminated pursuant to clause (2)(c) under "Termination of the Merger Agreement" and (v) within 12 months of such termination the Company enters into an agreement to consummate an Acquisition Proposal; (f) in addition to the fee paid under clause (e), a fee of $12,500,000 if the Merger Agreement is terminated in the circumstances contemplated by clause (e) and thereafter an Acquisition Proposal is consummated that involves the person party to the agreement referred to in clause (e)(v); and (g) a fee of $25,000,000 if (i) after the date of the Merger Agreement and prior to the termination of the Merger Agreement, any person makes a Takeover Proposal, (ii) the Offer remains open until the scheduled expiration date immediately following the date such Takeover Proposal is made (or such later date as the Offer may be extended at the Company's request pursuant to the Merger Agreement), (iii) the Minimum Condition is not satisfied at the expiration of the Offer, (iv) the Merger Agreement is terminated pursuant to clause (2)(c) of "Termination of the Merger Agreement" above; and (v) within 12 months of such termination an Acquisition Proposal is consummated. The Merger Agreement provides that under no circumstances will the Company be obligated to pay fees as described in this paragraph in excess of $25,000,000 in the aggregate. The Merger Agreement defines "Acquisition Proposal" to mean a Takeover Proposal, provided that for the purpose of this definition, each reference to "15%" in the definition of Takeover Proposal shall be deemed a reference to "50%". Conduct of Business. The Merger Agreement provides that, except as contemplated or permitted by the terms of the Merger Agreement from the date of the Merger Agreement to the effective time of the Merger or earlier termination of the Merger Agreement, the Company will, and will cause its subsidiaries to, conduct their respective business in the usual and ordinary course consistent with past practice except as required to comply with changes in applicable law occurring after the date of the Merger Agreement and, to the extent consistent therewith, use all reasonable efforts to preserve intact their current business organizations and keep available the services of their current officers and employees to maintain their respective goodwill and ongoing business, in addition, and without limiting the generality of the foregoing, except as contemplated or permitted by the terms of the Merger Agreement, from the date of the Merger Agreement to the effective time of the Merger Agreement, the Company shall not, and shall not permit any of its subsidiaries to, do any of the following without the prior written consent of Weyerhaeuser: (i) (A) declare, set aside or pay any dividends on, or make any other distributions in respect of, any of its capital stock, other than (1) dividends and distributions by a direct or indirect wholly-owned subsidiary of the Company to its parent, (2) regular quarterly cash dividends with respect to the Common Stock, not in excess of $0.055 per share, with usual declaration, record and payment dates and in accordance with the 25 Company's past dividend policy, (3) regular annual cash dividends, not in excess of $1.065 per share, payable on outstanding Preferred Stock in accordance with the current terms thereof, and (4) any dividend or distribution permitted by the terms of the Partnership Agreement (as defined under "Waiver Under Partnership Agreement") or previously approved by the Board of Directors of the Partnership, (B) split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock, or (C) except for the redemption of Preferred Stock as required by paragraph (C) of Section 8 of the Certificate of Designation for the Preferred Stock by reason of the Merger Agreement or pursuant to a request by Weyerhaeuser pursuant to the Merger Agreement, purchase, redeem or otherwise acquire any shares of capital stock of the Company or any of its subsidiaries or any other securities thereof or any rights, warrants or options to acquire any such shares or other securities; (ii) issue, deliver, sell or grant (A) any shares of its capital stock, (B) any voting debt or other voting securities, (C) any securities convertible into or exchangeable for, or any options, warrants or rights to acquire, any such shares, voting company debt, voting securities or convertible or exchangeable securities or (D) any "phantom" stock, "phantom" stock rights, stock appreciation rights or stock-based performance units, other than (1) the issuance of Common Stock (and associated Rights) upon the exercise of Company Employee Stock Options outstanding on the date of the Merger Agreement and in accordance with their present terms, (2) the issuance of up to an additional 2,500 Company Employee Stock Options, each of which shall have an exercise price not less than the fair market value of Common Stock on the date of grant, pursuant to the Company Stock Plans in accordance with their present terms and the issuance of Common Stock (and associated Rights) upon the exercise of such Company Employee Stock Options and (3) the issuance of junior preferred stock upon the exercise of Rights; (iii) amend its certificate of incorporation, by-laws or other comparable charter or organizational documents; (iv) except in the ordinary course consistent with past practice, acquire or agree to acquire (A) by merging or consolidating with, or by purchasing a substantial portion of the assets of, or by any other manner, any equity interest in or business or any corporation, partnership, joint venture, association or other business organization or division thereof or (B) any assets that are material, individually or in the aggregate, to the Company and any of its subsidiaries, taken as a whole; (v) (A) grant to any officer or director of the Company or any of its subsidiaries any increase in compensation, except in the ordinary course consistent with prior practice or to the extent required under employment agreements in effect as of the date hereof, (B) grant to any employee, officer or director of the Company or any of its subsidiaries any increase in severance or termination pay, except to the extent required under any agreement in effect as of the date hereof, (C) enter into any employment, consulting, indemnification, severance or termination agreement with any officer or director of the Company or any of its subsidiaries, (D) establish, adopt, enter into or amend in any material respect any collective bargaining agreement or benefit plan, except as may be required by applicable law in effect as of the date hereof, (E) take any action to accelerate any rights or benefits, or make any material determinations not in the ordinary course consistent with prior practice, under any collective bargaining agreement or benefit plan or (F) enter into any agreement described in clause (C) hereof with (1) any other employee of the Company or any of its subsidiaries employed in the United States or Canada or (2) any such employee employed outside the United States and Canada except for agreements required by applicable law in the relevant jurisdiction; (vi) make any change in financial accounting methods, principles or practices materially affecting the reported consolidated assets, liabilities or results of operations of the Company, except insofar as may have been required by a change in GAAP or by operation of applicable law; (vii) sell, lease (as lessor), license or otherwise dispose of or subject to any lien any properties or assets, except sales of inventory and excess or obsolete assets or real property in the ordinary course consistent with past practice; 26 (viii) (A) incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its subsidiaries, guarantee any debt securities of another person, enter into any "keep well" or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing, except for short-term borrowings incurred in the ordinary course consistent with past practice, or (B) make any loans, advances or capital contributions to, or investments in, any other person, other than to or in the Company or any direct or indirect wholly-owned subsidiary of the Company or to or in the Partnership; (ix) make or agree to make any new capital expenditure or expenditures (other than expenditures in the existing capital expenditure budget that, individually, is in excess of $5,000,000 or, in the aggregate, are in excess of $9,000,000; (x) make any material tax election, except in the ordinary course consistent with past practice or as required to comply with changes in applicable law occurring after the date of the Merger Agreement, or settle or compromise any material tax liability or refund; (xi) (A) pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction, in the ordinary course consistent with past practice or in accordance with their terms or the terms of the Merger Agreement, of liabilities reflected or reserved against in, or contemplated by, the most recent consolidated financial statements (or the notes thereto) of the Company included in the documents filed by the Company with the Commission or incurred in the ordinary course consistent with past practice, (B) cancel any material indebtedness (individually or in the aggregate) or waive any claims or rights of substantial value or (C) waive the benefits of, or agree to modify in any manner, any confidentiality, standstill or similar agreement to which the Company or any subsidiary of the Company is a party, except, in the case of this clause (C), to the extent required by the fiduciary obligations of the Board of Directors of the Company, as determined in good faith by it after consultation with outside counsel; (xii) exercise any rights it may have under the Limited Partnership Agreement between the Company and MBA dated as of September 30, 1991, as amended by the Amendment to Limited Partnership Agreement, dated February 14, 1992 (the "Partnership Agreement"), to purchase MBA's interest in the Partnership, as a result of the MB Transaction; or (xiii) authorize any of, or commit or agree to take any of, the foregoing actions. In addition to the foregoing, in the Merger Agreement the Company and Weyerhaeuser have agreed that they will not, and will not permit any of their respective subsidiaries to, take any action that would, or that would reasonably be expected to, result in (a) any of the representations and warranties of such party set forth in the Merger Agreement that is qualified as to Material Adverse Effect becoming untrue, (b) any of such representations and warranties that is not so qualified becoming untrue in any material respect or (c) any of the conditions to the Merger described under "Conditions to the Merger" above not being satisfied. Board of Directors. The Merger Agreement provides that promptly upon the acceptance for payment of, and payment by the Board of Directors of the Company for, Shares pursuant to the Offer, the Purchaser will be entitled to designate such number of directors on the Board of Directors of the Company as will give the Purchaser, subject to compliance with Section 14(f) of the Exchange Act, representation on the Board of Directors of the Company equal to at least that number of directors, rounded up to the next whole number, which is the product of (a) the total number of directors on the Board of Directors of the Company (giving effect to the directors elected pursuant to this sentence) multiplied by (b) the percentage that (i) such number of Shares so accepted for payment and paid for by the Purchaser plus the number of Shares otherwise owned by the Purchaser or any other subsidiary of Weyerhaeuser bears to (ii) the number of Fully Diluted Shares (as defined in Section 14), and the Company will, at such time, cause the Purchaser's designees to be so elected; provided, however, that in the event that the Purchaser's designees are appointed or elected to the Board of Directors of the Company, until the effective time of the Merger, the Board of Directors of the Company will include at least three directors who were directors of the Company as of the date of the Merger Agreement and who are not 27 officers of the Company ("Independent Directors"); and provided further, however, that, in such event, if the number of Independent Directors shall be reduced below three for any reason whatsoever, any remaining Independent Directors (or Independent Director, if there shall be only one remaining) shall be entitled to designate persons to fill such vacancies who shall be deemed to be Independent Directors for purposes of the Merger Agreement or, if no Independent Directors then remain, the other directors shall designate three persons to fill such vacancies who are not officers, stockholders or affiliates of the Company, Weyerhaeuser or the Purchaser, and such persons shall be deemed to be Independent Directors for purposes of the Merger Agreement. Subject to applicable law, the Company has agreed to take all action requested by Weyerhaeuser necessary to effect any such election, including mailing to its stockholders the Information Statement containing the information required by Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder, which Information Statement is attached as Annex A to the Schedule 14D-9 (provided that the Purchaser shall have provided to the Company on a timely basis all information required in the Information Statement with respect to the Purchaser's designees). In connection with the foregoing, the Company promptly shall, at the option of the Purchaser, use all reasonable efforts to either increase the size of the Company Board or obtain the resignation of such number of its current directors as is necessary to enable the Purchaser's designees to be elected or appointed to the Company Board as provided above. See "Plans for the Company" below. Following the election or appointment of the Purchaser's designees pursuant to the provisions described in this section, and prior to the effective time of the Merger, any amendment or termination of the Merger Agreement approved by the Company, extension for the performance or waiver of the obligations of Weyerhaeuser or the Purchaser or waiver of the Company's rights hereunder shall require the concurrence of a majority of the Independent Directors. Stock Options. The Merger Agreement provides that as soon as practicable after the date of the Merger Agreement, the Board of Directors of the Company (or, if appropriate, any committee administering the Company Stock Plans) shall adopt such resolutions or take such other actions as are required, subject to any required consent of the holders, to adjust the terms of all outstanding Company Employee Stock Options and all outstanding Company SARs heretofore granted under any Company Stock Plan to provide that each Company Employee Stock Option (and any Company SAR related thereto) outstanding immediately prior to the acceptance for payment of Common Shares pursuant to the Offer shall be canceled in exchange for a cash payment by the Company at that time of an amount equal to (i) the excess, if any, of (x) the consideration payable pursuant to the Merger over (y) the exercise price per Common Share subject to such Company Employee Stock Option, multiplied by (ii) the number of Common Shares for which such Company Employee Stock Option shall not theretofore have been exercised. The Merger Agreement defines (a) "Company Employee Stock Option" as any option to purchase Common Stock granted under any Company Stock Plan, (b) "Company SAR" as any stock appreciation right linked to the price of Common Stock and granted under any Company Stock Plan, and (c) "Company Stock Plans" as the Company's Key Employees' 1992 Stock Option Plan, Key Employees' 1993 Stock Option Plan, Amended and Restated Restricted Stock Plan for Non-Employee Directors, Key Employees' 1982 Incentive Stock Option Plan, as amended, 1985 Incentive Stock Option Plan, as amended, 1998 Stock Option Plan, as amended, Non-Employee Directors 1997 Stock Plan and 1996 Stock Option Plan. The Merger Agreement provides that the Company shall use its reasonable best efforts to obtain all consents of the holders of the Company Employee Stock Options as shall be necessary to effectuate the provisions described in the prior paragraphs and to ensure that following the effective time of the Merger no holder of a Company Employee Stock Option or Company SAR or any participant in any Company Stock Plan or other Company Benefit Plan shall have any right thereunder to acquire any capital stock of the Company or the surviving corporation. Notwithstanding anything to the contrary contained in the Merger Agreement, payment shall, at Weyerhaeuser's request, be withheld in respect of a Company Employee Stock Option until all necessary consents in respect of such Company Employee Stock Option are obtained. The Merger Agreement provides that the Company Stock Plans shall terminate as of the effective time of the Merger, and the provisions in any other Benefit Plan providing for the issuance, transfer or grant of any capital stock of the Company or any interest in respect of any capital stock of the Company shall be deleted as of the effective time of the Merger. 28 Existing Agreements, Plans and Policies. The Merger Agreement provides that from and after the effective time of the Merger, Weyerhaeuser will and will cause the surviving corporation to honor in accordance with their respective terms (as in effect on the date of the Merger Agreement), all the Company's employment, severance and termination agreements, plans and policies disclosed to Weyerhaeuser. If prior to the effective time Weyerhaeuser agrees to grant options to acquire common stock of Weyerhaeuser to any officer or director of the Company prior to the effective time of the Merger, the Board of Directors of Weyerhaeuser, or an appropriate committee of non-employee directors thereof, shall if necessary adopt a resolution consistent with the interpretive guidance of the Commission so that the acquisition by any officer or director of the Company who may become a covered person of Weyerhaeuser for purposes of Section 16 of the Exchange Act and the rules and regulations thereunder ("Section 16") of options to acquire common stock of Weyerhaeuser pursuant to the Merger Agreement and the Merger shall be an exempt transaction for purposes of Section 16. For a period of not less than one year following the effective time of the Merger, Weyerhaeuser shall provide, or shall cause to be provided, to current employees of the Company and its subsidiaries (the "Company Employees"), taken as a whole, employee benefits that are, in the aggregate, no less favorable than those provided from time to time after the effective time of the Merger to employees of Weyerhaeuser and its subsidiaries who are similarly situated, in terms of positions and geographic locations, to such Company Employees; provided, however, that nothing described in this paragraph shall require Weyerhaeuser to continue or cause to be continued any Company Stock Plan. Without limiting the generality of the foregoing, all Company Employees who are covered by the Company's Severance Pay Plan as in effect on the date hereof and whose employment is terminated on or before the first anniversary of the effective time of the Merger shall be provided with severance pay and benefits on a basis, and in amounts, not less favorable than those provided for under the Company's Severance Pay Plan. For all purposes under the employee benefit plans of Weyerhaeuser and its affiliates providing benefits to any Company Employees after the effective time of the Merger (the "New Plans"), each Company Employee shall be credited with his or her years of service with the Company and its affiliates before the effective time of the Merger, to the same extent as such Company Employee was entitled, before the effective time of the Merger, to credit for such service under any similar Company Benefit Plans, except for purposes of benefit accrual under defined benefit pension plans. In addition, and without limiting the generality of the foregoing: (i) each Company Employee shall be immediately eligible to participate, without any waiting time, in any and all New Plans to the extent coverage under such New Plan replaces coverage under a comparable Company Benefit Plan in which such Company Employee participated immediately before the effective time of the Merger and previously described to Weyerhaeuser (such plans, collectively, the "Old Plans"); and (ii) for purposes of each New Plan providing medical, dental, pharmaceutical and/or vision benefits to any Company Employee, Weyerhaeuser shall cause all pre- existing condition exclusions and actively-at-work requirements of such New Plan to be waived for such employee and his or her covered dependents (other than limitations or waiting periods that are already in effect with respect to such employees and dependents and that have not been satisfied as of the effective time of the Merger), and Weyerhaeuser shall cause any eligible expenses incurred by such employee and his or her covered dependents during the portion of the plan year of the Old Plan ending on the date such employee's participation in the corresponding New Plan begins to be taken into account under such New Plan for purposes of satisfying all deductible, coinsurance and maximum out-of-pocket requirements applicable to such employee and his or her covered dependents for the applicable plan year as if such amounts had been paid in accordance with such New Plan. Under the Merger Agreement, Weyerhaeuser agrees that for purposes of any of the Company Benefit Plans conferring rights on a current or former employee, officer or director as a result of a change of control of the Company, the consummation of the Merger (or such earlier event contemplated by the Merger Agreement and specified in such Company Benefit Plans) shall be deemed to constitute a "Change of Control" (as that term is defined in such Company Benefit Plans). 29 Subject to compliance by Weyerhaeuser with its obligations described under the first and third paragraphs of this section entitled "Existing Agreement Plans and Policies", nothing described in this section or elsewhere in the Merger Agreement shall be construed to prevent the termination of employment of any Company Employee or any change in the employee benefits available to any Company Employee or the amendment or termination of any particular Company Benefit Plan to the extent permitted by its terms as in effect immediately prior to the effective time of the Merger. Indemnification. Weyerhaeuser has agreed, to the fullest extent permitted by law: (a) to cause the surviving corporation to honor all the Company's obligations to indemnify (including any obligations to advance funds for expenses) the current or former directors or officers of the Company and its subsidiaries for acts or omissions by such directors and officers occurring at or prior to the effective time of the Merger to the extent that such obligations of the Company exist on the date of the Merger Agreement, whether pursuant to the Restated Certificate of Incorporation, as amended, or By-laws, as amended, of the Company, individual indemnity agreements or otherwise and that such obligations will survive the Merger and will continue in full force and effect in accordance with the terms of the Restated Certificate of Incorporation, as amended, and By-laws, as amended, of the Company and such individual indemnity agreements from the effective time of the Merger until the expiration of the applicable statute of limitations with respect to any claims against such directors or officers arising out of such acts or omissions; and (b) for a period of six years after the effective time of the Merger, to cause to be maintained in effect the current policies of directors' and officers' liability insurance maintained by the Company (provided that Weyerhaeuser may substitute therefor policies with reputable and financially sound carriers of at least the same coverage and amounts containing terms and conditions which are no less advantageous) with respect to claims arising from or related to facts or events which occurred at or before the effective time of the Merger, provided, however, that Weyerhaeuser will not be obligated to make annual premium payments for such insurance to the extent such premiums exceed 300% of the annual premiums paid as of the date hereof by the Company for such insurance (such 300% amount, the "Maximum Amount") . If such insurance coverage cannot be obtained at all, or can only be obtained at an annual premium in excess of the Maximum Amount, Weyerhaeuser will maintain the most advantageous policies of directors' and officers' insurance obtainable for an annual premium equal to such amount; provided, however, that if such insurance coverage cannot be obtained at all, Weyerhaeuser shall purchase all available extended reporting periods with respect to pre-existing insurance in an amount which, together with all other insurance purchased pursuant to clause (b) above, does not exceed the Maximum Amount. The Merger Agreement further provides that Weyerhaeuser will not, and will cause the Company not to, take any action that would have the effect of limiting the aggregate amount of insurance coverage required to be maintained for the individuals referred to in clause (b) above. Weyerhaeuser has also agreed that: (a) from and after the consummation of the Offer, to the full extent permitted by law, Weyerhaeuser will, and will cause the Company (or any successor to the Company) to, indemnify, defend and hold harmless the present officers and directors of the Company and its subsidiaries (each an "Indemnified Party") against all losses, claims, damages, liabilities, fees and expenses (including attorneys' fees and disbursements) , judgments, fines and amounts paid in settlement (collectively, "Losses") arising out of actions or omissions occurring at or prior to the effective time of the Merger in connection with the Merger Agreement, the Offer, the Merger and the other transactions contemplated by the Merger Agreement; provided, however, that an Indemnified Party shall not be entitled to indemnification under this clause (a) for Losses arising out of actions or omissions by the Indemnified Party constituting (i) a breach of the Merger Agreement or the Stockholder Agreement, (ii) criminal conduct or (iii) any violation of federal, state or foreign securities laws; and provided further, however, that in order to be entitled to indemnification under this clause (a), an Indemnified Party must give Weyerhaeuser and the Company written notice of any third party claim which may give rise to any indemnity obligation under this clause (a), and Weyerhaeuser and the Company shall have the right to assume the defense of any such claim through counsel of their own choosing (subject to such counsel's reasonable judgment that separate defenses that would create a conflict of interest on the part of such counsel are not available), provided that if Weyerhaeuser and the Company do not assume any such defense, they shall be liable for all reasonable costs and expenses of defending such claim incurred by the Indemnified Party, including 30 reasonable fees and disbursements of counsel and shall advance such reasonable costs and expenses to the Indemnified Party; provided, however, that such advance shall be made only after receiving an undertaking from the Indemnified Party that such advance shall be repaid if it is determined that such Indemnified Party is not entitled to indemnification therefor and that neither Weyerhaeuser nor the Company shall be liable under this clause (a) for any Losses resulting from any settlement, compromise or offer to settle or compromise any such claim or litigation or other action, without the prior written consent of Weyerhaeuser and the Company; (b) the Company shall not, and Weyerhaeuser shall not permit the Company to, amend or repeal any provision of the Restated Certificate of Incorporation or By-laws of the Company after the consummation of the Offer if such action would adversely affect the rights of individuals who on or prior to the consummation of the Offer were entitled to advances, indemnification or exculpation thereunder, for actions or omissions by such individuals prior to the effective time of the Merger provided, that the individuals referred to in this clause (b) shall include any individuals who served as of the effective time of the Merger as directors or officers of any subsidiary of the Company at the Company's request, it being acknowledged by the parties hereto that each director or officer of the Company who is currently serving as a director or officer of a subsidiary of the Company is doing so at such request of the Company; and (c) in the event the surviving corporation or any successor to the surviving corporation (i) consolidates with or merges into any other person and shall not be the continuing or surviving corporation or entity in such consolidation or merger or (ii) transfers all or substantially all its properties and assets to any person, then, and in each case, proper provision shall be made so that the successors of the surviving corporation honor the obligations of the Company set forth in the provisions of the Merger Agreement described, in this and the immediately preceding paragraph. Reasonable Efforts; Notification. The Merger Agreement provides that: (a) upon the terms and subject to the conditions set forth in the Merger Agreement, each of the Company, Weyerhaeuser and the Purchaser will use all reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, and to assist and cooperate with the other parties in doing, all things necessary, proper or advisable to consummate and make effective, in the most expeditious manner practicable, the Offer, the Merger and the other transactions contemplated by the Merger Agreement, including (i) the obtaining of all necessary actions or nonactions and Consents (as defined below) from Governmental Entities and the making of all necessary registrations and filings (including filings with Governmental Entities, if any) and the taking of all reasonable steps as may be necessary to obtain an approval or waiver from, or to avoid an action or proceeding by, any Governmental Entity, (ii) the obtaining of all necessary Consents waivers from third parties, (iii) the defending of any lawsuits or other legal proceedings, whether judicial or administrative, challenging the Merger Agreement or the consummation of the transactions contemplated thereby, including seeking to have any stay or temporary restraining order entered by any court or other Governmental Entity vacated or reversed and (iv) the execution and delivery of any additional instruments necessary to consummate the transactions contemplated by the Merger Agreement and to fully carry out the purposes of the Merger Agreement; (b) in connection with and without limiting the foregoing, the Company and the Board of Directors of the Company will, if any state takeover statute or similar statute or regulation is or becomes applicable to any transaction contemplated by the Merger Agreement, take all action necessary to ensure that the Offer, the Merger and the transactions contemplated by the Merger Agreement may be consummated as promptly as practicable on the terms contemplated by the Merger Agreement; provided, however, that nothing in clause (a) or (b) will prevent the Company from taking any action permitted in the second paragraph under "Takeover Proposals" and that nothing in the Merger Agreement will require any party to take any action that would result in any of the consequences referred to in paragraph (a) of Section 14; and (c) the Company shall give prompt notice to Weyerhaeuser of (i) any representation or warranty made by it contained in the Merger Agreement that is qualified as to a Material Adverse Effect becoming untrue or inaccurate in any respect or any such representation or warranty that is not so qualified becoming untrue or inaccurate in any material respect or (ii) the failure by it to comply with or satisfy in any material respect any covenant, condition or agreement to be complied with or satisfied by it under the Merger Agreement; provided, however, that no such notification shall affect the representations, warranties, covenants or agreements of the parties or the conditions to the obligations of the parties under the Merger Agreement. The Merger Agreement defines "Consent" to mean any consent, approval, license, permit, order or authorization of a governmental entity. The Merger Agreement defines "Material Adverse Effect" on a party as a material adverse effect on the 31 business, financial condition, as ongoing, longer-term profitability (but not prospects) of such party and its subsidiaries. Representations and Warranties. The Merger Agreement contains various customary representations and warranties. Procedure for Termination, Amendment, Extension or Waiver. The Merger Agreement provides that following the election or appointment of the Purchaser's designees to the Board of Directors of the Company as described above under "Board of Directors", prior to the effective time of the Merger, any amendment or termination of the Merger Agreement, extension for the performance or waiver of the obligations of Weyerhaeuser or the Purchaser or waiver of the Company's rights thereunder will require the concurrence of a majority of the directors of the Company who were directors on the date of the Merger Agreement and who are not officers of the Company. Rights Agreement. The Rights Agreement has been amended as of November 23, 1999 to render the Rights inapplicable to the Merger Agreement, the Offer, the Merger and the other transactions contemplated by the Merger Agreement. The Company has agreed that neither it nor the Board of Directors will, without the prior consent of Weyerhaeuser, (i) further amend the Rights Agreement, (ii) redeem the Rights or (iii) take any action with respect to, or make any determination under, the Rights Agreement, except, in each case, to the extent necessary to comply with the fiduciary obligations of the Board of Directors of the Company as determined by it in good faith after consultation with outside counsel. Waiver Under Partnership Agreement. The Company has waived, and agreed to cause any of its subsidiaries with a partnership interest under the Partnership Agreement to waive, any rights they may have described below under "Partnership Agreement" to exercise (x) the "sell procedure" or (y) the "mandatory buy/sell procedure" (the rights referred to in clauses (x) and (y), together with the "buy procedure" described below under "Partnership Agreement", are referred to as the "Buy/Sell Rights"), in each case, as result of the consummation of the MB Transaction. In the Merger Agreement, the Company acknowledges that Weyerhaeuser does not agree that the Company is entitled to exercise any of the Buy/Sell Rights as a result of the MB Transaction, and Weyerhaeuser acknowledges that the Company believes that it is entitled to exercise the Buy/Sell Rights as a result of the MB Transaction. The Merger Agreement provides that if the Merger Agreement is terminated pursuant to clause (6) under "Termination of the Merger Agreement", the Company will, subject to the next sentence, purchase the entire partnership interest (the "Weyerhaeuser Interest") of Weyerhaeuser and its subsidiaries in the Partnership, and Weyerhaeuser will, and will cause its subsidiaries to, in each case subject to the next sentence, sell the Weyerhaeuser Interest to the Company, for $700,000,000 in cash. Such purchase and sale will be consummated simultaneously with, and as a condition to, the consummation of the transactions contemplated by any Takeover Proposal made by the person who made the Superior Proposal that gave rise to such termination. In the agreement entered into by the Company with such person in connection with such termination, such person must unconditionally guarantee (for the benefit of Weyerhaeuser and its subsidiaries) the obligations of the Company contained this paragraph. The Merger Agreement provides that if (i) after the date of the Merger Agreement, any person makes a Takeover Proposal or amends a Takeover Proposal made prior to the date of the Merger Agreement, (ii) the Offer remains open until the scheduled expiration date immediately following the date such Takeover Proposal is made (or such later date as the Offer may be extended to at the Company's request pursuant to the Merger Agreement), (iii) the Minimum Condition is not satisfied at the expiration of the Offer and (iv) the Merger Agreement is terminated pursuant to clause (2)(c) under "Termination of the Merger Agreement", the Buy Rights, if any, resulting from the MB Transaction will terminate; provided, however, notwithstanding anything in the Partnership Agreement to the contrary: 32 (A) the Company may exercise the Buy Rights within the 10 day period beginning with the date of termination of the Merger Agreement for a "Buy Price" of $700,000,000 in cash and otherwise pursuant to the terms of the Partnership Agreement; and (B) if the Company did not exercise its right under clause (A) above and within 12 months following such termination the Company enters into an agreement to consummate an Acquisition Proposal, or an Acquisition Proposal is consummated, the Company shall purchase the Weyerhaeuser Interest, and Weyerhaeuser shall, and shall cause its subsidiaries, to sell the Weyerhaeuser Interest to the Company, for $700,000,000 in cash, such purchase and sale to be consummated simultaneously with, and as a condition to, the consummation of such Acquisition Proposal. The Merger Agreement provides that, notwithstanding anything contained in the Partnership Agreement to the contrary, but subject to this provisions described in this section, the Company may not exercise the Buy Rights as a result of the MB Transaction if the Merger Agreement is terminated prior to the acceptance for payment of Shares pursuant to the Offer: (A) in the circumstances contemplated by the two preceding paragraphs; (B) pursuant to clause (2)(c) or clause (4) under "Termination of the Merger Agreement" following the failure of the condition in paragraph (f) of Section 14; or (C) pursuant to clause (2)(c) or clause (3) under "Termination of the Merger Agreement" following the failure of the condition in paragraph (e) of Section 14, because, in either case, (A) other than as disclosed, since the date of the most recent audited financial statements included in documents filed by the Company with the Commission and prior to the date of the Merger Agreement, there shall have occurred any event, change, effect or development that, individually or in the aggregate, has had or is reasonably likely to have a Material Adverse Effect or (B)(1) any representation or warranty of the Company in the Merger Agreement that is qualified as to Material Adverse Effect shall not be true and correct as of the date of the Merger Agreement or (2) the representations and warranties of the Company that are not qualified as to Material Adverse Effect shall not be true and correct in all respects as of the date of the Merger Agreement if the failure of all such representations and warranties in this clause (2) to be true and correct, individually or in the aggregate, is materially adverse to the transactions contemplated by the Merger Agreement, taken as a whole. The Merger Agreement provides that notwithstanding any provision to the contrary in the Partnership Agreement, if the Merger Agreement is terminated in accordance with the terms hereof and none of the preceding three paragraphs is applicable, the 90-day period under the Partnership Agreement during which the Company may exercise its Buy Rights, if any, in connection with the MB Transaction shall be deemed to begin to run from the date of such termination of the Merger Agreement. Except with respect to the running of the 90-day period, the procedures governing the Buy Rights as set forth in the Partnership Agreement, to the extent applicable, shall apply. Grant of Conditional Option. Pursuant to the Merger Agreement, the Company has granted to the Purchaser an irrevocable option (the "Option") to purchase for a price of $42.00 per share (the "Per Share Price") in cash a number of Common Shares (the "Optioned Shares") equal to the Applicable Amount. The "Applicable Amount" shall be the number of Common Shares which, when added to the number of Common Shares owned by Weyerhaeuser and the Purchaser immediately prior to its exercise of the Option, would result in the Purchaser owning immediately after its exercise of the Option 90% of the then- outstanding Common Shares. The Purchaser may exercise the Option only if, at the time of exercise, Weyerhaeuser, the Purchaser and any other subsidiary of Weyerhaeuser shall have acquired at least 50.1% of the Fully Diluted Shares pursuant to the Offer. The Option shall expire if not exercised prior to the effective time of the Merger. The Per Share Price may, at the election of the Purchaser, be paid either (i) in cash or (ii) a combination of $1.00 in cash and a promissory note of Weyerhaeuser in a principal amount equal to $41.00, which promissory note shall mature in 12 months (and be Prepayable at any time by Parent without penalty) and shall bear interest at an annual rate of 6.50% payable at maturity. 33 Termination/Amendment of ESOP; Redemption of Company Preferred Stocks; Repayment of ESOP Loan. If upon consummation of the Offer, the Purchaser owns a number of Common Shares that, together with the Common Shares that the Purchaser has the Option to purchase as described under "Grant of Conditional Option", equals at least 90% of the then-outstanding Common Shares (after giving effect to the exercise of such Option), then the Company shall take such action as requested by Weyerhaeuser and permitted by the terms of the Company Preferred Certificate of Designation and applicable law to terminate and/or amend the ESOP and to call for redemption all the then-outstanding Preferred Stock as promptly as practicable after such request by Weyerhaeuser. As soon as practicable after the date of the Merger Agreement, the Company shall direct the trustee for the Company's Investment Plan to use any cash proceeds resulting from the redemption of the Preferred Stock or resulting from the purchase or exchange of Common Stock (into which Preferred Stock was converted) for cash pursuant to the Offer or the Merger, in each case, with respect to shares that have not been allocated to participants or beneficiaries under the Company's Investment Plan, shall be used to repay any outstanding amounts under the loan from the Company to the trustee for the Company's Investment Plan, and shall use its best efforts to take or cause to be taken such other actions consistent with applicable law to cause the Trustee to comply with such direction, and the parties agree that any remaining cash proceeds shall be allocated to participants and beneficiaries under the Company's Investment Plan in accordance with applicable law. The foregoing summary of the Merger Agreement is qualified in its entirety by reference to the Merger Agreement, a copy of which is filed as Exhibit (c)(1) to the Schedule 14D-1. The Merger Agreement should be read in its entirety for a more complete description of the matters summarized above. Partnership Agreement Substantially all of the current business of the Company is conducted through the Partnership. In 1991, the Company contributed its North American engineered lumber products business to the Partnership in exchange for general and limited partnership interests representing a 51% interest in the Partnership, and MBA, a wholly-owned subsidiary of MB, contributed all of its and MB's North American engineered lumber technology and manufacturing facilities in exchange for a 49% limited partnership interest in the Partnership. The management and control of the Partnership is vested in the Company as general partner. Under the Partnership Agreement a management board was established and consists of four members appointed by the Company and three members appointed by MBA. The Company, as general partner, is required to consult with the management board with respect to certain matters regarding the operation of the Partnership. In addition, unanimous approval of the management board is required to approve certain significant matters, including distributions of distributable cash to the partners, redemptions of partnership interests, dissolution or winding up of the Partnership, the merger or consolidation of the Partnership, and certain other matters including the encumbrance of assets, incurrence of debt, investments and capital expenditures by the Partnership. The Partnership is to continue for an indefinite term until terminated by mutual agreement of the partners. The Partnership Agreement prohibits each partner from selling, pledging or otherwise disposing of its interest in the Partnership, without the consent of the other partner, other than certain permitted transfers to affiliates of a partner, permitted encumbrances and transfers by a partner that offers the other partner a right of first refusal. The Partnership Agreement specifies certain events of default by a partner and the remedies available to the nondefaulting partner. Among the "events of default" under the Partnership Agreement is a change in control of a partner. The Partnership Agreement states that an event of default will occur if a partner is "taken over or purchased by a third party or parties resulting in a change in control compared with those controlling the defaulting partner" as of September 30, 1991, the date the Partnership became effective. The Partnership Agreement defines "control" as " (i) the right to exercise a majority of the votes which may be cast at a general meeting of a corporation; and (ii) the right to elect or appoint, directly or indirectly, a majority of the directors of 34 a corporation or other persons who have the right to manage or supervise the management of the affairs and business of the corporation." On November 1, 1999, MBA became an indirect wholly owned subsidiary of Weyerhaeuser. As described in Section 11, the Company has asserted that the consummation of the MB Transaction constituted a change of control of MBA within the meaning of the Partnership Agreement that gives the Company the ability to exercise the rights under the Purchase Agreement described below. Weyerhaeuser has asserted that the consummation of the MB Transaction did not constitute such a change of control of MBA and that the Company does not have any of such rights. See "The Merger Agreement--Waiver Under Partnership Agreement" above. The Purchase Agreement provides that if a change in control of a partner (the "defaulting partner") occurs, the other partner (the "nondefaulting partner") may initiate one of the following procedures within 90 days of the change in control. (1) Buy Procedure: The nondefaulting partner may purchase all of the defaulting partner's interest in the Partnership at a purchase price equal to the value of the business of the Partnership represented by each partner's interest, as determined by two investment bankers selected by the partners. If they are unable to agree on value, the values determined by each of them will be submitted to a third investment banker, which will make a final determination by choosing between the two values submitted. The value to be determined by the investment bankers is the value of the defaulting partner's interest without the premium, if any, attributable to the change in control of the defaulting partner. The nondefaulting partner then has 30 days after the determination of the purchase price to exercise its right to buy the defaulting partner's interest and the closing of such purchase is to occur on the 90th business day following such exercise. (2) Sell Procedure: The nondefaulting partner may sell all of its interest in the Partnership to the defaulting partner at a sale price equal to the value determined by investment bankers as described under (1) above, plus the premium, if any, attributable to the change in control of the defaulting partner. If the sale procedure is implemented, the defaulting partner must purchase the nondefaulting partner's interest within 90 business days of the determination of the sale price. (3) Mandatory Buy/Sell Procedure: The nondefaulting partner may give the defaulting partner notice containing an offer to purchase all of the interest held by the defaulting partner and an offer to sell all of the interest held by the nondefaulting partner. The offer to buy and the offer to sell will be at the same price, adjusted for the percentage represented by each partner's interest. If the defaulting partner does not accept either offer within 30 days after receipt of notice, it will be deemed to have accepted an offer by the nondefaulting partner to purchase all the defaulting partner's interest in the Partnership. See "The Merger Agreement--Waiver Under Partnership Agreement" above for a description of certain changes to rights of the partners under the Partnership Agreement agreed in connection with the Merger Agreement. The summary of certain provisions of the Partnership Agreement above does not purport to be a complete description of the terms of the Partnership Agreement and is qualified by reference to the Partnership Agreement which is filed as an Exhibit to the Form 8-K filed by the Company with the Commission on September 30, 1991. Standstill Agreement In connection with the formation of the Partnership, MB and the Company entered into an agreement dated as of October 1, 1991 (the "Standstill Agreement"). The Standstill Agreement prohibits MB and entities controlled by it (the "MB Group"), either alone or in concert with others, from (a) acquiring voting securities of the Company, with certain exceptions including the acquisition of voting securities in response to a tender offer by a third party for the Company's voting securities or in the event that a third party acquires voting securities of the Company representing more than 40% of the total voting power of all outstanding voting securities, (b) participating in a solicitation of holders of voting securities of the Company or otherwise attempting to influence such holders unless approved by the Board of Directors of the Company, or (c) participating in arrangements 35 with respect to the voting, holding or acquisition of voting securities of the Company or any matter relating to the control of the Company. The Standstill Agreement also contains provisions for the disposition of voting securities that may be owned or acquired by members of the MB Group. The Standstill Agreement provides that it shall continue in effect until six years after the dissolution of the Partnership. Confidentiality Agreement Weyerhaeuser and the Company entered into a Confidentiality Agreement on November 16, 1999. Pursuant to the Confidentiality Agreement, Weyerhaeuser agreed to treat confidentially any information that the Company or its agents or advisors furnish to Weyerhaeuser or its representatives, subject to exceptions for applicable law and deposition, interrogatory, request for documents, subpoena, civil investigative demand or similar process. Weyerhaeuser also agreed that, for the period ending six months from the date of the Confidentiality Agreement, it will not solicit for employment any person who is currently employed in a management position with the Company. Plans for the Company Currently, Weyerhaeuser anticipates that, following the Merger, the Company will operate as a separate operating division of Weyerhaeuser under the Company's current management team. Weyerhaeuser expects that the Company will continue to own its assets and conduct its business as it currently does, although the Company's sales and marketing functions will be integrated into and rationalized with Weyerhaeuser's. Weyerhaeuser also currently expects to leverage its staff to provide greater efficiencies in staff and logistical/purchasing support for the Company's operations. Appraisal Rights The holders of Shares do not have appraisal rights as a result of the Offer. However, if the Merger is consummated, holders of Shares at the effective time of the Merger will have certain rights pursuant to the provisions of Section 262 of the DGCL ("Section 262") to dissent and demand appraisal of their Shares. Under Section 262, dissenting stockholders who comply with the applicable statutory procedures will be entitled to receive a judicial determination of the fair value of their Shares (exclusive of any element of value arising from the accomplishment or expectation of the Merger) and to receive payment of such fair value in cash, together with a fair rate of interest, if any. Any such judicial determination of the fair value of Shares could be based upon factors other than, or in addition to, the price per Share to be paid in the Merger or the market value of the Shares. The value so determined could be more or less than the price per Share to be paid in the Merger. The foregoing summary of Section 262 does not purport to be complete and is qualified in its entirety by reference to Section 262. Failure to follow the steps required by Section 262 for perfecting appraisal rights may result in the loss of such rights. Going Private Transactions The Commission has adopted Rule 13e-3 under the Exchange Act, which is applicable to certain "going private" transactions. The Purchaser does not believe that Rule 13e-3 will be applicable to the Merger unless the Merger is consummated more than one year after the termination of the Offer. If applicable, Rule 13e-3 requires, among other things, that certain financial information concerning the fairness of the Merger and the consideration offered to minority stockholders in the Merger be filed with the Commission and disclosed to stockholders prior to the consummation of the Merger. Except as otherwise described in this Offer to Purchase, the Purchaser and Weyerhaeuser have no current plans or proposals that would relate to, or result in, an extraordinary corporate transaction involving the Company, such as a merger, reorganization or liquidation involving the Company or any of its subsidiaries, a sale or transfer of a material amount of assets of the Company or any of its subsidiaries, any change in the present 36 Board of Directors or management of the Company, including, but not limited to, any plans or proposals to change the number or term of directors or to fill any existing vacancies on the Board of Directors, any material change in the Company's present capitalization or dividend policy, any other material change in the Company's corporate structure or business, causing a class of securities of the Company to be delisted from a national securities exchange or to cease to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association or a class of equity securities of the Company becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Exchange Act. 13. Dividends and Distributions Pursuant to the terms of the Merger Agreement, the Company is prohibited from taking any of the actions described in the two succeeding paragraphs, and nothing herein shall constitute a waiver by the Purchaser or Weyerhaeuser of any of its rights under the Merger Agreement or a limitation of remedies available to the Purchaser or Weyerhaeuser for any breach of the Merger Agreement, including termination thereof. If the Company (a) splits, combines or otherwise changes the Shares or its capitalization, (b) acquires or otherwise causes a reduction in the number of outstanding Shares or other securities or (c) issues or sells additional Shares, shares of any other class of Capital Stock, other voting securities or any securities convertible into, or rights, warrants or options, conditional or otherwise, to acquire any of the foregoing, other than Shares issued pursuant to the exercise of outstanding Company Employee Stock Options, then, subject to the provisions described in Section 14, the Purchaser may, subject to the terms of the Merger Agreement (which restricts the Purchaser from taking certain actions without the consent of the Company) make such adjustments as it deems appropriate in the Offer Price and other terms of the Offer, including without limitation, the number or type of securities offered to be purchased. If, on or after November 23, 1999, the Company declares or pays any cash dividend on the Shares or other distribution on the Shares, or issues with respect to the Shares any additional Shares, shares of any other class of capital stock, other voting securities or any securities convertible into, or rights, warrants or options, conditional or otherwise, to acquire, any of the foregoing, payable or distributable to stockholders of record on a date prior to the transfer of the Shares purchased pursuant to the Offer to the Purchaser or its nominee or transferee on the Company's stock transfer records (other than the dividends permitted under the Merger Agreement as described in clause (b)(i) under the heading "The Merger Agreement--Conduct of Business" in Section 12), then, subject to the provisions described in Section 14 and subject to the terms of the Merger Agreement (which restrict the Purchaser from taking certain actions without the consent of the Company), (a) the Offer Price may be reduced by the amount of any such cash dividend or cash distribution and (b) the whole of any such noncash dividend, distribution or issuance to be received by the tendering stockholders will (i) be received and held by the tendering stockholders for the account of the Purchaser and will be required to be promptly remitted and transferred by each tendering stockholder to the Depositary for the account of the Purchaser, accompanied by appropriate documentation of transfer, or (ii) at the direction of the Purchaser, be exercised for the benefit of the Purchaser, in which case the proceeds of such exercise will promptly be remitted to the Purchaser. Pending such remittance and subject to applicable law, the Purchaser will be entitled to all rights and privileges as owner of any such noncash dividend, distribution, issuance or proceeds and may withhold the entire Offer Price or deduct from the Offer Price the amount or value thereof, as determined by the Purchaser in its sole discretion. 14. Certain Conditions of the Offer Notwithstanding any other term of the Offer or the Merger Agreement, the Purchaser will not be required to accept for payment or, subject to any applicable rules and regulations of the Commission, including Rule 14e-l(c) under the Exchange Act (relating to the Purchaser's obligation to pay for or return tendered Shares promptly after the termination or withdrawal of the Offer), to pay for any Shares tendered pursuant to the Offer unless (i) the Minimum Condition shall have been satisfied and (ii) (A) any waiting period under the HSR Act applicable to the purchase of Shares pursuant to the Offer shall have expired or been terminated, (B) any waiting period under the Canadian Competition Act applicable to the purchase of Shares pursuant to the Offer shall have 37 expired or been terminated and/or an advance ruling certificate pursuant to the Canadian Competition Act or, in the alternative of an advance ruling certificate, a no-action letter from the Commissioner of Competition, related thereto shall have been received and (C) any consents, approvals and filings under any foreign antitrust law, the absence of which would prohibit the consummation of the Offer, shall have been obtained or made. For purposes of the Minimum Condition, the Merger Agreement defines "Fully Diluted Shares" as all outstanding securities entitled generally to vote in the election of directors of the Company on a fully diluted basis, after giving effect to the exercise or conversion of all options, rights and securities exercisable or convertible into such voting securities, other than potential dilution attributable to the Rights and the Option. Furthermore, notwithstanding any other term of the Offer, the Purchaser may, subject to the terms of the Merger Agreement, amend the Offer or postpone the acceptance for payment of or payment for tendered Shares if, at any time on or after the date of the Merger Agreement and before the expiration of the Offer, any of the following conditions exists: (a) there shall be pending any suit, action or proceeding by any Governmental Entity that has a reasonable likelihood of success, (i) challenging the acquisition by Weyerhaeuser or the Purchaser of any Shares, seeking to restrain or prohibit the making or consummation of the Offer or the Merger or seeking to obtain from the Company, Weyerhaeuser or the Purchaser any damages that are material in relation to the Company and its subsidiaries taken as whole as a result of the transactions contemplated by the Merger Agreement, (ii) seeking to prohibit or limit in any material respect the ownership or operation by the Company, Weyerhaeuser or any of their respective subsidiaries of any material portion of the business or assets of the Company, Weyerhaeuser or any of their respective subsidiaries, or to compel the Company, Weyerhaeuser or any of their respective subsidiaries to dispose of or hold separate any material portion of the business or assets of the Company, Weyerhaeuser or any of their respective subsidiaries, as a result of the Offer and the Merger, (iii) seeking to impose limitations on the ability of Weyerhaeuser or the Purchaser to acquire or hold, or exercise full rights of ownership of, any Shares, including the right to vote the Shares purchased by it on all matters properly presented to the stockholders of the Company or (iv) seeking to prohibit Weyerhaeuser or any of its subsidiaries from controlling in any material respect the business or operations of the Company and its subsidiaries; (b) any statute, rule, regulation, legislation, interpretation, judgment, order or injunction shall be enacted, entered, enforced, promulgated or issued with respect to, or deemed applicable to, or any consent or approval withheld with respect to (i) Weyerhaeuser, the Company or any of their respective subsidiaries or (ii) the Offer, the Merger or any other transaction contemplated by the Merger Agreement, in each case, by any Governmental Entity that is reasonably likely to result, directly or indirectly, in any of the consequences referred to in paragraph (a) above; (c) except as disclosed, since the date of the Merger Agreement there shall have occurred any event, change, effect or development that, individually or in the aggregate, has had or is reasonably likely to have, a Material Adverse Effect; (d) there shall have occurred and continued to exist (i) any general suspension of trading in, or limitation on prices for, securities on any national securities exchange or in the over-the-counter market in the United States (excluding any suspension or limitations resulting from physical damage or interference with such exchange not related to market conditions), (ii) a decline of at least 30% in the Dow Jones Industrial Average, (iii) a declaration of a banking moratorium or any suspension of payments in respect of banks in the United States, (iv) any mandatory limitation by any Governmental Entity on, or other event that materially and adversely affects, the extension of credit by banks or other lending institutions in the United States, (v) a commencement of a war or armed hostilities or other national or international calamity directly or indirectly involving the United States or (vi) in the case of any of the foregoing existing on the date of the Merger Agreement, a material acceleration or worsening thereof; (e) (i) any representation and warranty of the Company in the Merger Agreement that is qualified as to Material Adverse Effect shall not be true and correct as of the date of the Merger Agreement or as of such time, except to the extent such representation and warranty expressly relates to an earlier date (in which case on and as of such earlier date) and (ii) the representations and warranties of the Company that are not qualified as to Material Adverse Effect shall not be true and correct in all respects as of the date of the 38 Merger Agreement, or as of such time, except to the extent such representations and warranties expressly relate to an earlier date (in which case on and as of such earlier date) if the failure of all such representations and warranties in this clause (ii) to be true and correct, in aggregate, is materially adverse to the transactions contemplated by the Merger Agreement, taken as a whole; (f) the Company shall have failed to perform in any material respect any obligation or to comply in any material respect with any agreement or covenant of the Company to be performed or complied with by it under the Merger Agreement; or (g) the Merger Agreement shall have been terminated in accordance with its terms; which, in the sole judgment of the Purchaser or Weyerhaeuser, in any such case, and regardless of the circumstances giving rise to any such condition (including any action or inaction by Weyerhaeuser or any of its affiliates not otherwise required by the Merger Agreement), makes it inadvisable to proceed with such acceptance for payment or payment. The foregoing conditions are for the sole benefit of the Purchaser and Weyerhaeuser and may be asserted by the Purchaser or Weyerhaeuser regardless of the circumstances giving rise to such condition or may be waived by the Purchaser and Weyerhaeuser in whole or in part at any time and from time to time in their sole discretion. The failure by Weyerhaeuser, the Purchaser or any other affiliate of Weyerhaeuser at any time to exercise any of the foregoing rights shall not be deemed a waiver of any such right, the waiver of any such right with respect to particular facts and circumstances shall not be deemed a waiver with respect to any other facts and circumstances and each such right shall be deemed an ongoing right that may be asserted at any time and from time to time. 15. Certain Legal Matters Except as described in this Section 15, based on a review of publicly available filings made by the Company with the Commission and other publicly available information concerning the Company and discussions of representatives of Weyerhaeuser with representatives of the Company, none of the Purchaser, Weyerhaeuser or the Company is aware of any license or regulatory permit that appears to be material to the business of the Company and its subsidiaries, taken as a whole, that might be adversely affected by the Purchaser's acquisition of Shares (and the indirect acquisition of the stock of the Company's subsidiaries) as contemplated herein or of any approval or other action by any Governmental Entity that would be required or desirable for the acquisition or ownership of Shares by the Purchaser as contemplated herein. Should any such approval or other action be required or desirable, the Purchaser and Weyerhaeuser currently contemplate that such approval or other action will be sought, except as described below under "State Takeover Laws". While (except as otherwise expressly described in this Section 15) the Purchaser does not presently intend to delay the acceptance for payment of or payment for Shares tendered pursuant to the Offer pending the outcome of any such matter, there can be no assurance that any such approval or other action, if needed, would be obtained or would be obtained without substantial conditions or that failure to obtain any such approval or other action might not result in consequences adverse to the Company's business or that certain parts of the Company's business might not have to be disposed of if such approvals were not obtained or such other actions were not taken or in order to obtain any such approval or other action. If certain types of adverse action are taken with respect to the matters discussed below, the Purchaser could decline to accept for payment or pay for any Shares tendered. See Section 14 for a description of certain conditions to the Offer. State Takeover Laws. A number of states throughout the United States have enacted takeover statutes that purport, in varying degrees, to be applicable to attempts to acquire securities of corporations that are incorporated or have assets, stockholders, executive offices or places of business in such states. In Edgar v. MITE Corp., the Supreme Court of the United States held that the Illinois Business Takeover Act, which involved state securities laws that made the takeover of certain corporations more difficult, imposed a substantial burden on interstate commerce and therefore was unconstitutional. In CTS Corp. v. Dynamics Corp. of America, however, the Supreme Court of the United States held that a state may, as a matter of corporate law and, in particular, those laws concerning corporate governance, constitutionally disqualify a potential acquiror from voting on the affairs 39 of a target corporation without prior approval of the remaining stockholders, provided that such laws were applicable only under certain conditions. Subsequently, a number of federal courts ruled that various state takeover statutes were unconstitutional insofar as they apply to corporations incorporated outside the state of enactment. Section 203 of the DGCL, in general, prohibits a Delaware corporation such as the Company from engaging in a "Business Combination" (defined as a variety of transactions including, mergers with an "Interested Stockholder") (defined generally as a person that is the beneficial owner of 15% or more of a corporation's outstanding voting stock) for a period of three years following the time that such person became an Interested Stockholder unless, among other things, prior to the time such person became an Interested Stockholder, the board of directors of the corporation approved either the Business Combination or the transaction that resulted in the stockholder becoming an Interested Stockholder. The Board of Directors of the Company has taken action sufficient to render Section 203 and Article Tenth of the Company Charter inapplicable (a) to Weyerhaeuser and the Purchaser solely by reason of their entering into the Merger Agreement or consummating the Offer or the Merger or the grant or exercise of the Option and (b) to the Offer, the Merger and certain other transactions contemplated by the Merger Agreement, assuming the accuracy of Weyerhaeuser's representations that neither Weyerhaeuser nor the Purchaser beneficially owns any Shares and that neither Weyerhaeuser nor the Purchaser is an Interested Stockholder of the Company. Based on information supplied by the Company, the Purchaser does not believe that any other state takeover statutes or similar laws purport to apply to the Offer or the Merger. In particular, the Company has not elected to be subject to the control share acquisition provisions and the business combination provisions of the State of Idaho. Neither the Purchaser nor Weyerhaeuser has currently complied with any state takeover statute or regulation. The Purchaser reserves the right to challenge the applicability or validity of any state law purportedly applicable to the Offer or the Merger and nothing in this Offer to Purchase or any action taken in connection with the Offer or the Merger is intended as a waiver of such fight. If it is asserted that any state takeover statute is applicable to the Offer or the Merger and an appropriate court does not determine that it is inapplicable or invalid as applied to the Offer or the Merger, the Purchaser might be required to file certain information with, or to receive approvals from, the relevant state authorities, and the Purchaser might be unable to accept for payment or pay for Shares tendered pursuant to the Offer, or be delayed in consummating the Offer or the Merger. In such case, the Purchaser may not be obligated to accept payment or pay for any Shares tendered pursuant to the Offer. See Section 14. Antitrust. Under the provisions of the HSR Act applicable to the Offer, the acquisition of Shares under the Offer may be consummated after the expiration of a 15-calendar day waiting period commenced by the filing by Weyerhaeuser of a Notification and Report Form with respect to the Offer, unless Weyerhaeuser receives a request for additional information or documentary material from the Antitrust Division or the FTC or earlier if early termination of the waiting period is granted. Weyerhaeuser expects to make such filing in the near future. If, within the initial 15-day waiting period, either the Antitrust Division or the FTC requests additional information or material from Weyerhaeuser concerning the Offer, the waiting period will be extended and would expire at 11:59 p.m., New York City time, on the tenth calendar day after the date of substantial compliance by Weyerhaeuser with such request, unless earlier terminated. Only one extension of the waiting period pursuant to a request for additional information is authorized by the HSR Act. Thereafter, such waiting period may be extended only by court order or with the consent of Weyerhaeuser. In practice, complying with a request for additional information or material can take a significant amount of time. In addition, if the Antitrust Division or the FTC raises substantive issues in connection with a proposed transaction, the parties frequently engage in negotiations with the relevant governmental agency concerning possible means of addressing those issues and may agree to delay consummation of the transaction while such negotiations continue. Expiration or termination of the applicable waiting period under the HSR Act is a condition to the Purchaser's obligation to accept for payment and pay for Shares tendered pursuant to the Offer. Pursuant to the HSR Act, Weyerhaeuser will request early termination of the applicable waiting period, but there can be no assurance that the waiting period will be terminated early. 40 The Merger will not require an additional filing under the HSR Act if the Purchaser owns 50% or more of the outstanding Shares at the time of the Merger or if the Merger occurs within one year after the HSR Act waiting period applicable to the Offer expires or is terminated. The Antitrust Division and the FTC frequently scrutinize the legality under the antitrust laws of transactions such as the Purchaser's proposed acquisition of the Company. At any time before or after the Purchaser's acquisition of Shares pursuant to the Offer, the Antitrust Division or the FTC could take such action under the antitrust laws as it deems necessary or desirable in the public interest, including seeking to enjoin the purchase of Shares pursuant to the Offer or the consummation of the Merger or seeking the divestiture of Shares acquired by the Purchaser or the divestiture of substantial assets of the Company or its subsidiaries or Weyerhaeuser or its subsidiaries. Private parties and states may also bring legal action under the antitrust laws under certain circumstances. Although Weyerhaeuser currently owns a 49% interest in the Partnership, there can be no assurance that a challenge to the Offer on antitrust grounds will not be made or, if such a challenge is made, of the result thereof. Canadian Competition Act. Under the provisions of the Competition Act (Canada) (the "Canadian Act"), the acquisition of Shares under the Offer may be consummated after the expiration of a 7-calendar day waiting period commenced by the filing by Weyerhaeuser of a short-form premerger filing under the Canadian Act with respect to the Offer, unless Weyerhaeuser receives a request to complete a long-form filing prior to the expiration of the 7- calendar day waiting period, in which case a long-form filing must be made, after completion of which a 21-day calendar day waiting period is mandated. These waiting periods are expected to be doubled by legislative changes that may be implemented in respect of premerger notification filings under the Canadian Act made after mid-December 1999. Weyerhaeuser expects to make a short-form filing under the Canadian Act in the near future. Before or after the waiting periods referred to above have expired, upon application by the Commissioner of Competition under the Canadian Act (the "Commissioner") which certifies that in the Commissioner's opinion more time is required to complete his inquiry into the Offer, the Canadian Competition Tribunal may issue an interim order forbidding any person from, among other things, completing the Offer. The interim order shall not have a term longer than thirty days; on further application by the Commissioner that he is unable to complete an inquiry within the period specified in the order because of circumstances beyond his control, the Canadian Competition Tribunal may extend the duration of the order to a day not more than sixty days after the order takes effect. In the course of his inquiry, the Commissioner may request additional information. In practice, complying with such requests can take a significant amount of time. In addition, if the Commissioner raises substantive issues in connection with a proposed transaction, the parties frequently engage in negotiations with the Commissioner concerning possible means of addressing those issues and may agree to delay consummation of the transaction while such negotiations continue. Expiration of the applicable waiting periods under the Canadian Act is a condition to the Purchaser's obligation to accept for payment and pay for Shares tendered pursuant to the Offer. The Merger will not require an additional filing under the Canadian Act if the Purchaser owns more than 50% of the outstanding Shares at the time of the Merger or if the Merger is completed within one year after the making of the premerger notification filings under the Canadian Act. The Commissioner frequently scrutinizes the legality under the Canadian Act of transactions such as the Purchaser's proposed acquisition of the Company. At any time before or after the Purchaser's acquisition of Shares pursuant to the Offer, the Commissioner could take such action under the Canadian Act as he deems necessary or desirable in the public interest, including seeking to enjoin the purchase of Shares pursuant to the Offer or the consummation of the Merger or seeking the divestiture of Shares acquired by the Purchaser or the divestiture of substantial assets of the Company or its subsidiaries or Weyerhaeuser or its subsidiaries. There can be no assurance that a challenge to the Offer under the Canadian Act will not be made or, if such a challenge is made, of the result thereof. Other Foreign Laws. The Company and certain of its subsidiaries conduct business in several foreign countries where regulatory filings or approvals may be required or desirable in connection with the consummation of the Offer. Certain of such filings or approvals, if required or desirable, may not be made or 41 obtained prior to the expiration of the Offer. The Purchaser is seeking further information regarding the applicability of any such laws and currently intends to take such action as may be required or desirable. If any foreign Governmental Entity takes any action prior to the completion of the Offer that might have certain adverse effects, the Purchaser will not be obligated to accept for payment or pay for any Shares tendered. See Section 14. 16. Fees and Expenses Morgan Stanley is acting as Dealer Manager in connection with the Offer and is providing certain financial advisory services to the Purchaser and Weyerhaeuser in connection with the Offer. Pursuant to an engagement letter dated November 15, 1999, between Weyerhaeuser and Morgan Stanley, advisory fees of $875,000 are currently payable to Morgan Stanley. An additional fee of $2,085,000 will be payable to Morgan Stanley in the event the Offer is consummated. Weyerhaeuser has also agreed to reimburse Morgan Stanley for its out-of-pocket expenses, including the fees and expenses of its counsel and any other advisor retained by Morgan Stanley in connection with its engagement, and to indemnify Morgan Stanley and certain related persons against certain liabilities and expenses, including certain liabilities under federal securities laws. In the ordinary course of its business, Morgan Stanley engages in securities trading, market-making and brokerage activities and may, at any time, hold long or short positions and may trade or otherwise effect transactions in debt or equity securities or senior loans of the Company. The Purchaser and Weyerhaeuser have retained Georgeson Shareholder Communications Inc. to act as the Information Agent and the First Chicago Trust Company of New York to serve as the Depositary in connection with the Offer. The Information Agent and the Depositary each will receive reasonable and customary compensation for their services, be reimbursed for certain reasonable out-of-pocket expenses and be indemnified against certain liabilities and expenses in connection therewith, including certain liabilities and expenses under the U.S. federal securities laws. Neither the Purchaser nor Weyerhaeuser will pay any fees or commissions to any broker or dealer or other person (other than the Dealer Manager and the Information Agent) in connection with the solicitation of tenders of Shares pursuant to the Offer. Brokers, dealers, banks and trust companies will be reimbursed by the Purchaser upon request for customary mailing and handling expenses incurred by them in forwarding material to their customers. 17. Miscellaneous The Offer is not being made to (nor will tenders be accepted from or on behalf of) holders of Shares in any jurisdiction in which the making of the Offer or the acceptance thereof would not be in compliance with the laws of such jurisdiction. Neither the Purchaser nor Weyerhaeuser is aware of any jurisdiction in which the making of the Offer or the acceptance thereof would not be in compliance with the laws of such jurisdiction. To the extent the Purchaser or Weyerhaeuser becomes aware of any state law that would limit the class of offerees in the Offer, the Purchaser will amend the Offer and, depending on the timing of such amendment, if any, will extend the Offer to provide adequate dissemination of such information to holders of Shares prior to the expiration of the Offer. In any jurisdiction the securities, blue sky or other laws of which require the Offer to be made by a licensed broker or dealer, the Offer is being made on behalf of the Purchaser by the Dealer Manager or one or more registered brokers or dealers licensed under the laws of such jurisdiction. No person has been authorized to give any information or to make any representation on behalf of the Purchaser or Weyerhaeuser not contained herein or in the Letter of Transmittal and, if given or made, such Information or representation must not be relied upon as having been authorized. The Purchaser and Weyerhaeuser have filed with the Commission the Schedule 14D-1 pursuant to Rule 14d-3 under the Exchange Act together with exhibits, furnishing certain additional information with respect to the Offer, and may file amendments thereto. In addition, the Company has filed the Schedule 14D-9 pursuant to 42 Rule 14d-9 under the Exchange Act, together with exhibits, setting forth its recommendation with respect to the Offer and the reasons for such recommendation and furnishing certain additional related information. Such Schedules and any amendments thereto, including exhibits, should be available for inspection and copies should be obtainable in the manner set forth in Section 8 (except that such material will not be available at the regional offices of the Commission) . WTJ, INC. November 30, 1999 43 SCHEDULE I DIRECTORS AND EXECUTIVE OFFICERS OF WEYERHAEUSER AND THE PURCHASER 1. Directors and Executive Officers of Weyerhaeuser. The name, business address, present principal occupation or employment and employment history of each of the directors and executive officers of Weyerhaeuser are set forth below. All such directors and executive officers listed below are citizens of the United States except Mr. Mazankowski, who is a citizen of Canada. Unless otherwise indicated, the principal business address of each director or executive officer is 33663 Weyerhaeuser Way South, Federal Way, Washington, 98003.
Name, Age and Business Present Principal Occupation or Employment; Address Material Positions Held During the Past Five Years ---------------------- -------------------------------------------------- W. John Driscoll, 70....... Mr. Driscoll, a director of Weyerhaeuser since 1979, was chairman of Rock Island Company (private investment company) until his retirement in 1994. He is also a director of Comshare Incorporated, Northern States Power Company, John Nuveen & Company and The St. Paul Companies, Inc. Philip M. Hawley, 74....... Mr. Hawley, a director of Weyerhaeuser since 1989, is chairman and chief executive officer of Krause Furniture, Inc. (retailing). He was chairman and chief executive officer of Broadway Stores, Inc. (retailing) (formerly Carter Hawley Hale Stores, Inc.) until his retirement in 1993. He was chairman of the California Retailers Association from 1993 to 1995. He is a director of Atlantic Richfield Company and Johnson & Johnson. Robert J. Herbold, 57...... Mr. Herbold, director since 1999, is executive vice president and chief operating officer of Microsoft Corporation. Mr. Herbold joined Microsoft in November 1994, and was formerly senior vice president, advertising and information services, at The Procter & Gamble Company. He is also a director of Browning-Ferris Industries, Inc. and a member of the Advertising Council, the Washington Roundtable, the James Madison Council of the Library of Congress, and the Board of Trustees of Case Western Reserve University. Martha R. Ingram, 64....... Mrs. Ingram, a director of Weyerhaeuser since 1995, has been chairman of Ingram Industries Inc. (microcomputer book and video distribution, and inland barging) since 1995, a member of the board since 1981 and was director of public affairs from 1979 to 1995. She is also a director of Ingram Micro, Inc., Baxter International Inc. and First American Corporation. Mrs. Ingram was chairman of the 1996 Tennessee Bicentennial Commission and serves on the boards of Vassar College, Ashley Hall and Vanderbilt University. John I. Kieckhefer, 55..... Mr. Kieckhefer, a director of Weyerhaeuser since 1990, has been president of Kieckhefer Associates, Inc. (investment and trust management) since 1989 and was senior vice president prior to that time. He has been engaged in commercial cattle operations since 1967 and is a trustee of J. W. Kieckhefer Foundation, an Arizona charitable trust.
S-1 Arnold G. Langbo, 62....... Mr. Langbo, director since 1999, has been Kellogg Company's chairman since January 1, 1992. Mr. Langbo joined Kellogg Canada Inc. in November 1956 and was elected president, chief operating officer and a director of Kellogg Company in December 1990. He was chief executive officer from 1992 to April 1999. Mr. Langbo, is a member of the board of directors of Atlantic Richfield Co., Johnson & Johnson and Whirlpool Corporation. He also serves on the board of the Grocery Manufacturers of America, International Youth Foundation, the advisory board of the J.L. Kellogg Graduate School of Management at Northwestern University and the Business Roundtable. Rt. Hon. Donald F. Mr. Mazankowski, a director of Weyerhaeuser since Mazankowski, 64........... 1997, was a Member of Parliament, Government of Canada, from 1968 to 1993, served as Deputy Prime Minister from 1986-1993 and Minister of Finance from 1991 to 1993. He is also a director of the Power Group of Companies, Canadian Utilities Ltd., Shaw Communications Inc., IMC Global Inc., Gulf Canada Resources Ltd., Gulf Indonesia Resources Ltd., Golden Star Resources Ltd. and Weyerhaeuser Canada Ltd., a wholly owned subsidiary of Weyerhaeuser. He is also a member of the Board of Governors of the University of Alberta. Steven R. Rogel, 57........ Mr. Rogel, a director of Weyerhaeuser since 1997, has been the Company's president and chief executive officer since December 1997 and Chairman since April 1999. Prior to joining Weyerhaeuser he served as the president and chief executive officer of Willamette Industries, Inc. from 1995 to 1997 and as president and chief operating officer from 1991 to 1995. He is also a director of Fred Meyer, Inc. and the Cascade Pacific Council Boy Scouts of America. William D. Ruckelshaus, Mr. Ruckelshaus, a director of Weyerhaeuser since 67........................ 1989, has been chairman of Browning-Ferris Industries, Inc. (waste services) since 1988 and from 1988 to 1995 was chairman and chief executive officer until his retirement in 1995. He has been president of William D. Ruckelshaus Associates since 1987. He was administrator, Environmental Protection Agency from 1983 to 1985 and a senior vice president of Weyerhaeuser from 1976 to 1983. He is also a director of Cummins Engine Company, Inc., Monsanto Company, Nordstrom, Inc., and Gargoyles, Inc. Richard H. Sinkfield, 57... Mr. Sinkfield, a director of Weyerhaeuser since 1993, is a senior partner in the law firm of Rogers and Hardin in Atlanta, where he has been a partner since 1976. He is also a director of the United Auto Group, Inc, Metropolitan Atlanta Community Foundation, Inc. and the Atlanta College of Art. He is a member of the Board of Trust of Vanderbilt University and of the Board of Governors of the State Bar of Georgia. He is a former chairman of the board of Atlanta Urban League, Inc.
S-2 James N. Sullivan, 62...... Mr. Sullivan, a director of Weyerhaeuser since 1998, is vice-chairman of the board of Chevron Corporation (international oil company) where he has been a director since 1988. He joined Chevron in 1961 as a Process Engineer, was elected a vice- president in 1983 and assumed his present position in 1989. He is a member of the Board of Trustees of the University of San Francisco, the California Academy of Sciences and the Committee for Economic Development. He is a director of the American Petroleum Institute and the United Way of the Bay Area. George H. Weyerhaeuser, Mr. Weyerhaeuser, has been a director of 73........................ Weyerhaeuser since 1960 and was chairman of Weyerhaeuser from 1988 to April 1999. He joined Weyerhaeuser in 1949, became its president in 1966 and was chief executive officer from 1966 to 1991. He is also a director of The Boeing Company, Chevron Corporation and SAFECO Corporation and a member of The Business Council. Ambassador Clayton K. Ambassador Yeutter, director of Weyerhaeuser since Yeutter, 68............... 1999, is Of Counsel to Hogan & Hartson. Between 1985 and 1988 Ambassador Yeutter served as U.S. Trade Representative. He has also served as Secretary of Agriculture and National Chairman of the Republican Party. He is a director of Caterpillar, Inc.; ConAgra, Inc.; Farmers Insurance Company; FMC Corporation; Oppenheimer Funds; Texas Instruments and Zurich Financial Services. William R. Corbin, 58...... Mr. Corbin has been executive vice president, Wood Products for Weyerhaeuser since 1998. Prior to assuming his current position, he served as executive vice president, Timberlands and Distribution, from 1995 to 1998 and executive vice president, Wood Products, from 1992, when he joined Weyerhaeuser, to 1995. Mr. Corbin serves on the board of directors of Weyerhaeuser Canada Ltd. and is a member of the management board of the World TimberFund, a trustee and executive committee member of the Weyerhaeuser Company Foundation and a member of the company's policy committee. He is an advisory board member of both the University of Washington's School of Business Administration and college of Forest Resources. He serves as vice president and an executive committee member of the Mountains to Sound Greenway Trust and is a charter member of the International Advisory Board of the Institute for Environment and Natural Resource Policy at the University of Wyoming. C. William Gaynor, 59...... C. William Gaynor has been a senior vice president, Canada, of Weyerhaeuser since September 1999 and has been president and chief executive officer of Weyerhaeuser Canada, Ltd., a wholly owned subsidiary of Weyerhaeuser, since 1998. In his 25 years with Weyerhaeuser, he has held numerous management positions and served as vice president and general manager--Saskatchewan Division of Weyerhaeuser Canada, Ltd. from 1987 to 1998. Mr. Gaynor has been a
S-3 member of the Saskatchewan Provincial Action Committee on the Economy, the Roundtable on Environment and Economy and past-president of the Saskatchewan Chamber of Commerce. Richard C. Gozon, 61........ Mr. Gozon joined Weyerhaeuser on June 1, 1994, as executive vice president for Pulp, Paper and Packaging. Prior to that he was president and chief operating officer of Alco Standard Corporation (distributor of paper and office equipment). He is a director of U.G.I. Corporation, The Triumph Group and AmeriSource Health Corporation. He served as a director of Alco Standard Corporation from 1984 to 1993 and served on the board of trustees for Children's Hospital of Philadelphia from 1992 to 1994. Richard E. Hanson, 59....... Mr. Hanson is a senior vice president of Timberlands. During his 29-year career with Weyerhaeuser, he has held numerous management positions in the timberlands, wood products and paper businesses. Most recently, he served as vice president, Western Timberlands from February 1996 to November 1998. Mr. Hanson serves on the board of directors of the Oregon Forest Industries Council and Operating Committee, the advisory committee of the Oregon State University Forest Research Laboratory, and the board of trustees for the Oregon Zoo. Steven R. Hill, 52.......... Mr. Hill has been senior vice president, human resources since 1990 and was vice president, human resources from 1986 to 1990. He began his association with Weyerhaeuser as a forester in 1968. He joined Corporate Human Resources in 1980. Mr. Hill was appointed to the board of directors of Weyerhaeuser Canada Ltd., in February 1996. He is a director of the Tacoma YMCA and Seattle Symphony and serves as trustee for both the Greater Tacoma Community Foundation and the Weyerhaeuser Foundation. Mack L. Hogans, 50.......... Mr. Hogans has been senior vice president, Corporate Affairs since April 1995. He was the director of Government Affairs and public-policy issues management before being appointed vice president of Government Affairs in December 1990. Mr. Hogans serves as a board member for The Association of Washington Business, the Washington Council on International Trade, the Seattle Chamber of Commerce and the University of Puget Sound, the Zion Preparatory Academy, the Public Affairs Council, the Discovery Institute and The Nature Conservancy. William C. Stivers, 61...... Mr. Stivers has been executive vice president and chief financial officer of Weyerhaeuser since 1998 and was senior vice president and chief financial officer from 1990 to 1998. Mr. Stivers is a director and officer of various Weyerhaeuser subsidiaries and affiliates. In addition, he is a director of the Factory Mutual Insurance Co. and is chairman of the Financial Management Committee of the American Forest & Paper Association.
S-4 George H. Weyerhaeuser, Jr., Mr. Weyerhaeuser Jr., serves as senior vice 46......................... president, technology, responsible for corporate research and development. He also is chairman of the board of Weyerhaeuser Canada and currently serves as chairman of the Pulp and Paper Research Institute of Canada, chair of the Canadian National Advisory Board on Forestry Research and chairman of the Forest Alliance of British Columbia. He is a director of the Dietzen Corporation and Clearwater Management Company and a board member of the Thea Foss Waterway Public Development Authority. He served as president and chief executive officer of Weyerhaeuser Canada from 1993 to 1998.
2. Directors and Executive Officers of the Purchaser. The name, business address, present principal occupation or employment and five-year employment history of each of the directors and executive officers of the Purchaser are set forth below. The business address of each such director and executive officer is WTJ, Inc. in care of Weyerhaeuser, 33663 Weyerhaeuser Way South, Federal Way, Washington, 98003. All such directors and executive officers listed below are citizens of the United States. Further information concerning the directors and executive officers listed below, each of whom also serves as an executive officer of Weyerhaeuser, is provided above.
Name, Age and Business Present Principal Occupation or Employment; Address Material Positions Held During the Past Five Years ---------------------- -------------------------------------------------- Robert A. Dowdy, 58........ Robert A. Dowdy, a director and vice president of the Purchaser, has been an attorney with Weyerhaeuser Company since 1972; a senior legal counsel from 1974 to 1986; assistant general counsel 1986 to 1991; deputy general counsel from 1991 to 1997 and vice president and general counsel since 1997. Mr. Dowdy is a member of the Association of General Counsel; the American Forest and Paper Association, General Counsel's Committee; the Advisory Council of the Kitsap County Foundation; and the Board of Law Fund. Sandy D. McDade, 47........ Sandy D. McDade, a director and vice president of the Purchaser, has been an attorney with Weyerhaeuser since 1980, a senior legal counsel from 1989-1998, Assistant General Counsel since 1998 and Corporate Secretary since 1993. Mr. McDade has been chair of the Corporate Law Department Section of the Washington State Bar Association and serves on the Camping Services Board of the Seattle Metropolitan YMCA. William R. Corbin, 58...... Vice president. Additional information provided above. Scott R. Marshall, 53...... Mr. Marshall is a vice president of the Purchaser and has served as the vice president, Policy, Finance & Strategic Planning, Timberlands for Weyerhaeuser since 1991. Mr. Marshall is a member of the Technical Association of the Pulp and Paper Industry, the Society of American Foresters, Forest Products Research Society, BOD Foundation for Russian-American Economic Cooperation, World TimberFund Management Committee and the Executive Committee of the Board of Directors for APEC. Steven R. Rogel, 57........ President. Additional information provided above. William C. Stivers, 61..... Vice president. Additional information provided above.
S-5 Manually signed facsimile copies of the Letter of Transmittal will be accepted. The Letter of Transmittal, certificates for Shares and any other required documents should be sent or delivered by each stockholder of the Company or such stockholder's broker, dealer, bank, trust company or other nominee to the Depositary at one of its addresses set forth below. The Depositary for the Offer is: First Chicago Trust Company Of New York By Mail: By Overnight Courier: By Hand: First Chicago Trust First Chicago Trust First Chicago Trust Company Company Company of New York of New York of New York Corporate Actions Corporate Actions, Suite c/o Securities Transfer Suite 4660 4660 and P.O. Box 2569 525 Washington Blvd., Reporting Services Inc. Jersey City, NJ 07303- 3rd Floor Attn. Corporate Actions 2569 Jersey City, NJ 07310 100 William Street, Galleria By Facsimile: New York, NY 10038 (201) 324-3402 or (201) 324-3403 Confirm by Telephone: (201) 222-4707 Questions and requests for assistance or for additional copies of this Offer to Purchase, the Letter of Transmittal and the Notice of Guaranteed Delivery may be directed to the Information Agent or to the Dealer Manager at their respective telephone numbers and location listed below. You may also contact your banker, dealer, bank, trust company or other nominee for assistance concerning the Offer. The Information Agent for the Offer is: [LOGO] GEORGESON SHAREHOLDER COMMUNICATIONS INC. 17 State Street, 10th Floor New York, New York 10004 Banks and Brokers Call Collect: (212) 440-9800 All Others Call Toll-Free: (800) 223-2064 The Dealer Manager for the Offer is: MORGAN STANLEY DEAN WITTER Morgan Stanley & Co. Incorporated 1585 Broadway New York, New York 10036 (212) 761-6531 EX-99.(A)(2) 3 LETTER OF TRANSMITTAL Exhibit (a)(2) LETTER OF TRANSMITTAL To Tender Shares of Common Stock (including the associated Preferred Share Purchase Rights) and Shares of ESOP Convertible Preferred Stock of TJ International, Inc. Pursuant to the Offer to Purchase Dated November 30, 1999 by WTJ, Inc., a wholly owned subsidiary of Weyerhaeuser Company THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 8:00 P.M., NEW YORK CITY TIME ON WEDNESDAY, JANUARY 5, 2000, UNLESS THE OFFER IS EXTENDED. To: First Chicago Trust Company of New York, as Depositary By Mail: By Overnight Courier: By Hand: First Chicago Trust First Chicago Trust First Chicago Trust Company Company Company of New York of New York of New York Suite 4660 Corporate Actions, c/o Securities Transfer P.O. Box 2569 Suite 4660 and Jersey City, NJ 07303- 525 Washington Blvd, Reporting Services Inc. 2569 3rd Floor Attn: Corporate Actions Jersey City, NJ 07310 100 William Street, Galleria New York, NY 10038 DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER, OTHER THAN AS SET FORTH ABOVE, DOES NOT CONSTITUTE A VALID DELIVERY. THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED. This Letter of Transmittal is to be used either if certificates for Shares (as defined below) are to be forwarded herewith or, unless an Agent's Message (as defined herein) is utilized, if delivery of Shares is to be made by book- entry transfer to an account maintained by the Depositary (as defined herein) at the Book-Entry Transfer Facility as defined in and pursuant to the procedures described in Section 2 of the Offer to Purchase. Stockholders who deliver Shares by book-entry transfer are referred to herein as "Book-Entry Stockholders" and other stockholders are referred to herein as "Certificated Stockholders". Stockholders whose certificates for Shares are not immediately available or who cannot deliver either the certificates for, or a Book-Entry Confirmation (as defined in Section 2 of the Offer to Purchase) with respect to, their Shares and all other documents required hereby to the Depositary prior to the Expiration Date (as defined in Section 1 of the Offer to Purchase) must tender their Shares in accordance with the guaranteed delivery procedures described in Section 2 of the Offer to Purchase. See Instruction 2. Delivery of documents to the Book-Entry Transfer Facility does not constitute delivery to the Depositary. DESCRIPTION OF SHARES TENDERED - -------------------------------------------------------------------------------
Name(s) and Address(es) of Registered Holder(s) (Please fill in exactly as name(s) appear(s) on Shares Tendered certificate(s)) (Attach list, if necessary) - ---------------------------------------------------------------------------------------- Number of Share Number of Shares Number of Preferred Certificate Represented by Common Shares Shares Number(s)(1) Certificate(s)(1) Tendered(2) Tendered(2) ------------------------------------------------------------ ------------------------------------------------------------ ------------------------------------------------------------ ------------------------------------------------------------ ------------------------------------------------------------ Total Shares
- ------------------------------------------------------------------------------- (1) Need not be completed by Book-Entry Stockholders. (2) Unless otherwise indicated, it will be assumed that all Shares described above are being tendered. See Instruction 4. 1 Holders of Common Shares (as defined below) will be required to tender one Right (as defined herein) for each Common Share tendered to effect a valid tender of such Common Share. Unless and until the Distribution Date (as defined in the Offer to Purchase) occurs, the Rights are represented by and transferred with the Common Shares. Accordingly, if the Distribution Date does not occur prior to the Expiration Date, a tender of Common Shares will constitute a tender of the associated Rights. If, however, pursuant to the Rights Agreement (as defined herein) or otherwise, a Distribution Date does occur, certificates representing a number of Rights equal to the number of Common Shares being tendered must be delivered to the Depositary in order for such Common Shares to be validly tendered. If a Distribution Date has occurred, a tender of Common Shares without Rights constitutes an agreement by the tendering stockholder to deliver certificates representing a number of Rights equal to the number of Common Shares tendered pursuant to the Offer to the Depositary within three trading days (as defined herein) after the date such certificates are distributed. The Purchaser (as defined herein) reserves the right to require that it receive such certificates prior to accepting Common Shares for payment. Payment for Common Shares tendered and purchased pursuant to the Offer will be made only after timely receipt by the Depositary of, among other things, such certificates, if such certificates have been distributed to holders of Shares. The Purchaser will not pay any additional consideration for the Rights tendered pursuant to the Offer. [_]CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO AN ACCOUNT MAINTAINED BY THE DEPOSITARY WITH THE BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING (ONLY PARTICIPANTS IN THE BOOK-ENTRY TRANSFER FACILITY MAY DELIVER SHARES BY BOOK-ENTRY TRANSFER): Name of Tendering Institution ___________________________________________ Account Number __________________________________________________________ Transaction Code Number _________________________________________________ [_]CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING: Name(s) of Registered Owners(s) _________________________________________ Date of Execution of Notice of Guaranteed Delivery ______________________ Name of Institution that Guaranteed Delivery ____________________________ If delivered by book-entry transfer: Name of Tendering Institution _______________________________________ Account Number at Book-Entry Transfer Facility ______________________ Transaction Code Number _____________________________________________ 2 NOTE: SIGNATURES MUST BE PROVIDED BELOW PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY. Ladies and Gentlemen: The undersigned hereby tenders to WTJ, Inc., a Delaware corporation (the "Purchaser"), which is a wholly owned subsidiary of Weyerhaeuser Company, a Washington corporation, the above-described shares of common stock, par value $1.00 per share (the "Common Shares"), and the above-described shares of ESOP Convertible Preferred Stock (the "Preferred Shares" and together with the Common Shares, the "Shares") of TJ International, Inc., a Delaware corporation (the "Company"), together, in the case of the Common Shares, with the associated Preferred Share Purchase Rights (the "Rights") issued pursuant to the Company's Rights Agreement dated August 26, 1999 (as amended from time to time, the "Rights Agreement"), upon the terms and subject to the conditions set forth in the Purchaser's Offer to Purchase dated November 30, 1999 (the "Offer to Purchase"), and this Letter of Transmittal (which, together with any amendments or supplements thereto or hereto, collectively constitute the "Offer"), receipt of which is hereby acknowledged. Unless the context otherwise requires, all references to Common Shares include the associated Rights, and all references to Rights include the benefits that may inure to holders of the Rights pursuant to the Rights Agreement. Upon the terms of the Offer, subject to, and effective upon, acceptance for payment of, and payment for, the Shares tendered herewith in accordance with the terms of the Offer, the undersigned hereby sells, assigns and transfers to, or upon the order of, the Purchaser all right, title and interest in and to all the Shares that are being tendered hereby (and any and all other Shares or other securities or rights issued or issuable in respect thereof on or after November 23, 1999), and irrevocably constitutes and appoints First Chicago Trust Company of New York (the "Depositary"), the true and lawful agent and attorney-in-fact of the undersigned, with full power of substitution (such power of attorney being deemed to be an irrevocable power coupled with an interest), to the full extent of the undersigned's rights with respect to such Shares (and any such other Shares or securities or rights), (a) to deliver certificates for such Shares (and any such other Shares or securities or rights) or transfer ownership of such Shares (and any such other Shares or securities or rights) on the account books maintained by the Book-Entry Transfer Facility together, in any such case, with all accompanying evidences of transfer and authenticity to, or upon the order of, the Purchaser, (b) to present such Shares (and any such other Shares or securities or rights) for transfer on the Company's books and (c) to receive all benefits and otherwise exercise all rights of beneficial ownership of such Shares (and any such other Shares or securities or rights), all in accordance with the terms of the Offer. The undersigned hereby represents and warrants that the undersigned has full power and authority to tender, sell, assign and transfer the tendered Shares (and any and all other Shares or other securities or rights issued or issuable in respect of such Shares on or after November 23, 1999) and, when the same are accepted for payment by the Purchaser, the Purchaser will acquire good title thereto, free and clear of all liens, restrictions, claims and encumbrances, and the same will not be subject to any adverse claim. The undersigned will, upon request, execute any additional documents deemed by the Depositary or the Purchaser to be necessary or desirable to complete the sale, assignment and transfer of the tendered Shares (and any and all such other Shares or securities or rights). All authority conferred or agreed to be conferred pursuant to this Letter of Transmittal shall be binding upon the successors, assigns, heirs, executors, administrators and legal representatives of the undersigned and shall not be affected by, and shall survive, the death or incapacity of the undersigned. Except as stated in the Offer to Purchase this tender is irrevocable. The undersigned hereby irrevocably appoints Robert A. Dowdy and Sandy D. McDade, and each of them, and any other designees of the Purchaser, the attorneys-in-fact and proxies of the undersigned, each with full power of substitution, to vote at any annual, special or adjourned meeting of the Company's stockholders or otherwise in such manner as each such attorney-in- fact and proxy or his substitute shall in his sole discretion deem proper with respect to, to execute any written consent concerning any matter as each such attorney-in-fact and proxy or his substitute shall in his sole discretion deem proper with respect to, and to otherwise act as each such attorney-in-fact and proxy or his substitute shall in his sole discretion deem proper with respect to, the Shares tendered hereby that have been accepted for payment by the Purchaser prior to the time any such action is taken and with respect to which the undersigned is entitled to vote (and any and all other Shares or other securities or rights issued or issuable in respect of such Shares on or after November 23, 1999). This 3 appointment is effective when, and only to the extent that, the Purchaser accepts such Shares for payment as provided in the Offer to Purchase. This power of attorney and proxy are irrevocable and are granted in consideration of the acceptance for payment of such Shares in accordance with the terms of the Offer. Upon such acceptance for payment, all prior powers of attorney, proxies and consents given by the undersigned with respect to such Shares (and any such other Shares or securities or rights) will, without further action, be revoked and no subsequent powers of attorney, proxies, consents or revocations may be given (and, if given, will not be effective) by the undersigned. The undersigned understands that the valid tender of Shares pursuant to any of the procedures described in Section 2 of the Offer to Purchase and in the Instructions hereto will constitute a binding agreement between the undersigned and the Purchaser upon the terms and subject to the conditions of the Offer. Unless otherwise indicated herein under "Special Payment Instructions", please issue the check for the purchase price and/or return any certificates for Shares not tendered or accepted for payment in the name(s) of the registered holder(s) appearing under "Description of Shares Tendered". Similarly, unless otherwise indicated under "Special Delivery Instructions", please mail the check for the purchase price and/or return any certificates for Shares not tendered or accepted for payment (and accompanying documents, as appropriate) to the address(es) of the registered holder(s) appearing under "Description of Shares Tendered". In the event that both "Special Delivery Instructions" and "Special Payment Instructions" are completed, please issue the check for the purchase price and/or return any certificates for Shares not tendered or accepted for payment (and any accompanying documents, as appropriate) in the name of, and deliver such check and/or return such certificates (and any accompanying documents, as appropriate) to, the person or persons so indicated. Please credit any Shares tendered herewith by book- entry transfer that are not accepted for payment by crediting the account at the Book-Entry Transfer Facility designated above. The undersigned recognizes that the Purchaser has no obligation pursuant to "Special Payment Instructions" to transfer any Shares from the name of the registered holder thereof if the Purchaser does not accept for payment any of the Shares so tendered. [_]CHECK HERE IF ANY OF THE CERTIFICATES REPRESENTING SHARES THAT YOU OWN HAVE BEEN LOST OR DESTROYED AND SEE INSTRUCTION 11. Number of Shares represented by the lost or destroyed certificates: SPECIAL PAYMENT INSTRUCTIONS (See SPECIAL DELIVERY INSTRUCTIONS Instructions 5, 6 and 7) (See Instructions 5, 6 and 7) To be completed ONLY if certifi- To be completed ONLY if certifi- cates for Shares not tendered or cates for Shares not tendered or not accepted for payment and/or not accepted for payment and/or the check for the purchase price the check for the purchase price of Shares accepted for payment of Shares accepted for payment are to be issued in the name of are to be sent to someone other someone other than the under- than the undersigned, or to the signed. undersigned at an address other than that above. Issue[_] Check [_] Certifi- cate(s) to: Mail[_] Check [_] Certifi- cate(s) to: Name _____________________________ (Please Print) Name______________________________ (Please Print) Address __________________________ Address __________________________ __________________________________ (Include Zip Code) __________________________________ (Include Zip Code) __________________________________ (Taxpayer Identification or __________________________________ Social Security Number) (Taxpayer Identification or Social Security Number) 4 SIGN HERE (Also Complete Substitute Form W-9 Below) (right arrow) ------------------------------------------------------- (left arrow) (right arrow) ------------------------------------------------------- (left arrow) (Signature(s) of Stockholder(s)) Dated: (Must be signed by registered holder(s) as name(s) appear(s) on the certificate(s) for the Shares or on a security position listing or by person(s) authorized to become registered holder(s) by certificates and documents transmitted herewith. If signature is by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, please provide the following information and see Instruction 5.) Name(s)________________________________________________ ------------------------------------------------------- (Please Print) Capacity (Full Title) _________________________________ Address _______________________________________________ ------------------------------------------------------- (Include Zip Code) Daytime Area Code and Telephone No. ___________________ Taxpayer Identification or Social Security Number ________________________________ (See Substitute Form W-9) GUARANTEE OF SIGNATURE(S) (If Required--See Instructions 1 and 5) ------------------------------------------------------- (Authorized Signature) ------------------------------------------------------- Name (Please Print) ------------------------------------------------------- Name of Firm ------------------------------------------------------- Address ------------------------------------------------------- (Include Zip Code) ------------------------------------------------------- Daytime Area Code and Telephone No. Dated: 5 INSTRUCTIONS FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER 1. Guarantee of Signatures. No signature guarantee is required on this Letter of Transmittal (a) if this Letter of Transmittal is signed by the registered holder(s) (which term, for purposes of this Instruction 1, includes any participant in the Book-Entry Transfer Facility's system whose name appears on a security position listing as the owner of the Shares) of Shares tendered herewith, and such registered holder(s) has not completed either the box entitled "Special Payment Instructions" or the box entitled "Special Delivery Instructions" on this Letter of Transmittal or (b) if such Shares are tendered for the account of a financial institution (including most commercial banks, savings and loan associations and brokerage houses) that is a participant in the Security Transfer Agents Medallion Program, the New York Stock Exchange Medallion Signature Guarantee Program or the Stock Exchange Medallion Program (such participant, an "Eligible Institution"). In all other cases, all signatures on this Letter of Transmittal must be guaranteed by an Eligible Institution. See Instruction 5. 2. Requirements of Tender. This Letter of Transmittal is to be completed by stockholders either if certificates are to be forwarded herewith or, unless an Agent's Message is utilized, if delivery of Shares is to be made pursuant to the procedures for book-entry transfer set forth in Section 2 of the Offer to Purchase. For a stockholder validly to tender Shares pursuant to the Offer, either (a) a Letter of Transmittal (or a facsimile thereof), property completed and duly executed, together with any required signature guarantees, or, in the case of a book-entry transfer, an Agent's Message, and any other required documents, must be received by the Depositary at one of its addresses set forth herein prior to the Expiration Date and either certificates for tendered Shares must be received by the Depositary at one of such addresses or Shares must be delivered pursuant to the procedures for book-entry transfer described herein (and a Book-Entry Confirmation received by the Depositary), in each case prior to the Expiration Date, or (b) the tendering stockholder must comply with the guaranteed delivery procedures described below and in Section 2 of the Offer to Purchase. Stockholders whose certificates for Shares are not immediately available or who cannot deliver their certificates and all other required documents to the Depositary or complete the procedures for book-entry transfer prior to the Expiration Date may tender their Shares by properly completing and duly executing the Notice of Guaranteed Delivery pursuant to the guaranteed delivery procedures described in Section 2 of the Offer to Purchase. Pursuant to such procedures, (a) such tender must be made by or through an Eligible Institution, (b) a properly completed and duly executed Notice of Guaranteed Delivery, substantially in the form provided by the Purchaser, must be received by the Depositary prior to the Expiration Date and (c) the certificates for all tendered Shares in proper form for transfer (or a Book- Entry Confirmation with respect to all such Shares), together with a Letter of Transmittal (or a facsimile thereof), properly completed and duly executed, with any required signature guarantees, or, in the case of a book-entry transfer, an Agent's Message, and any other required documents, must be received by the Depositary within three trading days after the date of execution of such Notice of Guaranteed Delivery as provided in Section 2 of the Offer to Purchase. A "trading day" is any day on which the Nasdaq Stock Market is open for business. The term "Agent's Message" means a message transmitted by the Book-Entry Transfer Facility to, and received by, the Depositary and forming a part of a Book-Entry Confirmation which states that such Book-Entry Transfer Facility has received an express acknowledgment from the participant in such Book-Entry Transfer Facility tendering the Shares that such participant has received and agrees to be bound by the terms of the Letter of Transmittal and that the Purchaser may enforce such agreement against the participant. The method of delivery of Shares, the Letter of Transmittal and all other required documents, including delivery through the Book-Entry Transfer Facility, is at the election and risk of the tendering stockholder. Shares will be deemed delivered only when actually received by the Depositary (including, in the case of a book-entry transfer, by Book-Entry Confirmation). If delivery is by mail, registered mail with return receipt requested, properly insured, is recommended. In all cases, sufficient time should be allowed to ensure timely delivery. No alternative, conditional or contingent tenders will be accepted and no fractional Shares will be purchased. All tendering stockholders, by execution of this Letter of Transmittal (or facsimile hereof), waive any right to receive any notice of the acceptance of their Shares for payment. 6 3. Inadequate Space. If the space provided herein is inadequate, the certificate numbers and/or the number of Shares should be listed on a separate schedule attached hereto. 4. Partial Tenders (Applicable to Certificate Stockholders Only). If fewer than all the Shares evidenced by any certificate submitted are to be tendered, fill in the number of Shares that are to be tendered in the box entitled "Number of Shares Tendered". In any case, new certificate(s) for the remainder of the Shares that were evidenced by the old certificate(s) will be sent to the registered holder, unless otherwise provided in the appropriate box on this Letter of Transmittal, as soon as practicable after the acceptance for payment of, and payment for, the Shares tendered herewith. All Shares represented by certificates delivered to the Depositary will be deemed to have been tendered unless otherwise indicated. 5. Signatures on Letter of Transmittal, Stock Powers and Endorsements. If this Letter of Transmittal is signed by the registered holder of the Shares tendered hereby, the signature must correspond with the name as written on the face of the certificate(s) without any change whatsoever. If any of the Shares tendered hereby are owned of record by two or more joint owners, all such owners must sign this Letter of Transmittal. If any tendered Shares are registered in different names on several certificates, it will be necessary to complete, sign and submit as many separate Letters of Transmittal as there are different registrations of certificates. If this Letter of Transmittal or any certificates or stock powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing, and proper evidence satisfactory to the Purchaser of their authority so to act must be submitted. When this Letter of Transmittal is signed by the registered owner(s) of the Shares listed and transmitted hereby, no endorsements of certificates or separate stock powers are required unless payment is to be made to, or certificates for Shares not tendered or accepted for payment are to be issued to, a person other than the registered owner(s). Signatures on such certificates or stock powers must be guaranteed by an Eligible Institution. If this Letter of Transmittal is signed by a person other than the registered owner(s) of the certificates listed, the certificates must be endorsed or accompanied by appropriate stock powers, in either case signed exactly as the name or names of the registered owner or owners appear on the certificates. Signatures on such certificates or stock powers must be guaranteed by an Eligible Institution. 6. Stock Transfer Taxes. The Purchaser will pay any stock transfer taxes with respect to the transfer and sale of Shares to it or its order pursuant to the Offer. If, however, payment of the purchase price is to be made to, or if certificates for Shares not tendered or accepted for payment are to be registered in the name of, any person(s) other than the person(s) signing this Letter of Transmittal, the amount of any stock transfer taxes (whether imposed on the registered owner(s) or such person(s)) payable on account of the transfer to such person(s) will be deducted from the purchase price unless satisfactory evidence of the payment of such taxes or exemption therefrom is submitted. Except as provided in this Instruction 6, it will not be necessary for transfer tax stamps to be affixed to the certificates listed in this Letter of Transmittal. 7. Special Payment and Delivery Instructions. If a check is to be issued in the name of, and/or certificates for Shares not accepted for payment are to be returned to, a person other than the signer of this Letter of Transmittal or if a check is to be sent and/or such certificates are to be returned to a person other than the signer of this Letter of Transmittal or to an address other than that shown above, the appropriate boxes on this Letter of Transmittal should be completed. 8. Waiver of Conditions. The Purchaser reserves the right, subject to the Merger Agreement and to the applicable rules and regulations of the Commission, to waive any of the specified conditions of the Offer, in whole or in part, in the case of any Shares tendered. If any of the conditions of the Offer set (other than the Minimum Condition (as defined in the Offer to Purchase)) is not satisfied on the Expiration Date, then, if requested by the Company, the Purchaser must extend the 7 Offer one or more times (the period of each such extension to be determined by the Purchaser) for up to 30 days in the aggregate for all such extensions, provided that at the time of such extension any such condition is reasonably capable of being satisfied and the Company has not received a Takeover Proposal (as defined in the Offer to Purchase). 9. 31% Backup Withholding. In order to avoid backup withholding of Federal income tax on payments of cash pursuant to the Offer, a stockholder surrendering Shares in the Offer must, unless an exemption applies, provide the Depositary with such stockholder's correct taxpayer identification number ("TIN") on Substitute Form W-9 below in this Letter of Transmittal and certify under penalties of perjury that such TIN is correct and that such stockholder is not subject to backup withholding. If a stockholder does not provide such stockholder's correct TIN or fails to provide the certifications described above, the Internal Revenue Service (the "IRS") may impose a $50 penalty on such stockholder and payment of cash to such stockholder pursuant to the Offer may be subject to backup withholding of 31%. Backup withholding is not an additional income tax. Rather, the amount of the backup withholding can be credited against the U.S. federal income tax liability of the person subject to the backup withholding, provided that the required information is given to the IRS. If backup withholding results in an overpayment of tax, a refund can be obtained by the stockholder upon filing an income tax return. The stockholder is required to give the Depositary the TIN (i.e., social security number or employer identification number) of the record owner of the Shares. If the Shares are held in more than one name or are not in the name of the actual owner, consult the enclosed "Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9" for additional guidance on which number to report. The box in Part 3 of the Substitute Form W-9 may be checked if the tendering stockholder has not been issued a TIN and has applied for a TIN or intends to apply for a TIN in the near future. If the box in Part 3 is checked, the stockholder or other payee must also complete the Certificate of Awaiting Taxpayer Identification Number below in order to avoid backup withholding. Notwithstanding that the box in Part 3 is checked and the Certificate of Awaiting Taxpayer Identification Number is completed, the Depositary will withhold 31% on all payments made prior to the time a properly certified TIN is provided to the Depositary. However, such amounts will be refunded to such stockholder if a TIN is provided to the Depositary within 60 days. Certain stockholders (including, among others, all corporations and certain foreign individuals and entities) are not subject to backup withholding. Noncorporate foreign stockholders should complete and sign the main signature form and a Form W-8, Certificate of Foreign Status, a copy of which may be obtained from the Depositary, in order to avoid backup withholding. See the enclosed "Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9" for more instructions. 10. Requests for Assistance or Additional Copies. Questions and requests for assistance or additional copies of the Offer to Purchase, this Letter of Transmittal, the Notice of Guaranteed Delivery and the Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 may be directed to the Information Agent at its address set forth below. 11. Lost, Destroyed or Stolen Certificates. If any certificate representing Shares has been lost, destroyed or stolen, the stockholder should promptly notify the Depositary by checking the box immediately preceding the special payment/special delivery instructions and indicating the number of Shares lost. The stockholder will then be instructed as to the steps that must be taken in order to replace the certificate. This Letter of Transmittal and related documents cannot be processed until the procedures for replacing lost or destroyed certificates have been followed. IMPORTANT: This Letter of Transmittal (or a facsimile hereof), together with any required signature guarantees, or, in the case of a book-entry transfer, an Agent's Message, and any other required documents, must be received by the Depositary prior to the Expiration Date and either certificates for tendered Shares must be received by the Depositary or Shares must be delivered pursuant to the procedures for book-entry transfer, in each case prior to the Expiration Date, or the tendering stockholder must comply with the procedures for guaranteed delivery. 8 PAYER'S NAME: FIRST CHICAGO TRUST COMPANY OF NEW YORK Part 1--PLEASE PROVIDE YOUR TIN IN THE BOX AT RIGHT AND ---------------------- SUBSTITUTE CERTIFY BY SIGNING AND Social Security Form W-9 DATING BELOW Number(s) OR Taxpayer identification Number(s) Part 2--Certification--Under penalties of perjury, I certify that: Department of the Treasury (1) the number shown on this form is my Part 3-- Internal correct Taxpayer Identification Revenue Service Number (or I am waiting for a number to be issued to me) and Awaiting (2) I am not subject to backup TIN [_] withholding because (a) I am exempt ----------- from backup withholding or (b) I have not been notified by the Internal Revenue Service (the "IRS") that I am subject to backup withholding as a result of a failure to report all interest or dividends or (c) the IRS has notified me that I am no longer subject to backup withholding. -------------------------------------------------------- Part 4-- Payer's Exempt TIN Request for [_] Taxpayer Identification Number (TIN) -------------------------------------------------------- Certification instructions--You must cross out item (2) in Part 2 above if you have been notified by the IRS that you are subject to backup withholding be- cause of under-reporting interest or dividends on your tax returns. However, if after being notified by the IRS that you were subject to backup withholding you received another notification from the IRS stat- ing that you are no longer subject to backup with- holding, do not cross out such item (2). If you are exempt from backup withholding, check the box in Part 4 above. SIGN HERE -------------------------------------------------------------------------- (right arrow) SIGNATURE ____________________________________ DATE _________________ YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 3 OF SUBSTITUTE FORM W-9 CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER I certify under penalties of perjury that a taxpayer identification number has not been issued to me, and either (a) I have mailed or delivered an application to receive a taxpayer identification number to the appropriate Internal Revenue Service Center or Social Security Administration Office or (b) I intend to mail or deliver such an application in the near future. I understand that if I do not provide a taxpayer identification number to the Depositary, 31% of all reportable payments made to me will be withheld, but will be refunded if I provide a certified taxpayer identification number within 60 days. ----------------------------------------------- -------------------- Signature Date NOTE: FAILURE TO COMPLETE AND RETURN THIS SUBSTITUTE FORM W-9 MAY RESULT IN BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL INFORMATION. 9 The Information Agent for the Offer is: [LOGO] GEORGESON SHAREHOLDER COMMUNICATIONS INC. 17 State Street, 10th Floor New York, New York 10004 Banks and Brokers Call Collect: (212) 440-9800 All others Call Toll-Free: (800) 223-2064 The Dealer Manager for the Offer is: MORGAN STANLEY DEAN WITTER Morgan Stanley & Co. Incorporated 1585 Broadway New York, New York 10036 (212) 761-6531 November 30, 1999 10 EX-99.(A)(3) 4 NOTICE OF GUARANTEED DELIVERY EXHIBIT (a)(3) NOTICE OF GUARANTEED DELIVERY for Tender of Shares of Common Stock (including the associated Preferred Share Purchase Rights) and ESOP Convertible Preferred Stock of TJ International, Inc. As set forth in Section 2 of the Offer to Purchase (as defined below), this form or one substantially equivalent hereto must be used to accept the Offer (as defined below) if certificates for shares of Common Stock, par value $1.00 per share (the "Common Shares"), or shares of ESOP Convertible Preferred Stock (the "Preferred Shares" and, together with the Common Shares, the "Shares") of TJ International, Inc., a Delaware corporation (the "Company"), together, in the case of Common Shares, with the associated Preferred Share Purchase Rights (the "Rights") issued pursuant to the Company's Rights Agreement dated August 26, 1999 (as amended from time to time, the "Rights Agreement"), are not immediately available or if the procedures for book-entry transfer cannot be completed on a timely basis or time will not permit all required documents to reach the Depositary (as defined in the Offer to Purchase) prior to the Expiration Date (as defined in Section 1 of the Offer to Purchase). This form may be delivered by hand to the Depositary or transmitted by telegram, facsimile transmission or mail to the Depositary and must include a guarantee by an Eligible Institution (as defined in Section 2 of the Offer to Purchase). See Section 2 of the Offer to Purchase. Unless the context otherwise requires, all references to Common Shares shall include the associated Rights, and all references to Rights include the benefits that may inure to holders of the Rights pursuant to the Rights Agreement. The Depositary for the Offer is: First Chicago Trust Company Of New York By Overnight Courier: By Hand: By Mail: First Chicago Trust First Chicago Trust First Chicago Trust Company Company Company of New York of New York of New York Corporate Actions, Suite c/o Securities Transfer Corporate Actions, Suite 4660 and 4660 525 Washington Blvd, 3rd Reporting Services Inc. P.O. Box 2569 Floor Attn: Corporate Actions Jersey City, NJ 07303- Jersey City, NJ 07310 100 William Street, 2569 Galleria By Facsimile: New York, NY 10038 (201) 324-3402 or (201) 324-3403 Confirm by Telephone: (201) 222-4707 DELIVERY OF THIS INSTRUMENT TO AN ADDRESS, OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER, OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A VALID DELIVERY. This form is not to be used to guarantee signatures. If a signature on a Letter of Transmittal is required to be guaranteed by an Eligible Institution under the instructions thereto, such signature guarantee must appear in the applicable space provided in the signature box on the Letter of Transmittal. THE ELIGIBLE INSTITUTION THAT COMPLETES THIS FORM MUST COMMUNICATE THE GUARANTEE TO THE DEPOSITARY AND MUST DELIVER THE LETTER OF TRANSMITTAL OR AN AGENT'S MESSAGE (AS DEFINED IN THE OFFER TO PURCHASE) AND CERTIFICATES FOR SHARES TO THE DEPOSITARY WITHIN THE TIME PERIOD SHOWN HEREIN. FAILURE TO DO SO COULD RESULT IN A FINANCIAL LOSS TO SUCH ELIGIBLE INSTITUTION. THE GUARANTEE ON THE REVERSE SIDE MUST BE COMPLETED. Ladies and Gentlemen: The undersigned hereby tenders to WTJ, Inc., a Delaware corporation (the "Purchaser"), which is a wholly owned subsidiary of Weyerhaeuser Company, a Washington corporation, upon the terms and subject to the conditions set forth in the Purchaser's Offer to Purchase, dated November 30, 1999 (the "Offer to Purchase"), and the related Letter of Transmittal (which, together with any amendments or supplements thereto, collectively constitute the "Offer"), receipt of which is hereby acknowledged, the number of Shares set forth below, all pursuant to the guaranteed delivery procedures described in Section 2 of the Offer to Purchase. Name(s) of Record Holder(s)_________ Number of Common Shares ____________ ____________________________________ Number of Preferred Shares _________ ____________________________________ Certificate Nos. (if available) ____ Please Print ____________________________________ Address(es) ________________________ ____________________________________ ____________________________________ Zip Code If Shares will be tendered by book- entry transfer: Daytime Area Code and Tel. No. _____ Account Number at Book- Signature(s) _______________________ EntryTransfer Facility _____________ ____________________________________ Dated ______________________________ GUARANTEE (Not to be used for signature guarantee) The undersigned, a participant in the Security Transfer Agents Medallion Program, the New York Stock Exchange Medallion Signature Guarantee Program or the Stock Exchange Medallion Program, hereby guarantees to deliver to the Depositary either the certificates representing the Shares tendered hereby, in proper form for transfer, or a Book-Entry Confirmation (as defined in the Offer to Purchase) with respect to such Shares, in any such case together with a properly completed and duly executed Letter of Transmittal (or a facsimile thereof), with any required signature guarantees, or an Agent's Message (as defined in the Offer to Purchase), and any other required documents, within three trading days (as defined in the Offer to Purchase) after the date hereof. The Eligible Institution that completes this form must communicate this guarantee to the Depositary and must deliver the Letter of Transmittal and certificates for Shares to the Depositary within the time period shown herein. Failure to do so could result in a financial loss to such Eligible Institution. Name of Firm _______________________ ____________________________________ Authorized Signature Address ____________________________ Name _______________________________ ____________________________________ Please Print Zip Code Title ______________________________ Area Code and Tel. No. _____________ Dated ______________________________ NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE. CERTIFICATES FOR SHARES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL. 2 EX-99.(A)(4) 5 LETTER TO BROKERS, DEALERS, BANKS Exhibit (a)(4) Offer to Purchase for Cash All Outstanding Shares of Common Stock (including the associated Preferred Share Purchase Rights) and All Outstanding Shares of ESOP Convertible Preferred Stock of TJ International, Inc. at $42.00 Net Per Share by WTJ, Inc., a wholly owned subsidiary of Weyerhaeuser Company THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 8:00 P.M., NEW YORK CITY TIME, ON WEDNESDAY, JANUARY 5, 2000, UNLESS EXTENDED. November 30, 1999 To Broker, Dealers, Banks, Trust Companies and Other Nominees We have been appointed by WTJ, Inc., a Delaware corporation (the "Purchaser") and a wholly owned subsidiary of Weyerhaeuser Company, a Washington corporation ("Weyerhaeuser"), to act as Dealer Manager (as defined in the Offer to Purchase) in connection with the Purchaser's offer to purchase all the outstanding shares of common stock, par value $1.00 per share (the "Common Shares"), and all the outstanding shares of ESOP Convertible Preferred Stock (the "Preferred Shares" and, together with the Common Shares, the "Shares") of TJ International, Inc., a Delaware corporation (the "Company"), together, in the case of the Common Shares, with the associated Preferred Share Purchase Rights (the "Rights") issued pursuant to the Company's Rights Agreement dated August 26, 1999 (as amended from time to time, the "Rights Agreement"), at $42.00 per Share, in each case net to the seller in cash, upon the terms and subject to the conditions set forth in the Purchaser's Offer to Purchase dated November 30, 1999 (the "Offer to Purchase"), and the related Letter of Transmittal (which, together with any supplements or amendments thereto, collectively constitute the "Offer"). We urge you to contact your clients promptly. Please note that the Offer and withdrawal rights will expire at 8:00 P.M., New York City time, on Wednesday, January 5, 2000, unless extended. Please furnish copies of the enclosed materials to those of your clients for whom you hold Shares registered in your name or in the name of your nominee. Unless the context otherwise requires, all references to Common Shares include the associated Rights, and all references to Rights include benefits that may enure to holders of the Rights pursuant to the Rights Agreement. Enclosed herewith are copies of the following documents: 1. Offer to Purchase dated November 30, 1999; 2. Letter of Transmittal to be used by stockholders of the Company accepting the Offer; 3. Letter to Stockholders of the Company from the Chairman and Chief Executive Officer of the Company, accompanied by the Company's Solicitation/Recommendation Statement on Schedule 14D-9 filed with the Securities and Exchange Commission and mailed to stockholders; 4. A printed form letter that may be sent to your clients for whose account you hold Shares in your name or in the name of a nominee, with space provided for obtaining such client's instructions with regard to the Offer; 5. Notice of Guaranteed Delivery; 6. Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9; and 7. Return envelope addressed to First Chicago Trust Company of New York, the Depositary. THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER THAT NUMBER OF SHARES THAT WOULD REPRESENT AT LEAST A MAJORITY OF ALL SHARES (DETERMINED ON A FULLY DILUTED BASIS FOR ALL OUTSTANDING STOCK OPTIONS AND ANY OTHER RIGHTS TO ACQUIRE SHARES) ON THE DATE OF PURCHASE AND (2) ANY WAITING PERIOD UNDER THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976 APPLICABLE TO THE PURCHASE OF SHARES PURSUANT TO THE OFFER HAVING EXPIRED OR BEEN TERMINATED. The Board of Directors of the Company unanimously (A) approved the Merger Agreement (as defined below), the Offer and the Merger, (B) determined that the transactions contemplated by the Merger Agreement, including the Offer and the Merger, are fair to and in the best interests of the Company and its stockholders and (C) recommends that the stockholders of the Company accept the Offer and tender their Shares pursuant to the Offer. The Offer is being made pursuant to the Agreement and Plan of Merger, dated November 23, 1999 (the "Merger Agreement"), among Weyerhaeuser, the Purchaser and the Company pursuant to which, following the consummation of the Offer and the satisfaction or waiver of certain conditions, the Purchaser will be merged with and into the Company, with the Company surviving the merger as a subsidiary of Weyerhaeuser (the "Merger"). In the Merger, each outstanding Share (other than Shares owned by the Company or by any subsidiary of the Company or by Weyerhaeuser, the Purchaser or any other subsidiary of Weyerhaeuser or by stockholders, if any, who are entitled to and who properly exercise appraisal rights under Delaware law) will be converted into the right to receive $42.00 per Share, without interest, or such higher price as set forth in the Merger Agreement and described in the Offer to Purchase. In all cases, payments for Shares accepted for payment pursuant to the Offer will be made only after timely receipt by First Chicago Trust Company of New York (the "Depositary") of (a) certificates for (or a timely Book-Entry Confirmation (as defined in the Offer to Purchase) such Shares, (b) a Letter of Transmittal (or a facsimile thereof), properly completed and duly executed, with any required signature guarantees, or, in the case of a book-entry transfer effected pursuant to the procedures described in Section 2 of the Offer to Purchase, an Agent's Message (as defined in the Offer to Purchase), and (c) any other documents required by the Letter of Transmittal. Accordingly, tendering shareholders may be paid at different times depending upon when certificates for Shares or Book-Entry Confirmations with respect to Shares are actually received by the Depositary. The Purchaser shall not have any obligation to pay interest on the purchase price for tendered Shares, whether or not the Purchaser exercises its right to extend the Offer. Neither the Purchaser nor Weyerhaeuser will pay any fees or commissions to any broker or dealer or other person (other than the Dealer Manager and the Information Agent as described in the Offer to Purchase) in connection with the solicitation of tenders of Shares pursuant to the Offer. You will be reimbursed upon request 2 for customary mailing and handling expenses incurred by you in forwarding the enclosed offering materials to your customers. Questions and requests for additional copies of the enclosed material may be directed to the Information Agent or the Dealer Manager at their respective addresses and telephone numbers set forth on the back cover of the enclosed Offer to Purchase. Very truly yours, MORGAN STANLEY & CO. Incorporated NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL RENDER YOU OR ANY OTHER PERSON THE AGENT OF THE PURCHASER, WEYERHAEUSER, THE COMPANY, THE DEALER MANAGER, THE DEPOSITARY, THE INFORMATION AGENT OR ANY AFFILIATE THEREOF OR AUTHORIZE YOU OR ANY OTHER PERSON TO GIVE ANY INFORMATION OR USE ANY DOCUMENT OR MAKE ANY STATEMENTS ON BEHALF OF ANY OF THEM WITH RESPECT TO THE OFFER OTHER THAN THE ENCLOSED DOCUMENTS AND THE STATEMENT CONTAINED THEREIN. 3 EX-99.(A)(5) 6 LETTER TO CLIENTS FOR USE BY BROKERS, DEALERS Exhibit (a)(5) Offer to Purchase for Cash All Outstanding Shares of Common Stock (including the associated Preferred Share Purchase Rights) and All Outstanding Shares of ESOP Convertible Preferred Stock of TJ International, Inc. at $42.00 Net Per Share by WTJ, Inc., a wholly owned subsidiary of Weyerhaeuser Company THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 8:00 P.M., NEW YORK CITY TIME, ON WEDNESDAY, JANUARY 5, 2000, UNLESS THE OFFER EXTENDED. November 30, 1999 To Our Clients: Enclosed for your consideration is an Offer to Purchase dated November 30, 1999 (the "Offer to Purchase"), and a related Letter of Transmittal (which, together with any amendments or supplements thereto, collectively constitute the "Offer") relating to an offer by WTJ, Inc., a Delaware corporation (the "Purchaser") and a wholly owned subsidiary of Weyerhaeuser Company, a Washington corporation ("Weyerhaeuser"), to purchase shares of common stock, par value $1.00 per share (the "Common Shares"), and shares of ESOP Convertible Preferred Stock (the "Preferred Shares" and, together with the Common Shares, the "Shares") of TJ International, Inc., a Delaware corporation (the "Company"), together, in the case of the Common Stock, with the associated Preferred Share Purchase Rights (the "Rights") issued pursuant to the Company's Rights Agreement dated August 26, 1999 (as amended from time to time, the "Rights Agreement"), at $42.00 per Share, in each case net to the seller in cash, upon the terms and subject to the conditions set forth in the Offer. Also enclosed is the Letter to Stockholders of the Company from the Chairman and Chief Executive Officer of the Company accompanied by the Company's Solicitation/Recommendation Statement on Schedule 14D-9. Unless the context otherwise requires, all references to Shares include the associated Rights, and all references to Rights include the benefits that may enure to holders of the Rights pursuant to the Rights Agreement. We are the holder of record of Shares held by us for your account. A tender of such Shares can be made only by us as the holder of record and pursuant to your instructions. The Letter of Transmittal is furnished to you for your information only and cannot be used to tender Shares held by us for your account. We request instructions as to whether you wish to tender any of or all the Shares held by us for your account, pursuant to the terms and conditions set forth in the Offer. Your attention is directed to the following: 1. The tender price is $42.00 per Share, net to the seller in cash, upon the terms and subject to the conditions set forth in the Offer. 2. The Board of Directors of the Company unanimously (A) approved the Merger Agreement (as defined below), the Offer and the Merger (as defined below) (B) determined that the transactions contemplated by the Merger Agreement, including each of the Offer and the Merger, are fair to, and in the best interests of, the Company and its stockholders and (C) recommends that the stockholders of the Company accept the Offer and tender their Shares pursuant to the Offer. 3. The Offer is being made for all outstanding Shares. 4. The Offer is being made pursuant to the Agreement and Plan of Merger dated November 23, 1999 (the "Merger Agreement"), among Weyerhaeuser, the Purchaser and the Company pursuant to which, following the consummation of the Offer and the satisfaction or waiver of certain conditions, the Purchaser will be merged with and into the Company, with the Company surviving the merger as a subsidiary of Weyerhaeuser (the "Merger"). In the Merger, each outstanding Share (other than Shares owned by the Company or by any subsidiary of the Company or by Weyerhaeuser, the Purchaser or any other subsidiary of Weyerhaeuser or by stockholders, if any, who are entitled to and who properly exercise appraisal rights under Delaware law) will be converted into the right to receive $42.00 per Share, without interest, as set forth in the Merger Agreement and described in the Offer to Purchase. 5. The Offer is conditioned upon, among other things, there being validly tendered and not withdrawn prior to the expiration of the Offer that number of Shares which would represent at least 50.1% of all Fully Diluted Shares (as defined in the Offer to Purchase) on the date of purchase. 6. The Offer and withdrawal rights will expire at 8.00 P.M., New York City time, on Wednesday, January 5, 2000 unless the Offer is extended by the Purchaser. 7. The Purchaser will pay any stock transfer taxes with respect to the transfer and sale of Shares to it or its order pursuant to the Offer, except as otherwise provided in Instruction 6 of the Letter of Transmittal. 8. The Preferred Shares may only be tendered by the trustee for the Company's Investment Plan (as defined in the Offer to Purchase). Accordingly, holders of beneficial interests in the Preferred Shares who wish to tender such shares should do so by delivering appropriate instructions to the trustee. If you wish to have us tender any of or all your Shares, please so instruct us by completing, executing, detaching and returning to us the instruction form set forth below. An envelope to return your instructions to us is enclosed. If you authorize tender of your Shares, all such Shares will be tendered unless otherwise specified below. Your instructions to us should be forwarded promptly to permit us to submit a tender on your behalf prior to the expiration of the Offer. In all cases, payments for Shares accepted for payment pursuant to the Offer will be made only after timely receipt by First Chicago Trust Company of New York (the "Depositary"), of (a) certificates for (or a timely Book-Entry Confirmation (as defined in the Offer to Purchase) with respect to) such Shares, (b) a Letter of Transmittal (or a facsimile thereof), properly completed and duly executed, with any required signature guarantees, or, in the case of a book-entry transfer effected pursuant to the procedures described in Section 2 of the Offer to Purchase, an Agent's Message (as defined in the Offer to Purchase), and (c) any other documents required by the Letter of Transmittal. Accordingly, tendering shareholders may be paid at different times depending upon when certificates for Shares or Book-Entry Confirmations with respect to Shares are actually received by the Depositary. The Purchaser does not have any obligation to pay interest on the purchase price for tendered Shares, whether or not the Purchaser exercises its right to extend the Offer. The Offer is not being made to, nor will tenders be accepted from or on behalf of, holders of Shares in any jurisdiction in which the making or acceptance of the Offer would not be in compliance with the laws of such jurisdiction. However, Weyerhaeuser and Purchaser may, in their discretion, take such action as they may deem necessary to make the Offer in any jurisdiction and extend the Offer to holders of Shares in such jurisdiction. In any jurisdiction where the securities, blue sky or other laws require the Offer to be made by a licensed broker, or dealer, the Offer will be deemed to be made on behalf of Weyerhaeuser and Purchaser by Morgan Stanley & Co. Incorporated, the Dealer Manager for the Offer, or one or more registered brokers or dealers licensed under the laws of such jurisdiction. 2 Instructions With Respect To The Offer To Purchase All Outstanding Shares of Common Stock (including the associated Preferred Share Purchase Rights) and All Outstanding Shares of ESOP Convertible Preferred Stock of TJ International, Inc. by WTJ, Inc., a wholly owned subsidiary of Weyerhaeuser Company The undersigned acknowledges receipt of your letter enclosing the Offer to Purchase, dated November 30, 1999, of WTJ, Inc., a Delaware corporation and a wholly owned subsidiary of Weyerhaeuser Company, a Washington corporation, and the related Letter of Transmittal, relating to shares of common stock, par value $1.00 per share (the "Common Shares"), and ESOP convertible preferred stock (the "Preferred Shares" and, together with the common shares, the "Shares") of TJ International, Inc., a Delaware corporation, together in the case of the Common Shares with the associated Preferred Stock Purchase Rights (the "Rights") pursuant to the Company's Rights Agreement dated August 26, 1999 (as amended from time to time, the "Rights Agreement"). Unless the context otherwise requires, all references to Common Shares include the associated Rights, and all references to Rights include the benefits that may inure to holders of the Rights pursuant to the Rights Agreement. This will instruct you to tender the number of Common Shares indicated below held by you for the account of the undersigned on the terms and conditions set forth in such Offer to Purchase and the related Letter of Transmittal. ------------------------------------- Dated: _________________________ ------------------------------------- Number of Common Shares Signature(s) to be Tendered:* Shares ------------------------------------- ------------------------------------- Please print name(s) Address _____________________________ ------------------------------------- ------------------------------------- ------------------------------------- (Include Zip Code) Area Code and Telephone No. _________ Taxpayer Identification or Social Security No. _______________________ - -------- * Unless otherwise indicated, it will be assumed that all your Shares are to be tendered. 3 EX-99.(A)(6) 7 GUIDELINES FOR CERTIFICATION ON FORM W-9 EXHIBIT (a)(6) GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 Guidelines for Determining the Proper Identification Number to Give the Payer.--Social Security numbers have nine digits separated by two hyphens: i.e. 000-00-0000. Employer identification numbers have nine digits separated by only one hyphen: i.e. 00-0000000. The table below will help determine the number to give the payer. - ------------------------------------- -------------------------------------
Give the SOCIAL SECURITY For this type of account: number of-- - ------------------------------------------------ 1. An individual's account The individual 2. Two or more individuals The actual owner of (joint account) the account or, if combined funds, the first individual on the account(1) 3. Husband and wife (joint The actual owner of account) the account or, if joint funds, either person(1) 4. Custodian account of a The minor(2) minor (Uniform Gift to Minors Act) 5. Adult and minor (joint The adult or, if account) the minor is the only contributor, the minor(1) 6. Account in the name of The ward, minor, or guardian or committee incompetent for a designated ward, person(3) minor, or incompetent person 7.a. The usual revocable The grantor- savings trust trustee(1) account (grantor is also trustee) b. So-called trust account The actual owner(1) that is not a legal or valid trust under State law
Give the EMPLOYER IDENTIFICATION For this type of account: number of-- ------ 8. Sole proprietorship The owner(4) account 9. A valid trust, estate, The legal entity or pension trust (Do not furnish the identifying number of the personal representative or trustee unless the legal entity itself is not designated in the account title.)(5) 10. Corporate account The corporation 11. Religious, charitable, The organization educational or other exempt partnership organization account 12. Partnership account The partnership held in the name of the other exempt partnership 13. Association, club, or The organization other tax-exempt organization 14. A broker or registered The broker or nominee registered nominee 15. Account with the The public entity Department of Agriculture in the name of a public entity (such as a State or local government, school district, or prison) that receives agricultural program payments
- ------------------------------------- ------------------------------------- (1) List all names first and circle the name of the person whose number you furnish. If only one person on a joint account has a Social Security number, that person's number must be furnished. (2) Circle the minor's name and furnish the minor's Social Security number. (3) Circle the ward's, minor's or incompetent person's name and furnish such person's Social Security number. (4) You must show your individual name, but you may also enter your business or "doing business as" name. You may use either your Social Security number or employer identification number (if you have one). (5) List first and circle the name of the legal trust, estate, or pension trust. Note: If no name is circled when there is more than one name, the number will be considered to be that of the first name listed. GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 Page 2 Obtaining a Number If you don't have a taxpayer identification number or you don't know your number, obtain Form SS-5, Application for a Social Security Card, or Form SS- 4, Application for Employer Identification Number (for business and all other entities), at the local office of the Social Security Administration or the Internal Revenue Service and apply for a number. Payee Exempt from Backup Withholding Payees specifically exempted from backup withholding on ALL payments include the following: . A corporation. . A financial institution. . An organization exempt from tax under section 501(a) of the Internal Revenue Code of 1986, as amended (the "Code"), or an individual retirement plan, or a custodial account under Section 403(b)(7), if the account satisfies the requirements of Section 401(f)(2). . The United States or any agency or instrumentalities. . A State, the District of Columbia, a possession of the United States, or any subdivision or instrumentality thereof. . A foreign government, a political subdivision of a foreign government, or any agency or instrumentality thereof. . An international organization or any agency, or instrumentality thereof. . A registered dealer in securities or commodities registered in the U.S., the District of Columbia or a possession of the U.S. . A real estate investment trust. . A common trust fund operated by a bank under section 584(a) of the Code. . An exempt charitable remainder trust, or a non-exempt trust described in Section 4947(a)(1) of the Code. . An entity registered at all times under the Investment Company Act of 1940. . A foreign central bank of issue. . A middleman known in the investment community as a nominee or who is listed in the most recent publication of the American Society of Corporate Securities, Inc. Nominee List. Payments of dividends and patronage dividends not generally subject to backup withholding include the following: . Payments to nonresident aliens subject to withholding under Section 1441 of the Code. . Payments to partnerships not engaged in a trade or business in the U.S. and which have at least one nonresident partner. . Payments of patronage dividends where the amount received is not paid in money. . Payments made by certain foreign organizations. . Payments made to a nominee. . Section 404(k) payments made by an ESOP. Payments of interest not generally subject to backup withholding include the following: . Payments of interest on obligations issued by individuals. Note: You may be subject to backup withholding if this interest is $600 or more and is paid in the course of the payer's trade or business and you have not provided your correct taxpayer identification number to the payer. . Payments of tax-exempt interest (including exempt-interest dividends under Section 852 of the Code). . Payments described in Section 6049(b)(5) of the Code to nonresident aliens. . Payments on tax-free covenant bonds under Section 1451 of the Code. . Payments made by certain foreign organizations. . Payments made to a nominee. . Mortgage interest paid to you. Exempt payees described above should file a Form W-9 to avoid possible erroneous backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, SIGN AND DATE THE FORM AND RETURN IT TO THE PAYER. IF YOU ARE A NONRESIDENT ALIEN OR A FOREIGN ENTITY NOT SUBJECT TO BACKUP WITHHOLDING, FILE WITH A PAYER A COMPLETED INTERNAL REVENUE FORM W-8 (CERTIFICATE OF FOREIGN STATUS). Certain payments other than interest, dividends, and patronage dividends that are not subject to information reporting are also not subject to backup withholding. For details, see the regulations under Section 6041, 6041A, 6042, 6044, 6049, 6050A and 6050N of the Code and the regulations promulgated thereunder. Privacy Act Notice.--Section 6109 of the Code requires most recipients of dividends, interest, or other payments to give taxpayer identification numbers to payers who must report the payments to the IRS. The IRS uses the numbers for identification purposes. Payers must be given the numbers whether or not recipients are required to file tax returns. Payers must generally withhold 31% of taxable interest, dividends and certain other payments to a payee who does not furnish a taxpayer identification number to a payer. Certain penalties may also apply. Penalties (1) Penalty for Failure to Furnish Taxpayer Identification Number.--If you fail to furnish your taxpayer identification number to a payer, you are subject to a penalty of $50 for each such failure unless your failure is due to reasonable cause and not to willful neglect. (2) Civil Penalty for False Information With Respect to Withholding.--If you make a false statement with no reasonable basis that results in no imposition of backup withholding, you are subject to a penalty of $500. (3) Criminal Penalty for Falsifying Information.--Willfully falsifying certifications or affirmations may subject you to criminal penalties including fines and/or imprisonment. FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE SERVICE. EX-99.(A)(7) 8 FORM OF SUMMARY ADVERTISEMENT DATED 11/30/99 Exhibit (a)(7) This announcement is neither an offer to purchase nor a solicitation of an offer to sell Shares. The Offer is made solely by the Offer to Purchase dated November 30, 1999, and the related Letter of Transmittal and is not being made to (nor will tenders be accepted from or on behalf of) holders of Shares in any jurisdiction in which the making of the Offer or the acceptance thereof would not be in compliance with the laws of such jurisdiction. In any jurisdiction where securities, blue sky or other laws require the Offer to be made by a licensed broker or dealer, the Offer shall be deemed to be made on behalf of the Purchaser by Morgan Stanley & Co. Incorporated or one or more registered brokers or dealers licensed under the laws of such jurisdiction. Notice of Offer to Purchase for Cash All Outstanding Shares of Common Stock (including the associated Preferred Share Purchase Rights) and All Outstanding Shares of ESOP Convertible Preferred Stock of TJ International, Inc. at $42.00 Net Per Share by WTJ, Inc., a wholly owned subsidiary of Weyerhaeuser Company WTJ, Inc., a Delaware corporation (the "Purchaser"), a wholly owned subsidiary of Weyerhaeuser Company, a Washington corporation ("Weyerhaeuser"), is offering to purchase all outstanding shares of Common Stock, par value $1.00 per share (the "Common Shares"), and all outstanding shares of ESOP Convertible Preferred Stock, par value $1.00 per share (the "Preferred Shares" and together with the Common Shares, the "Shares"), of TJ International, Inc., a Delaware corporation (the "Company"), together, in the case of the Common Shares, with the associated preferred share purchase rights (the "Rights") issued pursuant to the Company's Rights Agreement dated August 26, 1999, as amended (the "Rights Agreement"), at a price of $42.00 per Share, net to the seller in cash, without interest thereon, upon the terms and subject to the conditions set forth in the Offer to Purchase dated November 30, 1999, and in the related Letter of Transmittal (which, together with any amendments or supplements thereto, collectively constitute the "Offer"). Unless the context otherwise requires, all references to Common Shares include the associated Rights, and all references to the Rights include the benefits that may enure to holders of the Rights pursuant to the Rights Agreement. ------------------------------------------------------------------------- THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 8:00 PM, NEW YORK CITY TIME, ON WEDNESDAY, JANUARY 5, 2000, UNLESS THE OFFER IS EXTENDED. ------------------------------------------------------------------------- THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER, THAT NUMBER OF SHARES THAT WOULD REPRESENT AT LEAST 50.1% OF ALL OUTSTANDING COMMON SHARES ON A FULLY DILUTED BASIS AND (2) ANY WAITING PERIOD UNDER THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976 APPLICABLE TO THE PURCHASE OF SHARES PURSUANT TO THE OFFER HAVING EXPIRED OR BEEN TERMINATED. The Offer is being made pursuant to an Agreement and Plan of Merger, dated as of November 23, 1999 (the "Merger Agreement"), among Weyerhaeuser, the Purchaser and the Company pursuant to which, following the consummation of the Offer and the satisfaction or waiver of certain conditions, the Purchaser will be merged with the Company (the "Merger") with the company surviving the Merger as a wholly owned subsidiary of Weyerhaeuser. In the Merger, each issued Share (other than Shares owned by Weyerhaeuser, the Purchaser or the Company or any of their wholly owned subsidiaries, or by stockholders, if any, who are entitled to and properly exercise appraisal rights under Delaware law) will be converted into $42.00 in cash, without interest (or such higher price as may be paid in the Offer). THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY (i) APPROVED THE MERGER AGREEMENT, THE OFFER AND THE MERGER, (ii) DETERMINED THAT THE TRANSACTIONS CONTEMPLATED BY THE MERGER AGREEMENT, INCLUDING THE OFFER AND THE MERGER, ARE FAIR TO AND IN THE BEST INTERESTS OF THE COMPANY AND ITS STOCKHOLDERS AND (iii) RECOMMENDS THAT THE STOCKHOLDERS OF THE COMPANY ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER. For purposes of the Offer, the Purchaser will be deemed to have accepted for payment, and thereby purchased, Shares properly tendered to the Purchaser and not withdrawn as, if and when the Purchaser gives oral or written notice to the Depositary for the Offer of the Purchaser's acceptance for payment of such Shares. Upon the terms and subject to the conditions of the Offer, payment for Shares accepted for payment pursuant to the Offer will be made by deposit of the purchase price therefor with the Depositary, which will act as an agent for tendering stockholders for the purpose of receiving payment from the Purchaser and transmitting payment to tendering stockholders. In all cases, payment for Shares accepted for payment pursuant to the Offer will be made only after timely receipt by the Depositary of (a) certificates for such Shares or timely confirmation of book-entry transfer of such Shares into the Depositary's account at a Book-Entry Transfer Facility (as defined in the Offer to Purchase) pursuant to the procedures described in Section 2 of the Offer to Purchase, (b) a Letter of Transmittal (or a facsimile thereof), properly completed and duly executed, with any required signature guarantees, or, in the case of a book-entry transfer, an Agent's Message (as defined in the Offer to Purchase) and (c) any other documents required by the Letter of Transmittal. Under no circumstances will interest be paid on the purchase price of the Shares to be paid by the Purchaser, regardless of any extension of the Offer or any delay in making such payment. The term "Expiration Date" means 8:00 PM, New York City time, on Wednesday, January 5, 2000, unless and until the Purchaser, in its sole discretion (but subject to the terms of the Merger Agreement), shall have extended the period of time during which the Offer is open, in which event the term "Expiration Date" shall mean the latest time and date on which the Offer, as so extended by the Purchaser, shall expire. Subject to the Merger Agreement (which prohibits certain amendments to the Offer without the consent of the Company) and the applicable rules and regulations of the Securities and Exchange Commission, the Purchaser reserves the right (but shall not be obligated), at any time and from time to time, and regardless of whether or not any of the events or facts set forth in Section 14 of the Offer to Purchase shall have occurred, (i) to extend the period of time during which the Offer is open, and thereby delay acceptance for payment of and the payment for any Shares, by giving oral or written notice of such extension to the Depositary and (ii) to amend the Offer in any other respect by giving oral or written notice of such amendment to the Depositary. If certain of the conditions set forth in Section 14 of the Offer to Purchase have not been satisfied or waived, then, if requested by the Company, the Purchaser must extend the Offer one or more times (the period of each such extension to be determined by the Purchaser) for up to 30 days in aggregate for all such extensions, provided that at the time of such extension any such condition is reasonably capable of being satisfied. Any extension of the Offer will be followed by a public announcement thereof no later than 9:00 AM, New York City time, on the next business day after the previously scheduled Expiration Date. During any such extension, all Shares previously tendered and not withdrawn will remain subject to the Offer, subject to the right of a tendering stockholder to withdraw such stockholder's Shares. Except as otherwise provided below, tenders of Shares are irrevocable. Shares tendered pursuant to the Offer may be withdrawn pursuant to the procedures set forth below at any time prior to the Expiration Date and, unless theretofore accepted for payment and paid for by the Purchaser pursuant to the Offer, may also be withdrawn at any time after January 28, 2000. For a withdrawal to be effective, a written notice of withdrawal must be timely received by the Depositary at one of its addresses set forth on the back cover of the Offer to Purchase and must specify the name of the person having tendered the Shares to be withdrawn, the number of Shares to be withdrawn and the name of the registered holder of the Shares to be withdrawn, if different from the name of the person who tendered the Shares. If certificates for Shares have been delivered or otherwise identified to the Depositary, then, prior to the physical release of such certificates, the serial numbers shown on such certificates must be submitted to the Depositary and, unless such Shares have been tendered by an Eligible Institution (as defined in Section 2 of the Offer to Purchase), the signatures on the notice of withdrawal must be guaranteed by an Eligible Institution. If Shares have been delivered pursuant to the procedures for book-entry transfer described in Section 2 of the Offer to Purchase, any notice of withdrawal must also specify the name and number of the account at the appropriate Book-Entry Transfer Facility to be credited with the withdrawn Shares and otherwise comply with such Book-Entry Transfer Facility's procedures. Withdrawals of tenders of Shares may not be rescinded, and any Shares properly withdrawn will thereafter be deemed not validly tendered for purposes of the Offer. However, withdrawn Shares may be retendered by again following one of the procedures described in Section 2 of the Offer to Purchase at any time prior to the Expiration Date. All questions as to the form and validity (including time of receipt) of notices of withdrawal will be determined by the Purchaser in its sole discretion, which determination will be final and binding. The Company has provided the Purchaser with the Company's stockholder lists and security position listings for the purpose of disseminating the Offer to holders of Shares. The Offer to Purchase, the related Letter of Transmittal and other relevant materials will be mailed to record holders of Shares and will be furnished to brokers, dealers, banks, trust companies and similar persons whose names, or the names of whose nominees, appear on the stockholder lists or, if applicable, who are listed as participants in a clearing agency's security position listing for subsequent transmittal to beneficial owners of Shares. The information required to be disclosed by Rule 14d-6(e)(1)(vii) of the Securities Exchange Act of 1934, as amended, is contained in the Offer to Purchase and is incorporated herein by reference. THE OFFER TO PURCHASE AND LETTER OF TRANSMITTAL CONTAIN IMPORTANT INFORMATION WHICH SHOULD BE READ BEFORE ANY DECISION IS MADE WITH RESPECT TO THE OFFER. Requests for copies of the Offer to Purchase, the Letter of Transmittal and other tender offer materials may be directed to the Information Agent or the Dealer Manager as set forth below, and copies will be furnished promptly at the Purchaser's expense. No fees or commissions will be payable to brokers, dealers or other persons other than the Dealer Manager and the Information Agent for soliciting tenders of Shares pursuant to the Offer. The Information Agent for the Offer is: GEORGESON SHAREHOLDER COMMUNICATIONS INC. 17 State Street, 10th Floor New York, New York 10004 Banks and Brokers Call Collect: (212) 440-9800 All Others Call Toll-Free: (800) 223-2064 The Dealer Manager for the Offer is: MORGAN STANLEY DEAN WITTER Morgan Stanley & Co. Incorporated 1585 Broadway New York, New York 10036 (212) 761-6531 November 30, 1999 EX-99.(A)(9) 9 PRESS RELEASE 11/23/99 ISSUED BY WEYERHAEUSER Exhibit (a)(9) WEYERHAEUSER TO ACQUIRE TJ INTERNATIONAL FOR $720 MILLION FEDERAL WAY, Wash. - Weyerhaeuser Company (NYSE: WY), one of North America's largest forest products companies, today announced an agreement with TJ International (NASDAQ: TJCO) that will make Weyerhaeuser the leading provider of "value added" engineered wood products. Under the definitive agreement, Weyerhaeuser will pay $720 million in cash, or $42 per share, to acquire all outstanding shares of TJ International, a 51 percent owner and managing partner of Trus Joist MacMillan (TJM). Weyerhaeuser currently owns 49 percent of Trus Joist MacMillan, the world's leading manufacturer and marketer of engineered lumber products. "Trus Joist MacMillan provides an excellent opportunity to grow our value-added wood business and is a logical extension of our acquisition of MacMillan Bloedel," said Steven R. Rogel, Weyerhaeuser chairman, president and chief executive officer. "Engineered wood is a high-margin product with solid growth potential and Trus Joist MacMillan is the leading company in this area. It is the worldwide leader in sales, innovation and product quality in its segment. It has the premier brand name that is associated with quality. This acquisition will provide us with a growing stream of cash flow and earnings." Harold E. Thomas, chairman of TJ International and co-founder of Trus Joist MacMillan, said that today's announcement also will result in significant customer benefits. "I have always believed in the critical importance of innovation in our products and services," Thomas said. "I have long admired the Weyerhaeuser Company and believe that the organization that will emerge in the months ahead will take engineered wood products to the next level." The acquisition further enhances the long-standing relationship between Weyerhaeuser and TJM. Weyerhaeuser is one of TJM's largest suppliers of raw material and serves as its largest distributor. Weyerhaeuser expects the acquisition to generate approximately $50 million in annual savings, primarily through improving purchasing practices, distribution and streamlining operations. The acquisition will be immediately accretive to Weyerhaeuser's earnings and cash flow. "This is an opportune time to complete this acquisition," Rogel said. "The outlook for housing starts, interest rates and global GDP remains relatively strong, and Trus Joist MacMillan's business is closely aligned with ours. This acquisition will enable us to achieve a smooth and rapid integration of production, sales, marketing and service. Equally important, it allows us to capture meaningful synergies that are only possible from the combination of Weyerhaeuser, MacMillan Bloedel and TJ International." Weyerhaeuser intends to finance this transaction using cash and existing credit arrangements. It will account for the acquisition as a purchase. The transaction is subject to normal regulatory approvals. Weyerhaeuser will commence a tender offer for all outstanding shares of TJ International within the next five business days and the companies anticipate a closing date early next year. "This combination offers significant value to Trus Joist MacMillan customers and employees and TJ International shareholders," said Tom Denig, Trus Joist MacMillan president and chief executive officer. "We've worked with Weyerhaeuser for a long time and we share similar philosophies in innovation and enhanced product offerings, backed by quality customer support. Additionally, we will combine production, marketing and distribution efforts, enabling both companies to realize valuable synergies." Weyerhaeuser is the world's largest producer of softwood lumber and market pulp and the world's largest owner of softwood timber. The company also is the third largest producer of containerboard in the United States and the world's second largest manufacturer of oriented strand board (OSB). Weyerhaeuser is one of the largest producers of corrugated packaging in the U.S. Boise, Idaho-based Trus Joist MacMillan manufactures a variety of engineered lumber products for structural framing and industrial applications. It currently operates 16 manufacturing facilities across North America and employs nearly 4,000 people around the world. Trus Joist MacMillan's unique patented manufacturing technologies transforms wood fiber into high-performance, consistent products. The company, which utilizes small-diameter trees that provide resource-efficient alternatives to traditional sawmill products, further enhances Weyerhaeuser's wood product line. Weyerhaeuser Company one of the world's largest integrated forest products companies, was incorporated in 1900. It has offices or operations in 12 countries, with customers worldwide. Weyerhaeuser is principally engaged in the growing and harvesting of timber; the manufacture, distribution and sale of forest products; and real estate construction, development and related activities. EX-99.(C)(1) 10 AGREEMENT AND PLAN OF MERGER DATED 11/23/99 Exhibit (c)(1) EXECUTION COPY ======= AGREEMENT AND PLAN OF MERGER Dated as of November 23, 1999 Among WEYERHAEUSER COMPANY, WTJ, INC. And TJ INTERNATIONAL, INC. ========= TABLE OF CONTENTS Page ARTICLE I The Offer and the Merger ------------------------ SECTION 1.01. The Offer.................................................... 2 SECTION 1.02. Company Actions.............................................. 3 SECTION 1.03. The Merger................................................... 4 SECTION 1.04. Closing...................................................... 5 SECTION 1.05. Effective Time............................................... 5 SECTION 1.06. Effects...................................................... 5 SECTION 1.07. Certificate of Incorporation and By-laws..................... 5 SECTION 1.08. Directors.................................................... 6 SECTION 1.09. Officers..................................................... 6 ARTICLE II Effect on the Capital Stock of the Constituent Corporations; ------------------------------------------------------------ Exchange of Certificates ------------------------ SECTION 2.01. Effect on Capital Stock...................................... 6 SECTION 2.02. Exchange of Certificates..................................... 8 ARTICLE III Representations and Warranties of the Company --------------------------------------------- SECTION 3.01. Organization, Standing and Power............................. 11 SECTION 3.02. Company Subsidiaries; Equity Interests....................... 11 SECTION 3.03. Capital Structure............................................ 12 SECTION 3.04. Authority; Execution and Delivery; Enforceability............ 14 SECTION 3.05. No Conflicts; Consents....................................... 15 SECTION 3.06. SEC Documents................................................ 17 SECTION 3.07. Information Supplied......................................... 18 SECTION 3.08. Absence of Certain Changes or Events......................... 19 SECTION 3.09. Taxes........................................................ 20 SECTION 3.10. Absence of Changes in Benefit Plans.......................... 21 SECTION 3.11. ERISA Compliance; Excess Parachute Payments.................. 22 SECTION 3.12. Labor Matters................................................ 24 SECTION 3.13. Litigation................................................... 24 SECTION 3.14. Compliance with Applicable Laws.............................. 25 SECTION 3.15. Brokers; Schedule of Fees and Expenses....................... 25 SECTION 3.16. Opinion of Financial Advisor................................. 25 SECTION 3.17. Year 2000 Compliance......................................... 26 SECTION 3.18. Environmental Matters........................................ 26 SECTION 3.19. Contracts; Debt Instruments.................................. 27 SECTION 3.20. Intellectual Property........................................ 27 ARTICLE IV Representations and Warranties of Parent and Sub ------------------------------------------------ SECTION 4.01. Organization, Standing and Power............................. 28 SECTION 4.02. Sub Actions.................................................. 28 SECTION 4.03. Authority; Execution and Delivery; Enforceability............ 29 SECTION 4.04. No Conflicts; Consents....................................... 29 SECTION 4.05. Information Supplied......................................... 30 SECTION 4.06. Financing.................................................... 30 SECTION 4.07. Stock Ownership; Interested Stockholders..................... 31 SECTION 4.08. Brokers...................................................... 31 ARTICLE V Covenants Relating to Conduct of Business ----------------------------------------- SECTION 5.01. Conduct of Business.......................................... 31 SECTION 5.02. No Solicitation.............................................. 35 ARTICLE VI Additional Agreements --------------------- SECTION 6.01. Preparation of Proxy Statement; Stockholders Meetings........ 38 SECTION 6.02. Access to Information; Confidentiality....................... 40 SECTION 6.03. Reasonable Efforts; Notification............................. 40 SECTION 6.04. Company Employee Stock Options............................... 41 SECTION 6.05. Existing Agreements, Plans and Policies...................... 43 SECTION 6.06. Indemnification.............................................. 45 SECTION 6.07. Fees and Expenses............................................ 47 SECTION 6.08. Public Announcements......................................... 49 SECTION 6.09. Transfer Taxes............................................... 49 SECTION 6.10. Rights Agreements; Consequences if Rights Triggered.......... 50 SECTION 6.11. Directors.................................................... 50 SECTION 6.12. TJM Partnership Agreement.................................... 51 SECTION 6.13. Grant of Option.............................................. 54 SECTION 6.14. Termination/Amendment of ESOP; Redemption of Company Preferred Stock; Repayment of ESOP Loan............ 55 ARTICLE VII Conditions Precedent -------------------- SECTION 7.01. Conditions to Each Party's Obligation To Effect the Merger... 56 ARTICLE VIII Termination, Amendment and Waiver --------------------------------- SECTION 8.01. Termination.................................................. 57 SECTION 8.02. Effect of Termination........................................ 59 SECTION 8.03. Amendment.................................................... 59 SECTION 8.04. Extension; Waiver............................................ 60 SECTION 8.05. Procedure for Termination, Amendment, Extension or Waiver.... 60 ARTICLE IX General Provisions ------------------ SECTION 9.01. Nonsurvival of Representations and Warranties................ 60 SECTION 9.02. Notices...................................................... 60 SECTION 9.03. Definitions.................................................. 61 SECTION 9.04. Interpretation; Disclosure Letters........................... 62 SECTION 9.05. Severability................................................. 62 SECTION 9.06. Counterparts................................................. 63 SECTION 9.07. Entire Agreement; No Third-Party Beneficiaries............... 63 SECTION 9.08. Governing Law................................................ 63 SECTION 9.09. Assignment................................................... 63 SECTION 9.10. Enforcement.................................................. 63 Exhibits - -------- Exhibit A Conditions of the Offer 1 AGREEMENT AND PLAN OF MERGER dated as of November 23, 1999 (this "Agreement"), among WEYERHAEUSER COMPANY, a Washington corporation ("Parent"), WTJ, INC. a Delaware corporation ("Sub"), ------ --- and a wholly owned subsidiary of Parent, and TJ INTERNATIONAL, INC., a Delaware corporation (the "Company"). ------- WHEREAS the respective Boards of Directors of Parent, Sub and the Company have approved the acquisition of the Company by Parent on the terms and subject to the conditions set forth in this Agreement; WHEREAS, in furtherance of such acquisition, Parent proposes to cause Sub to make a tender offer (as such tender offer may be amended from time to time as permitted under this Agreement, the "Offer") to purchase all the ----- outstanding (x) shares of common stock, par value $1.00 per share, of the Company (the "Company Common Stock"), including the associated Company Rights -------------------- (as defined in Section 3.03(a)), at a price per share of Company Common Stock (including the associated Company Right) of $42.00 (such amount, or any greater amount per share paid pursuant to the Offer, the "Offer Price") and (y) shares ----------- of ESOP Convertible Preferred Stock, par value $1.00 per share, of the Company (the "Company Preferred Stock" and, together with the Company Common Stock, the ----------------------- "Company Capital Stock") at a price per share of Company Preferred Stock equal --------------------- to the Offer Price, in each case, net to the seller in cash, on the terms and subject to the conditions set forth in this Agreement; WHEREAS the respective Boards of Directors of Parent, Sub and the Company have approved the merger (the "Merger") of Sub into the Company, or (at ------ the election of Parent) the Company into Sub, on the terms and subject to the conditions set forth in this Agreement, whereby each issued share of Company Common Stock not owned by Parent, Sub or the Company, including each share of Company Common Stock issued upon the automatic conversion of shares of Company Preferred Stock immediately prior to the Merger, shall be converted into the right to receive the Offer Price in cash; and 2 WHEREAS Parent, Sub and the Company desire to make certain representations, warranties, covenants and agreements in connection with the Offer and the Merger and also to prescribe various conditions to the Offer and the Merger. NOW, THEREFORE, the parties hereto agree as follows: ARTICLE I The Offer and the Merger ------------------------ 3 SECTION 1.01. The Offer. (a) Subject to the conditions of this --------- Agreement, as promptly as practicable but in no event later than five business days after the date of this Agreement, Sub shall, and Parent shall cause Sub to, commence the Offer within the meaning of the applicable rules and regulations of the Securities and Exchange Commission (the "SEC"). The obligation of Sub to, --- and of Parent to cause Sub to, commence the Offer and accept for payment, and pay for, any shares of Company Capital Stock tendered pursuant to the Offer are subject to the conditions set forth in Exhibit A (any of which may be waived by Sub, in its sole discretion, provided that, without the consent of the Company, -------- Sub may not waive the Minimum Tender Condition (as defined in Exhibit A)) and to the other conditions in this Agreement. The initial expiration date of the Offer shall be January 5, 2000. Sub expressly reserves the right to modify the terms of the Offer, except that, without the consent of the Company, Sub shall not (i) reduce the number of shares of Company Capital Stock subject to the Offer, (ii) reduce the price per share of Company Common Stock to be paid pursuant to the Offer, (iii) reduce the price per share of Company Preferred Stock to be paid pursuant to the Offer, (iv) modify or add to the conditions set forth in Exhibit A, (v) extend the Offer, (vi) change the form of consideration payable in the Offer or (vii) otherwise amend the Offer in any manner materially adverse to holders of Company Capital Stock. Notwithstanding the foregoing, Sub may, without the consent of the Company, (i) extend the Offer, if, at the scheduled expiration date of the Offer, any of the conditions to Sub's obligation to purchase shares of Company Capital Stock are not satisfied, until such time as such conditions are satisfied or waived, (ii) extend the Offer for any period required by any rule, regulation, interpretation or position of the SEC or the staff thereof applicable to the Offer and (iii) extend the Offer for any reason for a period (a "Parent Extension Period") of not more than 10 ----------------------- business days beyond the latest expiration date that would otherwise be permitted under clause (i) or (ii) of this sentence or that results from an extension of the Offer requested by the Company pursuant to the next sentence; provided, however, that if Sub extends the Offer pursuant to clause (iii) of - -------- ------- this sentence, it shall waive during any such Parent Extension Period all conditions of the Offer set forth in Exhibit A other than (x) the Minimum Tender Condition and (y) the condition in paragraph (b) of Exhibit A solely to the extent Parent and Sub would violate any Applicable Law (as defined in Section 3.05(a)) or Judgment (as defined in 4 Section 3.05(a)) in purchasing shares of Company Common Stock pursuant to the Offer. If any of the conditions of the Offer set forth in Exhibit A (other than the Minimum Tender Condition) is not satisfied or waived on any scheduled expiration date of the Offer, then, if requested by the Company, Sub shall extend the Offer one or more times (the period of each such extension to be determined by Sub) for up to 30 days in the aggregate for all such extensions, provided that at the time of such extension any such condition is reasonably capable of being satisfied. On the terms and subject to the conditions of the Offer and this Agreement, Sub shall, and Parent shall cause Sub to, pay for all shares of Company Capital Stock validly tendered and not withdrawn pursuant to the Offer that Sub becomes obligated to purchase pursuant to the Offer as soon as practicable after the expiration of the Offer. (b) On the date of commencement of the Offer, Parent and Sub shall file with the SEC a Tender Offer Statement on Schedule 14D-1 with respect to the Offer, which shall contain an offer to purchase and a related letter of transmittal and summary advertisement (such Schedule 14D-1 and the documents included therein pursuant to which the Offer will be made, together with any supplements or amendments thereto, the "Offer Documents"). Each of Parent, Sub --------------- and the Company shall promptly correct any information provided by it for use in the Offer Documents if and to the extent that such information shall have become false or misleading in any material respect, and each of Parent and Sub shall take all steps necessary to amend or supplement the Offer Documents and to cause the Offer Documents as so amended or supplemented to be filed with the SEC and to be disseminated to the Company's stockholders, in each case, as and to the extent required by applicable Federal securities laws. Parent and Sub shall provide the Company and its counsel with any comments Parent, Sub or their counsel may receive from the SEC or its staff with respect to the Offer Documents promptly after the receipt of such comments. SECTION 1.02. Company Actions. (a) The Company hereby approves of ----------------- and consents to the Offer and the Merger and the other transactions contemplated by this Agreement. (b) On the date the Offer Documents are filed with the SEC, the Company shall file with the SEC a Solicitation/Recommendation Statement on Schedule 14D-9 with respect to the Offer (such Schedule 14D-9, as amended from time to time, the "Schedule 14D-9") containing the recommendations described in -------------- Section 3.04(b) and shall mail the 5 Schedule 14D-9 to the holders of Company Capital Stock. Each of the Company, Parent and Sub shall promptly correct any information provided by it for use in the Schedule 14D-9 if and to the extent that such information shall have become false or misleading in any material respect, and the Company shall take all steps necessary to amend or supplement the Schedule 14D-9 and to cause the Schedule 14D-9 as so amended or supplemented to be filed with the SEC and disseminated to the Company's stockholders, in each case, as and to the extent required by applicable Federal securities laws. The Company shall provide Parent and its counsel with any comments the Company or its counsel may receive from the SEC or its staff with respect to the Schedule 14D-9 promptly after the receipt of such comments. (c) In connection with the Offer, the Company shall cause its transfer agent to promptly furnish Sub with mailing labels containing the names and addresses of the record holders of Company Capital Stock as of a recent date and of those persons becoming record holders subsequent to such date, together with copies of all lists of stockholders, security position listings and computer files and all other information in the Company's possession or control regarding the beneficial owners of Company Capital Stock, and shall furnish to Sub such information and assistance (including updated lists of stockholders, security position listings and computer files) as Parent may reasonably request in communicating the Offer to the Company's stockholders. Subject to the requirements of Applicable Law, and, except for such steps as are necessary to disseminate the Offer Documents and any other documents necessary to consummate the transactions contemplated by this Agreement, Parent and Sub shall hold in confidence the information contained in any such labels, listings and files, shall use such information only in connection with the Offer and the Merger, and, if this Agreement shall be terminated, shall, upon request, deliver to the Company all copies of such information then in their possession. SECTION 1.03. The Merger. On the terms and subject to the conditions ----------- set forth in this Agreement, and in accordance with the Delaware General Corporation Law (the "DGCL"), Sub shall be merged with and into the Company at ---- the Effective Time (as defined in Section 1.05). At the Effective Time, the separate corporate existence of Sub shall cease and the Company shall continue as the surviving corporation (the "Surviving Corporation"). Notwithstanding the --------------------- foregoing, Parent may elect, at any time prior to the 6 Merger, instead of merging Sub with and into the Company as provided above, to merge the Company with and into Sub; provided, however, that the Company shall -------- ------- not be deemed to have breached any of its representations, warranties or covenants set forth in this Agreement solely by reason of such election. In such event, the parties shall execute an appropriate amendment to this Agreement in order to reflect the foregoing. At the election of Parent, any direct or indirect subsidiary of Parent may be substituted for Sub as a constituent corporation in the Merger. In such event, the parties shall execute an appropriate amendment to this Agreement in order to reflect the foregoing. SECTION 1.04. Closing. The closing (the "Closing") of the Merger -------- ------- shall take place at the offices of Cravath, Swaine & Moore, 825 Eighth Avenue, New York, New York 10019 at 10:00 a.m. on the second business day following the satisfaction (or, to the extent permitted by Applicable Law, waiver by all parties) of the conditions set forth in Section 7.01, or as soon as practicable after all the conditions set forth in Section 7.01 have been satisfied (or, to the extent permitted by Applicable Law, waived by the parties entitled to the benefits thereof), or at such other place, time and date as shall be agreed in writing between Parent and the Company. The date on which the Closing occurs is referred to in this Agreement as the "Closing Date". ------------ SECTION 1.05. Effective Time. Prior to the Closing, Parent shall --------------- prepare, and on the Closing Date or as soon as practicable thereafter, Parent shall file with the Secretary of State of the State of Delaware, a certificate of merger or other appropriate documents (in any such case, the "Certificate of -------------- Merger") executed in accordance with the relevant provisions of the DGCL, and - ------ shall make all other filings or recordings required under the DGCL. The Merger shall become effective at such time as the Certificate of Merger is duly filed with such Secretary of State, or at such other time as Parent and the Company shall agree and specify in the Certificate of Merger (the time the Merger becomes effective being the "Effective Time"). -------------- SECTION 1.06. Effects. The Merger shall have the effects set forth -------- in Section 259 of the DGCL. SECTION 1.07. Certificate of Incorporation and By-laws. (a) The ----------------------------------------- Certificate of Incorporation of the Company shall be amended at the Effective Time to: 7 (i) delete Articles Tenth and Eleventh thereof; and (ii) amend paragraph (a) of Article Fifth thereof to delete all but the first sentence thereof, and, as so amended, such Certificate of Incorporation shall be the Certificate of Incorporation of the Surviving Corporation, until thereafter changed or amended as provided therein or by Applicable Law. (b) The By-laws of Sub as in effect immediately prior to the Effective Time shall be the By-laws of the Surviving Corporation, until thereafter changed or amended as provided therein or by Applicable Law; provided, however, that the By-laws of the Surviving Corporation shall include - -------- ------- the provisions of Article XI of the Company By-laws (as defined in Section 3.01) as of the date of this Agreement (only to the extent such provisions are applicable to events occurring prior to the Effective Time) for a period of at least six years following the Effective Time. SECTION 1.08. Directors. The directors of Sub immediately prior to ---------- the Effective Time shall be the directors of the Surviving Corporation, until the earlier of their resignation or removal or until their respective successors are duly elected and qualified, as the case may be. SECTION 1.09. Officers. The officers of the Company immediately --------- prior to the Effective Time shall be the officers of the Surviving Corporation, until the earlier of their resignation or removal or until their respective successors are duly elected or appointed and qualified, as the case may be. ARTICLE II Effect on the Capital Stock of the ---------------------------------- Constituent Corporations; Exchange of Certificates -------------------------------------------------- SECTION 2.01. Effect on Capital Stock. At the Effective Time, by ------------------------ virtue of the Merger and without any action on the part of the holder of any shares of Company Capital Stock or any shares of capital stock of Sub: (a) Capital Stock of Sub. Each issued and outstanding share of --------------------- capital stock of Sub shall be converted into and become a number of fully paid and nonassessable shares of common stock, par value $0.01 per share, of the Surviving Corporation (the "Surviving Corporation Common ---------------------------- 8 Stock") equal to (i) the number of shares of Company Common Stock (including - ----- each share of Company Common Stock issued upon the automatic conversion of shares of Company Preferred Stock immediately prior to the Effective Time as provided in paragraph (B) of Section 8 of the Company Preferred Certificate of Designation (as defined in Section 2.01(c)) outstanding immediately prior to the Effective Time divided by (ii) 1000; provided, however, that to the extent the -------- ------- aggregate number of shares of Surviving Corporation Common Stock into which the capital stock of Sub is to be converted pursuant to this Section 2.01(a) is not a whole number, such number shall be rounded up to the next higher whole number. (b) Cancelation of Treasury Stock, Parent-Owned Stock and Sub-Owned --------------------------------------------------------------- Stock. Each share of Company Capital Stock that is owned by the Company, Parent - ------ or Sub shall no longer be outstanding and shall automatically be canceled and retired and shall cease to exist, and no Parent capital stock or other consideration shall be delivered or deliverable in exchange therefor. Each share of Company Capital Stock that is owned by any Company Subsidiary (as defined in Section 3.01) or Parent (other than Sub) shall automatically be converted into one fully paid and nonassessable share of Surviving Corporation Common Stock. (c) Conversion of Company Capital Stock. Subject to Section 2.01(b), ------------------------------------ each issued share of Company Common Stock (including each share of Company Common Stock issued upon the automatic conversion of shares of Company Preferred Stock immediately prior to the Effective Time as provided in paragraph (B) of Section 8 of the Certificate of Designation of the terms of the Company Preferred Stock (the "Company Preferred Certificate of Designation")) shall be -------------------------------------------- converted into the right to receive the Offer Price in cash. The cash payable upon the conversion of shares of Company Common Stock pursuant to this Section 2.01(c) is referred to, collectively as "Merger Consideration". As of the -------------------- Effective Time, all shares of Company Capital Stock shall no longer be outstanding and shall automatically be canceled and retired and shall cease to exist, and each holder of a certificate representing any such shares of Company Capital Stock shall cease to have any rights with respect thereto, except the right to receive Merger Consideration upon surrender of such certificate in accordance with Section 2.02, without interest. (d) Appraisal Rights. Notwithstanding anything in this Agreement to ----------------- the contrary, shares (the "Appraisal --------- 9 Shares") of Company Common Stock that are outstanding immediately prior to the - ------ Effective Time and that are held by any person who is entitled to demand and properly demands appraisal of such Appraisal Shares pursuant to, and who complies in all respects with, Section 262 of the DGCL ("Section 262") shall not ----------- be converted into Merger Consideration as provided in Section 2.01(c), but, rather, each holder of Appraisal Shares shall be entitled to payment of the fair market value of such Appraisal Shares in accordance with Section 262; provided, -------- however, that, if any such holder shall fail to perfect or otherwise shall - ------- waive, withdraw or lose the right to appraisal under Section 262, then the right of such holder to be paid the fair value of such holder's Appraisal Shares shall cease and such Appraisal Shares shall be deemed to have been converted as of the Effective Time into, and to have become exchangeable solely for the right to receive, Merger Consideration as provided in Section 2.01(c). The Company shall provide prompt notice to Parent of any demands received by the Company for appraisal of any shares of Company Capital Stock, and Parent shall have the right to participate in and direct all negotiations and proceedings with respect to such demands. Prior to the Effective Time, the Company shall not, without the prior written consent of Parent, make any payment with respect to, or settle or offer to settle, any such demands, or agree to do any of the foregoing. SECTION 2.02. Exchange of Certificates. (a) Paying Agent. Prior to -------------------------- ------------- the Effective Time, Parent shall select a bank or trust company to act as paying agent (the "Paying Agent") for the payment of Merger Consideration upon ------------ surrender of certificates representing Company Common Stock. Parent shall take all steps necessary to enable and cause the Surviving Corporation to provide to the Paying Agent, immediately following the Effective Time, all the cash necessary to pay for the shares of Company Common Stock converted into the right to receive cash pursuant to Section 2.01(c) (such cash, the "Exchange Fund"). ------------- 10 (b) Exchange Procedure. As soon as reasonably practicable after the ------------------- Effective Time, the Paying Agent shall mail to each holder of record of a certificate or certificates (the "Certificates") that immediately prior to the ------------ Effective Time represented outstanding shares of Company Common Stock whose shares were converted into the right to receive Merger Consideration pursuant to Section 2.01, (i) a letter of transmittal (which shall specify that delivery shall be effected, and risk of loss and title to the Certificates shall pass, only upon delivery of the Certificates to the Paying Agent and shall be in such form and have such other provisions as Parent may reasonably specify), and (ii) instructions for use in effecting the surrender of the Certificates in exchange for Merger Consideration. Upon surrender of a Certificate for cancelation to the Paying Agent or to such other agent or agents as may be appointed by Parent, together with such letter of transmittal, duly executed, and such other documents as may reasonably be required by the Paying Agent, the holder of such Certificate shall be entitled to receive in exchange therefor the amount of cash into which the shares of Company Common Stock theretofore represented by such Certificate shall have been converted pursuant to Section 2.01, and the Certificate so surrendered shall forthwith be canceled. In the event of a transfer of ownership of Company Common Stock that is not registered in the transfer records of the Company, payment may be made to a person other than the person in whose name the Certificate so surrendered is registered if such Certificate shall be properly endorsed or otherwise be in proper form for transfer and the person requesting such payment shall pay any transfer or other taxes required by reason of the payment to a person other than the registered holder of such Certificate or establish to the satisfaction of Parent that such tax has been paid or is not applicable. Until surrendered as contemplated by this Section 2.02, each Certificate shall be deemed, at any time after the Effective Time, to represent only the right to receive upon such surrender the amount of cash, without interest, into which the shares of Company Common Stock theretofore represented by such Certificate have been converted pursuant to Section 2.01. No interest shall be paid or accrue on the cash payable upon surrender of any Certificate. If a mutilated Certificate is surrendered to the Paying Agent or if the holder of a Certificate submits an affidavit to the Paying Agent stating that the Certificate has been lost, destroyed or wrongfully taken, such holder shall furnish an indemnity bond sufficient in the judgment of Parent to 11 protect Parent, the Surviving Corporation and the Paying Agent from any loss that any of them may suffer. (c) No Further Ownership Rights in Company Capital Stock. The Merger ----------------------------------------------------- Consideration paid in accordance with the terms of this Article II upon conversion of any shares of Company Common Stock shall be deemed to have been paid in full satisfaction of all rights pertaining to shares of Company Capital Stock, subject, however, to the Surviving Corporation's obligation to pay any dividends or make any other distributions with a record date prior to the Effective Time that may have been declared or made by the Company on such shares of Company Capital Stock in accordance with the terms of this Agreement or prior to the date of this Agreement and that remain unpaid at the Effective Time, and, after the Effective Time, there shall be no further registration of transfers on the stock transfer books of the Surviving Corporation of shares of Company Capital Stock that were outstanding immediately prior to the Effective Time. If, after the Effective Time, any Certificates are presented to the Surviving Corporation or the Paying Agent for any reason, they shall be canceled and exchanged as provided in this Article II. (d) Termination of Exchange Fund. Any portion of the Exchange Fund ----------------------------- that remains undistributed to the holders of Company Capital Stock for six months after the Effective Time shall be delivered to Parent, upon demand, and any holder of Company Capital Stock who has not theretofore complied with this Article II shall thereafter look only to Parent for payment of its claim for Merger Consideration. (e) No Liability. None of Parent, Sub, the Company or the Paying ------------- Agent shall be liable to any person in respect of any cash from the Exchange Fund delivered to a public official pursuant to any applicable abandoned property, escheat or similar Applicable Law. If any Certificate has not been surrendered prior to the date on which Merger Consideration in respect of such Certificate would otherwise escheat to or become the property of any Governmental Entity (as defined in Section 3.05(b)), any such shares, cash, dividends or distributions in respect of such Certificate shall, to the extent permitted by Applicable Law, become the property of the Surviving Corporation, free and clear of all claims or interest of any person previously entitled thereto. 12 (f) Investment of Exchange Fund. The Paying Agent shall invest any ---------------------------- cash included in the Exchange Fund, as directed by Parent, on a daily basis. If for any reason (including losses) the Exchange Fund is inadequate to pay the amounts to which holders of Company Capital Stock shall be entitled under this Article II, Parent and the Surviving Corporation shall in any event be liable for payment thereof. The Exchange Fund shall not be used except as provided in this Agreement. Any interest and other income resulting from such investments shall be paid to Parent. (g) Withholding Rights. Parent or the Surviving Corporation shall be ------------------- entitled to deduct and withhold from the consideration otherwise payable to any holder of Company Capital Stock pursuant to this Agreement such amounts as may be required to be deducted and withheld with respect to the making of such payment under the Code (as defined in Section 3.11(b)), or under any provision of state, local or foreign tax law. 13 ARTICLE III Representations and Warranties of the Company --------------------------------------------- The Company represents and warrants to Parent and Sub that, except as set forth in the Company SEC Documents filed and publicly available prior to the date of this Agreement (the "Filed Company SEC Documents") or in the letter, --------------------------- dated the date of this Agreement, from the Company to Parent and Sub (the "Company Disclosure Letter"): - -------------------------- SECTION 3.01. Organization, Standing and Power. Each of the Company --------------------------------- and each of its subsidiaries (the "Company Subsidiaries") is duly organized, -------------------- validly existing and in good standing under the laws of the jurisdiction in which it is organized, and has full power and authority and possesses all governmental franchises, licenses, permits, authorizations and approvals necessary to enable it to own, lease or otherwise hold its properties and assets and to conduct its businesses as presently conducted, except where the failure (i) to be duly organized, validly existing and in good standing, in each case, other than any such failure in respect of the Company or the Partnership (as defined in Section 6.12(b)), or (ii) to have such power or authority or to possess such franchises, licenses, permits, authorizations and approvals, individually or in the aggregate, has not had and would not reasonably be expected to have a material adverse effect on the Company (a "Company Material ---------------- Adverse Effect") or a material adverse effect on the ability of the Company to - -------------- consummate the transactions contemplated by this Agreement. The Company and each Company Subsidiary is duly qualified to do business in each jurisdiction where the nature of its business or their ownership or leasing of its properties make such qualification necessary other than such failures to qualify that, individually or in the aggregate, has not had and would not reasonably be expected to have a Company Material Adverse Effect. The Company has made available to Parent true and complete copies of the certificates of incorporation of the Company, as amended to the date of this Agreement (the "Company Charter"), and the By-laws of the Company, as amended to the date of - ---------------- this Agreement (the "Company By-laws"), and the comparable charter and --------------- organizational documents of each Company Subsidiary, in each case, as amended through the date of this Agreement. SECTION 3.02. Company Subsidiaries; Equity Interests. (a) The --------------------------------------- Company Disclosure Letter lists each 14 Company Subsidiary and its jurisdiction of organization. All the outstanding shares of capital stock of each Company Subsidiary have been validly issued and are fully paid and nonassessable and, except as set forth in the Company Disclosure Letter, are owned by the Company, by another Company Subsidiary or by the Company and another Company Subsidiary, free and clear of all pledges, liens, charges, mortgages, encumbrances and security interests of any kind or nature whatsoever (collectively, "Liens"), except such as, individually or in ----- the aggregate, would not reasonably be expected to have a Company Material Adverse Effect (provided that the representation in this sentence with respect -------- to significant subsidiaries of the Company (within the meaning of Regulation S-X of the SEC, the "Significant Subsidiaries") is not qualified by reference to ------------------------ such Company Material Adverse Effect). (b) Except for its interests in the Company Subsidiaries, the Company does not own, directly or indirectly, any capital stock, membership interest, partnership interest, joint venture interest or other equity interest in any person. SECTION 3.03. Capital Structure. (a) The authorized capital stock of ------------------ the Company consists of 200,000,000 shares of Company Common Stock and 10,000,000 shares of preferred stock, par value $1.00 per share (the "Company ------- Authorized Preferred Stock" and, together with the Company Common Stock, the - -------------------------- "Company Stock"). At the close of business on November 17, 1999, (i) - -------------- 18,351,054 shares of Company Common Stock were issued and outstanding, (ii) 1,097,719 shares of Company Authorized Preferred Stock were issued and outstanding, consisting entirely of shares of Company Preferred Stock, (iii) 2,837,558 shares of Company Common Stock were held by the Company in its treasury, (iv) 1,097,719 shares of Company Common Stock were reserved for issuance upon conversion of outstanding shares of Company Preferred Stock, 1,671,436 shares of Company Common Stock were reserved for issuance pursuant to exercise of outstanding Company Employee Stock Options (as defined in Section 6.04(d)) and 550,564 additional shares of Company Common Stock were reserved for issuance pursuant to the Company Stock Plans (as defined in Section 6.04(d)), and (v) 185,000 shares of Series A Junior Participating Preferred Stock, par value $1.00 per share (the "Junior Preferred Stock"), of the Company were ---------------------- reserved for issuance in connection with the rights (the "Company Rights") -------------- issued pursuant to the Rights Agreement dated as of August 26, 15 1999, between the Company and First Chicago Trust Company of New York, as Rights Agent (as amended from time to time, the "Company Rights Agreement"). Except as ------------------------ set forth above at the close of business on November 17, 1999, no shares of Company Capital Stock or other equity securities or voting securities of the Company were issued, reserved for issuance or outstanding. There are no outstanding Company SARs (as defined in Section 6.04) that were not granted in tandem with a related Company Employee Company Stock Option. All outstanding shares of Company Capital Stock are, and all such shares that may be issued prior to the Effective Time will be when issued, duly authorized, validly issued, fully paid and nonassessable. There are not any bonds, debentures, notes or other indebtedness of the Company having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which holders of Company Stock may vote ("Voting Company Debt"). Except as ------------------- set forth above, except pursuant to the ESOP (as defined in Section 3.03(c)), a true and complete copy of which has been previously provided to Parent, and except for the transactions contemplated by this Agreement, there are not any options, warrants, rights, convertible or exchangeable securities, "phantom" stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts (as defined in Section 3.05(a)), arrangements or undertakings of any kind to which the Company or any Company Subsidiary is a party or by which any of them is bound (i) obligating the Company or any Company Subsidiary to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity interests in, or any security convertible or exercisable for or exchangeable into any capital stock of or other equity interest in, the Company or of any Company Subsidiary or any Voting Company Debt, (ii) obligating the Company or any Company Subsidiary to issue, grant, extend or enter into any such option, warrant, call, right, security, commitment, Contract, arrangement or undertaking or (iii) that give any person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights occurring to holders of Company Capital Stock. As of the date of this Agreement, except as set forth in the Partnership Agreement (as defined in Section 6.12(a)), there are not any outstanding contractual obligations of the Company or any Company Subsidiary to repurchase, redeem or otherwise acquire any shares of capital stock of the Company or any Company Subsidiary. The Company has delivered to Parent a complete and correct copy of the Company Rights Agreement. 16 (b) The "Liquidation Price" (as defined in the Company Preferred Certificate of Designation) is $11.8125 per share of Company Preferred Stock. The annual dividend payable on each share of Company Preferred Stock is $1.065, and the Company has paid all dividends on the Company Preferred Stock that have become payable as provided in the Company Preferred Certificate of Designation. Each share of Company Preferred Stock currently is convertible into one share of Company Common Stock as provided in the Company Preferred Certificate of Designation. In accordance with paragraph (B) of Section 8 of the Company Preferred Certificate of Designation, as a result of the transactions contemplated by Sections 1.07 and 2.01 each issued share of Company Preferred Stock will be automatically converted into one share of Company Common Stock immediately prior to the Effective Time, and, at the Effective Time, there will not be any shares of Company Preferred Stock issued or outstanding. The Company has not taken any action to redeem, or that gives any holder the right to redeem, any shares of Company Preferred Stock other than as required by paragraph (C) of Section 8 of the Company Preferred Certificate of Designation by reason of the Company entering into this Agreement. The Company has not taken any action that would require any adjustment or other action under Section 9 of the Company Preferred Certificate of Designation. (c) As of the date hereof, the number of outstanding shares of Company Preferred Stock held by the trustee (the "Trustee") under the employee ------- stock ownership plan portion of the Company's Investment Plan (the "ESOP") is ---- 1,097,719, of which 487,436 shares are allocated to participants and beneficiaries under the Company's Investment Plan and 610,283 shares are unallocated. As of the date hereof, the outstanding and unpaid principal amount of the note evidencing the agreement to repay the loan (the "ESOP Loan") from --------- the Company to the Trustee, dated September 21, 1990, pursuant to which the Trustee on behalf of the ESOP purchased on such date 634,921 shares of Company Preferred Stock (equivalent after giving effect to a subsequent stock split to 1,269,842 shares of Company Preferred Stock), is $8,364,238. SECTION 3.04. Authority; Execution and Delivery; Enforceability. (a) -------------------------------------------------- The Company has all requisite corporate power and authority to execute and deliver this Agreement and to consummate the transactions contemplated by 17 this Agreement. The execution and delivery by the Company of this Agreement and the consummation by the Company of the transactions contemplated by this Agreement have been duly authorized by all necessary corporate action on the part of the Company, subject, in the case of the Merger, to receipt of the Company Stockholder Approval (as defined in Section 3.04(c)) if required under the DGCL and, in the case of the Option (as defined in Section 6.13(a)), any stockholder approval that may be required pursuant to the rules of The Nasdaq Stock Market, Inc. The Company has duly executed and delivered this Agreement, and, assuming the due and valid authorization, execution and delivery of this Agreement by Parent and Sub, this Agreement constitutes a legal, valid and binding obligation of the Company, enforceable against it in accordance with its terms. (b) The Board of Directors of the Company (the "Company Board"), at a ------------- meeting duly called and held prior to the date of this Agreement, duly and unanimously adopted resolutions (i) approving this Agreement, the Offer and the Merger, (ii) determining that the transactions contemplated by this Agreement, including each of the Offer and the Merger, are fair to and in the best interests of the Company and its stockholders, (iii) recommending that the Company's stockholders accept the Offer and tender their shares pursuant to the Offer, (iv) recommending that the Company's stockholders adopt this Agreement, to the extent required by Applicable Law, and (v) declaring that this Agreement is advisable. In addition, the Company Board has taken action sufficient to render Section 203 of the DGCL and Article Tenth of the Company Charter inapplicable (A) to Parent and Sub solely by reason of their entering into this Agreement or consummating the Offer or the Merger or the grant or exercise of the Option and (B) to the Offer, the Merger and the other transactions contemplated by this Agreement, assuming the accuracy of Parent's representation in Section 4.07. To the Company's Knowledge, as of the date of this Agreement no other state takeover statute or similar state statute or regulation applies or purports to apply to the Company with respect to this Agreement, the Offer, the Merger or the grant or exercise of the Option. (c) If a vote on the Merger by the Company's stockholder is required under the DGCL, the only vote of holders of any class or series of Company Capital Stock necessary to approve and adopt this Agreement and the Merger is the adoption of this Agreement by the holders of a majority of the outstanding Company Common Stock and 18 outstanding Company Preferred Stock, voting together as a single class (the "Company Stockholder Approval"). The affirmative vote of the holders of Company ---------------------------- Capital Stock, or any of them, is not necessary to consummate the Offer or any transaction contemplated by this Agreement other than the Merger, except that the exercise of the Option may require Company stockholder approval pursuant to the rules of The Nasdaq Stock Market, Inc. SECTION 3.05. No Conflicts; Consents. (a) None of the execution and ----------------------- delivery by the Company of this Agreement and the consummation of the Offer, the Merger and the other transactions contemplated by this Agreement and compliance with the terms hereof will, (i) conflict with the Company Charter, the Company By-laws or the comparable charter or organizational documents of any Significant Subsidiary or (ii) conflict with or result in any violation of or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of any obligation or to loss of a material benefit under, or result in the creation of any Lien upon any of the properties or assets of the Company or any Company Subsidiary under, any provision of (A) any contract, lease, license, indenture, note, bond, agreement, permit, concession, franchise or other instrument (a "Contract") to which the -------- Company or any Company Subsidiary is a party or by which any of their respective properties or assets is bound or (B) subject to the filings and other matters referred to in Section 3.05(b), any judgment, order or decree ("Judgment") or -------- statute, law (including common law), ordinance, rule or regulation ("Applicable ---------- Law") applicable to the Company or any Company Subsidiary or their respective - --- properties or assets, other than, in the case of clauses (A) and (B) of this sentence, any such items that, individually or in the aggregate, have not had and would not reasonably be expected to have a Company Material Adverse Effect or a material adverse effect on the ability of the Company to consummate the transactions contemplated by this Agreement. (b) No consent, approval, license, permit, order or authorization ("Consent") of, or registration, declaration or filing with, or permit from, any - --------- Federal, state, local or foreign government or any court of competent jurisdiction, administrative agency or commission or other governmental authority or instrumentality, domestic or foreign (a "Governmental Entity") is ------------------- required to be obtained or made by or with respect to the Company or any Company 19 Subsidiary in connection with the execution, delivery and performance of this Agreement or the consummation of the transactions contemplated by this Agreement, other than (i) compliance with and filings under the Hart-Scott- Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), (ii) the ------- filing with the SEC of (A) the Schedule 14D-9, (B) a proxy or information statement relating to the adoption of this Agreement by the Company's stockholders if required under the DGCL (the "Proxy Statement"), (C) any --------------- information statement (the "Information Statement") required under Rule 14f-1 in --------------------- connection with the Offer and (D) such reports under Sections 13 and 16 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as may be ------------ required in connection with this Agreement, the Offer, the Merger and the other transactions contemplated by this Agreement, (iii) the filing of the Certificate of Merger with the Secretary of State of the State of Delaware and appropriate documents with the relevant authorities of the other jurisdictions in which the Company is qualified to do business, (iv) Consents the failure of which to be obtained or made would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect or a material adverse effect on the ability of the Company to consummate the transactions contemplated by this Agreement, (v) such filings as may be required in connection with the Transfer Taxes (as defined in Section 6.09) described in Section 6.09 and (vi) any items required solely by reason of the participation of Parent (as opposed to any third party) in the transactions contemplated by this Agreement. (c) Assuming the accuracy of Parent's representation in Section 4.07, the Company and the Company Board have taken all action necessary to (i) render the Company Rights inapplicable to this Agreement, the Offer, the Merger and the other transactions contemplated by this Agreement and (ii) ensure that (A) neither Parent nor any of its affiliates or associates is or will become an "Acquiring Person" (as defined in the Company Rights Agreement) by reason of this Agreement, the Offer, the Merger or any other transaction contemplated by this Agreement), (B) a "Distribution Date" (as defined in the Company Rights Agreement) shall not occur by reason of this Agreement, the Offer, the Merger or any other transaction contemplated by this Agreement and (C) the Company Rights shall expire immediately prior to the Effective Time. 20 SECTION 3.06. SEC Documents; Financial Statements. The Company has ------------------------------------ filed all reports, schedules, forms, statements and other documents required to be filed by the Company with the SEC since January 1, 1998 (the "Company SEC ----------- Documents"). As of its respective date, each Company SEC Document complied in - --------- all material respects with the requirements of the Exchange Act or the Securities Act of 1933, as amended (the "Securities Act"), as the case may be, -------------- and the rules and regulations of the SEC promulgated thereunder applicable to such Company SEC Document, and did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. The consolidated balance sheets as of January 2, 1999, January 3, 1998, and December 28, 1997, and the related consolidated statements of income, stockholders' equity and cash flows for each of the three fiscal years in the period ended January 2, 1999 (including the related notes and schedules thereto) of the Company contained in the Forms 10-K for the fiscal years ended January 2, 1999, January 3, 1998, and December 28, 1997 included in the Company SEC Documents present fairly in all material respects the consolidated financial position and the consolidated results of operations and cash flows of the Company and its consolidated subsidiaries as of the dates or for the periods presented therein in conformity with United States generally accepted accounting principles ("GAAP") applied on a consistent basis ---- during the periods involved except as otherwise noted therein, including the related notes. The consolidated balance sheets and the related statements of income and cash flows (including in each case the related notes thereto) of the Company contained in the Forms 10-Q that are Company SEC Documents have been prepared in accordance with the requirements for interim financial statements contained in Regulation S-X, which do not require all the information and footnotes necessary for a fair presentation of financial position, results of operations and cash flows in conformity with generally accepted accounting principles. The Forms 10-Q that are Company SEC Documents reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly in all material respects the consolidated financial position, results of operations and cash flows of the Company for all periods presented. None of the Company Subsidiaries is, or has at any time since January 1, 1998 been, subject to the reporting requirements of Sections 13(a) and 15(d) of the Exchange Act. 21 SECTION 3.07. Information Supplied. None of the information supplied --------------------- or to be supplied by the Company for inclusion or incorporation by reference in (i) the Offer Documents, the Schedule 14D-9 or the Information Statement, will, at the time such document is filed with the SEC, at any time it is amended or supplemented or at the time it is first published, sent or given to the Company's stockholders, contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading or (ii) the Proxy Statement will, at the date it is first mailed to the Company's stockholders or at the time of the Company Stockholders Meeting (as defined in Section 6.01(b)), contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading. The Schedule 14D- 9, the Proxy Statement and the Information Statement will comply as to form in all material respects with the requirements of the Exchange Act and the rules and regulations thereunder, except that no representation is made by the Company with respect to statements made or incorporated by reference therein based on information supplied by Parent or Sub in writing for inclusion or incorporation by reference therein. SECTION 3.08. Absence of Certain Changes or Events. From the date of ------------------------------------- the most recent audited financial statements included in the Filed Company SEC Documents to the date of this Agreement, the Company has, as a general matter, conducted its business only in the ordinary course (other than any changes that resulted from the MacMillan Bloedel Transaction (as defined in Section 6.12(a)), and during such period there has not been: (i) any event, change, effect or development that, individually or in the aggregate, has had or would reasonably be expected to have a Company Material Adverse Effect or a material adverse effect on the ability of the Company to consummate the transactions contemplated by this Agreement; (ii) any declaration, setting aside or payment of any dividend or other distribution (whether in cash, stock or property) with respect to any Company Capital Stock (other than regular annual quarterly cash dividends not in excess of $0.055 per share of Company 22 Common Stock with usual record and payment dates and in accordance with the Company's present dividend policy and other than regular cash dividends not in excess of $1.065 per share of Company Preferred Stock payable on outstanding Company Preferred Stock in accordance with the current terms thereof); (iii) any split, combination or reclassification of any Company Capital Stock or any issuance or the authorization of any issuance of any other securities in respect of, in lieu of or in substitution for shares of Company Capital Stock; (iv) (A) any granting by the Company or any Company Subsidiary to any director or executive officer of the Company or any Company Subsidiary of any increase in compensation, except in the ordinary course consistent with prior practice or as was required under employment agreements in effect as of the date of the most recent audited financial statements included in the Filed Company SEC Documents, (B) any granting by the Company or any Company Subsidiary to any such director or executive officer of any increase in severance or termination pay, except as was required under any employment, severance or termination agreements in effect as of the date of the most recent audited financial statements included in the Filed Company SEC Documents and except for any increase in severance or termination pay resulting solely from increases in compensation made in the ordinary course, or (C) any entry by the Company or any Company Subsidiary into, or any amendment of, any employment, severance or termination agreement with any such director or executive officer; (v) any change in financial accounting methods, principles or practices by the Company or any Company Subsidiary materially affecting the consolidated assets, liabilities or results of operations of the Company, except insofar as may have been required by a change in GAAP; or (vi) any material elections with respect to Taxes (as defined in Section 3.09(f)) by the Company or any Company Subsidiary or settlement or compromise by the Company or any Company Subsidiary of any material Tax liability or refund, except, in each case, in the ordinary course consistent with past practice or as 23 required to comply with changes in Applicable Law occurring prior to the date of this Agreement. SECTION 3.09. Taxes. (a) Each of the Company and each Company ------ Subsidiary has timely filed, or has caused to be timely filed on its behalf, all Tax Returns (as defined in Section 3.09(f)) required to be filed by it, and all such Tax Returns are true, complete and accurate, except to the extent any failure to file or any failure to be true, complete or accurate in any filed Tax Returns would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect. All Taxes shown to be due on such Tax Returns, or otherwise owed, have been timely paid, except to the extent that any failure to pay, individually or in the aggregate, has not had and would not reasonably be expected to have a Company Material Adverse Effect. (b) The most recent financial statements contained in the Filed Company SEC Documents reflect an adequate reserve for all current Taxes payable by the Company and the Company Subsidiaries (in addition to any reserve for deferred Taxes established to reflect timing differences between book and Tax income) for all taxable periods and portions thereof through the date of such financial statements, except to the extent that any failures have not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect. No deficiency with respect to any Taxes has been proposed, asserted or assessed against the Company or any Company Subsidiary, and no requests for waivers of the time to assess any such Taxes are pending, except to the extent any such deficiency or request for waiver, individually or in the aggregate, have not had and would not reasonably be expected to have a Company Material Adverse Effect. (c) The Federal income Tax Returns of the Company and each corporation that is a Company Subsidiary consolidated in such Tax Returns have been examined by and settled with the United States Internal Revenue Service for all years through 1991. All material assessments for Taxes due with respect to such completed and settled examinations or any concluded litigation have been fully paid. (d) As of the date of this Agreement, neither the Company nor any Company Subsidiary is bound by any sharing, allocation or indemnification agreement with respect to Taxes that is material to the business, financial condition 24 or ongoing, longer-term profitability (but not prospects) of the Company and the Company Subsidiaries, taken as a whole. (e) Neither the Company nor any Company Subsidiary has constituted either a "distributing corporation" or a "controlled corporation" (within the meaning of Section 355(a)(1)(A) of the Code) in a distribution of stock qualifying for tax-free treatment under Section 355 of the Code (i) in the two years prior to the date of this Agreement or (ii) in a distribution which otherwise constitutes part of a "plan" or "series of related transactions" (within the meaning of Section 355(e) of the Code) in conjunction with the Merger. (f) For purposes of this Agreement: "Taxes" includes all forms of taxation, whenever created or imposed, ----- and whether of the United States or elsewhere, and whether imposed by a local, municipal, governmental, state, foreign, Federal or other Governmental Entity, including all interest, penalties and additions imposed with respect to such amounts. "Tax Return" means all Federal, state, local, provincial and foreign ---------- Tax returns, declarations, statements, reports, schedules, forms and information returns and any amended Tax return required to be filed with any taxing authority with respect to Taxes. SECTION 3.10. Absence of Changes in Benefit Plans. There has not ------------------------------------ been any adoption or amendment in any material respect by the Company or any Company Subsidiary of the Company Benefit Plans described in the Company's Associate Benefits Summary referred to in Section 3.11(a) or in the Filed Company SEC Documents. For purposes of this Agreement, the term "Company ------- Benefit Plans" means, collectively, any bonus, pension, profit sharing, deferred - ------------- compensation, incentive compensation, stock ownership, stock purchase, stock option, "phantom" stock, retirement, vacation, severance, disability, death benefit, hospitalization, medical or other plan, agreement or arrangement providing benefits to any current or former employee, officer or director of the Company or any Company Subsidiary. As of the date of this Agreement, there are not any employment, consulting, indemnification, severance or termination agreements or arrangements between the Company or any Company Subsidiary and any current or former executive officer or director of the Company or any Company 25 Subsidiary, nor are there any such agreements with any other current or former employee of the Company or any Company Subsidiary who is or was employed in the United States or Canada, other than (i) agreements that do not require the payment of more than $100,000 per year, and (ii) letter agreements setting forth the terms and conditions of employment in connection with the hiring of such individual and not providing for any entitlement to severance pay and benefits in excess of $100,000. SECTION 3.11. ERISA Compliance; Excess Parachute Payments. (a) The -------------------------------------------- Company Disclosure Letter includes a copy of the Company's Associate Benefits Summary, which sets forth an accurate description of the principal Company Benefit Plans (other than those Company Benefit Plans that are filed with the Filed Company SEC Documents) provided to employees of the Company and the Company Subsidiaries who are employed in the United States (the "U.S. ---- Employees"), as in effect as of July 1, 1999 (the "U.S. Benefits"). The - --------- ------------- compensation and benefits provided pursuant to Company Benefit Plans for employees of the Company and the Company Subsidiaries who are not U.S. Employees are (i) with respect to expatriates, consistent with customary practice for expatriate employees, and (ii) with respect to all other such employees, designed to provide similar benefits to the U.S. Benefits, to the extent possible subject to Applicable Law, and, in each case, the aggregate cost thereof is not materially greater, on a per capita basis, than the aggregate cost of the U.S. Benefits. The Company has made available, or will hereafter make available upon request, to Parent true, complete and correct copies of (i) each Company Benefit Plan (or, in the case of any unwritten Company Benefit Plan, a description thereof), (ii) the most recent annual report on Form 5500 filed with the Internal Revenue Service with respect to each Company Benefit Plan (if any such report was required), (iii) the most recent summary plan description for each Company Benefit Plan for which such summary plan description is required and (iv) each trust agreement and group annuity contract relating to any Company Benefit Plan. (b) All "employee pension benefit plans" (as defined in Section 3(2) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA")) ----- that are maintained for U.S. Employees (sometimes referred to herein as "Company ------- Pension Plans") have been the subject of determination letters from the Internal - ------------- Revenue Service to the effect that such Company Pension Plans are qualified and 26 exempt from Federal income taxes under Sections 401(a) and 501(a), respectively, of the Internal Revenue Code of 1986, as amended (the "Code"), and no such ---- determination letter has been revoked nor, to the Knowledge of the Company, has revocation been threatened, nor has any such Company Pension Plan been amended since the date of its most recent determination letter or application therefor in any respect that would adversely affect its qualification. All Forms 5500 required to be filed with respect to Company Benefit Plans have been timely filed. (c) None of the Company, any Company Subsidiary, or any person that is considered one employer with the Company under Section 4001 of ERISA or Section 414 of the Code, has or could reasonably be expected to have any liability under Title IV of ERISA with respect to any "employee benefit plan" (as defined in Section 3(3) of ERISA) other than for payment of premiums to the Pension Benefit Guaranty Corporation with respect to the defined benefit pension plan disclosed in the Company Disclosure Letter. None of the Company Pension Plans has an "accumulated funding deficiency" (as such term is defined in Section 302 of ERISA or Section 412 of the Code), whether or not waived. None of the Company, any Company Subsidiary, any officer of the Company or any of its Company Subsidiary or any of the Company Benefit Plans that are subject to ERISA, including the Company Pension Plans, and to the Knowledge of the Company, any trusts created thereunder or any trustee or administrator thereof, have engaged in a "prohibited transaction" (as defined in Section 406 of ERISA or Section 4975 of the Code) or any other breach of fiduciary responsibility that could subject the Company, any Company Subsidiary or any officer of the Company or any Company Subsidiary to the Tax or penalty on prohibited transactions imposed by such Section 4975 in any material amount or to any material liability under Section 502(i) or 502(1) of ERISA. (d) With respect to any Company Benefit Plan that is an employee welfare benefit plan, except as disclosed in the Company Disclosure Letter, (i) no such Company Benefit Plan is unfunded or funded through a "welfare benefits fund" (as defined in Section 419(e) of the Code) and (ii) each such Company Benefit Plan that is a "group health plan" (as defined in Section 5000(b)(1) of the Code), complies with the applicable requirements of Section 4980B(f) of the Code. Neither the Company nor any Company Subsidiary has any obligations for retiree health and life benefits under any 27 Company Benefit Plan with respect to U.S. Employees (other than as required under Section 4980B(f) of the Code). (e) The Company Disclosure Letter sets forth a complete and accurate list of each individual who is a party to a change-in-control employment agreement with the Company, together with such individual's current base salary and target bonus. SECTION 3.12. Labor Matters. There are no collective bargaining or --------------- other labor union agreements to which the Company or any Company Subsidiary is a party or by which any of them is bound. As of the date of this Agreement, to the Knowledge of the Company, there is not any labor union organizing activity or any actual or threatened employee strikes, work stoppages, slowdowns or lockouts that, individually or in the aggregate, have had or would reasonably be expected to have a Company Material Adverse Effect. SECTION 3.13. Litigation. There is no suit, action or proceeding ----------- pending or, to the Knowledge of the Company, threatened against or affecting the Company or any Company Subsidiary (and the Company is not aware of any basis for any such suit, action or proceeding) that, individually or in the aggregate, has had or would reasonably be expected to have a Company Material Adverse Effect, nor is there any Judgment outstanding against the Company or any Company Subsidiary that has had or would reasonably be expected to have a Company Material Adverse Effect. As of the date of this Agreement, there is no suit, action or proceeding pending or, to the Knowledge of the Company, threatened against or affecting the Company or any Company Subsidiary (and the Company is not aware of any basis for any such suit, action or proceeding) that, individually or in the aggregate, would reasonably be expected to have a material adverse effect on the ability of the Company to consummate the transactions contemplated by this Agreement, nor as of the date of this Agreement is there any Judgment outstanding against the Company or any Company Subsidiary that would reasonably be expected to have a material adverse effect on the ability of the Company to consummate the transactions contemplated by this Agreement. SECTION 3.14. Compliance with Applicable Laws. The Company and the -------------------------------- Company Subsidiaries are in compliance with all Applicable Laws, including those relating to occupational health and safety, except for such instances of 28 noncompliance that, individually or in the aggregate, have not had or would not reasonably be expected to have a Company Material Adverse Effect. As of the date of this Agreement, the Company and the Company Subsidiaries are in compliance with all Applicable Laws, including those relating to occupational health and safety, except for such instances of noncompliance that, individually or in the aggregate, would not reasonably be expected to have a material adverse effect on the ability of the Company to consummate the transactions contemplated by this Agreement. To the Knowledge of the Company neither the Company nor any Company Subsidiary has received any written communication during the past two years from a Governmental Entity that alleges that the Company or a Company Subsidiary is not in compliance with any Applicable Law, except with respect to any alleged noncompliance that, individually or in the aggregate, would not reasonably be expected to have a Company Material Adverse Effect. This Section 3.13 does not relate to matters with respect to Taxes, which are the subject of Section 3.09, or environmental matters, which are the subject of Section 3.18. SECTION 3.15. Brokers; Schedule of Fees and Expenses. No broker, --------------------------------------- investment banker, financial advisor or other person, other than Goldman, Sachs & Co., the fees and expenses of which will be paid by the Company, is entitled to any brokers', finders', financial advisors' or other similar fee or commission in connection with the Offer, the Merger and the other transactions contemplated by this Agreement based upon arrangements made by or on behalf of the Company. The Company has furnished to Parent the financial details of all agreements between the Company and Goldman, Sachs & Co. relating to the Offer, the Merger and the other transactions contemplated by this Agreement. SECTION 3.16. Opinion of Financial Advisor. The Company has received ----------------------------- the opinion of Goldman, Sachs & Co., dated the date of this Agreement, to the effect that, as of such date, the consideration to be received in the Offer and the Merger by the holders of Company Common Stock is fair to such holders from a financial point of view, a signed copy of which opinion will promptly be delivered to Parent upon receipt by the Company. SECTION 3.17. Year 2000 Compliance. (a) To the Knowledge of the --------------------- Company, the computer systems of the Company and the Company Subsidiaries are Year 2000 Compliant (as defined below), except to the extent that such failures 29 to be Year 2000 Compliant would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect. All inventory of the Company and the Company Subsidiaries that is, consists of, includes or uses computer software is Year 2000 Compliant. Any failure on the part of the customers of and suppliers to the Company and the Company Subsidiaries to be Year 2000 Compliant by December 31, 1999, is not expected to have a Company Material Adverse Effect. As of the date of this Agreement, the SAP project is expected to be completed on schedule and within budget. (b) The term "Year 2000 Compliant", with respect to a computer system ------------------- or software program, means that such computer system or program: (i) is capable of recognizing, processing, managing, representing, interpreting and manipulating correctly date-related data for dates earlier and later than January 1, 2000; (ii) has the ability to provide date recognition for any data element without limitation for the purposes designed; (iii) has the ability to function automatically into and beyond the year 2000 without human intervention and without any change in operations associated with the advent of the year 2000; (iv) has the ability to interpret data, dates and time correctly into and beyond the year 2000; (v) has the ability not to produce noncompliance in existing data, nor otherwise corrupt such data, into and beyond the year 2000; (vi) has the ability to process correctly after January 1, 2000, data containing dates before that date; and (vii) has the ability to recognize all "leap year" dates, including February 29, 2000. SECTION 3.18. Environmental Matters. Neither the Company nor any ---------------------- Company Subsidiary has (x) to the Knowledge of the Company, placed, held, located, released, transported or disposed of any Hazardous Substances (as defined below) on, under, from or at any of the Company's or any of the Company Subsidiaries' properties, other than in a manner that would not, in all such cases taken individually or in the aggregate, reasonably be expected to result in a Company Material Adverse Effect, or (y) any Knowledge or reason to know of the presence of any Hazardous Substances on, under or at any of the Company's or any of the Company Subsidiaries' properties, other than in a manner that would not, in all such cases taken individually or in the aggregate, reasonably be expected to result in a Company Material Adverse Effect. There are no claims, investigations or administrative actions pending or, to the 30 Knowledge of the Company, threatened against or affecting the Company or any Company Subsidiary arising from or related to the harmful effects of, or the removal or remediation of, Hazardous Substances that has had or would be reasonably expected to have a Company Material Adverse Effect. For purposes of this Agreement, "Environmental Law" means any Applicable Law or Judgment of any ----------------- Governmental Entity relating to any matter of pollution, protection of the environment, environmental regulation or control or regarding Hazardous Substances on or under any of the Company's or any of the Company Subsidiary's properties or any other properties. For purposes of this Agreement, the term "Hazardous Substance" shall mean any toxic or hazardous materials or substances, ------------------- including asbestos, buried contaminants, chemicals, flammable explosives, radioactive materials, petroleum and petroleum products and any substances defined as, or included in the definition of, "hazardous substances", "hazardous wastes", "hazardous materials" or "toxic substances" under any Environmental Law. SECTION 3.19. Contracts; Debt Instruments. As of the date of this ---------------------------- Agreement, there are no contracts or agreements that are material to the conduct of the business of the Company and the Company Subsidiaries taken as a whole that are required to be filed as part of the Company SEC Documents. Neither the Company nor any of the Company Subsidiaries is in violation of or in default under (nor does there exist any condition which upon the passage of time or the giving of notice would cause such a violation of or default under) any Contract to which it is a party or by which it or any of its properties or assets is bound that, individually or in the aggregate, has had or would reasonably be expected to have a Company Material Adverse Effect. SECTION 3.20. Intellectual Property. The Company and the Company ---------------------- Subsidiaries own, or are validly licensed or otherwise have the right to use, all patents, patent rights, trademarks, trademark rights, trade names, trade name rights, service marks, service mark rights, copyrights and other proprietary intellectual property rights and computer programs (collectively, "Intellectual Property Rights") which are material to the conduct of the ---------------------------- business of the Company and the Company Subsidiaries taken as a whole, in each case, as currently conducted. No claims are pending or, to the Knowledge of the Company, threatened that the Company or any of the Company Subsidiaries is infringing or 31 otherwise adversely affecting the rights of any person with regard to any Intellectual Property Right, except for such claims that would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect. To the Knowledge of the Company, no person is infringing the rights of the Company or any of the Company Subsidiaries with respect to any Intellectual Property Right, except for such infringements that, individually or in the aggregate, have not had and would not reasonably be expected to have a Company Material Adverse Effect. ARTICLE IV Representations and Warranties of Parent and Sub ------------------------------------------------ Parent and Sub, jointly and severally, represent and warrant to the Company as follows: SECTION 4.01. Organization, Standing and Power. Each of Parent and --------------------------------- Sub is duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is organized, and has full power and authority and possesses all governmental franchises, licenses, permits, authorizations and approvals necessary to enable it to own, lease or otherwise hold its properties and assets and to conduct its businesses as presently conducted, except where the failure to have such power or authority or to possess such franchises, licenses, permits, authorizations and approvals, individually or in the aggregate, has not had and would not reasonably be expected to have a material adverse effect on Parent (a "Parent Material Adverse Effect") or a material ------------------------------ adverse effect on the ability of Parent to consummate the transactions contemplated by this Agreement. Each of Parent and Sub is duly qualified to do business in each jurisdiction where the nature of its business or its ownership or leasing of its properties makes such qualification necessary other than such failures to qualify that, individually or in the aggregate, have not had and would not reasonably be expected to have a Parent Material Adverse Effect. SECTION 4.02. Sub Actions. (a) Since the date of its incorporation, ------------ Sub has not carried on any business or conducted any operations other than the execution of this Agreement, the performance of its obligations hereunder and matters ancillary thereto. 32 (b) The authorized capital stock of Sub consists of 1,000 shares of common stock, par value $0.01 per share, all of which shares have been validly issued, are fully paid and nonassessable and are owned by Parent free and clear of any Lien. SECTION 4.03. Authority; Execution and Delivery; Enforceability. (a) -------------------------------------------------- Each of Parent and Sub has all requisite corporate power and authority to execute and deliver this Agreement and to consummate the transactions contemplated by this Agreement. The execution and delivery by each of Parent and Sub of this Agreement and the consummation by it of the transactions contemplated by this Agreement have been duly authorized by all necessary corporate action as the part of Parent and Sub. Parent, as sole stockholder of Sub, has approved this Agreement. Each of Parent and Sub has duly executed and delivered this Agreement, and, assuming the due and valid authorization, execution and delivery of this Agreement by the Company, this Agreement constitutes a legal, valid and binding obligation of each of Parent and Sub, enforceable against each of them in accordance with its terms. (b) The Board of Directors of Parent (the "Parent Board"), at a ------------ meeting duly called and held duly and unanimously adopted resolutions approving this Agreement. SECTION 4.04. No Conflicts; Consents. (a) None of the execution and ----------------------- delivery by each of Parent and Sub of this Agreement and the consummation of the Offer, the Merger and the other transactions contemplated by this Agreement and compliance with the terms hereof will (i) conflict with the certificate of incorporation or by-laws of Parent or Sub or (ii) conflict with or result in any violation of or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of any obligation or to loss of a material benefit under, or result in the creation of any Lien upon any of the properties or assets of Parent or Sub under any provision of, (A) any Contract to which Parent or Sub is a party or by which any of their respective properties or assets is bound or (B) subject to the filings and other matters referred to in Section 4.04(b), any Judgment or Applicable Law applicable to Parent or Sub or their respective properties or assets, other than, in the case of clauses (A) and (B) of this sentence, any such items that, individually or in the aggregate, have not had and would not reasonably be expected to have a Parent Material Adverse Effect. 33 (b) No Consent of, or registration, declaration or filing with, or permit from, any Governmental Entity is required to be obtained or made by or with respect to Parent or any subsidiary of Parent in connection with the execution, delivery and performance of this Agreement or the consummation of the transactions contemplated by this Agreement, other than (i) compliance with and filings under the HSR Act, (ii) expiration or earlier termination of the waiting period under Part IX of the Competition Act (Canada) (the "Competition Act") --------------- and/or receipt of an advance ruling certificate ("ARC") pursuant to the --- Competition Act or, in the alternative of an ARC, a no-action letter from the Commissioner of Competition, (iii) the filing with the SEC of (A) the Offer Documents and (B) such reports under Sections 13 and 16 of the Exchange Act, as may be required in connection with this Agreement, the Offer, the Merger and the other transactions contemplated by this Agreement, (iv) the filing of the Certificate of Merger with the Secretary of State of the State of Delaware, (v) Consents the failure of which to be obtained or made would not, individually or in the aggregate, reasonably be expected to have a Parent Material Adverse Effect, (vi) such filings as may be required in connection with the Transfer Taxes described in Section 6.09 and (vii) such other items (A) required solely by reason of the participation of the Company (as opposed to any third party) in the transactions contemplated by this Agreement or (B) that, individually or in the aggregate, have not had and would not reasonably be expected to have a Parent Material Adverse Effect. SECTION 4.05. Information Supplied. None of the information supplied --------------------- or to be supplied by Parent or Sub for inclusion or incorporation by reference in (i) the Offer Documents, the Schedule 14D-9 or the Information Statement, will, at the time such document is filed with the SEC, at any time it is amended or supplemented or at the time it is first published, sent or given to the Company's stockholders, contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, or (ii) the Proxy Statement will, at the date it is first mailed to the Company's stockholders or at the time of the Company Stockholders Meeting, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading. The Offer 34 Documents will comply as to form in all material respects with the requirements of the Securities Act and the rules and regulations thereunder, except that no representation is made by Parent or Sub with respect to statements made or incorporated by reference therein based on information supplied by the Company for inclusion or incorporation by reference therein. SECTION 4.06. Financing. Parent and Sub collectively will have at ---------- the expiration date of the Offer and at the Effective Time, and Parent will make available to Sub, sufficient funds to enable Sub to pay for all outstanding Company Capital Stock purchased pursuant to the Offer or converted into cash pursuant to the Merger, to perform Parent and Sub's obligations under this Agreement and to pay all fees and expenses related to the transactions contemplated by this Agreement payable by them. SECTION 4.07. Stock Ownership; Interested Stockholders. As of the ----------------------------------------- date hereof, neither Parent nor Sub beneficially owns any Company Capital Stock and neither Parent nor Sub is an "interested stockholder" of the Company, as such term is defined in Section 203(c)(5) of the DGCL. SECTION 4.08. Brokers. No broker, investment banker, financial -------- advisor or other person, other than Morgan Stanley & Co. Incorporated, the fees and expenses of which will be paid by Parent, is entitled to any brokers', finders', financial advisors' or other similar fee or commission in connection with the Offer, the Merger and the other transactions contemplated hereby based upon arrangements made by or on behalf of Parent. 35 ARTICLE V Covenants Relating to Conduct of Business ----------------------------------------- SECTION 5.01. Conduct of Business. (a) Conduct of Business by the -------------------- -------------------------- Company. Except for matters set forth in the Company Disclosure Letter or - -------- otherwise contemplated by this Agreement, from the date of this Agreement to the Effective Time or earlier termination of this Agreement, the Company shall, and shall cause each Company Subsidiary to, conduct its business in the usual and ordinary course consistent with past practice, except as required to comply with changes in Applicable Law occurring after the date hereof, and, to the extent consistent therewith, use all reasonable efforts to preserve intact its current business organization and keep available the services of its current officers and employees to maintain its goodwill and ongoing business. In addition, and without limiting the generality of the foregoing, except for matters set forth in the Company Disclosure Letter or otherwise contemplated by this Agreement, from the date of this Agreement to the Effective Time, the Company shall not, and shall not permit any Company Subsidiary to, do any of the following without the prior written consent of Parent: (i) (A) declare, set aside or pay any dividends on, or make any other distributions in respect of, any of its capital stock, other than (1) dividends and distributions by a direct or indirect wholly owned subsidiary of the Company to its parent, (2) regular quarterly cash dividends with respect to the Company Common Stock, not in excess of $0.055 per share, with usual declaration, record and payment dates and in accordance with the Company's past dividend policy, (3) regular annual cash dividends, not in excess of $1.065 per share, payable on outstanding Company Preferred Stock in accordance with the current terms thereof and (4) any dividend or distribution permitted by the terms of the Partnership Agreement (as defined in Section 6.12(a)) or previously approved by the Board of Directors of the Partnership, (B) split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock, or (C) except for the redemption of Company Preferred Stock as required by paragraph (C) of Section 8 of the Company Preferred Certificate of Designation by reason of this Agreement or pursuant to 36 a request by Parent under Section 6.14, purchase, redeem or otherwise acquire any shares of capital stock of the Company or any Company Subsidiary or any other securities thereof or any rights, warrants or options to acquire any such shares or other securities; (ii) issue, deliver, sell or grant (A) any shares of its capital stock, (B) any Voting Company Debt or other voting securities, (C) any securities convertible into or exchangeable for, or any options, warrants or rights to acquire, any such shares, Voting Company Debt, voting securities or convertible or exchangeable securities or (D) any "phantom" stock, "phantom" stock rights, stock appreciation rights or stock-based performance units, other than (1) the issuance of Company Common Stock (and associated Company Rights) upon the exercise of Company Employee Stock Options outstanding on the date of this Agreement and in accordance with their present terms, (2) the issuance of up to an additional 2,500 Company Employee Stock Options, each of which shall have an exercise price not less than the fair market value of Company Common Stock on the date of grant, pursuant to the Company Stock Plans in accordance with their present terms and the issuance of Company Common Stock (and associated Company Rights) upon the exercise of such Company Employee Stock Options and (3) the issuance of Junior Preferred Stock upon the exercise of Company Rights; (iii) amend its certificate of incorporation, by-laws or other comparable charter or organizational documents; (iv) except in the ordinary course consistent with past practice, acquire or agree to acquire (A) by merging or consolidating with, or by purchasing a substantial portion of the assets of, or by any other manner, any equity interest in or business or any corporation, partnership, joint venture, association or other business organization or division thereof or (B) any assets that are material, individually or in the aggregate, to the Company and the Company Subsidiaries, taken as a whole; (v) (A) grant to any officer or director of the Company or any Company Subsidiary any increase in compensation, except in the ordinary course consistent with prior practice or to the extent required under 37 employment agreements in effect as of the date hereof, (B) grant to any employee, officer or director of the Company or any Company Subsidiary any increase in severance or termination pay, except to the extent required under any agreement in effect as of the date hereof, (C) enter into any employment, consulting, indemnification, severance or termination agreement with any officer or director of the Company or any Company Subsidiary, (D) establish, adopt, enter into or amend in any material respect any collective bargaining agreement or Company Benefit Plan, except as may be required by Applicable Law in effect as of the date hereof, (E) take any action to accelerate any rights or benefits, or make any material determinations not in the ordinary course consistent with prior practice, under any collective bargaining agreement or Company Benefit Plan or (F) enter into any agreement described in clause (C) hereof with (1) any other employee of the Company or any Company Subsidiary employed in the United States or Canada or (2) any such employee employed outside the United States and Canada except for agreements required by Applicable Law in the relevant jurisdiction; provided, however, that the Company shall be -------- ------- permitted to adopt the amendment to its Severance Pay Plan set forth in the Company Disclosure Letter; (vi) make any change in financial accounting methods, principles or practices materially affecting the reported consolidated assets, liabilities or results of operations of the Company, except insofar as may have been required by a change in GAAP or by operation of Applicable Law; (vii) sell, lease (as lessor), license or otherwise dispose of or subject to any Lien any properties or assets, except sales of inventory and excess or obsolete assets or real property in the ordinary course consistent with past practice; (viii) (A) incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or warrants or other rights to acquire any debt securities of the Company or any Company Subsidiary, guarantee any debt securities of another person, enter into any "keep well" or other agreement to maintain any financial statement condition of another person or enter into any arrangement having 38 the economic effect of any of the foregoing, except for short-term borrowings incurred in the ordinary course consistent with past practice, or (B) make any loans, advances or capital contributions to, or investments in, any other person, other than to or in the Company or any direct or indirect wholly owned subsidiary of the Company or to or in the Partnership; (ix) make or agree to make any new capital expenditure or expenditures (other than expenditures in the existing capital expenditure budget, a copy of which is attached to the Company Disclosure Letter) that, individually, is in excess of $5,000,000 or, in the aggregate, are in excess of $9,000,000; (x) make any material Tax election, except in the ordinary course consistent with past practice or as required to comply with changes in Applicable Law occurring after the date of this Agreement, or settle or compromise any material Tax liability or refund; (xi) (A) pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction, in the ordinary course consistent with past practice or in accordance with their terms or the terms of this Agreement, of liabilities reflected or reserved against in, or contemplated by, the most recent consolidated financial statements (or the notes thereto) of the Company included in the Filed Company SEC Documents or incurred in the ordinary course consistent with past practice, (B) cancel any material indebtedness (individually or in the aggregate) or waive any claims or rights of substantial value or (C) waive the benefits of, or agree to modify in any manner, any confidentiality, standstill or similar agreement to which the Company or any Company Subsidiary is a party, except, in the case of this clause (C), to the extent necessary to comply with the fiduciary obligations of the Company Board, as determined in good faith by it after consultation with outside counsel; (xii) exercise any rights (the "Buy Rights") it may have under ---------- Section 15.2 of the Partnership Agreement to exercise the "buy procedure", as set out in Section 15.3 of the Partnership Agreement, as a result of the MacMillan Bloedel Transaction; or 39 (xiii) authorize any of, or commit or agree to take any of, the foregoing actions. (b) Other Actions. The Company and Parent shall not, and shall not -------------- permit any of their respective subsidiaries to, take any action that would, or that would reasonably be expected to, result in (i) any of the representations and warranties of such party set forth in this Agreement that is qualified by reference to a material adverse effect becoming untrue, (ii) any of such representations and warranties that is not so qualified becoming untrue in any material respect or (iii) except as otherwise permitted by Section 5.02, any condition to the Merger set forth in Article VII not being satisfied. SECTION 5.02. No Solicitation. (a) The Company shall not, nor shall ---------------- it permit any Company Subsidiary to, nor shall it authorize any officer, director or employee of, or any investment banker, attorney or other advisor or representative of, the Company or Company Subsidiary to, (i) solicit, initiate or knowingly encourage the submission of, any Company Takeover Proposal (as defined in Section 5.02(e)), (ii) enter into any agreement with respect to any Company Takeover Proposal or (iii) participate in any discussions or negotiations regarding, or furnish to any person any information with respect to, or take any other action to knowingly facilitate any inquiries or the making of any proposal that constitutes, or may reasonably be expected to lead to, any Company Takeover Proposal; provided, however, that at any time during the period -------- ------- following the execution of the Agreement and prior to the consummation of the Offer (the "Company Applicable Period"), if the Company receives a proposal or ------------------------- offer that was not solicited by the Company and that did not otherwise result from a breach of this Section 5.02(a) and that the Company Board determines in good faith (based on consultation with its outside counsel and a financial advisor of nationally recognized reputation) could result in a third party making a Superior Company Proposal (as defined in Section 5.02(e)), and subject to compliance with Section 5.02(c), the Company may, to the extent necessary to comply with the fiduciary obligations of the Company Board, as determined in good faith by it after consultation with outside counsel, (A) furnish information with respect to the Company to the person making such proposal or offer pursuant to a customary confidentiality agreement, as determined by the Company after consultation with its outside counsel, and 40 (B) participate in discussions or negotiations with such person regarding such proposal or offer. Without limiting the foregoing, it is agreed that any violation of the restrictions set forth in the preceding sentence by any executive officer of the Company or any Company Subsidiary or any affiliate, director or investment banker, attorney or other advisor or representative of the Company or any of the Company Subsidiaries, shall be deemed to be a breach of this Section 5.02(a) by the Company. The Company shall, and shall cause its officers and directors and any investment banker, attorney or other advisor or representative of the Company or any Company Subsidiary, to, cease immediately all discussions and negotiations regarding any proposal that constitutes, or may reasonably be expected to lead to, a Company Takeover Proposal. (b) Except as expressly permitted by this Section 5.02, neither the Company Board nor any committee thereof shall approve any letter of intent, agreement in principle, acquisition agreement or similar agreement relating to any Company Takeover Proposal or approve or recommend, or propose to approve or recommend, any Company Takeover Proposal. The Company may terminate this Agreement pursuant to Section 8.01(f) only if (i) the Company Board has received a Superior Company Proposal, (ii) in light of such Superior Company Proposal the Company Board has determined in good faith, after consultation with outside counsel, that it is necessary for the Company Board to withdraw or modify its approval or recommendation of this Agreement, the Offer or the Merger in order to comply with its fiduciary obligations, (iii) the Company has notified Parent in writing of the determinations described in clause (ii) above, (iv) at least three business days following receipt by Parent of the notice referred to in clause (iii) above, and taking into account any revised proposal made by Parent since receipt of the notice referred to in clause (iii) above, such Superior Company Proposal remains a Superior Company Proposal and the Company Board has again made the determinations referred to in clause (ii) above (although no additional time period shall be required following such determinations), (v) the Company is in compliance with this Section 5.02, (vi) the Company Board concurrently approves, and the Company concurrently enters into, a definitive agreement providing for the implementation of such Superior Company Proposal, (vii) such definitive agreement contains the guarantee required by Section 6.12(b) and (viii) Parent is not at such time entitled to terminate this Agreement pursuant to 41 Section 8.01(c) solely as a result of a knowing and deliberate breach by the Company of a representation or warranty in this Agreement or a material breach by the Company of a covenant in this Agreement. (c) The Company promptly shall advise Parent orally and in writing of any Company Takeover Proposal or any inquiry with respect to or that could reasonably be expected to lead to any Company Takeover Proposal, the identity of the person making any such Company Takeover Proposal or inquiry and the material terms of any such Company Takeover Proposal or inquiry. The Company shall (i) keep Parent fully informed of the status of any such Company Takeover Proposal or inquiry and (ii) provide to Parent as soon as practicable after receipt or delivery thereof with copies of all correspondence and other written material sent or provided to the Company from any third party in connection with any Company Takeover Proposal; provided, however, that the Company shall not be -------- ------- required to provide any nonpublic information specified in clause (ii) regarding the business or financial condition or prospects of such third party if (A) the Company is prohibited from disclosing such information pursuant to a legally binding confidentiality agreement and (B) such Company Takeover Proposal provides for consideration consisting solely of cash. (d) Neither the Company nor the Company Board nor any committee thereof shall withdraw or modify, or propose publicly to withdraw or modify, in a manner adverse to Parent or Sub, the approval or recommendation of the Company Board of this Agreement, the Offer or the Merger, or approve or recommend, or propose publicly to approve or recommend, a Company Takeover Proposal, unless a withdrawal or modification of such approval or recommendation is, in the good faith judgment of the Company Board after consultation with its outside counsel, necessary to comply with its fiduciary obligations. Nothing contained in this Section 5.02 shall prohibit the Company from taking and disclosing to its stockholders a position contemplated by Rule 14e-2(a) promulgated under the Exchange Act or from making any required disclosure to the Company's stockholders if, in the good faith judgment of the Company Board, based on the opinion of outside counsel, failure so to disclose would be inconsistent with its obligations under Applicable Law. (e) For purposes of this Agreement: 42 "Company Takeover Proposal" means any inquiry, proposal or offer for a ------------------------- merger, consolidation, dissolution, liquidation, recapitalization or other business combination involving the Company or Company Subsidiary, any proposal or offer for the issuance by the Company of over 15% of its equity securities as consideration for the assets or securities of any person or any proposal or offer to acquire in any manner, directly or indirectly, over 15% of the equity securities of consolidated total assets of the Company, in each case, other than the transactions contemplated by this Agreement. "Superior Company Proposal" means any proposal made by a third party ------------------------- to acquire all or substantially all of the equity securities or assets of the Company, pursuant to a tender or exchange offer, a merger, a consolidation, a liquidation or dissolution, a recapitalization, a sale of its assets or otherwise, which a majority of the disinterested directors of the Company determines in its good faith judgment (i) to be on terms superior in value from a financial point of view to the holders of Company Capital Stock than the transactions contemplated by this Agreement (based on consultation with the Company's independent financial advisor), taking into account all the terms and conditions of such proposal and this Agreement (including any proposal by Parent to amend the terms of the transactions contemplated by this Agreement) and (ii) reasonably capable of being completed, taking into account all financial, regulatory, legal and other aspects of such proposal. ARTICLE VI Additional Agreements --------------------- 43 SECTION 6.01. Preparation of Proxy Statement; Stockholders Meetings. ------------------------------------------------------ (a) If the approval of this Agreement by the Company's stockholders is required by Applicable Law, the Company shall, at Parent's request, as soon as practicable following the expiration of the Offer, prepare and file with the SEC the Proxy Statement in preliminary form, and the Company shall use its reasonable efforts to respond as promptly as practicable to any comments of the SEC with respect thereto. The Company shall notify Parent promptly of the receipt of any comments from the SEC or its staff and of any request by the SEC or its staff for amendments or supplements to the Proxy Statement or for additional information, and shall supply Parent with copies of all correspondence between the Company or any of its representatives, on the one hand, and the SEC or its staff, on the other hand, with respect to the Proxy Statement. If at any time prior to receipt of the Company Stockholder Approval, there shall occur any event that should be set forth in an amendment or supplement to the Proxy Statement, the Company shall promptly prepare and mail to its stockholders such an amendment or supplement. The Company shall not mail any Proxy Statement, or any amendment or supplement thereto, to which Parent reasonably objects. The Company shall use its reasonable efforts to cause the Proxy Statement to be mailed to the Company's stockholders as promptly as practicable after filing with the SEC. (b) If the approval of this Agreement by the Company's stockholders is required by Applicable Law, the Company shall, as soon as practicable following the expiration of the Offer, duly call, give notice of, convene and hold a meeting of its stockholders (the "Company Stockholders Meeting") for the ---------------------------- purpose of seeking the Company Stockholder Approval. The Company shall, through the Company Board, recommend to its stockholders that they give the Company Stockholder Approval, except to the extent that the Company Board shall have withdrawn or modified its approval or recommendation of this Agreement, the Offer or the Merger as permitted by Section 5.02(b). Without limiting the generality of the foregoing, the Company agrees that its obligations pursuant to the first sentence of this Section 6.01(b) shall not be affected by the commencement, public proposal, public disclosure or communication to the Company of any Company Takeover Proposal. Notwithstanding the foregoing, if Parent, Sub or any other subsidiary of Parent shall acquire at least 90% of the outstanding shares of each outstanding class of capital stock of the Company entitled to vote on the Merger, the parties shall, at the 44 request of Parent, take all necessary and appropriate action to cause the Merger to become effective as soon as practicable after the expiration of the Offer without a stockholders meeting in accordance with Section 253 of the DGCL. (c) Parent shall cause all shares of Company Capital Stock purchased pursuant to the Offer and all other shares of Company Capital Stock owned by Parent, Sub or any other subsidiary of Parent to be voted in favor of the approval of this Agreement. SECTION 6.02. Access to Information; Confidentiality. (a) The --------------------------------------- Company shall, and shall cause each of the Company Subsidiaries to, afford to Parent and to its officers, employees, accountants, counsel, financial advisors and other representatives, reasonable access during normal business hours during the period prior to the Effective Time to all of their properties, books, contracts, commitments, personnel and records and, during such period, the Company shall, and shall cause each of the Company Subsidiaries to, promptly furnish to Parent (i) a copy of each report, schedule, registration statement and other document filed by the Company or any of the Company Subsidiaries during such period pursuant to the requirements of Federal or state securities laws and (ii) all other information concerning its business, properties and personnel as Parent may reasonably request, subject to legally binding confidentiality restrictions with third parties in effect as of the date of this Agreement. Without limiting the generality of the foregoing, in the event the Company receives a Company Takeover Proposal, the Company shall, within two business days of request therefor, provide to Parent the information described in Rule 14a-7(a)(2)(ii) under the Exchange Act and any information to which a holder of Company Capital Stock would be entitled under Section 220 of the DGCL (assuming such holder met the requirements of such section). All information exchanged pursuant to this Section 6.02 shall be subject to the Confidentiality Agreement, dated November 16, 1999, between the Company and Parent (the "Confidentiality Agreement"). ------------------------- (b) The Company and Parent shall cooperate in determining whether the Company or any Company Subsidiary is or has been a United States real property holding corporation within the meaning of Section 897(c)(2) of the Code at any time during the five year period ending at the Effective Time. 45 SECTION 6.03. Reasonable Efforts; Notification. (a) Upon the terms --------------------------------- and subject to the conditions set forth in this Agreement, each of the parties shall use all reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, and to assist and cooperate with the other parties in doing, all things necessary, proper or advisable to consummate and make effective, in the most expeditious manner practicable, the Offer, the Merger and the other transactions contemplated by this Agreement, including (i) the obtaining of all necessary actions or nonactions, and Consents from Governmental Entities and the making of all necessary registrations and filings (including filings with Governmental Entities, if any) and the taking of all reasonable steps as may be necessary to obtain an approval or waiver from, or to avoid an action or proceeding by, any Governmental Entity, (ii) the obtaining of all necessary Consents from third parties, (iii) the defending of any lawsuits or other legal proceedings, whether judicial or administrative, challenging this Agreement or the consummation of the transactions contemplated by this Agreement, including seeking to have any stay or temporary restraining order entered by any court or other Governmental Entity vacated or reversed and (iv) the execution and delivery of any additional instruments necessary to consummate the transactions contemplated by this Agreement and to fully carry out the purposes of this Agreement. In connection with and without limiting the foregoing, the Company and the Company Board shall, if any state takeover statute or similar statute or regulation is or becomes applicable to any transaction contemplated by this Agreement, take all action necessary to ensure that the Offer, the Merger and the other transactions contemplated by this Agreement may be consummated as promptly as practicable on the terms contemplated by this Agreement. Notwithstanding the foregoing, (x) the Company shall not be prohibited under this Section 6.03(a) from taking any action permitted by Section 5.02(b) and (y) nothing in this Agreement shall be deemed to require any party to take any action that would result in any of the consequences referred to in paragraph (a) of Exhibit A. (b) The Company shall give prompt notice to Parent, and Parent or Sub shall give prompt notice to the Company, of (i) any representation or warranty made by it contained in this Agreement that is qualified as to a material adverse effect becoming untrue or inaccurate in any respect or any such representation or warranty that is not 46 so qualified becoming untrue or inaccurate in any material respect or (ii) the failure by it to comply with or satisfy in any material respect any covenant, condition or agreement to be complied with or satisfied by it under this Agreement; provided, however, that no such notification shall affect the -------- ------- representations, warranties, covenants or agreements of the parties or the conditions to the obligations of the parties under this Agreement. SECTION 6.04. Company Employee Stock Options. (a) As soon as ------------------------------- practicable following the date of this Agreement, the Company Board (or, if appropriate, any committee administering the Company Stock Plans) shall adopt such resolutions or take such other actions as are required, subject to any required consent of the holders, to adjust the terms of all outstanding Company Employee Stock Options and all outstanding Company SARs heretofore granted under any Company Stock Plan to provide that each Company Employee Stock Option (and any Company SAR related thereto) outstanding immediately prior to the acceptance for payment of shares of Company Common Stock pursuant to the Offer shall be canceled in exchange for a cash payment by the Company at that time of an amount equal to (i) the excess, if any, of (x) the Merger Consideration over (y) the exercise price per share of Company Common Stock subject to such Company Employee Stock Option, multiplied by (ii) the number of shares of Company Common Stock for which such Company Employee Stock Option shall not theretofore have been exercised. All amounts payable pursuant to this Section 6.04 shall be subject to any required withholding of Taxes and shall be paid without interest. (b) The Company shall use its reasonable best efforts to obtain all consents of the holders of the Company Employee Stock Options as shall be necessary to effectuate the foregoing and to ensure that following the Effective Time no holder of a Company Employee Stock Option or Company SAR or any participant in any Company Stock Plan or other Company Benefit Plan shall have any right thereunder to acquire any capital stock of the Company or the Surviving Corporation. Notwithstanding anything to the contrary contained in this Agreement, payment shall, at Parent's request, be withheld in respect of a Company Employee Stock Option until all necessary consents in respect of such Company Employee Stock Option are obtained. (c) The Company Stock Plans shall terminate as of the Effective Time, and the provisions in any other Benefit 47 Plan providing for the issuance, transfer or grant of any capital stock of the Company or any interest in respect of any capital stock of the Company shall be deleted as of the Effective Time. (d) In this Agreement: "Company Employee Stock Option" means any option to purchase Company ----------------------------- Common Stock granted under any Company Stock Plan. "Company SAR" means any stock appreciation right linked to the price ----------- of Company Common Stock and granted under any Company Stock Plan. "Company Stock Plans" means the Company's Key Employees' 1992 Stock ------------------- Option Plan, Key Employees' 1993 Stock Option Plan, Amended and Restated Restricted Stock Plan for Non-Employee Directors, Key Employees' 1982 Incentive Stock Option Plan, as amended, 1985 Incentive Stock Option Plan, as amended, 1998 Stock Option Plan, as amended, Non-Employee Directors 1997 Stock Plan and 1996 Stock Option Plan. SECTION 6.05. Existing Agreements, Plans and Policies. (a) From and ---------------------------------------- after the Effective Time, Parent shall, and shall cause the Surviving Corporation to honor in accordance with their respective terms (as in effect on the date of this Agreement), all the Company's employment, severance and termination agreements, plans and policies disclosed in the Company Disclosure Letter. (b) If prior to the Effective Time Parent agrees to grant options to acquire Parent Common Stock to any officer or director of the Company prior to the Effective Time, the Board of Directors of Parent, or an appropriate committee of non-employee directors thereof, shall if necessary adopt a resolution consistent with the interpretive guidance of the SEC so that the acquisition by any officer or director of the Company who may become a covered person of Parent for purposes of Section 16 of the Exchange Act and the rules and regulations thereunder ("Section 16") of options to acquire Parent Common ---------- Stock pursuant to this Agreement and the Merger shall be an exempt transaction for purposes of Section 16. (c) For a period of not less than one year following the Effective Time, Parent shall provide, or shall 48 cause to be provided, to current employees of the Company and the Company Subsidiaries (the "Company Employees"), taken as a whole, employee benefits that ----------------- are, in the aggregate, no less favorable than those provided from time to time after the Effective Time to employees of Parent and its subsidiaries who are similarly situated, in terms of positions and geographic locations, to such Company Employees; provided, however, that nothing contained in this Section -------- ------- 6.05(c) shall require Parent to continue or cause to be continued any Company Stock Plan. Without limiting the generality of the foregoing, all Company Employees who are covered by the Company's Severance Pay Plan as in effect on the date hereof and whose employment is terminated on or before the first anniversary of the Effective Time shall be provided with severance pay and benefits on a basis, and in amounts, not less favorable than those provided for under the Company's Severance Pay Plan as in effect on the date hereof as amended to reflect the amendment as described in the Company Disclosure Letter. (d) For all purposes under the employee benefit plans of Parent and its affiliates providing benefits to any Company Employees after the Effective Time (the "New Plans"), each Company Employee shall be credited with his or her --------- years of service with the Company and its affiliates before the Effective Time, to the same extent as such Company Employee was entitled, before the Effective Time, to credit for such service under any similar Company Benefit Plans, except for purposes of benefit accrual under defined benefit pension plans. In addition, and without limiting the generality of the foregoing: (i) each Company Employee shall be immediately eligible to participate, without any waiting time, in any and all New Plans to the extent coverage under such New Plan replaces coverage under a comparable Company Benefit Plan in which such Company Employee participated immediately before the Effective Time and previously described to Parent (such plans, collectively, the "Old Plans"); and --------- (ii) for purposes of each New Plan providing medical, dental, pharmaceutical and/or vision benefits to any Company Employee, Parent shall cause all pre- existing condition exclusions and actively-at-work requirements of such New Plan to be waived for such employee and his or her covered dependents (other than limitations or waiting periods that are already in effect with respect to such employees and dependents and that have not been satisfied as of the Effective Time), and Parent shall cause any eligible expenses incurred by such employee and his or her covered dependents during the 49 portion of the plan year of the Old Plan ending on the date such employee's participation in the corresponding New Plan begins to be taken into account under such New Plan for purposes of satisfying all deductible, coinsurance and maximum out-of-pocket requirements applicable to such employee and his or her covered dependents for the applicable plan year as if such amounts had been paid in accordance with such New Plan. (e) Parent agrees that for purposes of any of the Company Benefit Plans conferring rights on a current or former employee, officer or director as a result of a change of control of the Company, the consummation of the Merger (or such earlier event contemplated hereby and specified in such Company Benefit Plans) shall be deemed to constitute a "Change of Control" (as that term is defined in such Company Benefit Plans). (f) Subject to compliance by Parent with its obligations under Sections 6.05(a) and 6.05(c), nothing contained in this Section 6.05 or elsewhere in this Agreement shall be construed to prevent the termination of employment of any individual Company Employee or any change in the employee benefits available to any individual Company Employee or the amendment or termination of any particular Company Benefit Plan to the extent permitted by its terms as in effect immediately prior to the Effective Time. SECTION 6.06. Indemnification. (a) Parent shall, to the fullest ---------------- extent permitted by Applicable Law, cause the Surviving Corporation to honor all the Company's obligations to indemnify (including any obligations to advance funds for expenses) the current or former directors or officers of the Company and the Company Subsidiaries for acts or omissions by such directors and officers occurring at or prior to the Effective Time to the extent that such obligations of the Company exist on the date of this Agreement, whether pursuant to the Company Charter, the Company By-laws, individual indemnity agreements or otherwise, and such obligations shall survive the Merger and shall continue in full force and effect in accordance with the terms of the Company Charter, the Company By-laws and such individual indemnity agreements from the Effective Time until the expiration of the applicable statute of limitations with respect to any claims against such directors or officers arising out of such acts or omissions. 50 (b) For a period of six years after the Effective Time, Parent shall cause to be maintained in effect the current policies of directors' and officers' liability insurance maintained by the Company (provided that Parent may substitute therefor policies with reputable and financially sound carriers of at least the same coverage and amounts containing terms and conditions which are no less advantageous) with respect to claims arising from or related to facts or events which occurred at or before the Effective Time; provided, -------- however, that Parent shall not be obligated to make annual premium payments for - ------- such insurance to the extent such premiums exceed 300% of the annual premiums paid as of the date hereof by the Company for such insurance (such 300% amount, the "Maximum Premium"). If such insurance coverage cannot be obtained at all, --------------- or can only be obtained at an annual premium in excess of the Maximum Premium, Parent shall maintain the most advantageous policies of directors' and officers' insurance obtainable for an annual premium equal to the Maximum Premium; provided, however, if such insurance coverage cannot be obtained at all, Parent - -------- ------- shall purchase all available extended reporting periods with respect to pre- existing insurance in an amount which, together with all other insurance purchased pursuant to this Section 6.06(b), does not exceed the Maximum Premium. The Company represents to Parent that the Maximum Premium is $955,500. Parent shall not, and shall cause the Company not to, take any action that would have the effect of limiting the aggregate amount of insurance coverage required to be maintained for the individuals referred to in this Section 6.06(b). (c) From and after the consummation of the Offer, to the full extent permitted by Applicable Law, Parent shall, and shall cause the Company (or any successor to the Company) to, indemnify, defend and hold harmless the present officers and directors of the Company and the Company Subsidiaries (each an "Indemnified Party") against all losses, claims, damages, liabilities, fees and ----------------- expenses (including attorneys' fees and disbursements), judgments, fines and amounts paid in settlement (collectively, "Losses") arising out of actions or ------ omissions occurring at or prior to the Effective Time in connection with this Agreement, the Offer, the Merger and the other transactions contemplated hereby; provided, however, that an Indemnified Party shall not be entitled to - -------- ------- indemnification under this Section 6.06(c) for Losses arising out of actions or omissions by the Indemnified Party constituting (i) a breach of this Agreement, (ii) criminal conduct or (iii) any 51 violation of federal, state or foreign securities laws. In order to be entitled to indemnification under this Section 6.06(c), an Indemnified Party must give Parent and the Company written notice of any third party claim which may give rise to any indemnity obligation under this Section 6.06(c), and Parent and the Company shall have the right to assume the defense of any such claim through counsel of their own choosing, subject to such counsel's reasonable judgment that separate defenses that would create a conflict of interest on the part of such counsel are not available. If Parent and the Company do not assume any such defense, they shall be liable for all reasonable costs and expenses of defending such claim incurred by the Indemnified Party, including reasonable fees and disbursements of counsel and shall advance such reasonable costs and expenses to the Indemnified Party; provided, however, that such advance shall be made only -------- ------- after receiving an undertaking from the Indemnified Party that such advance shall be repaid if it is determined that such Indemnified Party is not entitled to indemnification therefor. Neither Parent nor the Company shall be liable under this Section 6.06(c) for any Losses resulting from any settlement, compromise or offer to settle or compromise any such claim or litigation or other action, without the prior written consent of Parent or the Company. (d) The Company shall not, and Parent shall not permit the Company to, amend or repeal any provision of the certificate of incorporation or by-laws of the Company after the consummation of the Offer if such action would adversely affect the rights of individuals who on or prior to the consummation of the Offer were entitled to advances, indemnification or exculpation thereunder for actions or omissions by such individuals prior to the Effective Time. The individuals referred to in the preceding sentence shall include any individuals who served as of the Effective Time as directors or officers of any Company Subsidiary at the Company's request, it being acknowledged by the parties hereto that each director or officer of the Company who is currently serving as a director or officer of a Company Subsidiary is doing so at such request of the Company. (e) In the event the Surviving Corporation or any successor to the Surviving Corporation (i) consolidates with or merges into any other person and shall not be the continuing or surviving corporation or entity in such consolidation or merger or (ii) transfers all or substantially all its properties and assets to any person, 52 then, and in each case, proper provision shall be made so that the successors of the Surviving Corporation honor the obligations of the Company set forth in this Section 6.06. SECTION 6.07. Fees and Expenses. (a) Except as provided below, all ------------------ fees and expenses incurred in connection with the Offer, the Merger and the other transactions contemplated by this Agreement shall be paid by the party incurring such fees or expenses, whether or not the Merger is consummated. (b) The Company shall pay to Parent: (i) a fee of $12,500,000 if this Agreement is terminated pursuant to Section 8.01(f); (ii) in addition to the fee paid under clause (i) above, a fee of $12,500,000 if this Agreement is terminated in the circumstances contemplated by clause (i) above and thereafter a Company Takeover Proposal is consummated that involves the person whose Superior Company Proposal resulted in such termination; (iii) a fee of $12,500,000 if this Agreement is terminated pursuant to Section 8.01(d); (iv) in addition to the fee paid under clause (iii) above, a fee of $12,500,000 if this Agreement is terminated in the circumstances contemplated by clause (iii) above and within 12 months of such termination either (x) a Company Acquisition Proposal (as defined below) is consummated or (y) the Company enters into an agreement to consummate a Company Acquisition Proposal and any Company Acquisition Proposal is thereafter consummated that includes the person party to such agreement, whether or not such consummation is within such 12 month period; (v) a fee of $12,500,000 if (A) after the date of this Agreement and prior to the termination of this Agreement, any person 53 makes a Company Takeover Proposal, (B) the Offer remains open until the scheduled expiration date immediately following the date such Company Takeover Proposal is made (or such later date as the Offer may be extended at the Company's request pursuant to Section 1.01(a)), (C) the Minimum Tender Condition is not satisfied at the expiration of the Offer, (D) this Agreement is terminated pursuant to Section 8.01(b)(iii) and (E) within 12 months of such termination the Company enters into an agreement to consummate a Company Acquisition Proposal; (vi) in addition to the fee paid under clause (v) above, a fee of $12,500,000 if this Agreement is terminated in the circumstances contemplated by clause (v) above and thereafter a Company Acquisition Proposal is consummated that involves the person party to the agreement referred to in Section 6.07(b)(v)(E); and (vii) a fee of $25,000,000 if (A) after the date of this Agreement and prior to the termination of this Agreement, any person makes a Company Takeover Proposal, (B) the Offer remains open until the scheduled expiration date immediately following the date such Company Takeover Proposal is made (or such later date as the Offer may be extended at the Company's request pursuant to Section 1.01(a)), (C) the Minimum Tender Condition is not satisfied at the expiration of the Offer, (D) this Agreement is terminated pursuant to Section 8.01(b)(iii) and (E) within 12 months of such termination a Company Acquisition Proposal is consummated. (c) Any fee due under Section 6.07(b)(i) shall be paid simultaneously with, and as a condition to, the termination of this Agreement. Any fee due under Section 6.07(b)(ii), 6.07(b)(vi) or 6.07(b)(vii) shall be paid at or prior to the consummation of the relevant transaction. Any fee due under Section 6.07(b)(iii) shall be paid on the business day following termination of this Agreement. Any fee due under Section 6.07(b)(iv) or 6.07(b)(v) shall be at 54 or prior to the consummation of the relevant transaction. All fees under due Section 6.07(b) shall be paid by wire transfer of same-day funds. Under no circumstances will the Company be obligated to pay fees pursuant to this Section 6.07 in excess of $25,000,000 in the aggregate. (d) "Company Acquisition Proposal" shall mean a Company Takeover ---------------------------- Proposal, provided that for the purpose of this definition, each reference to -------- "15%" in the definition of Company Takeover Proposal shall be deemed a reference to "50%". SECTION 6.08. Public Announcements. Parent and Sub, on the one hand, --------------------- and the Company, on the other hand, shall consult with each other before issuing, and provide each other the opportunity to review and comment upon, any press release or other public statements with respect to the Offer, the Merger and the other transactions contemplated by this Agreement and shall not issue any such press release or make any such public statement prior to such consultation, except as may be required by Applicable Law, court process or by obligations pursuant to any listing agreement with any national securities exchange or The Nasdaq Stock Market, Inc. SECTION 6.09. Transfer Taxes. All stock transfer, real estate --------------- transfer, documentary, stamp, recording and other similar Taxes (including interest, penalties and additions to any such Taxes) ("Transfer Taxes") incurred -------------- in connection with the transactions contemplated by this Agreement shall be paid by either Parent, Sub or Surviving Corporation, and Parent, Sub and the Surviving Corporation shall hold all other persons and entities (including the Company prior to the Merger) harmless from and against any losses in connection with such Transfer Taxes, and the Company shall cooperate with Sub or Parent in preparing, executing and filing any Tax Returns with respect to such Transfer Taxes, including supplying in a timely manner a complete list of all real property interests held by the Company that are located in New York State and any information with respect to such property that is reasonably necessary to complete such Tax Returns. The portion of the consideration to be received by holders of Company Capital Stock in connection with the Merger that is allocable to the real property of the Company and the Company Subsidiaries in New York State shall be determined by Sub in its reasonable discretion. 55 SECTION 6.10. Rights Agreements; Consequences if Rights Triggered. ---------------------------------------------------- Except as approved in writing by Parent, the Company Board shall not (i) amend the Company Rights Agreement, (ii) redeem the Company Rights or (iii) take any action with respect to, or make any determination under, the Company Rights Agreement, except, in each case, to the extent necessary to comply with the fiduciary obligations of the Company Board, as determined by it in good faith after consultation with outside counsel. If any "Distribution Date" or "Share Acquisition Date" occurs under the Company Rights Agreement at any time during the period from the date of this Agreement to the Effective Time, the Company and Parent shall make such adjustment to the Offer Price as the Company and Parent shall mutually agree so as to preserve the economic benefits that the Company and Parent each reasonably expected on the date of this Agreement to receive as a result of the consummation of the Offer and the Merger. SECTION 6.11. Directors. (a) Promptly upon the acceptance for ---------- payment of, and payment by Sub for, any shares of Company Capital Stock pursuant to the Offer, Sub shall be entitled to designate such number of directors on the Company Board as will give Sub, subject to compliance with Section 14(f) of the Exchange Act, representation on the Company Board equal to at least that number of directors, rounded up to the next whole number, which is the product of (A) the total number of directors on the Company Board (giving effect to the directors elected pursuant to this sentence) multiplied by (B) the percentage that (i) such number of shares of Company Capital Stock so accepted for payment and paid for by Sub plus the number of shares of Company Capital Stock otherwise owned by Sub or any other subsidiary of Parent bears to (ii) the number of Fully Diluted Shares (as defined in Exhibit A), and the Company shall, at such time, cause Sub's designees to be so elected; provided, however, that, in the event -------- ------- that Sub's designees are appointed or elected to the Company Board, until the Effective Time, the Company Board shall have at least three directors who are directors on the date of this Agreement and who are not officers of the Company (the "Independent Directors"); and provided further, however, that, in such --------------------- -------- ------- ------- event, if the number of Independent Directors shall be reduced below three for any reason whatsoever, any remaining Independent Directors (or Independent Director, if there shall be only one remaining) shall be entitled to designate persons to fill such vacancies who shall be deemed to be Independent Directors for purposes of this Agreement or, if no Independent Directors then remain, the other 56 directors shall designate three persons to fill such vacancies who are not officers, stockholders or affiliates of the Company, Parent or Sub, and such persons shall be deemed to be Independent Directors for purposes of this Agreement. Subject to Applicable Law, the Company shall take all action requested by Parent necessary to effect any such election, including mailing to its stockholders the Information Statement containing the information required by Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder, and the Company shall make such mailing with the mailing of the Schedule 14D-9 (provided that Sub shall have provided to the Company on a timely basis all -------- information required to be included in the Information Statement with respect to Sub's designees). In connection with the foregoing, the Company promptly shall, at the option of Sub, use all reasonable efforts to either increase the size of the Company Board or obtain the resignation of such number of its current directors as is necessary to enable Sub's designees to be elected or appointed to the Company Board as provided above. (b) Following the election or appointment of Sub's designees pursuant to Section 6.11(a) and prior to the Effective Time, any amendment or termination of this Agreement approved by the Company, extension for the performance or waiver of the obligations of Parent or Sub or waiver of the Company's rights hereunder shall require the concurrence of a majority of the Independent Directors. SECTION 6.12. TJM Partnership Agreement. (a) The Company hereby -------------------------- waives, and will cause any Company Subsidiary with a partnership interest under the Partnership Agreement to waive, any rights it may have under Section 15.2 of the Partnership Agreement to exercise (x) the "sell procedure" as set out in Section 15.4 of the Partnership Agreement or (y) the "mandatory buy/sell procedure" set out in Section 15.5 of the Partnership Agreement (the rights referred to in clauses (x) and (y), together with the Buy Rights, are referred to as the "Buy/Sell Rights"), in each case, as result of the consummation of the --------------- transactions contemplated by the Amended and Restated Merger Agreement, made as of June 20, 1999, between Parent, Weyerhaeuser Canada Limited and MacMillan Bloedel Limited (the "MacMillan Bloedel Transaction"). The Company acknowledges ----------------------------- that Parent does not agree that the Company is entitled to exercise any of the Buy/Sell Rights as a result of the MacMillan Bloedel Transaction and that the inclusion of this Section 6.12 and Section 5.01(a)(xii) in this Agreement does not constitute 57 an admission or the acceptance by Parent that any of such Buy/Sell Rights have been triggered by the MacMillan Bloedel Transaction, and Parent acknowledges that the Company believes that it is entitled to exercise the Buy/Sell Rights as a result of the MacMillan Bloedel Transaction and that the inclusion of this Section 6.12 and Section 5.01(a)(xii) in this Agreement does not constitute an admission or the acceptance by the Company that any of such Buy/Sell Rights have not been triggered by the MacMillan Bloedel Transaction. "Partnership Agreement" --------------------- means the Limited Partnership Agreement between the Company and MacMillan Bloedel of America Inc. dated as of September 30, 1991, as amended by the Amendment to Limited Partnership Agreement dated as of February 14, 1992. (b) If this Agreement is terminated pursuant to Section 8.01(f), the Company shall, subject to the next sentence, purchase the entire partnership interest (the "Parent Interest") of Parent and its subsidiaries in Trus Joist --------------- MacMillan A Limited Partnership (the "Partnership") held under the Partnership ----------- Agreement, and Parent shall, and shall cause its subsidiaries to, in each case, subject to the next sentence, sell the Parent Interest to the Company, for $700,000,000 in cash. Such purchase and sale shall be consummated simultaneously with, and as a condition to, the consummation of the transactions contemplated by any Company Takeover Proposal made by the person who made the Superior Company Proposal that gave rise to such termination. In the agreement entered into by the Company with such person in connection with such termination, such person must unconditionally guarantee (for the benefit of Parent and its subsidiaries) the obligations of the Company under this Section 6.12(b). (c) If (i) after the date of this Agreement, any person makes a Company Takeover Proposal or amends a Company Takeover Proposal made prior to the date of this Agreement, (ii) the Offer remains open until the scheduled expiration date immediately following the date such Company Takeover Proposal is made (or such later date as the Offer may be extended to at the Company's request pursuant to Section 1.01(a)), (iii) the Minimum Tender Condition is not satisfied at the expiration of the Offer and (iv) this Agreement is terminated pursuant to Section 8.01(b)(iii), then the Buy Rights, if any, resulting from the MacMillan Bloedel Transaction shall terminate; provided, however, -------- ------- notwithstanding anything in the Partnership Agreement to the contrary: 58 (A) the Company may exercise the Buy Rights within the 10 day period beginning with the date of termination of this Agreement for a "Buy Price" of $700,000,000 in cash and otherwise pursuant to the terms of Section 15.3 of the Partnership Agreement; and (B) if the Company does not exercise its right under clause (A) above and within 12 months following the date of such termination the Company enters into an agreement to consummate a Company Acquisition Proposal, or a Company Acquisition Proposal is consummated, the Company shall purchase the Parent Interest, and Parent shall, and shall cause its subsidiaries, to sell the Parent Interest to the Company, for $700,000,000 in cash, such purchase and sale to be consummated simultaneously with, and as a condition to, the consummation of such Company Acquisition Proposal. (d) Notwithstanding anything contained in the Partnership Agreement to the contrary, but subject to this Section 6.12, the Company may not exercise the Buy Rights as a result of the MacMillan Bloedel Transaction if this Agreement is terminated prior to the acceptance for payment of shares pursuant to the Offer: (i) in the circumstances contemplated by Section 6.12(b) or 6.12(c); (ii) pursuant to Section 8.01(d) or pursuant to Section 8.01(b)(iii) following the failure of the condition in paragraph (f) of Exhibit A; or (iii) pursuant to Section 8.01(c) or pursuant to Section 8.01(b)(iii) following the failure of the condition in paragraph (e) of Exhibit A because, in either case, (A) other than as disclosed in the Filed Company SEC Documents or the Company Disclosure Letter, since the date of the most recent audited financial statements included in the Filed Company SEC Documents and prior to the date of this Agreement, there shall have occurred any event, change, effect or development that, individually or in the aggregate, has had or is reasonably likely to have a Company Material Adverse Effect or (B)(1) any representation or warranty of the Company in this Agreement that is qualified as to Company Material Adverse Effect shall not be true and correct as of 59 the date of this Agreement or (2) the representations and warranties of the Company that are not qualified as to Company Material Adverse Effect shall not be true and correct in all respects as of the date of this Agreement if the failure of all such representations and warranties in this clause (2) to be true and correct, individually or in the aggregate, is materially adverse to the transactions contemplated by this Agreement, taken as a whole. (e) Notwithstanding any provision to the contrary in the Partnership Agreement, if this Agreement is terminated in accordance with the terms hereof and none of Sections 6.12(b), 6.12(c) and 6.12(d) is applicable, the 90-day period under the Partnership Agreement during which the Company may exercise its Buy Rights, if any, in connection with the MacMillan Bloedel Transaction shall be deemed to begin to run from the date of such termination of this Agreement. Except with respect to the running of the 90-day period, the procedures governing the Buy Rights as set forth in the Partnership Agreement, to the extent applicable, shall apply. (f) Except as provided above, the Partnership Agreement shall continue in full force and effect in accordance with its terms. SECTION 6.13. Grant of Option. (a) The Company hereby grants to ----------------- Sub an irrevocable option (the "Option") to purchase for a price of $42.00 per ------ share (the "Per Share Price") in cash a number of shares of Company Common Stock --------------- (the "Optioned Shares") equal to the Applicable Amount. The "Applicable Amount" --------------- ----------------- shall be the number of shares of Company Common Stock which, when added to the number of shares of Company Common Stock owned by Parent and Sub immediately prior to its exercise of the Option, would result in Sub owning immediately after its exercise of the Option 90% of the then-outstanding shares of Company Common Stock. Sub may exercise the Option only if, at the time of exercise, Parent, Sub and any other subsidiary of Parent shall have acquired at least 50.1% of the Fully Diluted Shares pursuant to the Offer. The Option shall expire if not exercised prior to the Effective Time. The Per Share Price may, at the election of Sub, be paid either (i) in cash or (ii) a combination of $1.00 in cash and a promissory note of Parent in a principal amount equal to $41.00, which promissory note shall mature in 12 months (and be prepayable at any time by 60 Parent without penalty) and shall bear interest at an annual rate of 6.50% payable at maturity. (b) In the event that Sub wishes to exercise the Option, Sub shall give written notice (the date of such notice, the "Notice Date") to the Company ----------- specifying the number of Optioned Shares it will purchase pursuant to such exercise and a place and date (not later than 10 business days from the Notice Date) for the closing of such purchase. (c) At any closing hereunder, (i) Sub will make payment to the Company of the full purchase price for the Optioned Shares by (A) certified or official bank check payable to the order to Company or by wire transfer to the Company, in an amount equal to the product of the cash portion of the Per Share Price (determined in accordance with the last sentence of Section 6.13(a)) multiplied by the number of Optioned Shares being purchased at such closing, and (B) delivery of the promissory note described in the last sentence of Section 6.13(a), and (ii) the Company will deliver to Sub a duly executed certificate or certificates representing the number of Optioned Shares so purchased, registered in the name of Sub or its nominee in the denominations designated by Sub in its notice of exercise. (d) Parent and Sub represent that any Optioned Shares purchased by Sub will be acquired for investment only and not with a view to any public distribution thereof and Sub will not offer to sell or otherwise dispose of any Optioned Shares so acquired by it in violation of the registration requirements of the Securities Act. The certificate(s) representing the shares of Company Common Stock acquired pursuant to the exercise of the Option will bear a legend indicating that such shares of Company Common Stock were sold without registration under the Securities Act. (e) In the event of any change in the number of outstanding shares of Company Common Stock by reason of any stock dividend, stock split, recapitalization, combination, exchange of shares, merger, consolidation, reorganization or the like or any other change in the corporate or capital structure of the Company that would have the effect of diluting Sub's rights hereunder, the number of Optioned Shares and the Per Share Price shall be adjusted appropriately so as to restore Sub to its rights hereunder with respect to the Option; provided, however, that nothing in this Section 6.13(e) shall be -------- ------- construed as permitting the 61 Company to take any action or enter into any transaction prohibited by this Merger Agreement. SECTION 6.14. Termination/Amendment of ESOP; Redemption of Company ---------------------------------------------------- Preferred Stock; Repayment of ESOP Loan. If upon consummation of the Offer, - ---------------------------------------- Sub owns a number of shares of Company Common Stock that, together with the shares of Company Common Stock that Sub has the Option to purchase pursuant to Section 6.13, equals at least 90% of the then-outstanding Company Common Stock (after giving effect to the exercise of such Option), then the Company shall take such action as requested by Parent and permitted by the terms of the Company Preferred Certificate of Designation and Applicable Law to terminate and/or amend the ESOP and to call for redemption all the then-outstanding Company Preferred Stock as promptly as practicable after such request by Parent. As soon as practicable following the date of this Agreement, the Company shall direct the Trustee to use any cash proceeds resulting from the redemption of the Company Preferred Stock or resulting from the purchase or exchange of Company Common Stock (into which Company Preferred Stock was converted) for cash pursuant to the Offer or the Merger, in each case, with respect to shares that have not been allocated to participants or beneficiaries under the Company's Investment Plan, to repay any outstanding amounts under the ESOP Loan and shall use its best efforts to take or cause to be taken such other actions consistent with Applicable Law to cause the Trustee to comply with such direction, and the parties hereto agree that any remaining cash proceeds shall be allocated to participants and beneficiaries under the Company's Investment Plan in accordance with Applicable Law. ARTICLE VII Conditions Precedent -------------------- SECTION 7.01. Conditions to Each Party's Obligation To Effect the --------------------------------------------------- Merger. The respective obligation of each party to effect the Merger is subject - ------- to the satisfaction or waiver on or prior to the Closing Date of the following conditions: (a) Stockholder Approval. The Company shall have obtained the --------------------- Company Stockholder Approval if required by Applicable Law. 62 (b) No Injunctions or Restraints. No temporary restraining order, ----------------------------- preliminary or permanent injunction or other order issued by any court of competent jurisdiction or other legal restraint or prohibition preventing the consummation of the Merger shall be in effect; provided, however, that each of -------- ------- the parties shall have used its reasonable efforts to prevent the entry of any such injunction or other order and to appeal as promptly as possible any such injunction or other order that may be entered. (c) Purchase of Shares. Sub shall have previously accepted for ------------------- payment and paid for Company Capital Stock pursuant to the Offer. ARTICLE VIII Termination, Amendment and Waiver --------------------------------- SECTION 8.01. Termination. This Agreement may be terminated at any ------------ time prior to the Effective Time, whether before or after receipt of the Company Stockholder Approval: (a) by mutual written consent of Parent, Sub and the Company; provided -------- that, any such consent shall require the concurrence of a majority of the Independent Directors if it occurs after the purchase by Sub of shares of Company Capital Stock pursuant to the Offer; (b) by either Parent or the Company: (i) if the Offer is not consummated on or before April 3, 2000 (the "Outside Date"), unless the failure to consummate the Offer is ------------ the result of a material breach of this Agreement by the party seeking to terminate this Agreement; provided, however, that the passage of -------- ------- such period shall be tolled for any part thereof during which any party shall be subject to a nonfinal order, decree, ruling or action restraining, enjoining or otherwise prohibiting the consummation of the Offer and the Outside Date shall be extended day-by-day for each day tolled; provided further, however, that the Outside Date shall not -------- ------- ------- be extended past May 18, 2000; 63 (ii) if any Governmental Entity issues an order, decree or ruling or takes any other action permanently enjoining, restraining or otherwise prohibiting the Merger and such order, decree, ruling or other action shall have become final and nonappealable; or (iii) if as the result of the failure of any of the conditions set forth in Exhibit A to this Agreement, the Offer shall have terminated or expired in accordance with its terms and the requirements of Section 1.01(a) without Sub having purchased any shares of Company Capital Stock pursuant to the Offer; provided, -------- however that the right to terminate this Agreement pursuant to this ------- clause (iii) shall not be available to any party whose failure to fulfill any of its obligations under this Agreement results in the failure of any such condition; (c) by Parent, if, prior to the consummation of the Offer, the Company breaches or fails to perform in any material respect any of its representations, warranties or covenants contained in this Agreement, which breach or failure to perform (i) would give rise to the failure of a condition set forth in Exhibit A, and (ii) cannot be or has not been cured within 30 days after the giving of written notice to the Company of such breach (provided that Parent may not terminate this Agreement pursuant to -------- this Section 8.01(c) if it is then in material breach of any representation, warranty or covenant contained in this Agreement); (d) by Parent: (i) if the Company Board or any committee thereof withdraws or modifies, or publicly proposes to withdraw or modify, in a manner adverse to Parent or Sub, its approval or recommendation of this Agreement, the Offer or the Merger or fails to recommend to the Company's stockholders that they give the Company Stockholder Approval or approves or recommends, or publicly proposes to approve or recommend, any Company Takeover Proposal; or (ii) if the Company Board fails to reaffirm publicly and unconditionally its recommendation to 64 the Company's stockholders that they give the Company Stockholder Approval, which public reaffirmation must be made within 10 business days after Parent's written request to do so (which request may be made at any time that a Company Takeover Proposal is pending and not withdrawn) and must also include the unconditional rejection of such Company Takeover Proposal (to the extent not previously withdrawn); provided, however, that, Parent may not request the Company Board to -------- ------- make more than one such reaffirmation in respect of any Company Takeover Proposal unless such Company Takeover Proposal has been materially amended or modified (and not withdrawn); (e) by the Company, if prior to the acceptance of shares of Company Capital Stock for payment pursuant to the Offer, Parent breaches or fails to perform in any material respect of any of its representations, warranties or covenants contained in this Agreement, which breach or failure to perform cannot be or has not been cured within 30 days after the giving of written notice to Parent of such breach (provided that the Company may not terminate this Agreement pursuant to this Section 8.01(e) if it is not then in material breach of any representation, warranty or covenant in this Agreement); (f) by the Company prior to the acceptance of shares of Company Capital Stock for payment pursuant to the Offer in accordance with all the requirements of Section 5.02(b), including the notice provisions therein; (g) by the Company if the Offer has not been commenced within seven business days after the date of this Agreement; or (h) by the Company if any event occurs which would result in the condition set forth in paragraph (d) of Exhibit A not being satisfied, and five business days have elapsed since such occurrence, unless Parent shall have waived its right to terminate this Agreement and its right not to consummate the Offer for the failure of such condition resulting from such event, in each case in accordance with Section 8.04. 65 SECTION 8.02. Effect of Termination. In the event of termination of ---------------------- this Agreement by either the Company or Parent as provided in Section 8.01, this Agreement shall forthwith become void and have no effect, without any liability or obligation on the part of Parent, Sub or the Company, other than the first sentence of Section 3.15, Section 4.08, the last sentence of Section 6.02(a), Section 6.07, Section 6.12, this Section 8.02 and Article IX, which provisions shall survive such termination, and except for any liability arising from the material breach by a party of any representation, warranty or covenant set forth in this Agreement. SECTION 8.03. Amendment. Subject to the requirements of Section ---------- 6.11(b), this Agreement may be amended by the parties at any time before or after receipt of the Company Stockholder Approval; provided, however, that, -------- ------- after receipt of the Company Stockholder Approval, there shall be made no amendment that by Applicable Law requires further approval by the stockholders of the Company without the further approval of such stockholders. This Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties. SECTION 8.04. Extension; Waiver. Subject to the requirements of ------------------ Section 6.11(b), at any time prior to the Effective Time, the parties may (a) extend the time for the performance of any of the obligations or other acts of the other parties, (b) waive any inaccuracies in the representations and warranties contained in this Agreement or in any document delivered pursuant to this Agreement or (c) subject to the proviso of Section 8.03, waive compliance with any of the agreements or conditions contained in this Agreement. Any agreement on the part of a party to any such extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such party. The failure of any party to this Agreement to assert any of its rights under this Agreement or otherwise shall not constitute a waiver of such rights. SECTION 8.05. Procedure for Termination, Amendment, Extension or -------------------------------------------------- Waiver. A termination of this Agreement pursuant to Section 8.01, an amendment - ------- of this Agreement pursuant to Section 8.03 or an extension or waiver pursuant to Section 8.04 shall, in order to be effective, require (x) in the case of Parent, Sub or the Company, action by its Board of Directors or the duly authorized designee of its Board of Directors and (y) if applicable, 66 satisfaction of the requirements set forth in Section 6.11(b). ARTICLE IX General Provisions ------------------ SECTION 9.01. Nonsurvival of Representations and Warranties. None of ---------------------------------------------- the representations and warranties in this Agreement or in any instrument delivered pursuant to this Agreement shall survive the Effective Time. This Section 9.01 shall not limit any covenant or agreement of the parties which by its terms contemplates performance after the Effective Time. SECTION 9.02. Notices. All notices, requests, claims, demands and -------- other communications under this Agreement shall be in writing and shall be deemed given upon receipt by the parties at the following addresses (or at such other address for a party as shall be specified by like notice): (a) if to Parent or Sub, to Weyerhaeuser Company 33663 Weyerhaeuser Way South Federal Way, WA 98003 Attention: General Counsel Telecopy: (253) 924-3353 with a copy to: Cravath, Swaine & Moore 825 Eighth Avenue New York, New York 10019 Attention: Richard Hall Telecopy: (212) 474-3700 67 (b) if to the Company, to TJ International, Inc. 200 E. Mallard Drive Boise, Idaho 83706 Attention: Thomas H. Denig Telecopy: (208) 364-3760 with a copy to: Wachtell, Lipton, Rosen & Katz 51 West 52nd Street New York, New York 10019 Attention: David A. Katz Telecopy: (212) 403-2000 SECTION 9.03. Definitions. For purposes of this Agreement: ------------ An "affiliate" of any person means another person that directly or --------- indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such first person. "Knowledge of the Company" or "Company's Knowledge" means, when used ------------------------ ------------------- in any representation, covenant or warranty of the Company contained herein, the actual knowledge of, or what should reasonably have been known by, any officer or director of the Company. A "material adverse effect" on a party means a material adverse effect ----------------------- on the business, financial condition or ongoing, longer-term profitability (but not prospects) of such party and its subsidiaries, taken as a whole; provided, -------- however, that any adverse effect that has resulted or may result from the - ------- acquisition of MacMillan Bloedel Limited by Parent shall not be deemed a material adverse effect for purposes of this Agreement. For the purposes of Article III of this Agreement, in any provision qualified by reference to a material adverse effect or Company Material Adverse Effect, the words "has had" and "have had" shall be deemed to be followed by the words "since January 2, 1999". A "person" means any individual, firm, corporation, partnership, ------ company, limited liability 68 company, trust, joint venture, association, Governmental Entity or other entity. A "subsidiary" of any person means another person, an amount of the ---------- voting securities, other voting ownership or voting partnership interests of which is sufficient to elect at least a majority of its board of directors or other governing body (or, if there are no such voting interests, 50% or more of the equity interests of which) is owned directly or indirectly by such first person. SECTION 9.04. Interpretation; Disclosure Letters. When a reference ----------------------------------- is made in this Agreement to a Section, such reference shall be to a Section of this Agreement unless otherwise indicated. The table of contents and headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Whenever the words "include", "includes" or "including" are used in this Agreement, they shall be deemed to be followed by the words "without limitation". Any matter disclosed in any section of the Company Disclosure Letter shall be deemed disclosed only for the purposes of the specific Sections of this Agreement to which such section relates or such other sections in which such disclosure may be specifically cross-referenced. SECTION 9.05. Severability. If any term or other provision of this -------------- Agreement is invalid, illegal or incapable of being enforced by any rule or Applicable Law, or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner to the end that transactions contemplated hereby are fulfilled to the extent possible. SECTION 9.06. Counterparts. This Agreement may be executed in one or ------------- more counterparts, all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other parties. 69 SECTION 9.07. Entire Agreement; No Third-Party Beneficiaries. This ----------------------------------------------- Agreement, taken together with the Company Disclosure Letter and the Confidentiality Agreement, (a) constitute the entire agreement, and supersede all prior agreements and understandings, both written and oral, among the parties with respect to the transactions contemplated hereby and (b) except for the provisions of Article II and Sections 6.04, 6.06 and 6.12, are not intended to confer upon any person other than the parties any rights or remedies. SECTION 9.08. Governing Law. This Agreement shall be governed by, -------------- and construed in accordance with, the laws of the State of Delaware, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws thereof. SECTION 9.09. Assignment. Neither this Agreement nor any of the ----------- rights, interests or obligations under this Agreement shall be assigned, in whole or in part, by operation of law or otherwise by any of the parties without the prior written consent of the other parties, except that Sub may assign, in its sole discretion, any of or all its rights, interests and obligations under this Agreement to Parent or to any direct or indirect wholly owned subsidiary of Parent, but no such assignment shall relieve Parent or Sub of any of its obligations under this Agreement. Any purported assignment without such consent shall be void. Subject to the preceding sentences, this Agreement will be binding upon, inure to the benefit of, and be enforceable by, the parties and their respective successors and assigns. SECTION 9.10. Enforcement. The parties agree that irreparable damage ------------ would occur in the event that any of the provisions of this Agreement were not performed in accordance with its specific terms or were otherwise breached. It is agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in any Delaware state court or any Federal court located in the State of Delaware, this being in addition to any other remedy to which they are entitled at law or in equity. In addition, each of the parties hereto (a) consents to submit itself to the personal jurisdiction of any Delaware state court or any Federal court located in the State of Delaware in the event any dispute arises out of this Agreement, (b) agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court, (c) agrees that it will not bring any action relating to this Agreement in any court other than any Delaware state court or any Federal court sitting in the State of Delaware and (d) waives any right to trial by jury with respect to any action related to or arising out of this Agreement. IN WITNESS WHEREOF, Parent, Sub and the Company have duly executed this Agreement, all as of the date first written above. WEYERHAEUSER COMPANY, by _______________________________ Name: Title: WTJ, INC., by _______________________________ Name: Title: TJ INTERNATIONAL, INC., by _______________________________ Name: Title: EXHIBIT A Conditions of the Offer ----------------------- Notwithstanding any other term of the Offer or this Agreement, Sub shall not be required to accept for payment or, subject to any applicable rules and regulations of the SEC, including Rule 14e-l(c) under the Exchange Act (relating to Sub's obligation to pay for or return tendered shares of Company Capital Stock promptly after the termination or withdrawal of the Offer), to pay for any shares of Company Capital Stock tendered pursuant to the Offer unless (i) there shall have been validly tendered and not withdrawn prior to the expiration of the Offer that number of shares of Company Capital Stock which would represent at least 50.1% of the Fully Diluted Shares (the "Minimum Tender -------------- Condition") and (ii)(A) any waiting period under the HSR Act applicable to the - --------- purchase of shares of Company Capital Stock pursuant to the Offer shall have expired or been terminated, (B) any waiting period under the Competition Act applicable to the purchase of shares of Company Capital Stock pursuant to the Offer shall have expired or been terminated and/or an ARC pursuant to the Competition Act or, in the alternative of an ARC, a no-action letter from the Commissioner of Competition, related thereto shall have been received and (C) any consents, approvals and filings under any foreign antitrust law, the absence of which would prohibit the consummation of the Offer, shall have been obtained or made. The term "Fully Diluted Shares" means all outstanding securities -------------------- entitled generally to vote in the election of directors of the Company on a fully diluted basis, after giving effect to the exercise or conversion of all options, rights and securities exercisable or convertible into such voting securities, other than potential dilution attributable to the Company Rights and shares of Company Common Stock issuable pursuant to Section 6.13. Furthermore, notwithstanding any other term of the Offer, Sub may, subject to the terms of this Agreement, amend the Offer or postpone the acceptance for payment of or payment for tendered Company Capital Stock, if, at any time on or after the date of this Agreement and before the expiration of the Offer, any of the following conditions exists: (a) there shall be pending any suit, action or proceeding by any Governmental Entity that has a reasonable likelihood of success, (i) challenging the acquisition by Parent or Sub of any Company Capital 2 Stock, seeking to restrain or prohibit the making or consummation of the Offer or the Merger, or seeking to obtain from the Company, Parent or Sub any damages that are material in relation to the Company and the Company Subsidiaries taken as whole as a result of the transactions contemplated by this Agreement, (ii) seeking to prohibit or limit in any material respect the ownership or operation by the Company, Parent or any of their respective subsidiaries of any material portion of the business or assets of the Company, Parent or any of their respective subsidiaries, or to compel the Company, Parent or any of their respective subsidiaries to dispose of or hold separate any material portion of the business or assets of the Company, Parent or any of their respective subsidiaries, as a result of the Offer and the Merger, (iii) seeking to impose limitations on the ability of Parent or Sub to acquire or hold, or exercise full rights of ownership of, any shares of Company Capital Stock, including the right to vote the Company Capital Stock purchased by it on all matters properly presented to the stockholders of the Company or (iv) seeking to prohibit Parent or any of its subsidiaries from controlling in any material respect the business or operations of the Company and the Company Subsidiaries; (b) any statute, rule, regulation, legislation, interpretation, judgment, order or injunction shall be enacted, entered, enforced, promulgated or issued with respect to, or deemed applicable to, or any consent or approval withheld with respect to, (i) Parent, the Company or any of their respective subsidiaries or (ii) the Offer, the Merger or any other transaction contemplated by this Agreement, in each case, by any Governmental Entity that is reasonably likely to result, directly or indirectly, in any of the consequences referred to in paragraph (a) above; (c) except as disclosed in the Filed Company SEC Documents or the Company Disclosure Letter, since the date of this Agreement shall have occurred any event, change, effect or development that, individually or in the aggregate, has had or is reasonably likely to have, a Company Material Adverse Effect; (d) there shall have occurred and continued to exist (i) any general suspension of trading in, or limitation on prices for, securities on any national 3 securities exchange or in the over-the-counter market in the United States (excluding any suspension or limitations resulting from physical damage or interference with such exchange not related to market conditions), (ii) a decline of at least 30% in the Dow Jones Industrial Average, (iii) a declaration of a banking moratorium or any suspension of payments in respect of banks in the United States, (iv) any mandatory limitation by any Governmental Entity on, or other event that materially and adversely affects, the extension of credit by banks or other lending institutions in the United States, (v) a commencement of a war or armed hostilities or other national or international calamity directly or indirectly involving the United States or (vi) in the case of any of the foregoing existing on the date of this Agreement, a material acceleration or worsening thereof; (e) (i) any representation and warranty of the Company in this Agreement that is qualified as to Company Material Adverse Effect shall not be true and correct as of the date of this Agreement or as of such time, except to the extent such representation and warranty expressly relates to an earlier date (in which case on and as of such earlier date), and (ii) the representations and warranties of the Company that are not qualified as to Company Material Adverse Effect shall not be true and correct in all respects as of the date of this Agreement, or as of such time, except to the extent such representations and warranties expressly relate to an earlier date (in which case on and as of such earlier date) if the failure of all such representations and warranties in this clause (ii) to be true and correct, in aggregate, is materially adverse to the transactions contemplated by this Agreement, taken as a whole; (f) the Company shall have failed to perform in any material respect any obligation or to comply in any material respect with any agreement or covenant of the Company to be performed or complied with by it under this Agreement; or (g) this Agreement shall have been terminated in accordance with its terms; which, in the sole judgment of Sub or Parent, in any such case, and regardless of the circumstances giving rise to any 4 such condition (including any action or inaction by Parent or any of its affiliates not otherwise required by the Merger Agreement), makes it inadvisable to proceed with such acceptance for payment or payment. The foregoing conditions are for the sole benefit of Sub and Parent and may be asserted by Sub or Parent regardless of the circumstances giving rise to such condition or may be waived by Sub and Parent in whole or in part at any time and from time to time in their sole discretion. The failure by Parent, Sub or any other affiliate of Parent at any time to exercise any of the foregoing rights shall not be deemed a waiver of any such right, the waiver of any such right with respect to particular facts and circumstances shall not be deemed a waiver with respect to any other facts and circumstances and each such right shall be deemed an ongoing right that may be asserted at any time and from time to time. EX-99.(C)(2) 11 CONFIDENTIALITY AGREEMENT Exhibit (c)(2) EXECUTION COPY -------------- TJ International, Inc. 200 East Mallard Drive Boise, ID 83706 CONFIDENTIAL - ------------ NOVEMBER 16, 1999 The Weyerhaeuser Company P.O. Box 2999 Tacoma, Washington 98477-2999 Ladies and Gentlemen: The Weyerhauser Company ("Weyerhauser") has requested information from TJ International, Inc. (the "Company"), in connection with its consideration of a possible transaction involving the acquisition of the Company by Weyerhauser (a "Transaction"). As a condition to furnishing such information to you, the Company requires that Weyerhauser agree, as set forth below, to treat confidentially any information (whether prepared by the Company, its advisors or otherwise, and whether oral or written) that the Company or its agents or advisors, furnish to Weyerhauser or its representatives (which term, when used herein with reference to Weyerhauser or the Company, shall include its directors, officers, employees, affiliates, agents, advisors, representatives and potential financing sources) (such information being collectively referred to herein as the "Evaluation Material") and to take or abstain from taking certain other actions set forth herein. The term "Evaluation Material" does not include information that (i) is already in your possession, provided that such information is not known by you to be subject to another confidentiality agreement with or other obligation of secrecy to the Company or another party or (ii) becomes generally available to the public other than as a result of a disclosure by you or your representatives or (iii) becomes available to you on a non-confidential basis from a source other than the Company or its advisors, provided that such source is not known by you to be bound by a confidentiality agreement with or other obligation of secrecy to the Company or another party. You hereby agree that the Evaluation Material will be used by you or your representatives solely for the purpose of evaluating a possible Transaction, and will be kept confidential by you and your representatives; provided, however, that any such information may be disclosed to your representatives who need to know such information for the purpose of evaluating any such possible Transaction and who agree to keep such information confidential and to be bound by this agreement to the same extent as if they were parties hereto. You will be responsible for any breach of this agreement by your representatives and the Company shall be entitled to directly enforce such agreements. You hereby acknowledge that you are aware, and that you will advise your representatives who are informed as to the matters which are the subject of this letter, that the United States securities laws prohibit any person who has received from an issuer material, non-public information concerning the matters which are the subject of this letter from purchasing or selling securities of such issuer or from communicating such information to any other person under circumstances in which it is reasonably foreseeable that such person is likely to purchase or sell such securities. In the event that you or your representatives receive a request to disclose all or any part of the information contained in the Evaluation Material by deposition, interrogatory, request for documents, subpoena, civil investigative demand or similar process or an order issued by a court of competent jurisdiction or by a governmental body, you agree to (i) promptly notify the Company of the existence, terms and circumstances surrounding such a request, so that it may seek an appropriate protective order and/or waive your compliance with the provisions of this letter agreement (and, if the Company seeks such an order, to provide such cooperation as the Company shall reasonably request) and (ii) if disclosure of such information is required in the opinion of your counsel, who shall be reasonably satisfactory to the Company, exercise your best efforts to obtain an order or other reliable assurance that confidential treatment will be accorded to such of the disclosed information which the Company so designates. In addition, to the extent you are otherwise required to disclose under applicable law all or any part of the information contained in the Evaluation Material (whether such requirement arises from action taken by you or otherwise), you will only disclose such information as is required to be disclosed under applicable law in the opinion of your counsel, who shall be reasonably satisfactory to the Company. You also hereby agree that, for the period ending six months from the date of this letter, you will not, without the Company's written consent, directly or indirectly, solicit for employment (other than by means of a general advertisement) any person who is currently employed in a management position with the Company. Each of Weyerhauser and the Company agrees that, except as required by applicable law or the applicable rules of any stock exchange, it will not, and will cause its representatives not to, disclose to any person either the fact that discussions or negotiations are taking place concerning a possible Transaction or any of the terms, conditions or other facts with respect to any such possible Transaction, including the status thereof. Although the Company has endeavored to include in the Evaluation Material information which it believes to be relevant for the purpose of your investigation, you understand that neither the Company nor any of its representatives or advisors have made or make any representation or warranty as to the accuracy or completeness of the Evaluation Material. You agree that neither the Company nor its representatives or advisors shall have any liability to you or any of your representatives resulting from the use or content of the Evaluation Material or from any action taken or any inaction occurring in reliance on the Evaluation Material, except as may be included in any definitive agreement with respect to any Transaction. At the request of the Company or in the event that you do not proceed with a Transaction you and your representatives shall promptly redeliver to the Company all written -2- Evaluation Material and any other written material containing or reflecting any information in the Evaluation Material (whether prepared by the Company, its advisors, agents or otherwise)and will not retain any copies, extracts or other reproductions in whole or in part of such written material. All documents, memoranda, notes and other writings whatsoever prepared by you or your representatives based on the information in the Evaluation Material shall be destroyed, and such destruction shall be certified in writing to the Company by an authorized officer supervising such destruction. It is further understood and agreed that no failure or delay by either party hereto in exercising any right, power or privilege it may have under this letter shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any right, power or privilege hereunder. You and we agree that unless and until a definitive agreement between the Company and you with respect to a Transaction has been executed and delivered, neither the Company nor you will be under any legal obligation of any kind whatsoever with respect to such a Transaction by virtue of this or any written or oral expression with respect to such a Transaction by any of its directors, officers, employees, agents or any other representatives or its advisors except for the matters specifically agreed to in this letter. You and we further acknowledge and agree that (i) neither party hereto shall have any obligation to authorize or pursue with the other party any Transaction, and (ii) each party reserves the right, in its sole and absolute discretion, to reject all proposals and to terminate discussions and negotiations with the other party at any time. You further acknowledge and agree that the Company has not, as of the date hereof, authorized any Transaction and that the Company reserves the right to discontinue the provision of Evaluation Material to you at any time. The agreements set forth in this letter agreement may be modified or waived only by a separate writing between the Company and you expressly so modifying or waiving such agreements. The parties hereto acknowledge that money damages are an inadequate remedy for breach of this letter agreement because of the difficulty of ascertaining the amount of damage that will be suffered by you or the Company in the event that this agreement is breached. Therefore, each party hereto agrees that the other party may obtain specific performance of this agreement and injunctive or other equitable relief as a remedy for any such breach and further waives any requirement for the securing or posting of any bond in connection with any such remedy. Such remedy shall not be deemed to be the exclusive remedy for any breach of this letter agreement, but shall be in addition to all other remedies available at law or equity. If any term, provision, covenant or restriction of this letter agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated. This letter agreement shall be goverened by, and construed in accordance with, the internal laws of the State of Delaware, without giving effect to the principles of conflicts of laws thereof. Each party hereto consents to the jurisdiction and venue for any action to enforce the provisions of this letter agreement in any state or federal court in the State of Delaware. - 3 - If you are in agreement with the foregoing, please so indicate by signing and returning one copy of this letter agreement, which will constitute our agreement with respect to the matters set forth herein. Very truly yours, TJ, INTERNATIONAL, Inc. By: /s/ Thomas H. Denig ------------------------------------- President and Chief Executive Officer Confirmed and Agreed to: The Weyerhaeuser Company By: /s/ Robert A. Dowdy ------------------------------ Vice President & General Counsel -4- -----END PRIVACY-ENHANCED MESSAGE-----