-----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, Te+2yZNAB+TXd42WdgkQC8hA4UtkbmM+1pJJH8y88xijOa2UyUHCEFL8qs7AVoIU C3ZqWzL0UNCrQg1XieDU+Q== 0000912057-97-027336.txt : 19970813 0000912057-97-027336.hdr.sgml : 19970813 ACCESSION NUMBER: 0000912057-97-027336 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19970628 FILED AS OF DATE: 19970812 SROS: NASD FILER: 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: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-07469 FILM NUMBER: 97657435 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 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934. For Quarter Ended June 28, 1997 Commission file number 0-7469 TJ INTERNATIONAL, INC. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) DELAWARE 82-0250992 - ------------------------------ ------------------------------ State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 200 E. Mallard Drive BOISE, IDAHO 83706 - ---------------------------------------- ----------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (208) 364-3300 --------------- Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934 during the preceding 12 months (or for each shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. August 4, 1997, 16,991,870 shares of $1 par value common stock, excluding 711,152 shares held as treasury stock. EXHIBIT INDEX ON PAGE 14 TJ INTERNATIONAL, INC. PART I. FINANCIAL INFORMATION The condensed consolidated financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. In the opinion of management, all adjustments necessary to present fairly the results for the periods presented have been included therein. The adjustments made were of a normal, recurring nature. Certain information and footnote disclosure normally included in financial statements have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. It is recommended that these condensed financial statements be read in conjunction with the financial statements and the notes thereto included in the company's latest annual report on Form 10-K. The results of operations for the periods presented are not necessarily indicative of the results that might be expected for the fiscal year ending January 3, 1998. TJ INTERNATIONAL, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(AMOUNTS IN THOUSANDS) JUNE 28, DECEMBER 28, JUNE 29, ASSETS 1997 1996 1996 Current assets Cash and cash equivalents $70,875 $36,801 $20,957 Receivables, less allowances of $403, $451 and $419 81,623 73,893 51,689 Inventories 51,649 51,549 43,700 Other 11,540 9,741 18,429 ---------- ---------- ---------- 215,687 171,984 134,775 Property Property and equipment 580,174 566,603 558,983 Less - Accumulated depreciation (202,711) (184,504) (165,983) ---------- ---------- ---------- 377,463 382,099 393,000 Goodwill 20,020 20,540 21,060 Other assets 23,676 25,192 18,751 ---------- ---------- ---------- $636,846 $599,815 $567,586 ---------- ---------- ---------- ---------- ---------- ---------- LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Notes payable $ 96 $ -- $ 1,017 Current portion of long-term debt -- -- 340 Accounts payable 33,455 23,113 30,702 Accrued liabilities 46,397 37,286 28,062 ---------- ---------- ---------- 79,948 60,399 60,121 Long-term debt, excluding current portion 99,790 88,140 95,180 Other long-term liabilities 6,050 6,050 10,517 Reserve for discontinued operations 18,945 21,970 2,003 Minority interest in Partnership 205,394 195,186 185,738 Stockholders' equity ESOP Convertible Preferred Stock, $1.00 par value, authorized 10,000,000 shares, issued 1,156,947, 1,162,914, and 1,174,500 13,650 13,721 13,857 Guaranteed ESOP Benefit (9,204) (9,204) (10,382) Common stock, $1.00 par value, authorized 200,000,000 shares, issued 17,707,180, 17,500,896, and 17,276,923 17,707 17,501 17,277 Paid-in capital 150,602 145,583 142,195 Retained earnings 73,839 63,249 53,902 Other (1,687) -- -- Cumulative translation adjustment (3,188) (2,780) (2,822) Treasury stock, 711,152, shares, at cost (15,000) -- -- ---------- ---------- ---------- 226,719 228,070 214,027 ---------- ---------- ---------- $636,846 $599,815 $567,586 ---------- ---------- ---------- ---------- ---------- ----------
TJ INTERNATIONAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(amounts in the thousands except per share figures) FOR THE FISCAL FOR THE TWO FISCAL QUARTER ENDED QUARTERS ENDED ---------------------------- ---------------------------- JUNE 28, JUNE 29, JUNE 28, JUNE 29, 1997 1996 1997 1996 ---------- ---------- ---------- ---------- SALES $185,730 $155,050 $346,993 $266,207 ---------- ---------- ---------- ---------- COSTS AND EXPENSES COST OF SALES 134,598 115,465 252,521 205,667 SELLING EXPENSES 19,216 16,994 36,299 30,281 ADMINISTRATIVE EXPENSES 8,762 6,348 17,324 12,402 ---------- ---------- ---------- ---------- 162,576 138,807 306,144 248,350 ---------- ---------- ---------- ---------- INCOME FROM OPERATIONS 23,154 16,243 40,849 17,857 INVESTMENT INCOME, NET 876 161 1,288 219 INTEREST EXPENSE (1,564) (1,634) (3,113) (3,115) MINORITY INTEREST IN PARTNERSHIP (10,480) (7,503) (18,275) (7,723) ---------- ---------- ---------- ---------- INCOME BEFORE INCOME TAXES 11,986 7,267 20,749 7,238 INCOME TAXES 4,495 2,799 7,781 2,787 ---------- ---------- ---------- ---------- NET INCOME $ 7,491 $ 4,468 $ 12,968 $ 4,451 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- NET INCOME (LOSS) PER COMMON SHARE PRIMARY $0.41 $0.24 $0.71 $0.23 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- FULLY DILUTED $0.39 $0.23 $0.67 $0.22 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- DIVIDENDS DECLARED PER COMMON SHARE $0.0550 $0.0550 $0.1100 $0.1100 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING DURING THE PERIODS PRIMARY 17,654 17,566 ---------- ---------- ---------- ---------- FULLY DILUTED 18,818 18,744 ---------- ---------- ---------- ----------
TJ INTERNATIONAL, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE TWO FISCAL QUARTERS ENDED JUNE 28, 1997, AND JUNE 29, 1996, (UNAUDITED) (AMOUNTS IN THOUSANDS)
JUNE 28, JUNE 29, 1997 1996 --------- --------- CASH FLOWS FROM OPERATING ACTIVITIES - ------------------------------------ NET INCOME (LOSS) $ 12,968 $ 4,452 ADJUSTMENTS TO RECONCILE NET INCOME (LOSS) TO NET CASH PROVIDED BY OPERATING ACTIVITIES: DEPRECIATION AND AMORTIZATION 20,608 19,728 MINORITY INTEREST IN PARTNERSHIPS 18,275 7,723 OTHER, NET 1,787 495 CHANGE IN WORKING CAPITAL ITEMS: RECEIVABLES (7,730) (22,935) INVENTORIES (100) (5,140) OTHER CURRENT ASSETS (1,799) (786) ACCOUNTS PAYABLE AND ACCRUED LIABILITIES 18,940 10,230 OTHER, NET (2,642) (3,462) --------- --------- NET CASH PROVIDED BY OPERATING ACTIVITIES $ 60,307 $ 10,305 --------- --------- --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES - ------------------------------------ CAPITAL EXPENDITURES $(15,957) $(10,484) DECREASE IN UNEXPENDED BOND FUNDS --- 117 PROCEEDS (ADVANCES) FROM NOTES RECEIVABLE 581 706 OTHER, NET 265 (738) --------- --------- NET CASH USED IN INVESTING ACTIVITIES $(15,111) $(10,399) --------- --------- --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES - ------------------------------------ CASH DIVIDENDS PAID ON COMMON STOCK $ (1,914) $ (1,885) CASH DIVIDENDS PAID ON PREFERRED STOCK (1,245) --- MINORITY PARTNERS TAX DISTRIBUTIONS (4,996) (835) NET BORROWINGS (REPAYMENTS) UNDER LINES-OF-CREDIT 96 (1,977) PROCEEDS FROM THE ISSUANCE OF LONG-TERM DEBT 11,650 5,740 PURCHASE OF TREASURY STOCK (15,000) --- OTHER, NET 286 294 --------- --------- NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES $(11,122) $ 1,336 --------- --------- --------- --------- NET CHANGE IN CASH AND CASH EQUIVALENTS - --------------------------------------- NET INCREASE IN CASH AND CASH EQUIVALENTS $ 34,074 $ 1,242 CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 36,801 19,715 --------- --------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 70,875 $ 20,957 --------- --------- --------- --------- SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION - ------------------------------------------------- CASH PAID DURING THE PERIOD FOR: INTEREST, NET OF AMOUNTS CAPITALIZED 3,095 3,033 INCOME TAXES 534 1,323
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. TJ INTERNATIONAL, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) INVENTORIES Inventories consisted of the following: (amounts in thousands) June 28, Dec. 28, June 29, 1997 1996 1996 ------- -------- -------- Finished goods $39,412 $38,278 $32,436 Raw materials and work-in-progress 12,237 13,271 13,709 ------- ------- ------- 51,649 51,549 46,145 Reduction to LIFO cost -- -- (2,445) ------- ------- ------- $51,649 $51,549 $43,700 ------- ------- ------- ------- ------- ------- The determination of inventory under the LIFO method can be made only at the end of each fiscal year based on the inventory levels and costs at that time. Accordingly, interim LIFO calculations must necessarily be based on the Company's estimates of expected year-end inventory levels and costs. Since these estimates are subject to many forces beyond the Company's control, interim results could possibly be affected by the final year-end LIFO inventory valuation. NET INCOME PER COMMON SHARE: Primary net income per common share is based on net income adjusted for preferred stock dividends and related tax benefits divided by the weighted average number of common shares outstanding after giving effect to stock options as common stock equivalents. Fully diluted net income per common share assumes conversion of the ESOP convertible preferred stock into common stock at the date of issuance. Primary net income and fully diluted net income was calculated as follows: For the fiscal For the two fiscal quarter ended quarters ended ------------------- ------------------- June 28, June 29, June 28, June 29, 1997 1996 1997 1996 ------------------- ------------------- Primary net income - ------------------ Net income from continuing operations as reported $ 7,491 $ 4,468 $ 12,968 $ 4,451 Preferred stock dividends, net of related tax benefits (246) (237) (494) (477) ------- ------- ------- ------- Primary net income $ 7,245 $ 4,231 $ 12,474 $ 3,974 ------- ------- ------- ------- ------- ------- ------- ------- Fully diluted net income - ------------------------- Net income from continuing operations as reported $ 7,491 $ 4,468 $ 12,968 $ 4,451 Additional ESOP contribution payable upon assumed conversion of ESOP preferred stock, net of related tax benefits (174) (181) (348) (361) ------- ------- ------- ------- Fully diluted net income $ 7,317 $ 4,287 $12,620 $4,090 ------- ------- ------- ------- ------- ------- ------- ------- - -------------------------------------------------------------------------------- In February 1997, the Financial Accounting Standards Board issued Statement 128, Earnings per Share, which will be implemented in the fourth quarter of 1997. Primary earnings per share will be replaced with basic earnings per share and fully diluted earnings per share will be renamed diluted earnings per share, neither of which will be significantly different than previously reported primary and fully diluted earnings per share. All previously reported amounts will be restated. TJ INTERNATIONAL, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL QUARTER ENDED JUNE 28, 1997 OPERATING RESULTS The following comments discuss material variations in the results of operations for the comparative periods presented in the condensed consolidated statements of income. SALES The Company's sales by quarter during the current year and for the preceding four years are as follows: SALES BY QUARTER ---------------- (AMOUNTS IN THOUSANDS) QUARTER 1997 1996 1995 1994 1993 - ------- -------- -------- -------- -------- -------- First $161,263 $111,157 $109,941 $118,163 $ 93,799 Second 185,730 155,050 123,882 128,773 106,529 Third 179,571 137,759 136,266 118,698 Fourth 131,388 113,263 112,858 117,576 -------- -------- -------- -------- -------- $346,993 $577,166 $484,845 $496,060 $436,602 ======== ======== ======== ======== ======== SECOND QUARTER OF 1997 COMPARED WITH THE SECOND QUARTER OF 1996 Second quarter sales increased $30.7 million or 20% from the prior year second quarter. The sales increase is primarily the result of the growing acceptance of the Company's engineered lumber products as a substitute for commodity solid-sawn lumber. Second quarter sales increased despite a relatively flat housing market. North American housing starts in the second quarter of 1997 were up 1% from the prior year second quarter. Prices for competing wide-dimension lumber were slightly above year ago prices early in the quarter, falling to year ago prices by mid-quarter and trending sideways through the remainder of the quarter. Continued product acceptance aided in the continuing conversion of builders to engineered lumber from traditional commodity lumber products. Unit volume sales growth accounted for virtually all the sales increase for the second quarter of 1997. Volume gains were strongest in the Company's TJI-Registered Trademark- Joist products. The Company's new technology TimberStrand-Registered Trademark- LSL and Parallam-Registered Trademark- PSL products delivered the largest percentage growth for the quarter. In particular, new products, such as the TimberStrand-Registered Trademark; components for the Japanese manufactured housing market, Light-Duty Header products and the Parallam-Registered Trademark-Commercial Beam, joined existing new technology products (e.g., TimberStrand-Registered Trademark- Rim Board, window and door parts, furniture components) in achieving these significant volume increases.(3) Gross margins for the second quarter were 27.5% compared with 25.5% in the second quarter of 1996. The margin gains were primarily the result of lower raw material costs for oriented strand board which is a significant component of the Company's TJI-Registered Trademark--joist product line. Also, the higher sales volumes resulted in more efficient production at the Company's manufacturing facilities. Margin improvement also was a result of better performance at the Company's two most recent new technology plant additions. The Company's new combination Microllam-Registered Trademark- LVL and Parallam-Registered Trademark- PSL plant in Buckhannon, West Virginia has made significant cost reductions since the second quarter of 1996 and is currently the Company's low cost producer of Microllam-Registered Trademark- laminated veneer lumber and Parallam-Registered Trademark- parallel strand lumber. The TimberStrand-Registered Trademark- LSL plant in Eastern Kentucky also had improved results over the second quarter of last year and delivered break-even results at the gross margin line in the second quarter of 1997. Selling expenses increased $2.2 million in the second quarter of 1997, compared to the prior year. This increase is largely due to variable selling expenses and commissions. Additionally, the Company continues to invest in developing and bringing new and innovative products to the marketplace and to fund operating costs in its international sales efforts. General and administrative expenses increased $2.4 million from the prior year. This increase is primarily driven by the Company's investment in business support software which will provide the infrastructure for future growth. Minority interest expense increased $3.0 million from 1996 due to the increase in earnings at the Trus Joist MacMillan (TJM) Partnership. FIRST TWO QUARTERS OF 1997 COMPARED WITH THE FIRST TWO QUARTERS OF 1996 Sales for the first half of 1997 increased by $81 million or 30% from the comparable period last year. Unit volume sales growth accounted for the majority of the increase due to increased acceptance of the Company's engineered lumber products. Gross margins increased from 22.7% to 27.29% between the two periods. Improved performance at the Company's two new plants represented the majority of the improvement. Selling expenses increased $6.0 million or 20%. As a percent of sales, however, they decreased from 11.4% to 10.5% on sales. This reflects the increased absorption of fixed selling costs offset by an increased investment in new product introduction and national advertising. General and administrative expenses increased $4.9 million. This increase is driven primarily by the Company's investment in business support software which will provide the infrastructure for future growth. LIQUIDITY AND CAPITAL RESOURCES JUNE 28, 1997 COMPARED TO DECEMBER 28, 1996 Working capital increased $24 million during the first half of 1997 to $136 million. The increase reflects the Company's seasonal investment in inventory and receivables as the traditional building season gains full momentum. Cash flows from operations were $60 million. JUNE 28, 1997 COMPARED TO JUNE 29, 1996 Working capital increased $61 million from the prior year, to $136 million at June 28, 1997. The increase in liquidity is due to strong earnings combined with modest capital expansion spending. The Company announced it will begin construction of a new TJI-Registered Trademark- joists and Microllam-Registered Trademark-, laminated veneer lumber (LVL) manufacturing facility in Evergreen, Alabama. The first phase of this new plant will cost approximately $45 million. Construction is planned to begin late in the third quarter of 1997, after all required state and local permits are secured. The plant is expected to begin manufacturing LVL and TJI-Registered Trademark- joists in late 1998. The Company has begun the construction of a TimberStrand-Registered Trademark- LSL -flange I line at its Eastern Kentucky location. The new production facility will allow the Company to produce traditional I-joist products, using TimberStrand-Registered Trademark- LSL as the top and bottom flange material. The additional I-line will require a capital investment of approximately $20 million. Production is expected to begin ramping up in late 1997. In December of 1996, the Company's Board of Directors authorized the purchase of up to $15 million of the Company's common stock at market prices. The Company purchased $8.3 million of treasury stock during the first quarter and $6.7 million during the second quarter completing the stock repurchase program. In the second quarter of 1996, the Company issued $5.7 million of industrial revenue bonds to finance construction of the Hazard, Kentucky TimberStrand-Registered Trademark- LSL plant. The bonds are due in a single maturity in 2026, with interest payable semi-annually at 6.8 percent. In the second quarter of 1997, the Company issued $11.65 million of industrial revenue bonds associated with the construction of this plant. The bonds are due in a single maturity in 2027, with interest payable semi-annually at 6.55 percent. The Company is evaluating potential sites for a third TimberStrand-Registered Trademark- LSL plant but has not determined whether or when to proceed with construction. The Company believes that current cash balances, cash generated from operations, and borrowing under a $150 million Revolving Credit Facility will be sufficient to meet the on-going operating and capital expansion needs of the Company. The Company also believes that additional or expanded lines of credit or appropriate long-term capital can be obtained to fund other major capital requirements as they arise, or to fund an acquisition. The Company sold its windows operations in 1996, however, it retained certain liabilities related to these operations. Management believes that existing reserves are adequate to meet all subsequent liabilities that may arise related to the discontinued operations. Substantially all of the Company's operating assets are held, and revenue generated, by its TJM partnership. The partnership regularly distributes cash to the partners to fund the tax liabilities generated by the partnership at the corporate level. All other distributions of cash by the partnership are dependent on the affirmative votes of the representatives of the minority partner. Accordingly, there can be no assurance that such distributions will be approved and thereby be available for the payment of dividends or to fund other operations of the Company. INDUSTRY, COMPETITION, AND CYCLICALITY The Company's engineered lumber products continue to gain market acceptance as high-quality alternatives to traditional solid-sawn lumber products. Through the Company's intensive marketing efforts, builders and other wood users are increasingly recognizing the consistent quality, superior strength, lighter weight, and ease of installation of engineered lumber products. The Company believes that this trend will continue well into the future. No other company possesses the range of engineered lumber products, the levels of service and technical support, or the second generation technologies of TimberStrand-Registered Trademark- LSL or Parallam-Registered Trademark- PSL. There are, however, a number of companies, including several large forest products companies, that now produce look-alike wood I-joist and laminated veneer lumber products. Several of these companies have announced capacity expansions. These look-alike products are manufactured using processes similar to the Company's oldest generation technologies. The Company believes its network of manufacturing plants and multiple technologies position it as the low-cost producer of engineered lumber. While competition helps expand the market for engineered wood products, including those manufactured by the Company, it may also make the existing markets more price competitive. Traditional wide-dimension lumber, however, remains the predominant structural framing material used in residential construction and is the primary competitor of the Company's products. Commodity lumber prices historically have been subject to high volatility, and during periods of significant lumber price movements the Company's prices have trended in the same direction. The Company's operations are strongly influenced by the cyclicality and seasonality of residential housing construction. This industry experiences fluctuations resulting from a number of factors, including the state of the economy, consumer confidence, credit availability, interest rates, and weather patterns. Consistent with the seasonal pattern of the construction industry as a whole, the Company's sales have historically tended to be lowest in the first and fourth quarters and highest in the second and third quarters of each year. Microllam-Registered Trademark-, Parallam-Registered Trademark-, and TimberStrand-Registered Trademark- are registered trademarks of Trus Joist MacMillan a Limited Partnership, Boise, Idaho TJ INTERNATIONAL, INC. PART II OTHER INFORMATION Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. At the Company's May 21, 1997 annual meeting of stockholders, the following matters were voted upon and approved by the stockholders as indicated: Votes Cast ---------------------------------- Against or Description For Withheld Abstentions ------------------------ ----------- ----------- ----------- 1. To elect as directors the following individuals FOR TERMS EXPIRING AT THE 2000 ANNUAL MEETING Joyce A. Godwin 15,268,226 108,282 85,810 J. L. Scott 15,309,528 71,680 85,810 Harold E. Thomas 15,298,784 82,424 85,810 William J. White 15,310,330 70,878 84,910 2. Adopt TJ International, Inc. Non-Employee Directors 1997 Stock Plan 12,209,047 638,381 219,764 3. Adopt TJ International, Inc. Key Employees 1996 Stock Option Plan 12,060,688 811,543 191,929 4. Ratification of Appointment of Arthur Andersen LLP as Independent Accountants for the Company 15,271,019 105,021 94,688 Item 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Filed as an exhibit to this report is the following: (4) A copy of the TJ International, Inc. Non-Employee Directors 1997 Stock Plan, which is a subject in Item 4 of this report. (4) A copy of the TJ International, Inc. Key Employees 1996 Stock Option Plan, which is a subject in Item 4 of this report. (27) Financial Data Schedule (b) No reports on Form 8-K were filed during the quarter. TJ INTERNATIONAL INC. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. TJ INTERNATIONAL, INC. /s/ Valerie A. Heusinkveld ------------------------------------------- Valerie A. Heusinkveld Vice President, Finance & Chief Financial Officer Date: August 12, 1997 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 EXHIBITS TO FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL QUARTER ENDED JUNE 28, 1997 COMMISSION FILE NUMBER 0-7469 TJ INTERNATIONAL, INC. EXHIBIT INDEX Exhibits Page - -------- ---- (4) TJ International, Inc. Non-Employee Directors 1997 Stock Plan Document 2 (4) TJ International, Inc. Key Employees 1996 Stock Option Plan Document 3 (27) Financial Data Schedule Document 4 EX-4 2 EXHIBIT 4 THE TJ INTERNATIONAL, INC. NON-EMPLOYEE DIRECTORS 1997 STOCK PLAN This Non-Employee Directors 1997 Stock Plan (the "Plan") of TJ INTERNATIONAL, INC., a Delaware corporation (the "Company") contains both nonstatutory stock option provisions and stock award provisions. 1. PURPOSE OF THE PLAN. The purpose of the Plan is to encourage ownership in the Company by outside directors of the Company (individually, a "Non-Employee Director," or collectively, the "Non-Employee Directors") whose continued services are considered essential to the Company's continued progress and thus to provide them with an opportunity to share in the future success of the Company and with a further incentive to remain as directors of the Company. Options granted under this Plan ("Options") are non-statutory stock options which are not entitled to special tax treatment under Section 422 of the Internal Revenue Code. 2. ADMINISTRATION OF THE PLAN. (a) The Plan shall be administered by the Board of Directors of the Company (the "Board"). (b) Subject to the provisions of the Plan, the Board shall have authority in its discretion (i) to construe and interpret the Plan and all Options granted hereunder, to determine the terms and provisions (and amendments thereof) of the Options granted under the Plan; (ii) to define the terms used in the Plan and in the Options granted thereunder; (iii) to prescribe, amend or rescind rules and regulations relating to the Plan; (iv) to make all other determinations necessary or advisable for the administration of the Plan; and (v) to exercise all powers expressly granted to the Board by this Plan and all other powers deemed by the Board, in its discretion, to be necessary or desirable to accomplish the intent and purposes of the Plan. All determinations and interpretations made by the Board shall be binding and conclusive on all participants in the Plan and on their legal representatives and beneficiaries. (c) Any action of the Board with respect to the Plan shall be taken by a majority vote at a meeting of the Board or by written consent of a majority of the Board without a meeting. (d) The Board may, if it deems advisable, appoint a Stock Option Committee, consisting of not less than two (2) Non-Employee Directors of the Company appointed by the Board, to carry out such functions and to serve such terms as the Board may designate. However, all Options granted under this Plan shall be granted by the Board unless the Board -1- expressly authorizes the Stock Option Committee to grant Options under this Plan. For purposes of this Section 2(d) only, "Non-Employee Director" means a director who meets the criteria of Rule 16b-3(b)(3)(i) of the Securities Exchange Act of 1934 (i.e., a director who, at the time he exercises discretion concerning this plan (1) is not an officer or employee of the Company or any subsidiary or parent of the Company; (2) does not receive compensation, either directly or indirectly, from the Company or any subsidiary or parent of the Company in any capacity other than as a director, except for an amount that would not need to be disclosed under 17 C.F.R. Section 229.404(a); (3) does not possess an interest in any other transaction required to be disclosed under 17 C.F.R. Section 229.404(a); and (4) is not engaged in a business relationship required to be disclosed under 17 C.F.R. Section 229.404(a)). 3. MAXIMUM NUMBER OF SHARES SUBJECT TO PLAN. The maximum number of shares of the Company's $1.00 per value common stock ("Stock") that may be issued under the Plan, whether in direct stock awards ("Awards") or upon exercise of Options or both, shall be One Hundred Thousand (100,000) shares of Stock, subject to adjustment in accordance with Section 14 of the Plan. If any Option granted hereunder shall expire or terminate for any reason without having been exercised in full, the unpurchased shares of Stock subject thereto shall (unless the Plan shall have been terminated) again be available for other Awards or Options to be granted under the Plan. Shares of Stock subject to Options granted under this Plan may be made available, as the Board shall determine from time to time, from authorized but unissued shares of Stock or issued shares of Stock which have been reacquired by the Company. Shares of Stock delivered under the Plan shall be fully paid, validly issued and nonassessable. 4. PARTICIPATION IN THE PLAN. Each member of the Board who is not an officer or employee of the Company or any of its subsidiaries or affiliates shall be eligible to participate in the Plan. 5. DURATION OF PLAN AND OPTIONS. Unless the Plan shall theretofore have been terminated as provided in Section 18, the Plan shall terminate on February 12, 2007, and no Options shall be granted and no Stock Awards shall be made under this Plan after the date on which the Plan terminates. Notwithstanding any other provision of this Plan, no Option may be exercised after ten (10) years from the date of grant of such Option. Unexercised Options shall expire ten (10) years after date of grant. 6. GRANT OF OPTIONS. The Board shall have authority to grant each eligible director Options to purchase Stock subject to the terms set forth in Section 7. -2- 7. TERMS OF OPTIONS. (a) The exercise price per share of Stock subject to each Option shall be determined by the Board at the time of granting each individual Option hereunder and shall be set forth in the applicable Option Agreement; but in no event shall the exercise price of an Option be less than the fair market value of the Company's Stock on the date the Option is granted. The fair market value of such shares shall be determined by the Board on the basis of published market quotations; but in no event shall the fair market value so determined be less than the closing price of the publicly traded shares of Stock on the trading day immediately preceding the date on which the Option is granted, as quoted in the WALL STREET JOURNAL or successor generally recognized business journal or, if such business journal does not list the published market quotation, then on the NASDAQ reporting system or successor reporting system. (b) In 1997, the Board shall have authority in its discretion to grant eligible directors Options to purchase up to Four Thousand (4,000) shares of Stock. The Options granted in 1997 shall be exercisable as follows: (i) Options to purchase up to Two Thousand (2,000) shares of Stock may be exercisable beginning one (1) year after the grant; (ii) Options to purchase up to an additional One Thousand Three Hundred Thirty-Three (1,333) shares of Stock may be exercisable beginning two (2) years after the grant; and (iii) Options to purchase the remaining additional shares (I.E. up to Six Hundred Sixty-Seven (667)) of Stock may be exercisable beginning three (3) years after the grant. Each year after 1997, the Board shall have authority in its discretion to grant eligible directors Options to purchase up to Two Thousand (2,000) shares of Stock. Such Options shall be exercisable in three (3) equal annual installments beginning one (1) year after the grant. The Board shall prescribe in the applicable Option Agreement the time or times when an Option may be exercised and the number of shares of Stock subject to the Option. Each Option shall expire and all rights to purchase Stock thereunder shall cease on the date fixed by the Board in the Option Agreement. 8. TIME OF OPTION GRANT. No Option shall be deemed to have been granted until it has been duly executed in writing by the Company. The grant of an Option pursuant to the Plan shall be effective as of the date of the Board meeting (or written consent in lieu of a meeting) approving the grant of the Option, but only if a written Option Agreement containing the terms and conditions of the Option shall thereafter be duly executed and delivered by or on behalf of the Company and the director to whom such Option is granted. The Option Agreement shall be dated as of the date of the meeting (or written consent) of the Board at which grant of the Option was approved. 9. EXERCISE OF OPTIONS. (a) Except as hereinafter expressly provided, no Option may be exercised at any time unless the holder thereof is at the time of exercise a director of the Company. After an Option or an installment of an Option becomes exercisable, such Option or installment may -3- be exercised in full or in part at any time prior to its expiration or termination as provided in this Plan. (b) Options may be exercised by giving written notice to the Company specifying the number of shares of Stock to be acquired, accompanied by the entire exercise price for such shares either (i) in cash (or by certified or cashier's check or money order), or (ii) in the form of an assignment to the Company of sufficient other shares of Stock, which have been owned by the Option holder for at least six months before the date of exercise, having a fair market value equalling such exercise price, or (iii) in a combination of such cash and Stock. If shares of Stock are used to pay the exercise price in whole or in part, such shares shall be valued on the basis of published market quotations; but in no event shall the fair market value so determined be less than the closing price of the publicly traded shares of Stock on the trading day immediately preceding the date on which the Option holder exercises the Option, as quoted in the WALL STREET JOURNAL or successor generally recognized business journal or, if such business journal does not list the published market quotation, then on the NASDAQ reporting system or successor reporting system. (c) Payment of the exercise price may also be made by delivering to the Company a properly executed exercise notice together with irrevocable instructions to the Company to deliver, to a securities broker specified in the notice, the certificate for the Stock acquired upon exercise of the Option and further irrevocable instructions to the specified broker to deposit the Stock in the Option holder's cash account (if the Stock is to be sold to pay the exercise price) or his/her margin account (if the exercise price is to be funded by a margin loan) and to promptly deliver to the Company the Stock sale or margin loan proceeds in the amount of the exercise price. The Board may adopt regulations establishing a mechanism by which this payment method shall be implemented in accordance with Federal Reserve Board Regulation T. (d) Notwithstanding anything contained herein to the contrary, the issuance date of the shares of Stock issued upon the exercise of the Option shall be the date the cash and/or Stock received by the Company is appropriately recorded in the Company's books and records. No person entitled to exercise any Option granted under the Plan shall have any of the rights and privileges of a shareholder of the Company in respect to any shares of Stock issuable upon exercise of such Option until certificates representing such shares shall have been issued and delivered. 10. STOCK OWNERSHIP GUIDELINES. (a) Directors otherwise eligible to receive Options under this Plan ("Participants") will observe a stock ownership guideline as described herein (the "Guideline"). Each Participant will own a number of shares of Stock determined by the Board. The Board may change the Guideline in its sole discretion from time to time by notice to each Participant. For purposes of determining whether the Participant meets the Guideline, the Participant may calculate the number of Eligible Shares the Participant owns at the time of receipt of any such -4- notice. "Eligible Shares" shall mean (i) shares of Stock held (whether in certificated form or in street name) directly in sole ownership or in joint ownership with a spouse, and (ii) shares of Stock held (whether in certificated form or in street name) indirectly in beneficial ownership or in joint beneficial ownership with a spouse in a trust, family limited partnership or similar estate planning vehicle. (b) In consideration for a Participant's compliance with the Guideline, the Participant will be eligible to receive grants of Options under the Plan in each year in which the Guideline is satisfied. If Options are granted under this Plan to a Participant because the Participant has satisfied the applicable Guideline and the Participant later sells, or otherwise transfers, enough Stock so that the Participant no longer satisfies the applicable Guideline, the Participant shall not be eligible to receive grants of additional Options under the Plan until the Participant again satisfies the applicable Guideline, and the Board may, in its discretion, cancel all or any part of the then unexercised Options held by the Participant under this Plan. (c) Notwithstanding the foregoing, any director first elected to the Board (a "new director") after the effective date of this Plan, shall not be required to satisfy the Guideline until the end of the three-year period beginning on the date the new director is first elected. The Board contemplates that new directors will obtain, through the exercise of Options or otherwise, sufficient shares of Stock over this three-year period to satisfy the Guideline. To assist new directors in accomplishing that objective, each new director shall be entitled to receive, at the time of his or her first election to the Board, a grant of Two Thousand (2,000) shares of Stock, which shall be subject to the restrictions set forth in Section 10(d). (d) A stock certificate representing the number of shares granted shall be registered in the Participant's name but shall be held in custody by the Company for the Participant's account. The Participant shall have all rights and privileges of a stockholder as to such shares, except that, unless otherwise provided in this Section 10(d), the following restrictions shall apply: (i) the Participant shall not be entitled to delivery of the certificate until the completion of three years of service (the "Earn-out Period") as an eligible director; (ii) none of the shares may be sold, transferred, assigned, pledged, or otherwise encumbered or disposed of during the Earn-out Period; (iii) the shares shall be forfeited and all rights of the Participant to such shares shall terminate unless the Participant has remained an eligible director of the Company for the entire Earn-out Period except that 33-1/3% of the shares shall become non-forfeitable after each succeeding year of service as an eligible director following the date of grant. If a Participant ceases to be an eligible director before the end of the Earn-out Period for any reason (including, without limitation, becoming an ineligible employee director), the Participant shall forfeit all shares with respect to which the appropriate years of service as an eligible director have not been completed and all restrictions on the shares that have become non-forfeitable shall lapse. The forfeited shares shall be transferred to the Company without further action by the Participant, and a certificate for the non-forfeitable shares shall be delivered to the Participant or the Participant's beneficiary or estate, as the case may be. If a Participant remains an eligible director to the end of the Earn-out Period, the restrictions on the shares shall lapse and a stock -5- certificate for the full number of shares granted pursuant to Section 10(c) shall be delivered, free of all such restrictions, to the Participant. The Company shall not be required to deliver any fractional share of Stock but will pay, in lieu thereof, the fair market value (measured as of the date the restrictions lapse) of such fractional share to the Participant or the Participant's beneficiary or estate, as the case may be. 11. SPECIAL EXERCISE PROVISIONS. (a) At any time after the date of grant, an Option shall be exercisable (notwithstanding any contrary provisions of this Plan or any Option Agreement under this Plan) with respect to the full number of shares subject to that Option: (1) During the period commencing as of the effective date of any agreement entered by the Company or the shareholders of the Company to dispose of all or substantially all of the assets or stock of the Company by means of a sale, reorganization, liquidation, or otherwise, and ending two (2) years after the disposition of assets or stock contemplated by the agreement; or (2) During the two (2) year period commencing on the date any person or group (within the meaning of Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934) commences, or announces the intent to make, a tender offer or exchange offer the consummation of which would result in the beneficial ownership by the person or group of at least thirty percent (30%) of the common stock then outstanding, or acquires, or obtains the right to acquire, beneficial ownership of at least twenty percent (20%) of the common stock then outstanding. (b) After an Option holder's service on the Board terminates for any reason other than death or permanent and total disability, the Option holder may exercise his/her Options that were exercisable as of his/her last day of service on the Board within thirty (30) days after the date he/she ceased to serve on the Board. Any Options that were not yet exercisable as of the Option holder's last day of service on the Board shall immediately be cancelled on the date he/she ceases to serve on the Board. All Options not exercised by the Option holder shall expire on the thirty-first (31st) day after the Option holder's last day of service on the Board. 12. DEATH/DISABILITY OF THE OPTION HOLDER. (a) If an Option holder dies or becomes totally and permanently disabled while serving on the Board, all of his/her Options, whether or not previously exercisable, shall become exercisable upon the date of his/her death or disability. The Options shall continue to be exercisable until the earlier of the expiration date of the Option and two (2) years from the date of death or disability. -6- (b) If an Option holder dies after termination of service on the Board, the Options that were exercisable on the date of his/her death may be exercised by the personal representative of his/her estate, his/her heir or his/her legatee until the earlier of the expiration date of the Option and two (2) years from the date of death. (c) If deemed by the Board to be in the best interest of the Company, any Option granted to an Option holder who is not a citizen of the United States may include a cash settlement right ("Cash Settlement Right"). Cash Settlement Rights shall be subject to such terms and conditions not inconsistent with the other provisions of this Plan as the Board shall determine, provided that: (1) A Cash Settlement Right shall be exercisable only after the Option holder's death, by a legatee or legatees of the Cash Settlement Right under the Option holder's last will, by the personal representative of the Option holder's estate or by the Option holder's heirs or distributees, and only to the extent the Option in which the Cash Settlement Right is included is exercisable. Notwithstanding the preceding sentence, a Cash Settlement Right is exercisable only when the fair market value of a share of Stock exceeds the exercise price specified in the Option. (2) A Cash Settlement Right shall entitle the Option holder's legatee, personal representative, heir or distributee (as the case may be) to surrender to the Company unexercised the Option, or portion thereof, to which it is related, or any portion thereof, and to receive from the Company in exchange therefor cash in an amount equal to the excess of the fair market value on the date of exercise of one share of Stock over the exercise price per share specified in such Option multiplied by the number of shares of Stock subject to the Option, or portion thereof, which is so surrendered. The Board of Directors may elect to settle the Company's obligation arising out of the exercise of a Cash Settlement Right by payment of cash or by check. 13. STOCK AWARDS UPON RETIREMENT. In addition to Options which may be granted as provided above, upon retirement from the Board, each eligible director who has completed at least one full term of service on the Board shall be entitled to receive (i) a grant of One Thousand (1,000) shares of Stock if such director has served on the Board for more than four (4) but less than nine (9) years or (ii) a grant of Two Thousand Five Hundred (2,500) shares of Stock if such director has served on the Board for nine (9) or more years. Except as otherwise provided below, each grant pursuant to this Section 13 shall become effective and the eligible director shall be entitled to receive all of such shares of Stock on the last day such director serves on the Board prior to retirement therefrom (the "last day of service"). Notwithstanding the foregoing, an eligible director may elect to defer receipt of shares of Stock granted pursuant to this Section 13 ratably over a five-year period -7- commencing on the last day of service; provided, however, such election shall not be effective unless contained in a written instrument signed by the eligible director and delivered to the Company not less than 90 days prior to the last day of service. Such election, by the terms of such instrument, shall be irrevocable as of the date of its execution. Such instrument also shall designate a beneficiary to receive the shares of Stock in the event the eligible director dies prior to the expiration of such five-year period; the beneficiary so designated shall receive the shares of Stock in such amounts and at such times as would the eligible director had he or she survived. Shares of Stock granted pursuant to this Section 13 shall become non-forfeitable immediately upon grant on the last day of service. 14. ADJUSTMENTS. The number of shares subject to the Plan and to Options granted under the Plan shall be adjusted as follows: (a) In the event that the Company's outstanding common stock is changed by any stock dividend, stock split or combination of shares, the number of shares subject to the Plan and to Options therefore granted thereunder and the exercise price of such Options shall be proportionately adjusted; provided, however, that no fractional share or shares shall be effected by such an event. (b) In the event of any merger or consolidation of the Company with any other corporation or corporations, there shall be substituted for each share of Stock then subject to the Plan, whether or not at the time subject to the outstanding Options, the number and kind of shares of stock or other securities into which each outstanding share of Stock of the Company shall be converted by such merger or consolidation. (c) The number of shares to be granted as Awards of restricted stock under Section 10 as Stock Awards under Section 13 shall be adjusted upon the occurrence of the events described in Section 14(b). The Board may, in its discretion, adjust the number of shares to be granted as Stock Awards under Section 10 and Section 13 upon the occurrence of the events described in Section 14(a). (d) The Board may, in its discretion, adjust the annual limitation on Options in Section 7(b) upon the occurrence of the events described in Sections 14(a) and (b). 15. EFFECTIVE DATE OF PLAN. The effective date of this Plan shall be February 13, 1997, subject to subsequent approval thereof by the holders of one-half (1/2) of all the issued and outstanding voting stock in the Company. -8- 16. NON-TRANSFERABILITY OF OPTIONS. (a) Except as provided in subsection (b) next below, no Option granted under this Plan shall be transferrable by any Option holder otherwise than by will or the laws of descent and distribution; and, during an Option holder's lifetime, his/her Options shall be exercisable only by him/her. (b) Notwithstanding the provisions of subsection (a) above, an Option holder, at any time before his/her death, may assign all or any portion of any Option granted to him/her to (i) his/her spouse or lineal descendant, (ii) the trustee of a trust for the primary benefit of his/her spouse or lineal descendant, or (iii) a partnership of which his/her spouse and lineal descendants are the only partners. In such event, the spouse, lineal descendant, trustee or partnership will be entitled to the right to exercise the assigned portion of such Option, subject to all of the terms, conditions and restrictions applicable to the Option, as set forth in this Plan and in the related Option Agreement immediately prior to the effective date of the assignment. (For example, the provisions of this Plan and the Option Agreement dealing with termination of service on the Board, death and disability shall continue to apply with respect to the Option holder's termination of service on the Board, death or disability and not with respect to the termination of service, death or disability of any other person to whom the Option has been assigned.) Any such assignment will be permitted only if (i) the Option holder does not receive any consideration therefor, and (ii) the assignment is expressly permitted by the applicable Option Agreement as approved by the Board. Any such assignment shall be evidenced by an appropriate written document executed by the Option holder, and a copy thereof shall be delivered to the Company on or before the effective date of the assignment. 17. TERMINATION AND AMENDMENT. The Board may at any time suspend or terminate the Plan. The Board may also amend or revise the terms of the Plan. However, no such action shall: (i) Change the class of persons eligible to receive Options; (ii) Without the consent of the Option holder, change or impair any Option previously granted; (iii) Increase the maximum number of shares subject to Options hereunder; (iv) Change the minimum exercise price; (v) Change the limitations on the Options; or (vi) Increase the time limitations on the grant of Options. -9- Nothing in this Section 17 shall prevent adjustments required by Section 14 hereof. -10- EX-4.1 3 EXHIBIT 4.1 THE TJ INTERNATIONAL, INC. KEY EMPLOYEES' 1996 STOCK OPTION PLAN This plan is a stock option plan that contains both "incentive" stock option and nonstatutory stock option provisions (the "Plan"), under which options can be granted from time to time to eligible employees of TJ INTERNATIONAL, INC., a Delaware corporation (the "Company"), or any of its subsidiary corporations (the "Option Holders"), to purchase shares of the Company's $1.00 par value common stock ("Stock") subject to the limitations, provisions and requirements hereinafter stated. 1. PURPOSE OF THE PLAN. The general purpose of the Plan is to aid in attracting, developing and retaining a management capable of insuring the future success of the Company. The Plan is designed to aid the Company in retaining the services of key management employees of the Company, or any of its subsidiaries, including the officers of the Company, as may be determined in the discretion of the Board of Directors from time to time; to attract new management personnel needed for future operations and growth; to offer such present and future key employees additional incentives to put forth maximum efforts for the future success of the Company; and to afford them opportunities to obtain or increase a proprietary interest in the Company, and thereby, to have an opportunity to share in such future success. Options granted under this Plan are intended to qualify either as "incentive" stock options ("Incentive Options") under IRC Section 422A of the Internal Revenue Code of 1986, as now or hereafter amended ("Internal Revenue Code"), or, if so elected by the Board of Directors, as stock options which do not meet the requirements of IRC Section 422A of the Internal Revenue Code ("Nonstatutory Options"). Incentive Options and Nonstatutory Options are collectively referred to as "Options." 2. ADMINISTRATION OF THE PLAN. (a) The Plan shall be administered by the Board of Directors of the Company. (b) Subject to the provisions of the Plan, the Board of Directors shall have authority in its discretion (i) to construe and interpret the Plan and all Options granted hereunder, to determine the terms and provisions (and amendments thereof) of the Options granted under the Plan (which need not be identical), including such terms and provisions (and amendments) as shall be required in the judgment of the Board of Directors to provide that Incentive Options under the Plan will be treated as "incentive" stock options under the Internal Revenue Code or to conform to any change in any law or regulation applicable thereto; (ii) to define the terms used in the Plan and in the Options granted thereunder; (iii) to prescribe, amend or rescind rules and regulations relating to the Plan; (iv) to determine the individuals to whom and the time or times -1- at which Options shall be granted, the types of Options granted, the number of shares subject to each Option, the exercise price for Options, and the duration of leaves of absence which may be granted to participants without constituting a termination of their employment for the purposes of the Plan; (v) to make all other determinations necessary or advisable for the administration of the Plan; and (vi) to exercise all powers expressly granted to the Board of Directors by this Plan and all other powers deemed by the Board of Directors, in its discretion, to be necessary or desirable to accomplish the intent and purposes of the Plan. All determinations and interpretations made by the Board of Directors shall be binding and conclusive on all participants in the Plan and on their legal representatives and beneficiaries. (c) Any action of the Board of Directors with respect to the Plan shall be taken by a majority vote at a meeting of the Board of Directors or by written consent of a majority of the Board of Directors without a meeting. (d) The Board of Directors may, if it deems advisable, appoint a Stock Option Committee, consisting of not less than two (2) Non-Employee Directors of the company appointed by the Board of Directors, to carry out such functions and to serve such terms as the Board may designate. However, all Options granted under this Plan shall be granted by the Board of Directors of the Company unless the Board expressly authorizes the Stock Option Committee to grant Options under this Plan. For purposes of this Plan, "Non -Employee Director" means a director who meets the criteria of Rule 16b-3(b)(3)(i) of the Securities Exchange Act of 1934 (i.e., a director who, at the time he exercises discretion concerning this plan (1) is not an officer or employee of the Company or any subsidiary or parent of the Company; (2) does not receive compensation, either directly or indirectly, from the Company or any subsidiary or parent of the Company in any capacity other than as a director, except for an amount that would not need to be disclosed under 17 C.F.R. Section 229.404(a); (3) does not possess an interest in any other transaction required to be disclosed under 17 C.F.R. Section 229.404(a); and (4) is not engaged in a business relationship required to be disclosed under 17 C.F.R. Section 229.404(a)). 3. MAXIMUM NUMBER OF SHARES SUBJECT TO PLAN. The Board of Directors may grant Options to purchase from the Company not more than One Million Five Hundred Thousand (1,500,000) shares of Stock, subject to adjustment in accordance with Section 13 of the Plan. If any Option granted hereunder shall expire or terminate for any reason without having been exercised in full, the unpurchased shares of Stock subject thereto shall (unless the Plan shall have been terminated) again be available for other Options to be granted under the Plan. Shares of Stock subject to Options granted under this Plan may be made available, as the Board of Directors of the Company shall determine from time to time, from authorized but unissued shares of Stock or issued shares of Stock which have been reacquired by the Company. Shares of Stock delivered under the Plan shall be fully paid, validly issued and nonassessable. -2- 4. SELECTION OF OPTION HOLDERS. Options shall be granted only to such key management employees, including officers of the Company or any of its subsidiaries, as may from time to time be selected by the Board of Directors of the Company, subject to the provisions herein contained. No Option shall be granted to a Director or officer who is not an employee of the Company or one of its subsidiaries. No Incentive Option shall be granted to an employee who immediately before such grant owned stock representing more than ten percent (10%) of the voting power or value of all classes of stock of the Company or any of its subsidiaries unless the exercise price is at least one hundred ten percent (110%) of the fair market value of the Stock subject to the Incentive Option at the time of the grant, and such Incentive Option is not exercisable more than five (5) years after the date such Option was granted. 5. DURATION OF PLAN AND OPTIONS. Unless the Plan shall theretofore have been terminated as provided in Section 18, no Options shall be granted under this Plan later than December 18, 2006. Notwithstanding any other provision of this Plan, no Option may be exercised after ten (10) years from the date of grant of such Option. Unexercised Options shall expire ten (10) years after date of grant. 6. TERMS OF OPTIONS. (a) The exercise price per share of Stock subject to each Option shall be determined by the Board of Directors of the Company at the time of granting each individual Option hereunder and shall be set forth in the applicable Option Agreement; but in no event shall the exercise price of an Option be less than the fair market value of the Company's Stock on the date the Option is granted. The fair market value of such shares shall be determined by the Board of Directors on the basis of published market quotations; but in no event shall the fair market value so determined be less than the closing price of the publicly traded shares of Stock on the trading day immediately preceding the date on which the Option is granted, as quoted in the WALL STREET JOURNAL or successor generally recognized business journal or, if such business journal does not list the published market quotation, then on the NASDAQ reporting system or successor reporting system. (b) The Board of Directors shall have authority in its discretion to prescribe in any Option Agreement the time or times when an Option may be exercised and the number of shares of Stock subject to the Option. Each Option shall expire and all rights to purchase Stock thereunder shall cease on the date fixed by the Board in the Option Agreement. 7. INCENTIVE OPTIONS. The provisions of this Section 7 apply only to Incentive Options: -3- The aggregate fair market value (determined as of the date of grant) of shares of Stock for which "incentive" stock options are exercisable for the first time by an employee under all stock option plans of the Company or any of its subsidiaries, shall not exceed $100,000 during any calendar year. 8. TIME OF OPTION GRANT. No Option shall be deemed to have been granted until it has been duly executed in writing by the Company. The grant of an Option pursuant to the Plan shall be effective as of the date of the Board meeting (or written consent in lieu of a meeting) approving the grant of the Option, but only if a written Option Agreement containing the terms and conditions of the Option shall thereafter be duly executed and delivered by or on behalf of the Company and the employee to whom such Option is granted. The Option Agreement shall be dated as of the date of the meeting (or written consent) of the Board of Directors at which grant of the Option was approved. 9. EXERCISE OF OPTIONS. (a) Except as hereinafter expressly provided, no Option, whether Incentive or Nonstatutory, may be exercised at any time unless the Option Holder thereof is at the time of exercise an employee of the Company or one of its subsidiaries. After an Option or an installment of an Option becomes exercisable, such Option or installment may be exercised in full or in part at any time prior to its expiration or termination as provided in this Plan. (b) Options may be exercised by giving written notice to the Company specifying the number of shares of Stock to be acquired, accompanied by the entire exercise price for such shares either (i) in cash (or by certified or cashier's check or money order), or (ii) in the form of an assignment to the Company of sufficient other shares of Stock, which have been owned by the Option Holder for at least six months before the date of exercise, having a fair market value equalling such exercise price, or (iii) in a combination of such cash and Stock. If shares of Stock are used to pay the exercise price in whole or in part, such shares shall be valued on the basis of published market quotations; but in no event shall the fair market value so determined be less than the closing price of the publicly traded shares of Stock on the trading day immediately preceding the date on which the Option Holder exercises the Option, as quoted in the WALL STREET JOURNAL or successor generally recognized business journal or, if such business journal does not list the published market quotation, then on the NASDAQ reporting system or successor reporting system. (c) Payment of the exercise price may also be made by delivering to the Company a properly executed exercise notice together with irrevocable instructions to the Company to deliver, to a securities broker specified in the notice, the certificate for the Stock acquired upon exercise of the Option and further irrevocable instructions to the specified broker to deposit the Stock in the Option Holder's cash account (if the Stock is to be sold to pay the -4- exercise price) or his/her margin account (if the exercise price is to be funded by a margin loan) and to promptly deliver to the Company the Stock sale or margin loan proceeds in the amount of the exercise price. The Board of Directors may adopt regulations establishing a mechanism by which this payment method shall be implemented in accordance with Federal Reserve Board Regulation T. (d) In addition to payment of the exercise price upon exercise of an Option under this Plan, the Company shall require the recipient of the Stock to remit to the Company an amount sufficient to satisfy all applicable federal and state income tax withholding requirements resulting from the exercise, either (i) in cash (or by certified or cashier's check or money order), or (ii) in the form of an assignment to the Company of sufficient other shares of Stock which have been owned by the Option Holder for at least six months before the date of exercise, having a fair market value equalling such withholding tax, or (iii) in a combination of such cash and Stock. Stock surrendered under this Section 9(d) shall be valued at its fair market value on the date the amount of withholding tax is determined. (e) Notwithstanding anything contained herein to the contrary, the issuance date of the shares of Stock issued upon the exercise of the Option shall be the date the cash and/or Stock received by the Company is appropriately recorded in the Company's books and records. No person entitled to exercise any Option granted under the Plan shall have any of the rights and privileges of a shareholder of the Company in respect to any shares of Stock issuable upon exercise of such Option until certificates representing such shares shall have been issued and delivered. 10. STOCK OWNERSHIP GUIDELINES. The Company anticipates that some of the Options granted pursuant to this Plan will be granted under the Company's Long Term Stock Ownership Incentive Program to eligible executives ("Executives") who satisfy Stock ownership guidelines set forth in the Company's Leveraged Stock Purchase Plan (the "Stock Purchase Plan"). If Options are granted under this Plan to an Executive because the Executive has satisfied the Stock ownership guidelines in the Stock Purchase Plan and the Executive later sells, or otherwise transfers, enough Stock of the Company so that the Executive no longer satisfies the applicable Stock ownership guideline, the Board of Directors may, in its discretion, cancel all or any part of the then unexercised Options held by the Executive under this Plan. 11. SPECIAL EXERCISE PROVISIONS. At any time after the date of grant, an Option shall be exercisable (notwithstanding any contrary provisions of this Plan or any Option Agreement under this Plan) with respect to the full number of shares subject to that Option: -5- (1) During the period commencing as of the effective date of any agreement entered by the Company or the shareholders of the Company to dispose of all or substantially all of the assets or stock of the Company by means of a sale, reorganization, liquidation, or otherwise, and ending two (2) years after the disposition of assets or stock contemplated by the agreement; or (2) During the two (2) year period commencing on the date any person or group (within the meaning of Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934) commences, or announces the intent to make, a tender offer or exchange offer the consummation of which would result in the beneficial ownership by the person or group of at least thirty percent (30%) of the common stock then outstanding, or acquires, or obtains the right to acquire, beneficial ownership of at least twenty percent (20%) of the common stock then outstanding. 12. TERMINATION OF EMPLOYMENT. (a) If an Option Holder's employment with the Company is terminated for cause (as defined in Section 12(e)) or if the Option Holder voluntarily terminates employment with the Company for any reason other than death, permanent and total disability or retirement after age 55 pursuant to the terms of a retirement program of the Company, the Option Holder may exercise his/her Options that were exercisable as of his/her last day of employment within thirty (30) days after the date he/she ceased employment. Any Options that were not yet exercisable as of the Option Holder's last day of employment shall immediately be cancelled on the date he/she ceases employment. All Options not exercised by the Option Holder shall expire on the thirty-first (31st) day after the Option Holder's last day of employment. (b) If an Option Holder's employment with the Company is terminated involuntarily but not for cause (as defined in Section 12(e)), the Option Holder may exercise his/her Options that were exercisable as of his/her last day of employment during a period to be determined by the Board of Directors of the Company, but in no event less than thirty (30) days or more than one (1) year for Incentive Options and two (2) years for Nonstatutory Options after his/her last day of employment. The Board of Directors shall also have discretion to determine what additional Options, if any, held by the Option Holder on his/her last day of employment shall be exercisable during the exercise period the Board establishes. (c) If an Option Holder retires after reaching age fifty-five (55) pursuant to the terms of a retirement program of the Company, his/her Options that were exercisable as of his/her last day of employment shall continue to be exercisable and, for each year of the Option Holder's service with the Company, an additional three percent (3%) of his/her Options that were not previously exercisable shall become immediately exercisable upon his/her retirement. Incentive Options shall continue to be exercisable until the earlier of the expiration date and two (2) months after the Option Holder's retirement; and Nonstatutory Options shall continue to be exercisable until the earlier of the expiration date and two (2) years after the Option Holder's retirement. -6- (d) A leave of absence approved in writing by the Chief Executive Officer of the Company or, in the case of the Chief Executive Officer, by the Board of Directors, shall not be deemed a termination of employment for the purposes of this Section 11; but no Option may be exercised during any such leave of absence except during the first three (3) months thereof. (e) For purposes of this Plan, "cause" means the Option Holder has (i) committed any act detrimental to the Company's interest, such as any form of dishonesty, including theft; criminal or other conduct involving moral turpitude connected with employment or that otherwise reflects adversely upon the Company's reputation or operations; violation of any noncompetition agreement; unauthorized disclosure of proprietary or confidential information; sabotage or destruction of the Company's property or equipment; refusal to return property, documents, or information belonging to or originating with the Company; willful or intentional violation or disregard of Company policy; repeated performance or conduct problems; refusal to follow supervisory directions or instructions; unlawful harassment or discrimination; or similar acts or reasons; or (ii) engaged in any other type of conduct or behavior detrimental to the Company's safe and efficient operation, the orderly closure, elimination, sale, leasing or subcontracting out of the Option Holder's job, operation or department, and/or its other business interests. 13. DEATH/DISABILITY OF THE OPTION HOLDER. (a) If an Option Holder dies or becomes totally and permanently disabled while employed by the Company, all of his/her Options, whether or not previously exercisable, shall become exercisable upon the date of his/her death or disability. The Options shall continue to be exercisable until the earlier of the expiration date of the Option and two (2) years from the date of death or disability; provided that in the case of an Option Holder's disability, all Incentive Options shall expire no later than one (1) year after the date of disability. (b) If an Option Holder dies after termination of employment with the Company, the Options that were exercisable on the date of his/her death may be exercised by the personal representative of his/her estate, his/her heir or his/her legatee until the earlier of the expiration date of the Option and two (2) years from the date of death. (c) If deemed by the Board of Directors to be in the best interest of the Company, any Option granted to an Option Holder who is not a citizen of the United States may include a cash settlement right ("Cash Settlement Right"). Cash Settlement Rights shall be subject to such terms and conditions not inconsistent with the other provisions of this Plan as the Board of Directors shall determine, provided that: (1) A Cash Settlement Right shall be exercisable only after the Option Holder's death, by a legatee or legatees of the Cash Settlement Right under the Option Holder's last will, by the personal representative of the Option Holder's estate or by the Option Holder's heirs or distributees, and only to the extent the -7- Option in which the Cash Settlement Right is included is exercisable. Notwithstanding the preceding sentence, a Cash Settlement Right is exercisable only when the fair market value of a share of Stock exceeds the exercise price specified in the Option. (2) A Cash Settlement Right shall entitle the Option Holder's legatee, personal representative, heir or distributee (as the case may be) to surrender to the Company unexercised the Option, or portion thereof, to which it is related, or any portion thereof, and to receive from the Company in exchange therefor cash in an amount equal to the excess of the fair market value on the date of exercise of one share of Stock over the exercise price per share specified in such Option multiplied by the number of shares of Stock subject to the Option, or portion thereof, which is so surrendered. The Board of Directors may elect to settle the Company's obligation arising out of the exercise of a Cash Settlement Right by payment of cash or by check. 14. ADJUSTMENTS. The number of shares subject to the Plan and to Options granted under the Plan shall be adjusted as follows: (a) In the event that the Company's outstanding common stock is changed by any stock dividend, stock split or combination of shares, the number of shares subject to the Plan and to Options therefore granted thereunder and the exercise price of such Options shall be proportionately adjusted; provided, however, that no fractional share or shares shall be effected by such an event. (b) In the event of any merger or consolidation of the Company with any other corporation or corporations, there shall be substituted for each share of Stock then subject to the Plan, whether or not at the time subject to the outstanding Options, the number and kind of shares of stock or other securities into which each outstanding share of Stock of the Company shall be converted by such merger or consolidation. 15. DISCLOSURE. If an employee shall sell or otherwise dispose of the Stock acquired upon exercise of any Incentive Option either (i) before the expiration of a two (2) year period after the date of the grant of the Incentive Option, or (ii) before the expiration of a one (1) year period after the transfer of the Stock to him/her, the employee agrees to inform the Company of such sale and all details thereof, including the number of shares sold, selling price, ordinary income realized thereon, and such other reasonable details as may be requested by the Company. -8- 16. EFFECTIVE DATE OF PLAN. The effective date of this Plan shall be December 19, 1996, subject to subsequent approval thereof by the holders of one-half (1/2) of all the issued and outstanding voting stock in the Company. 17. NON-TRANSFERABILITY OF OPTIONS. (a) Except as provided in subsection (b) next below, no Option granted under this Plan shall be transferrable by any Option Holder otherwise than by will or the laws of descent and distribution; and, during an Option Holder's lifetime, his/her Options shall be exercisable only by him/her. (b) Notwithstanding the provisions of subsection (a) above, an Option Holder, at any time before his/her death, may assign all or any portion of any Nonstatutory Option granted to him/her to (i) his/her spouse or lineal descendant, (ii) the trustee of a trust for the primary benefit of his/her spouse or lineal descendant, or (iii) a partnership of which his/her spouse and lineal descendants are the only partners. In such event, the spouse, lineal descendant, trustee or partnership will be entitled to the right to exercise the assigned portion of such Option, subject to all of the terms, conditions and restrictions applicable to the Option, as set forth in this Plan and in the related Option Agreement immediately prior to the effective date of the assignment. (For example, the provisions of this Plan and the Option Agreement dealing with termination of employment, death and disability shall continue to apply with respect to the Option Holder's termination of employment, death or disability and not with respect to the termination of employment, death or disability of any other person to whom the Option has been assigned.) Any such assignment will be permitted only if (i) the Option Holder does not receive any consideration therefor, and (ii) the assignment is expressly permitted by the applicable Option Agreement as approved by the Board of Directors. Any such assignment shall be evidenced by an appropriate written document executed by the Option Holder, and a copy thereof shall be delivered to the Company on or before the effective date of the assignment. 18. TERMINATION AND AMENDMENT. The Board of Directors of the Company may at any time suspend or terminate the Plan. The Board may also amend or revise the terms of the Plan. However, no such action shall: (i) Change the class of employees eligible to receive Options; (ii) Without the consent of the Option Holder, change or impair any Option previously granted; (iii) Increase the maximum number of shares subject to Options hereunder; -9- (iv) Change the minimum exercise price; (v) Change the limitations on the Options; or (vi) Increase the time limitations on the grant of Options. Nothing in this Section 18 shall prevent adjustments required by Section 14 hereof. -10- EX-27 4 FDS, 1996
5 THIS DATA SCHEDULE CONTAINS RESTATED FINANCIAL INFORMATION EXTRACTED FROM THE TJ INTERNATIONAL, INC. BALANCE SHEET AT JUNE 29, 1996 AND FROM ITS STATEMENT OF INCOME FOR THE SIX MONTHS ENDED JUNE 29, 1996. THE INFORMATION PRESENTED IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 6-MOS DEC-28-1995 DEC-31-1995 JUN-29-1996 20,957 0 52,108 419 43,700 134,775 558,983 165,983 567,586 60,121 95,180 0 13,857 17,277 182,893 567,586 266,207 266,207 205,667 205,667 42,683 0 3,114 7,239 2,787 4,452 0 0 0 4,452 .23 .22
EX-27.1 5 FDS
5 THIS DATA SCHEDULE CONTAINS FINANCIAL INFORMATION EXTRACTED FROM THE TJ INTERNATIONAL, INC. BALANCE SHEET AT JUNE 28, 1997 AND FROM ITS STATEMENT OF INCOME FOR THE SIX MONTHS ENDED JUNE 28, 1997. THE INFORMATION PRESENTED IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 6-MOS DEC-29-1996 DEC-31-1996 JUN-28-1997 70,875 0 82,026 403 51,649 215,687 580,174 202,711 636,846 79,948 99,790 0 13,650 17,707 195,362 636,846 346,993 346,993 252,521 252,521 53,623 0 3,113 20,749 7,781 12,968 0 0 0 12,968 .71 .67
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