amette-Weyerhaeuser S howdown App roaches

With Weyerhaeuser's current $5.4 billion hostile takeover bid due to expire May 18, Willamette Industries continues rallying shareholders and employees to help fend off the unwelcome suitor.

Weyerhaeuser plans a proxy fight at Willamette's annual meeting June 7 to place three directors, all retired Weyerhaeuser executives, on the firm's board. Duane C. McDougall, Willamette president and c.e.o., questioned the slate's objectivity. "Contrary to usual practice, each of Weyerhaeuser's nominees is being paid $25,000 by Weyerhaeuser, which raises serious questions as to their independence and agenda," he said. "In addition, their proposed alternative slate of directors includes Weyerhaeuser's former chief executive, general counsel and a senior vice president, all of whom we believe are col lecti ng Weyerhaeuser retirement benefits."

Instead, Willamette is urging shareholders to re-elect McDougall, Kenneth W. Hergenhan and Robert M. Smelick. who are firmlv aeainst the takeover. "We are not for sale and even if we were, there is nothing we have heard new from them the last five months that indicates they are even in the ball park," McDougall said.

His comments came while discussing Willamette's first-quarter earnings, which tumbled 2lVo due to slower sales, higher energy costs, and a charge of $2 million a month to defend itself from the bid.

Although Willamette has strong shareholder defense mechanisms and company insiders that control abortt 3OVo of its stock, at one point more than half of the company's shareholder base supported the takeover tender. As of the last tender extension on March 12, about 297o of Willamette's shares had been tendered in support of the offer.

On the grass-roots level, Willamette began posting decals on the back of more than 600 delivery trucks that read "WeyerhaeuserExit Nowl"

Willamette employees also tried to take matters into their own hands, forming a "Just Say No Wey Committee."

The group launched a Web site (JustSayNoWey.com), sent e-mails, distributed fliers, and organized a rally to be held at Weyerhaeuser's annual meeting.

The committee ended up shutting down the Web site after the Securities & Exchange Commission ordered that it file SEC form 14D9, a disclosure form required of interested parties involved in a tender offer. According to spokesman Brad Pomroy, the SEC demanded a record of written and verbal communications between group members and a listing of how much Willamette stock each member held.