If your shares are held in street name on your behalf (you own shares in the name of a bank, broker or other holder of record), the broker or other registered holder must receive explicit voting instructions from you to be able to vote on the election of directors and on management’s proposals regarding executive compensation and the frequency of the advisory vote on executive compensation. Brokers do not have discretion to vote on these matters unless the beneficial owner of the shares has given explicit voting instructions. Consequently, if you do not give your broker explicit instructions, your shares will not be voted on these matters.

It is important to understand that your decision to vote for or against a proposal, to withhold your vote or to send in a proxy card on which you have left the direction blank may have a different effect depending on the vote needed to approve a matter.

In the election of directors and management’s proposals regarding executive compensation and the frequency of the advisory vote on executive compensation, certain shares present at the meeting are counted as not voted and have no effect on the matter being considered. These include any shares represented by ballots:

In the vote on the proposal made by the board of directors to amend the Company’s Articles of Incorporation, any action other than a vote for the proposal will have the effect of being a vote against the proposal.

The Company’s annual report to shareholders for 2010 is being mailed with this proxy statement to shareholders entitled to vote at the 2011 annual meeting.

VOTING INFORMATION

You may vote your shares in one of several ways, depending upon how you own your shares.

Shareholders of record (you own shares in your own name) can vote by telephone, on the Internet or by mail as described below. Street name shareholders (you own shares in the name of a bank, broker or

other holder of record) should refer to the proxy form or the information you receive from the record holder to see which voting methods are available to you.

If you are a street name shareholder, you must obtain a proxy, executed in your favor, from your broker or the holder of record to be able to vote at the annual meeting.

INFORMATION ABOUT THE MEETING

Attendance at the annual meeting is limited to shareholders. The meeting will be held at Weyerhaeuser’s Corporate Headquarters Building, 33663 Weyerhaeuser Way South, Federal Way, Washington.

If you are a shareholder of record, an admission ticket is attached to your proxy card. You must present this admission ticket at the registration desk to be allowed into the annual meeting. If you plan to attend the annual meeting, please vote your proxy, but keep the admission ticket and bring it to the annual meeting along with photo identification. If you arrive at the meeting without your admission ticket, we will admit you only if you have photo identification and we are able to verify that you are a shareholder of record.

If you are a street name shareholder and you plan to attend the annual meeting, you must present proof of your ownership of Weyerhaeuser common shares as of the record date, February 18, 2011. Acceptable proof would be an original bank or brokerage account statement as of that date. You

also must present photo identification to be admitted. If you arrive at the meeting without proof of your ownership of common shares as of the record date, you will not be admitted to the meeting.

If you are a street name shareholder and intend to designate a proxy holder, the designee must present:

If we cannot verify that you are a shareholder, your designee will not be admitted to the meeting.

If you are hearing impaired or require other special accommodations due to disability, please contact the Corporate Secretary prior to the meeting to indicate the accommodations that you will need.

No banners, placards, signs, literature for distribution, cameras, recording equipment, electronic devices, including cell phones, large bags, briefcases or packages will be permitted in the annual meeting.

INCORPORATION BY REFERENCE

We “incorporate by reference” into this proxy statement information that we file with the SEC.

This means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is considered to be an important part of this proxy statement. The Company’s Annual Report on Form 10-K for the year ended December 31, 2010 (except for information in this document that is deemed not to be filed) is incorporated by reference.

This proxy statement incorporates important business and financial information about the Company from other documents that are not included in or delivered with this document. The information relating to us contained in this proxy statement is not complete and should be read together with the information contained in the documents incorporated by reference. To receive a copy of any of the documents incorporated by reference in this proxy statement, other than exhibits unless they are specifically incorporated by reference in this proxy statement, call or write to our Vice President of Investor Relations at Weyerhaeuser Company, P.O. Box 9777, Federal Way, Washington 98063-9777, telephone (253) 924-2058. You may read and copy any document we file at the SEC’s public reference rooms at 100 F Street N.E., Washington, D.C. 20549. You may obtain information on the operation of the SEC’s public reference rooms by calling the SEC at 1-800-SEC-0330. Our SEC filings also are available to the public at the SEC’s web site at http://www.sec.gov.

ITEM 1. ELECTION OF DIRECTORS

Previously, the Company’s Articles of Incorporation provided that the directors of the Company are classified into three classes and that each class should be as nearly equal in number as possible. At the annual shareholders’ meeting held in 2010, shareholder approved an amendment to the Articles of Incorporation to declassify the board. Consequently, directors elected at any meeting beginning with this meeting in 2011 will be elected for only one year. The board of directors is authorized to fix the number of directors within the range of 9 to 13 members, and has fixed the number at 10. The three persons identified below are nominated to be elected at the 2011 annual meeting for one-year terms expiring at the 2012 annual meeting. All of the nominees currently are directors of the Company elected by the shareholders.

Unless a shareholder instructs otherwise on the proxy card, it is intended that the shares represented by properly signed proxies in the accompanying form will be voted for the persons nominated by the board of directors. The board of directors anticipates that the listed nominees will be able to serve, but if at the time of the meeting any nominee is unable or unwilling to serve, the proxy holders may vote such shares at their discretion for a substitute nominee.

The biography of each of the nominees and continuing directors below contains information regarding the person’s service as a director, business experience, director positions held currently or at any time during the last five years, information regarding involvement in certain legal or administrative proceedings, if applicable, and the experiences, qualifications, attributes or skills that caused the Governance and Corporate Responsibility Committee and the board to determine that the person should serve as a director for the Company beginning in 2011.

NOMINEES FOR ELECTION

TERMS EXPIRES IN 2012

Wayne W. Murdy, 66, a director of the Company since January 2009, held various management positions with Newmont Mining Corporation (international mining) from 1992 until his retirement in 2007, including chairman of the board from 2002 to December 2007 and chief executive officer from 2001 to June 2007. Before joining Newmont Mining, Mr. Murdy spent 15 years serving in senior financial positions in the oil and gas industry, including positions with Apache Corporation and Getty Oil Company. He also is a director of BHP Billiton Limited, BHP Billiton Plc. and Qwest Communications International Inc. He is a trustee of the Denver Art Museum, member of the Advisory Councils for the College of Engineering at the University of Notre Dame and the Daniels Business School at the University of Denver. He has extensive executive experience in leading natural resources companies and managing capital-intensive industry operations, with strong skills in corporate finance and accounting, international operations, strategic planning and public company executive compensation.

John I. Kieckhefer, 66, a director of the Company since 1990, has been president of Kieckhefer Associates, Inc. (investment and trust management) since 1989, and was senior vice president prior to that time. He has been engaged in commercial cattle operations since 1967 and is a trustee of J.W. Kieckhefer Foundation, an Arizona charitable trust. He has a strong background in business and finance, with extensive experience in public company executive compensation.

Charles R. Williamson, 62, a director of the Company since October 2004 and chairman of the board since April 2009, was the executive vice president of Chevron Corporation (international oil company) from August, 2005 until his retirement on December 1, 2005. He was chairman and chief executive officer of Unocal Corporation (oil and natural gas) until its acquisition by Chevron Corporation in 2005. He served as Unocal Corporation’s executive vice president, International Energy Operations from 1999 to 2000; group vice president, Asia Operations from 1998 to 1999; group vice president, International Operations from 1996 to 1997; and held numerous management jobs including positions in the United Kingdom, Thailand and the Netherlands since joining Unocal in 1977. He was a director of Unocal Corporation and former chairman of the US-ASEAN Business Council. He is also a director and chairman of the board of Talisman Energy Inc. and a director of PACCAR Inc. He has extensive executive experience in corporate finance, management of capital intensive operations, development of natural resources, technology, international operations, strategic planning and public company executive compensation.

CONTINUING DIRECTORS

TERMS EXPIRES IN 2012

Debra Cafaro, 53, a director the Company since February 2007, has been chairman, president and chief executive officer of Ventas, Inc. (health care real estate investment trust) since 2003. She was its president and chief executive officer from 1999 when she joined the company until 2003, and has been a director of the company since 1999. She served as president and director of Ambassador Apartments, Inc. (real estate investment trust) from 1997 until 1998 when it merged with AIMCO. She was a director of GGP, Inc. (real estate investment trust) from March 2010 through November 2010. She is the immediate past chair of NAREIT (National Association of Real Estate Investment Trusts) and a member of the Real Estate Roundtable. She has extensive REIT executive experience, with strong skills in real estate and corporate finance, strategic planning and public company executive compensation.

Nicole W. Piasecki, 48, a director of the Company since 2003, is the head of Business Development for Boeing Commercial Airlines. Previously, she served as president of Boeing Japan from 2006 to 2010, executive vice president of Business Strategy & Marketing for Boeing Commercial Airplanes, The Boeing Company, from 2003 to 2006; was vice president of Commercial Airplanes Sales, Leasing Companies from 2000 until January 2003; and served in various positions in engineering, sales, marketing, and business strategy for the Commercial Aircraft Group from 1991. She was a member of Secretary of Transportation’s Future of Aviation Advisory Committee in 2010, and has been a Trustee of Seattle University since 2010 and an at-large member of the University Council for Yale since 2010. She was a former member of the Federal Aviation’s Management Advisory Council. She has extensive executive experience in capital intensive industries, sales and marketing, strategic planning and international operations and relations.

Mark A. Emmert, 58, a director of the Company since June 2008, has been the president of the National Collegiate Athletic Association since October 2010. He served as president of the University of Washington in Seattle, Washington, from 2004 to 2010; as chancellor of Louisiana State University from 1999 to 2004 and chancellor and provost of the University of Connecticut from 1994 to 1999. Prior to 1994, he was provost and vice president for Academic Affairs at Montana State University and held faculty and administrative positions at the University of Colorado. He also is a director of Expeditors International of Washington, Inc. He is a Life Member of the Council on Foreign Relations and is a Fellow of the National Academy of Public Administration. He has also been a Fullbright Fellow, a Fellow of the American Council on Education and served on many non-profit boards. He is an experienced leader of major organizations, with strong skills in government and international relations, and strategic planning.

Daniel S. Fulton, 62, was elected chief executive officer and a member of the board of directors in April 2008. He has been president of Weyerhaeuser Company since January 2008. From May 2001 until March 2008 he was president and chief executive officer of Weyerhaeuser Real Estate Company, a wholly owned subsidiary of the Company. In January 2004 he was named to Weyerhaeuser Company’s senior management team. Mr. Fulton serves as the chair of United Way of King County. He is a member of the Advisory Board for the Foster School of Business at the University of Washington, and is the chair of the Policy Advisory Board of the Joint Center for Housing Studies at Harvard University. He has a strong executive background in real estate and corporate finance, with extensive experience managing capital intensive operations, international operations and strategic planning.

CONTINUING DIRECTORS

TERMS EXPIRES IN 2013

Richard H. Sinkfield, 68, a director of the Company since 1993, is a senior partner in the law firm of Rogers & Hardin in Atlanta, Georgia, and has been a partner in the firm since 1976. He was a director of United Auto Group, Inc. (automobile retailer) from 1993 to 1999 and its executive vice president and chief administrative officer from 1997 to 1999. He was a director of Central Parking Corporation from 2000 to February 2005. He is a former director of the Metropolitan Atlanta Community Foundation, Inc. and the Atlanta College of Art. He is a Trustee of Vanderbilt University, a member of the executive board of the Atlanta Area Council of the Boy Scouts of America; a member of the board of directors of the Georgia Appleseed Center for Law and Justice and was a member of the board of governors of the State Bar of Georgia from 1990 to 1998. He has extensive experience in corporate and securities laws and corporate governance matters.

D. Michael Steuert, 62, a director of the Company since October 2004, has been senior vice president and chief financial officer for Fluor Corporation (engineering and construction) since 2001. He served as senior vice president and chief financial officer at Litton Industries Inc. (defense electronics, ship construction and electronic technologies) from 1999 to 2001 and as a senior officer and chief financial officer of GenCorp Inc. (aerospace, propulsion systems, vehicle sealing systems, chemicals and real estate) from 1990 to 1999. He also serves as Trustee of Prologis and was formerly a member of the National Financial Executives Institute and the Carnegie Mellon Council on finance. He has extensive executive experience in corporate finance and accounting, managing capital intensive industry operations, natural resources development and strategic planning.

Kim Williams, 55, a director of the Company since October 2006, was senior vice president and associate director of global industry research for Wellington Management Company LLP (investment management) from 2001 to 2005, was elected a partner effective January 1995 and held various management positions with Wellington from 1986 to 2001. Prior to joining Wellington, she served as vice president, industry analyst for Loomis, Sayles & Co., Inc (investment management) from 1982 to 1986. She is also a director of E.W. Scripps Company, MicroVest and Xcel Energy Inc. She is a member of the Overseer Committee of Brigham and Women’s Hospital in Boston, Massachusetts and a Trustee of Concord Academy, Concord, Massachusetts. She has extensive experience in corporate finance, strategic planning and international operations.

BOARD OF DIRECTORS AND COMMITTEE INFORMATION

The board of directors of the Company has determined that each of the Company’s directors, with the exception of the Company’s chief executive officer, is independent within the meaning of the listing requirements established by the New York Stock Exchange. The independent directors meet during every board meeting in separate executive session without any member of Company management present. The chairman of the board, who is an independent director, presides over these meetings.

The board of directors has determined that having an independent director serve as chairman of the board is in the best interest of shareholders at this time. This structure has been particularly useful given the Company’s relatively new CEO as the board has considered significant changes in the Company’s portfolio and strategic direction. The structure ensures a greater role for the independent directors in the oversight of the Company and active participation of the independent directors in setting agendas and establishing priorities and procedures for the work of the board. This leadership structure also is preferred by a significant number of the Company’s shareholders. The board believes its administration of its risk oversight function has not affected the board’s leadership structure.

The board is actively involved in the oversight of risks that could affect the Company. This oversight is conducted primarily through committees of the board, as disclosed in the descriptions of each of the committees below and in the charters of each of the committees, but the full board has retained responsibility for general oversight of risks. The board satisfies this responsibility through full reports by each committee chair regarding the committee’s considerations and actions, as well as through regular reports directly from officers responsible for oversight of particular risks within the Company.

The board of directors has a number of committees that perform certain functions for the board. The current committees of the board of directors are the Executive Committee, Audit Committee, Compensation Committee, Governance and Corporate Responsibility Committee and Finance Committee.

The board of directors met on eight occasions in 2010. Each of the directors attended at least 75% of the total meetings of the board and the committees on which he or she served in 2010 except Ms. Cafaro, who was able to attend more than 75% of the meetings of the board of directors, but was able to attend approximately 72% of the total meetings of the board and the committees on which she served in 2010. The following table provides membership and meeting information for each of the board committees.

COMMITTEES OF THE BOARD

Each committee of the board of directors is described below. Each of the committees has adopted a charter and the current charter for each committee can be found on the Company’s website at www.weyerhaeuser.com under “Company” by clicking on the tab at the top of the page, “Investors,” and then under the “Governance” link. If you would like to receive a paper copy of any committee charter, you may request one by writing to Claire S. Grace, Vice President and Corporate Secretary, Weyerhaeuser Company, P.O. Box 9777, Federal Way, WA 98063-9777 or by sending an email to CorporateSecretary@Weyerhaeuser.com.

Executive Committee

The board of directors has given the Executive Committee the power and authority to act for the board in the interval between board meetings, except to the extent limited by law. The chairman of the board, who is an independent director, also serves as the chairman of the Executive Committee.

Audit Committee

The Audit Committee provides oversight of the quality and integrity of the accounting, auditing and financial reporting practices of the Company. It also is responsible for the oversight of the Company’s compliance with legal and regulatory requirements and for other duties that the board or the Audit Committee chair deems appropriate. It exercises its oversight obligations through regular meetings with management, the director of internal audit and the Company’s independent registered public accounting firm, KPMG LLP. The board of directors has determined that each member of the Audit Committee is independent within the meaning of the listing requirements of the New York Stock Exchange.

The Audit Committee is responsible for oversight of Company risks relating to accounting matters, financial reporting and legal and regulatory compliance. To satisfy these oversight responsibilities, the committee separately meets regularly with the Company’s chief accounting officer, director of internal audit, general counsel, KPMG LLP and management. The committee chair regularly meets between formal committee meetings with the Company’s chief accounting officer, director of internal audit and KPMG LLP. The

committee also receives regular reports regarding issues such as the status and findings of audits being conducted by the internal and independent auditors, the status of material litigation, accounting changes that could affect the Company’s financial statements and proposed audit adjustments.

Compensation Committee

The Compensation Committee is responsible for

The board of directors has determined that each member of the Compensation Committee is independent within the meaning of the listing requirements of the New York Stock Exchange.

The Compensation Committee is responsible for risks relating to employment policies and the Company’s compensation and benefits systems. To assist it in satisfying these oversight responsibilities, the committee has retained its own compensation consultant and meets regularly with management to understand the financial, human resources and shareholder implications of compensation decisions being made. The committee chair also regularly meets between formal committee meetings with management and the committee’s consultant.

Governance and Corporate Responsibility Committee

The Governance and Corporate Responsibility Committee takes a leadership role in shaping the governance of the Company. It provides oversight and direction regarding the functioning and operation of the board. It also recommends to the board candidates for election as directors and director candidates for election as the chairman of the board. The committee manages the processes

used by the board in its self-assessment and its evaluation of the chief executive officer. The committee also provides oversight of:

The board of directors has determined that each member of the Governance and Corporate Responsibility Committee is independent within the meaning of the listing requirements of the New York Stock Exchange.

The Governance and Corporate Responsibility Committee is responsible for oversight of risks relating to management and board succession planning, the Company’s sustainability and environmental practices and policies, stakeholder responses to the Company’s ethics and business practices, the Company’s political activities and governmental policy development that could affect Company operations and strategic decisions, and employee and investor responses to the Company’s human resources practices. To satisfy these oversight responsibilities, the committee receives regular reports from officers of the Company responsible for each of these risk areas on matters such as progress against succession planning programs and goals, trends in risk levels, the employee climate, risk management activities, and non-governmental and governmental policies or proposals that could affect Company operations. Because many of these risks could have financial and reporting implications for the Company, the board and the Governance and Corporate Responsibility Committee have determined that at least one member of the committee must serve concurrently on the Audit Committee.

Finance Committee

The Finance Committee monitors and oversees the Company’s financial resources and strategies, with emphasis on those issues that are long-term in nature. The committee:

The board of directors has determined that each member of the Finance Committee is independent within the meaning of the listing requirements of the New York Stock Exchange.

The Finance Committee is responsible for the oversight of risks related to the Company’s financial policies, material financial decisions, credit policies and ratings, compliance with the REIT asset and income rules, cash management and investment strategies, debt and equity structures, and significant business decisions. The committee satisfies this oversight responsibility through regular reports from officers of the Company responsible for each of these risk areas on matters such as the Company’s capital structure, debt levels, discussions with credit rating agencies, pension fund returns, insurance policies, cash flows and expected sources and uses of cash, and major business transactions or strategic decisions being considered. The committee also consults periodically with outside financial advisors.

Board Charter

The board of directors has documented the governance practices followed by the Company by adopting Corporate Governance Guidelines. The Corporate Governance Guidelines establish the practices the board of directors follow with respect to board function and operation, Company operations, board organization and composition and board conduct. The Governance Guidelines are available on the Company’s website at www.weyerhaeuser.com under “Company” at the top of the page, “Investors,” and then under the “Governance” link. If you would like to receive a paper copy, you may request one by writing to Claire S. Grace, Vice President and Corporate Secretary, Weyerhaeuser Company, P.O. Box 9777, Federal Way, WA 98063-9777 or by sending an email to CorporateSecretary@Weyerhaeuser.com.

CONSIDERATION OF DIRECTOR NOMINEES

Director Qualifications

The board codified standards for directors in the board’s Corporate Governance Guidelines. These Guidelines provide that the board should encompass a diverse range of talent, skill and expertise sufficient to provide sound and prudent guidance with respect to the Company’s operations and interests. The Corporate Governance Guidelines also provide that at all times a majority of the board must be “independent directors” as defined from time to time by the listing requirements of the New York Stock Exchange and any specific requirements established by the board. Each director also is expected to:

In addition, the board of directors has determined that the board as a whole must have the right diversity, mix of characteristics and skills for the optimal functioning of the board in its oversight of the Company. The board believes it should be comprised of persons with skills in areas such as:

In addition to the targeted skill areas, the Governance and Corporate Responsibility Committee looks for a strong record of achievement in key knowledge areas that it believes are critical for directors to add value to a board, including:

As part of its periodic self-assessment process, the board annually determines the diversity of specific skills and characteristics necessary for the optimal functioning of the board in its oversight of the Company over both the short- and longer-term. The Governance and Corporate Responsibility Committee has adopted a policy regarding the director selection process that requires the Committee to assesses the skill areas currently represented on the board and those skill areas represented by directors expected to retire or leave the board in the near future against the target skill areas established annually by the board, as well as recommendations of directors regarding skills that could improve the overall quality and ability of the board to carry out its function. The Governance and Corporate Responsibility Committee then establishes the specific target skill areas or experiences that are to be the focus of a director search, if necessary. Specific qualities or experiences could include matters such as experience in the Company’s industry, financial or technological expertise, experience in situations comparable to the Company’s (e.g. growth companies, companies that have grown through

acquisitions, or companies that have restructured their asset portfolios successfully), leadership experience and relevant geographical experience. The effectiveness of the board’s diverse mix of skills and experiences is considered as part of each board self-assessment.

Identifying and Evaluating Nominees for Directors

The Governance and Corporate Responsibility Committee uses a variety of methods for identifying and evaluating nominees for director. The Governance and Corporate Responsibility Committee regularly assesses the mix of skills and industries currently represented on the board, whether any vacancies on the board are expected due to retirement or otherwise, the skills represented by retiring directors, and additional skills highlighted during the board self-assessment process that could improve the overall quality and ability of the board to carry out its function. In the event vacancies are anticipated, or arise, the Governance and Corporate Responsibility Committee considers various potential candidates for director. Candidates may come to the attention of the Governance and Corporate Responsibility Committee through current board members, professional search firms, shareholders or other persons. The Governance and Corporate Responsibility Committee or a subcommittee may interview potential candidates to further assess their ability to serve as a director, as well as the qualifications possessed by the candidates. The Governance and Corporate Responsibility Committee then determines the best qualified candidates based on the established criteria and recommends those candidates to the board for election at the next annual meeting of shareholders.

Shareholder Nominees

The Governance and Corporate Responsibility Committee will consider nominees for the board of directors recommended by shareholders. If a shareholder wishes to recommend a nominee, he or she should write to the Governance and Corporate Responsibility Committee, care of Claire S. Grace, Vice President and Corporate Secretary, Weyerhaeuser Company, P. O. Box 9777, Federal Way, WA 98063-9777, specifying the name of the nominee and the nominee’s qualifications for membership on the board of directors. All recommendations will be brought to the attention of and considered by the Committee.

SHAREHOLDER/INTERESTED PARTY COMMUNICATIONS

Communications may be addressed to Claire S. Grace, Vice President and Corporate Secretary, Weyerhaeuser Company, P. O. Box 9777, Federal Way, WA 98063-9777 marked to the attention of the board or any of its committees, the independent directors or individual directors. Communications also may be sent by email to CorporateSecretary@Weyerhaeuser.com.

ANNUAL MEETING ATTENDANCE

The directors are expected to attend the Company’s annual meetings, if possible. All of the directors attended the 2010 annual meeting except Mr. Murdy and Mr. Sinkfield.

DIRECTORS’ COMPENSATION

The following table shows the annual compensation of our non-employee directors for 2010, which consisted of annual retainer fees paid in cash, including amounts associated with chairing board committees, and retainer deferred stock unit awards that are payable only in cash. All values are reported in U.S. dollars.

Non-Employee Director Compensation Program

The board believes that the level of non-employee director compensation should be based on board and committee responsibilities and be competitive with comparable companies. In addition, the board believes that a significant portion of non-employee director compensation should align director interests with the long-term interests of shareholders. As a result, retainer amounts automatically deferred into stock equivalent units in the Fee Deferral Plan for Directors are not paid to a director until after the director’s retirement or other termination of service to the Company and then are valued based on the value of the Company’s common stock in the year the payment is made.

Non-employee directors, other than the chairman of the board, are compensated by:

Effective April 2010, the board elected an independent director as chairman of the board. The board determined that the non-employee chairman of the board receives an annual cash retainer of $300,000 of which $150,000 will be paid in retainer deferred stock unit awards.

Annual Board Retainer Cash Fees

In 2010, non-employee directors received a cash Annual Board Retainer Fee of $70,000 per year. Non-employee directors who served as chairs of committees received an additional retainer fee of $10,000. The Company does not pay additional fees for attending board or committee meetings. All retainer fees are paid annually, immediately following the annual shareholders’ meeting. Directors who are appointed to fill a vacancy on the board are paid a pro rata amount of the annual retainer immediately following the effective date of the director’s appointment.

The Company reimburses non-employee directors for actual travel and out-of-pocket expenses incurred in connection with their services. Compensation also is available for extended travel on board business at the request of the board or a committee of the board at the rate of $2,000 per day, including travel days and work days. Directors who also are employees of the Company do not receive compensation for their service on the board or any committees.

Deferral of Cash Compensation

Non-employee directors may elect to defer all or part of their cash compensation into an interest-bearing, cash-based account or as deferred common stock equivalent units (an unfunded stock unit account) under the Company’s Fee Deferral Plan for Directors. The number of deferred stock equivalent units is calculated by dividing the amount of the deferred fees by the median price per share of Weyerhaeuser stock as reported by The Wall Street Journal for the New York Stock Exchange Composite Transactions for the last 11 trading days of January of the year in which the fees are paid. Directors do not have the right to vote or transfer deferred stock units. Deferred stock equivalent units earn the equivalent of dividends, which are credited as additional deferred stock equivalent units. Deferred stock equivalent units are distributed in cash following the director’s retirement or other termination of service to the Company based on the value of the Company’s stock in the year the payment is made.

Retainer Stock Unit Awards

Each non-employee director who continues to serve as a director following each annual meeting is granted a retainer stock unit award, with the number of units equal to the number of shares of Weyerhaeuser stock that could be purchased with an aggregate of $70,000. The number of retainer stock units awarded is based on the amount of the deferred fees divided by the median price per share of Weyerhaeuser stock as reported by The Wall Street Journal for the New York Stock Exchange Composite Transactions for the last 11 trading days of January of the year in which the fees are paid. For the 2010 awards, the median value on the last 11 trading days in January 2010 was $41.56, which resulted in a total of 1684 retainer stock units awarded to each director who served for the entire year; and 3609 retainer stock units awarded to the chairman of the board. The retainer stock units are credited to the director’s account (an unfunded stock unit account) in the Company’s Fee Deferral Plan for Directors and are immediately vested. Directors do not have the right to vote or transfer retainer stock units. Retainer stock units earn the equivalent of dividends, which are credited as additional retainer stock units. Retainer stock units are distributed in cash following the director’s retirement or other termination of service to the Company based on the value of the Company’s stock in the year the payment is made.

The amount reported in the Stock Awards column for each director is the dollar value of the retainer stock units awarded in 2010, computed in

accordance with Financial Accounting Standards Board Accounting Standards Codification Topic718, which was calculated based on the per share Market Value of Weyerhaeuser stock on the date of grant. See Note 18 of Notes to Consolidated Financial Statements set forth in the Company’s Annual Report on Form 10-K for fiscal year 2010.

The number of aggregate deferred stock equivalent units accumulated in each director’s deferral account as of December 31, 2010 for all years of service as a director is listed below in the table describing beneficial ownership of the Company’s common shares. This number includes stock equivalent units accumulated from fees for service as a director that were automatically deferred into retainer stock units under the director’s compensation policy, from voluntary deferrals of cash compensation portion of director fees into stock equivalent units in the deferred compensation plan for directors and from additional deferred stock equivalent units credited as a result of dividend equivalents earned with respect to previously deferred stock equivalent units.

Director Compensation Review Practices

The Compensation Committee is responsible for annually reviewing the Company’s non-employee director compensation practices in relation to comparable companies. Any changes to be made to non-employee director compensation practices must be recommended by the Compensation Committee for approval by the full board.

BENEFICIAL OWNERSHIP OF COMMON SHARES

DIRECTORS AND EXECUTIVE OFFICERS

The following table shows as of January 10, 2011 the number of common shares of the Company that each director, each named executive officer and the

directors and executive officers as a group, have the power to vote or cause disposition of the shares. Percentages of total beneficial ownership have been calculated based upon the total number of common shares outstanding as of December 31, 2010.

OWNERS OF MORE THAN 5%

The following table shows the number of common shares held by persons known to the Company to beneficially own more than five percent of its outstanding common shares.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 requires the Company’s directors and certain of its officers to send reports of their ownership of Weyerhaeuser stock and of changes in such ownership to the Securities and Exchange Commission (the “SEC”) and the New York Stock Exchange. Based solely on the Company’s review of the copies of such reports it has received, the Company believes that all its directors and officers filed all such reports on a timely basis with respect to transactions during 2010.

COMPENSATION DISCUSSION & ANALYSIS (CD&A)

EXECUTIVE SUMMARY

The Compensation Committee continues to refine the Company’s executive compensation structure and process, consistent with evolving governance practices and reflecting shareholder views. Compensation and governance practices implemented in recent years include the following:

Weyerhaeuser uses a compensation approach for its named executive officers that is designed to achieve several key objectives, including:

To achieve these objectives, Weyerhaeuser uses a mix of base pay, incentive opportunities (short and long-term), and other benefits and rewards. The various components of the compensation program are intended to be competitive in the market and to enable the Company to attract and retain key talent, while concentrating a majority of the executives’ reward opportunities in at-risk incentive pay that requires performance against measurable objectives to achieve payouts. The design of the compensation program is intended to support the Company’s overall business objectives and to increase long-term shareholder value.

Weyerhaeuser has made significant changes to its asset portfolio in recent years and has decreased its emphasis on being an integrated forest products company to focus more on its core timberlands assets. As a result, the diversity of its asset portfolio decreased and the Company’s businesses have become increasingly dependent on the housing industry, which has faced unprecedented challenges in the last few years. Consequently, the Company incurred significant losses in 2008 and

2009. To address the Company’s poor financial performance, a number of facilities were closed or indefinitely curtailed, businesses were restructured, facilities and businesses were sold, the Company’s support functions were reorganized and business and function employees were laid off. In December 2009, the board of directors determined that electing to be taxed as a real estate investment trust (“REIT”) would be in the best interest of shareholders. During 2010, the Company completed the steps necessary for conversion to a REIT, including announcing in December its on-going dividend policy. The Company is now operating as a REIT and will elect to be taxed as a REIT when it files its federal tax returns for fiscal 2010.

Based on the Company’s commitment to deliver pay for performance and in light of the Company’s financial performance, from 2007 through 2009, no bonuses were paid to executives under the Company’s short-term incentive plan; long-term incentive grants in the form of performance shares did not pay out; salaries for executive officers were frozen in 2009 and the CEO did not accept an increase in his base salary again in 2010; and the Company’s matching contributions to the 401(k) plan were suspended until mid-2010. Significant numbers of long-term incentives granted to executive officers in the form of options remain “underwater,” meaning that the stock price is less than the exercise price of the options.

In relation to the shift in the Company’s businesses and in light of the very challenging economic environment faced by the Company’s businesses in the last few years, the Compensation Committee redesigned the Company’s annual and long-term incentive programs for its homebuilding subsidiaries in 2008 and the annual incentive program for its forest products businesses in 2009. The compensation programs were redesigned to be easier for employees to understand and to give employees a clearer view of the effect of their efforts in improving business performance on their compensation and to tie incentive compensation more clearly to the achievement of strategic goals. These programs are described in greater detail below. In 2010, the Compensation Committee reviewed and redesigned the Company’s long-term incentive program for its forest products businesses to provide a stronger linkage to pay for performance. The new long-term incentive program, which was effective for 2011 grants, provides that

50% of the value of the long-term incentive grants to executive officers will be in the form of performance shares. In 2010, the transition year for becoming a REIT, the Compensation Committee focused on retention of executive skills and keeping executive attention on share price appreciation through the granting of long-term incentives in the form of stock options and time-vested restricted share units. The Company continues to face significant challenges, but returned to profitability in 2010 and has positioned itself to take advantage of improvements in the economy and to improve its total shareholder returns.

OVERVIEW

Weyerhaeuser Company is one of the world’s largest forest products companies. In 2010, the Company had sales of $6.552 billion. It has offices or operations in 10 countries, and customers worldwide. Weyerhaeuser’s primary businesses include the growing and harvesting of timber; the manufacture, distribution and sale of forest products; and real estate construction and development. Additional information about Weyerhaeuser’s businesses and products is available at http://www.weyerhaeuser.com.

Compensation Program and Review Process

The Company’s current compensation program was developed by the Compensation Committee, working with its compensation consultant, Mercer. The Compensation Committee established competitive compensation principles designed to promote and reward improved Company performance. Following the implementation of the compensation program, the Compensation Committee has regularly assessed the program’s effectiveness and its success in achieving the Compensation Committee’s goals and clearly tying compensation to the achievement of strategic goals. As a result, the Compensation Committee approved a redesign of certain aspects of the compensation program for employees of its homebuilding subsidiaries, including one of its named executive officers, effective in 2009 and approved a redesign of the annual incentive program for employees of its forest products businesses, including the remaining named executive officers, effective in 2010.

In December 2009, the board of directors determined that electing to be taxed as a real estate investment trust (“REIT”) would be in the

best interest of shareholders. During 2010, the Company completed the steps necessary for conversion to a REIT, including announcing in December its on-going dividend policy. The Company is now operating as a REIT and will elect to be taxed as a REIT when it files its federal tax returns for fiscal 2010. The Compensation Committee has reviewed and redesigned the Company’s long-term incentive program to provide a stronger linkage to pay for performance and to be more consistent with a REIT structure. The compensation program used for 2011 decisions continued to use a mix of base pay, short- and long-term incentives and other benefits and rewards. However, it used a different peer group more relevant to the current size of the Company’s overall business and its structure as a REIT, and revised long-term incentives to better reinforce a pay-for-performance culture, while enhancing retention of key employees. A brief summary of the changes effective for 2011 grants is below. The remaining sections in this discussion describe 2010 compensation program and decisions.

In September 2010, to qualify to elect REIT status, the Company distributed $5.6 billion to its shareholders (the “Special Dividend”), which represented the Company’s aggregate earnings and profits since inception. The value of the Special Dividend was distributed 90% in the form of common stock and 10% in the form of cash. Under the terms of the Company’s Long-Term Incentive Plan, the Compensation Committee was required to adjust outstanding equity grants and the number of shares available for grant under the plan to reflect the Special Dividend. The adjustment factors are described in Note 18 to the Company’ financial statement. All share numbers included in this proxy statement are the adjusted numbers reflecting the Special Dividend.

The Redesigned Long-Term Incentive Program Effective 2011

The redesigned long-term incentive program that was effective for 2011 grants enhances the program’s ability to promote and reward improved performance of the Company. The long-term incentive program for executive officers of the forest products businesses, including the named executive officers, uses a mix of forms of equity, with 1/2 of the value of the award granted as performance shares, 1/4 of the value of the award granted as stock options and 1/4 of the value of

the award granted as time-vested restricted share units. This mix puts more compensation at risk for senior executives and provides for greater rewards if superior performance is generated.

A target number of performance shares were granted to the forestry business named executive officers in 2011. The number of performance shares actually earned will be based on the Company’s performance against cash flow metrics during 2011 adjusted up or down based on the Company’s two-year total shareholder return (“TSR”) relative to the S&P 500 during 2011 and 2012. Achievement of one-year cash flow goals will determine the initial number of performance shares earned and the Company’s relative TSR will modify the initial number of shares earned up or down by 20%. TSR will be measured over 2011 and 2012 based on the Company’s percentile rank compared to the other 499 companies included in the S&P 500. Use of these measures balances operational and market performance and ensures that performance against each measure has a significant effect on earned compensation. This mix focuses the executive on the Company’s strategic business goal of cash generation as well as the Company’s performance compared to a broad index of companies.

For grants in 2011, the cash flow target is $400 million. Achievement of $320 million in cash flow or 80% of the target will earn 50% of the target number of shares. A participant will not earn any of the target number of performance shares if the Company’s cash flow generation is below the threshold of $320 million. Achievement of the target metric for cash flow earns the target number of shares, with a maximum earned opportunity of one and one-half times the target number of shares for achievement of $480 million in cash flow or 120% of the target. The number of shares earned will be decreased by 20% if the Company’s relative TSR ranking over the two-year period is in the 25^th percentile or lower. No modification would occur if the Company’s relative TSR ranking is in the 50^th percentile. The number of shares earned will be increased by 20% if the Company’s relative TSR ranking is in the 75^th percentile or greater. The maximum number of shares that can be earned is capped at 150% of the target number of shares. Payout for performance between points would be linearly interpolated. At the end of the two-year performance period, 50% of the performance

shares are vested and released to the participant, with the remaining share units vesting 25% a year over the subsequent two-year period.

The 2011 compensation program and plans will be described in greater detail in the proxy statement reflecting 2011 compensation decisions. The following sections of this compensation discussion and analysis reflect the program in effect for 2010 compensation decisions.

COMPENSATION PHILOSOPHY AND PRINCIPLES

Weyerhaeuser’s compensation philosophy is to motivate and reward employees for performance that will result in superior financial results and create long-term value for shareholders. Weyerhaeuser’s compensation programs are designed to:

The following key compensation principles guided the design and administration of the Company’s overall compensation program in 2010:

This compensation program for executive officers is comprised of:

COMPENSATION PRINCIPLES AND PROCESSES

Weyerhaeuser’s compensation principles are supported through a number of policies, concepts and processes.

Total Compensation

To provide a competitive overall compensation and benefits package that is tied to creating shareholder value and supports the execution of its business strategies, Weyerhaeuser uses a range of components. The combination of the components and the amount of each component is influenced by the role of the person in the Company, market surveys, and the total value of all the compensation and benefits and perquisites available to the person. In general, the Company positions itself at the median for each of the different components of total pay so that total compensation for the CEO and the named executive officers is comparable to the Company’s peers. The Compensation Committee reviews a tally sheet of all compensation, benefits and perquisites provided to the CEO and the named executive officers primarily to confirm that the aggregate compensation recommended for the executive officer complies with this principle. For 2010, the total target compensation for the named executive officers was somewhat above market median for similarly situated executive officers in the competitive market as a result of the restructuring of the Company’s businesses in 2010 and the resulting change in the Company’s size and portfolio. Actual cash compensation received was at the median of the competitive market because payouts of short-term bonuses were somewhat below target. Overall long-term incentive values for regular annual grants were positioned at the median for the competitive market median awards. The special option grants positioned the named executive officers somewhat above market median in total compensation and enhance the focus on increasing shareholder value.

Performance Management

Weyerhaeuser’s policy is to provide rewards for the achievement of specific performance goals. The Company uses an annual Performance

Management Process (“PMP”) for its employees to

assess individual performance. In the PMP process, each employee, including each of the named executive officers, establishes his or her performance goals at the beginning of the year in consultation with the employee’s manager. These performance goals, against which executive performance is assessed multiple times during the year, include a broad spectrum of metrics, such as safety results for the business or function, financial and operating results, strategy, competitive performance diversity accomplishments, talent development, corporate responsibility, and customer value delivery. Key performance goals for 2010 were principally in the areas of: safety, financial performance and operating results, strategy, relative competitive performance, customer value delivery and diversity. At the end of the year, the employee’s performance is assessed against these multiple goals, which results in an aggregate ranking of “exceeds,” “achieves” or “below.” This overall ranking is one factor in decisions regarding compensation. For 2010 compensation decisions, each of the named executive officers was deemed to have performed at the level of “achieves” or above in relation to his or her goals.

Variable Pay at Risk

The percentage of an employee’s compensation opportunity that is fixed instead of variable is based primarily on the employee’s role in the Company. In general, employees with more ability to directly influence overall Company performance have a greater portion of their pay at risk through short- and long-term incentive programs. Executive officers with more responsibility for strategic and operating decisions have a greater percentage of their compensation opportunity allocated to long-term incentives. Typically, approximately 40% of target total compensation opportunity for these executive officers is in the form of long-term incentives. In 2010, 50% of target total compensation for Weyerhaeuser’s named executive officers was at risk and over 70% of the aggregate target incentive compensation was at risk based on the performance of the Company and the executive officer (see chart below). For 2011, the percentage of target incentive compensation at risk is 80%

Variable Pay at Risk

Forms of Long-Term Incentive Compensation

Weyerhaeuser has made significant changes in its asset portfolio in recent years, and has decreased its emphasis on being an integrated forest products company to focus on its core timberlands assets. As a result, the diversity of its asset portfolio has decreased and the Company’s businesses have become increasingly dependent on the housing industry, which has faced unprecedented challenges in the last few years. Consequently, the Company incurred significant losses in 2008 and 2009. During 2010, the board of directors completed its analysis of the Company’s strategy and structure and determined that electing to be taxed as a real estate investment trust (“REIT”) would be in the best interest of shareholders. The Company is now operating as a REIT and intends to elect to be taxed as a REIT when it files it federal tax return for fiscal 2010. The Compensation Committee has reviewed and redesigned the Company’s long-term incentive program to be more consistent with a REIT structure and to provide a stronger linkage of pay for performance. The new long-term incentive plan was effective for grants made in 2011. In 2010, the year the Company transitioned to a REIT, the Compensation Committee focused on retention of executive skills and keeping executive attention on share appreciation through the granting of long-term incentives in the form of stock options and time-vested restricted share units. In 2010, long-term incentive participants who are managers in the forest products businesses, including named executive officers, received 50% of the value of the award granted as options and 50% of the value of the award granted as restricted stock

units. To recognize the differences between the forest products business and the homebuilding subsidiaries, senior management of WRECO, including a named executive officer who became the leader of the Wood Products segment in 2010, received stock options and participated in a cash long-term incentive plan more aligned with the direct financial results of the homebuilding subsidiaries.

Market Positioning

The Company establishes competitive compensation levels based on market reviews and then designs its pay program to focus executive officers on meeting Company performance objectives. Weyerhaeuser’s strategy is to set total compensation and benefit levels at the median of market pay and benefit levels. Each component of total compensation and other benefits is intended to be consistent with market practices as established by the peer group outlined below to help the Company attract and retain executives with the skills needed in Weyerhaeuser’s businesses.

Weyerhaeuser regularly reviews market compensation levels to determine whether total compensation for its employees remains in the targeted median pay range and makes adjustments when needed. This assessment includes evaluation of base salary, annual incentive opportunities and long-term incentives. In addition, rewards such as health benefits and retirement programs and perquisites regularly are assessed relative to the market. The Company also reviews the competitive performance of its peers to establish performance targets for incentive plans and to assess appropriate payout levels for performance. (See “Compensation Components” for details.)

Peer Group

For compensation decisions made in 2010, the Compensation Committee used a new peer group. Consolidation in the forest products industry and recent changes in the Company’s portfolio of businesses have decreased the number of direct peers in the sector. Because of this and the Company’s decision to elect to be taxed as a REIT for fiscal 2010, the Compensation Committee selected a group of companies for comparison of executive officer compensation comprised of a

broad group of basic materials companies and REITs. The peer group used for 2010 compensation decisions consisted of the following companies:

In addition to reviewing the current pay practices of these peers, the Compensation Committee reviews various pay surveys, including surveys of pay practices of forest products companies and comparably-sized manufacturing companies and general industry data for similar size companies. The peer group and survey data generally is weighted into a market composite based on equal weighting between the data sources, though the Compensation Committee may review the data separately to understand pay differences, if any, by industry or business segment and to assess whether any changes in pay data from year to year reflect true market trends.

NAMED EXECUTIVE OFFICERS

For purposes of this Compensation Discussion and Analysis, the Company’s named executive officers are the following persons:

COMPENSATION COMPONENTS—DETERMINATION OF COMPENSATION

Base Salary

Salaries are provided to employees as compensation for basic services to the Company and to meet the objective of attracting and retaining the talent needed to run the business. Salaries provide a consistent cash flow to employees assuming acceptable levels of performance and ongoing employment. To control fixed costs while still enabling the Company to attract critical talent, Weyerhaeuser targets base salaries at the median of market levels among the basic materials companies described above. Increases in salaries generally are based on the market level salary for the role in which the executive serves, individual PMP assessments, overall Company budgets and specific talent needs. Base salaries for the named executive officers in 2010 are noted in the following table. Because of the Company’s continued challenges and despite the fact that the Compensation Committee viewed Dan Fulton’s performance as very strong, Dan Fulton asked the Compensation Committee to not recommend an increase in his base salary to the board. The Compensation Committee and the board reluctantly agreed.

These pay levels generally positioned the executive officers slightly above the median of the market for 2010 except for Dan Fulton whose compensation is below median. The above-market positioning is due to the reduction in the size of the Company following recent portfolio changes and the change in the peer group. However compensation has

been structured to generally position the executive officers at median for total compensation.

Short-Term Incentive Plans

The Company has two short-term incentive plans, both of which are cash bonus incentive plans designed to focus executive officers and other participants on maximizing efficiency and generating strong financial performance. Salaried employees of the corporate and forest products segments, including executive officers, participate in the Annual Incentive Plan (“AIP”). Employees of the Company real estate development subsidiaries, including the WRECO president, participate in the WRECO Short-Term Incentive Plan (“STIP”). Each position in the Company is assigned a target bonus opportunity under the employee’s respective short-term incentive plan reflecting competitive practices in the market for similar positions. Both the AIP and the STIP are funded based on achieving pre-established financial performance targets, though the principal financial performance metric used in each plan is different because each plan uses the standard performance metric typically used by each of the industries. The AIP is funded based on the Company’s return on net asset (“RONA”) performance. Funding for the STIP is based on return on investment (“ROI”). The plans are funded based partly on the performance of each business against the RONA or ROI targets and partly against targets set annually by the Compensation Committee. Bonuses are awarded to individual employees based on the level of plan funding and the person’s performance against his or her PMP goals. In general, executive officers with a PMP rating of “achieves” receive an award at or near their funding-adjusted individual target level.

AIP Performance Measure and Plan Mechanics

The AIP is an annual cash bonus plan focused on the performance of the businesses in the Company’s Timberlands, Wood Products and Cellulose Fibers segments. The Company’s businesses tend to be cyclical and influenced by separate factors, highlighting the need to view each of the Company’s businesses separately. The redesigned AIP is easier for employees to understand and gives employees a clearer view of the effect of their efforts in improving business performance on their compensation.

80% of the funding is based on the absolute RONA of the businesses for the fiscal year. RONA is defined as earnings before interest and tax (“EBIT”) divided by average net assets. For purposes of determining RONA, net assets equals total assets less cash and short-term investments, accounts payable and accrued liabilities other than income taxes payable. RONA is used as the performance measure given its strong link over time to total shareholder return in the basic materials sector and Weyerhaeuser. The use of this measure is intended to focus participants on generating profitability, both through increasing revenues and controlling costs. In addition, use of this measure reinforces the importance of making capital investments that will improve the Company’s overall returns. The Compensation Committee has discretion to adjust the earnings used in the RONA calculation for special items as appropriate. In 2010 gains from sales of facilities, operations and property, as well as charges for asset impairments and closures and restructurings, were excluded.

20% of the funding for the AIP is based on the performance of the businesses against certain business metrics approved in advance by the Compensation Committee, such as competitive performance, financial measures and performance against strategic goals (the “business scorecard”). Funding for performance against the business scorecard metrics is capped at target or below by various factors, including the failure to achieve profitability and the safety performance of the business.

Employees of businesses in the Forest Products segments, including the executive officer leading the segment and any staff function employees who work only in that business’s facilities or substantially in support of that business receive bonuses based on the performance of the business against its RONA targets and business scorecard metrics, modified by the performance of the individual employee against his or her performance goals. Other staff function employees receive annual bonuses based on the actual funding of the plans for the Timberlands, Wood Products, Cellulose Fibers and WRECO segments modified by the performance of the individual employee against his or her performance goals. This funding mechanism is designed to focus support staff efforts on helping all the businesses to be successful.

AIP Performance Target Setting

Business performance targets required to be met by the Forest Products businesses to fund 80% of their AIP are established by the Compensation Committee at the beginning of each plan year and are not subject to adjustment by Company management. The Compensation Committee determines the level of RONA performance necessary for funding the threshold, target and maximum levels, which represent 20%, 100% and 200% target funding levels. If the segment’s RONA performance is below the threshold, the funding level for this portion of the AIP is 0%.

These targets are established based on a variety of factors, including the level required to fund the Company’s dividend for the threshold; the cost of capital for each segment, near-term outlook and competitive position for target; and internal benchmarks of outstanding performance for the maximum. For 2010, the Compensation Committee established 6% RONA as the threshold funding level for each of the segments. The threshold was set at a level below their costs of capital as part of the Company’s variable pay program based on the fact that Weyerhaeuser and its peers have generated results above and below the cost of capital historically, and because providing some level of payouts in either scenario is competitive practice for the Company’s peers. This threshold level allows minimum funding after certain minimum requirements of funding shareholder dividends have been achieved. For Timberlands, target was set at 9%, 1.5 times target was set at 12% and maximum was set at 17% RONA. For the Wood Products and Cellulose Fibers businesses, the Compensation Committee set target funding level at 10%, 1.5 times target was set at 15% for and maximum was set at 20%. Different levels were used for funding at target or above for the Timberlands sector because of the long-term nature of the Timberlands asset, the nature of its returns and a difference in its cost of capital.

Funding under the AIP for the CEO is based 80% on achievement of Company RONA and 20% on performance against goals approved by the board of directors. The Company RONA threshold for funding for the CEO was set at 6%, target funding level is 10% and maximum funding level is 17% RONA. For 2010, actual Company RONA was 5.9%, so the RONA portion of the AIP did not fund for the CEO. However, the CEO’s performance against his

performance goals was considered to be very strong and resulted in the board awarding him a bonus under the AIP of $600,000. Funding for the Executive Vice President – Forest Products is based 50% on the actual funding of Wood Products, 25% on actual funding of Timberlands and 25% on actual funding of Cellulose Fibers.

WRECO STIP

Employees of the Company’s homebuilding subsidiaries, including the WRECO president, participate in the STIP and are not eligible to participate in any other annual incentive plan offered by the Company. Funding for the STIP is based 60% on WRECO’s absolute ROI, 20% on the competitive ROI ranking and 20% based on performance against a set of business metrics. ROI, which is the financial performance metric typically used in the real estate industry, is defined as WRECO annual earnings before interest expense, capitalized interest amortized to cost of sales and taxes, divided by a five-quarter average of Invested Capital. Invested Capital is defined as total assets, less non-interest bearing liabilities and capitalized interest. ROI is used as the measure to focus participants on achieving top quartile competitive performance.

The ROI targets established for each plan year are approved by the Company’s CEO and the Compensation Committee. The minimum ROI threshold to fund the absolute and relative competitive ranking components of the STIP in 2010 was 6%. This level was chosen because it represented top quartile performance among public homebuilders and was aligned with minimum funding levels in the AIP. Target funding was set at 14%, which approximates WRECO’s cost of capital. The threshold competitive ROI ranking required to fund that component of the STIP in 2010 was a median competitive ranking. The business metrics used for 2010 funding focused on pre-tax earnings and cash generation. The resulting funding multiple from all components of the plan may not exceed 500% of target.

WRECO STIP Performance Target Setting and Plan Mechanics

At the beginning of the year, STIP participants are assigned a target bonus that reflects competitive practices in the market for similar positions. Bonus opportunities range from 0% to 500% of the target incentive value based on the participant’s

performance against the performance metrics with final awards approved by the Company CEO and the Compensation Committee. Award amounts in excess of 300% of target are automatically deferred for a minimum of two years. The Compensation Committee may recover reasonable amounts from this holdback amount if appropriate due to a restatement of income for the plan period or a material adjustment to income for the plan period in subsequent years. For 2010, absolute ROI was above threshold, competitive ROI ranking was in the top quartile and performance against business metrics exceeded threshold performance levels. The resulting funding factor was 103.4% of target bonus and funded an award for the WRECO President, who became the SVP Wood Products in October 2010, as outlined below.

Bonus Opportunities Under the AIP and STIP

At the beginning of the year, each position in the Company, including executive positions, was assigned a target bonus opportunity that reflected competitive practices in the market for similar positions. Targets for the named executive officers ranged from 75% to 125% of base pay. Payment of target bonus amounts was not guaranteed, but had to be earned based on the funding processes described for each plan above. The opportunity for each person ranged from 0% to 200% of the target incentive value under the AIP and 0% to 500% of the target incentive value in the STIP. Targets set for the CEO and the named executive officers were

based on competitive market practices and designed to focus the executive on the goal of improved operating performance.

Bonus Allocation Process

At the end of each year, the Compensation Committee approves the funding for the bonus based on the performance of each business against its pre-determined financial targets and business scorecard metrics. The bonus opportunities for executive officers are adjusted up or down from each officer’s target opportunity based on the level of funding achieved (e.g. 50% funding would reduce an officer’s target opportunity by half). Funded awards are allocated to executive officers based on each officer’s PMP rating. These ratings are established based on a qualitative and quantitative assessment of performance against the officer’s pre-established goals (see “Determination of Compensation – Performance Management”) and other individual performance criteria. In general, executive officers with a PMP rating of “achieves” receive an annual incentive award at or near their funding-adjusted individual target level. Similarly, executive officers with an “exceeds” rating receive an annual incentive award greater than their individual funding-adjusted target level. Those with a “below” rating receive less than their funding-adjusted target incentive opportunity. For 2010, each of the named executive officers was deemed to have performed at the level of achieves or above in relation to his or her goals.

The board of directors determines the bonus to be paid to the CEO based on the recommendation of the Compensation Committee. The Compensation Committee determines the bonuses to be paid to executive officers based on recommendations by the chief executive officer, executive vice president-Forest Products, and chief human resource officer. For 2010, AIP and STIP targets and bonus awards were as follows:

Bonuses paid to Mr. Fulton, Ms. Bedient and Mr. Chandrasekaran were somewhat above target levels. Mr. Fulton’s bonus was in recognition of superior performance against his PMP performance goals, successful preparation for conversion to a REIT, financial strategy execution, management of the Company’s non-strategic assets, significant reductions in the Company’s SG&A costs, and his leadership of the Company during extremely challenging business conditions. Ms. Bedient’s bonus was above target in recognition of her performance in developing the Company’s financial response to the recession, leadership in restructuring of the Company’s support staff, sponsoring the restructuring of the Company and preparing for REIT conversion, maintaining good relations with investors, leading the review of the Company’s pay and benefit structure, political and community leadership and outside professional activities. Mr. Chandrasekaran’s bonus was above target in recognition of his performance in leading the Company’s safety programs, successful leadership of Cellulose Fibers business and operations, and new business development.

Long-Term Incentive Compensation

Each year, target long-term incentive award opportunities are set for each of the Company’s senior officers, including the named executive officers. Target award opportunities generally are set at the median of peer companies. Grants of long-term incentives are not guaranteed and must be earned each year. These opportunities may be increased or decreased based on the executive officer’s PMP rating, using the criteria described in “Determination of Compensation – Performance Management.” Participants do not receive an equity grant if performance against their PMP performance goals does not meet minimum standards. In general, a PMP rating of “achieves objectives” will result in long-term incentive award at or near the target level opportunity. A rating of “exceeds objectives” may result in awards of up to 200% of an officer’s target opportunity. A rating of “below objectives” will result in below-target awards. For 2010, each of the named executive officers was deemed to have performed at the level of achieves or above in relation to his or her goals. The Compensation Committee also considers competitive market pressures, expected future contributions to the Company and retention concerns in determining the final grants to executive officers.

To fund the Company’s long-term compensation programs, the Compensation Committee establishes an equity pool available for grant in any given year. The pool level is set at the median level of competitive practices within the forest products and broader basic materials industries. For grants in 2010, the Compensation Committee established a pool of 3,377,129 shares (on an adjusted basis) or 0.63% of outstanding common shares to be available for grants of options and restricted stock units to all participants, including any special recognition grants. The Compensation Committee targets an annual share dilution rate of less than 2%. In addition, the Compensation Committee considers the accounting costs reflected in the Company’s financial statements when establishing the forms of equity to be granted and the size of the overall pool. The forms of equity selected are intended to be cost-efficient, and the overall cost must be within the acceptable levels for internal budgets.

In 2010, due to challenges associated with business conditions, significant changes in the Company’s portfolio of businesses and the board’s strategic consideration of whether to elect to be taxed as a REIT, as described above under “Compensation Principles and Processes – Forms of Long-Term Incentive Compensation,” the Compensation Committee granted long-term incentives to executive officers in the form of options and time-vested restricted stock.

Weyerhaeuser makes its annual long-term incentive grants in February of each year at the regular meeting of the Compensation Committee of the board, which typically is within one to two weeks after the Company publicly has released a report of its earnings. The Compensation Committee meeting date is the effective grant date for equity grants to all participants. For executive officers who are hired during the year, the Compensation Committee recommends compensation levels to the board in connection with the board’s appointment of the executive and approves equity grants for the executive that are effective upon the officer’s start date. Larry Burrows was awarded a grant under the WRECO LTIP in February 2010, but the grant was cancelled when he accepted the position of senior vice president, Wood Products in October 2010, and was no longer eligible to participate in the WRECO LTIP. At that time the Compensation Committee

awarded him a special grant of options as his initial grant under the Company’s Long-Term Incentive Plan.

Total Long-Term Incentive Compensation Grants

The Compensation Committee established a target level of long-term incentives for each executive officer position based on the median of competitive market long-term incentive levels. For 2010, the target long-term incentive values (as a percent of base salary) for the named executive officers were:

Stock Options

Stock options are issued at 100% of the fair market value (calculated as the average of the high and low price on the date of grant) to assure that executives will receive a benefit only when the stock price increases. Awards granted in 2010 to executive officers, including the named executive officers, generally vest 25% a year over four years, and, if not exercised, expire in a maximum of 10 years (or earlier in the case of termination of employment). In the event of normal retirement, the vested portion of outstanding 2010 awards may be exercised during the remaining term of the grant to a maximum of 10 years from the date of termination. In the event of early retirement, vested awards may be exercised during the remaining term of the grant to a maximum of five years from the date of termination. The number of stock options granted to the named executive officers was based on their performance compared to their PMP performance goals as noted above. In 2010, the following awards of stock options were granted to the named executive officers:

The stock options granted in 2010 to the named executive officers were generally at or above target for the respective position. Mr. Fulton was granted 398,119 options in 2010 in recognition of superior performance against his PMP performance goals, successful preparation for conversion to a REIT, financial strategy execution, management of the Company’s non-strategic assets, significant reductions in the Company’s SG&A costs, and his leadership of the Company during extremely challenging business conditions. Ms. Bedient’s compensation grant of 102,648 options was above target in recognition of her performance in developing the Company’s financial response to the recession, leadership in restructuring of the Company’s support staff, sponsoring the restructuring of the Company and preparing for REIT conversion, maintaining good relations with investors, leading the review of the Company’s pay and benefit structure, political and community leadership and outside professional activities. She also received a special grant of 72,643 options for her performance, retention, and expected future contributions to the Company. Mr. Burrows’ compensation grant of 95,548 options was above target in recognition of his strong leadership of WRECO during an exceptionally challenging economy, excellent safety record for both WRECO and its contractors, high level of customer satisfaction, strong cash flow generation, assistance in restructuring the Company’s incentive plans, successful restructuring of several WRECO subsidiaries, active participation with investors, political and community leadership and leadership of efforts to restructure the asset portfolio of the homebuilding subsidiaries. In addition, he was awarded a special grant of 15,650 options when he accepted the role of senior vice president, Wood Products in October 2010 and his 2010 WRECO LTIP grant was cancelled. Mr. Chandrasekaran’s compensation grant of 62,106 options was above target in recognition of his performance in leading the Company’s safety programs, successful leadership of Cellulose Fibers business and operations, and new business development. He also received a special retention grant of 41,404 options. Mr. Gideon’s compensation grant of 113,862 options was above target in recognition of his safety leadership, improvements in iLevel business and operations during a significantly challenging period, work to consolidate the leadership of the forest products segments, work on the restructuring of Company pay and benefits,

sponsoring the rationalization of the Company’s information technology and Timberlands expertise. He also received a special retention grant of 126,124 options.

Restricted Stock Awards

In 2010, the Company awarded 50% of the value of the long-term incentive compensation granted to corporate executive officers and forest products business leaders in the form of restricted stock units. To align the award with share price appreciation, vested awards are delivered to executives in shares with the value of the award contingent upon the price of the Company’s common stock when the shares are sold. Restricted stock units granted in 2010 cease to vest and are forfeited upon termination. The number of restricted stock units granted to the named executive officers was at or slightly above target for the respective position based on their performance compared to their PMP performance goals as noted above in “Stock Options.” The Compensation Committee does not use a specific formula to determine the PMP rating. Larry Burrows also received a special grant of 4,695 restricted stock units when he accepted the role of senior vice president, Wood Products in October 2010 and his WRECO LTIP grant was cancelled.

In 2010, the following awards were granted to the named executive officers who are leaders of the forest product businesses, as well as the CEO and CFO.

Other Benefits

All U.S. and Canadian salaried employees, including executive officers, are eligible for: a defined benefit retirement or pension plan, a defined contribution retirement plan, health and dental coverage, Company-paid term life insurance, disability insurance, paid time off and paid holidays. These rewards are designed to be competitive with overall market practices and are in place to attract and retain the talent needed in the business. In addition, officers may be eligible to participate in

the supplemental retirement plan and deferred compensation plan and to receive other benefits described below.

Supplemental Retirement Plan

Executives and other highly-paid officers in the U.S. are eligible to participate in the Supplemental Retirement Plan (the “Supplemental Plan”). The Supplemental Plan is provided because it is a competitive practice within the basic materials industry. Supplemental Plan benefits are paid outside the Weyerhaeuser Pension Plan (the “Plan”) from the general funds of the Company. Consistent with general market practices, these benefits are determined based on compensation paid in the five consecutive years when the officer was paid the highest total compensation during the 10 calendar years before his or her retirement. Total compensation means base salary plus any award under the Company’s eligible annual incentive compensation plans, limited to one times base pay. This amount is multiplied by the formula for determining salaried plan benefits under the Plan. The Compensation Committee believes that the Company should provide competitive retirement benefits linked to overall Company performance through the Supplemental Plan funding mechanism. Details of the plan benefits and the amounts accrued to each named executive officer are found in the Pension Benefits Table.

Deferred Compensation

Selected high-level employees, including executive officers, also are eligible to participate in a deferral plan. The deferral plan provides the opportunity to defer up to 50% of base salary and up to 100% of cash bonuses into an interest-bearing account for payment at a future date. This plan is provided to be competitive in the market for executive talent, and to provide executives with a tax-efficient alternative for receiving earnings at a nominal cost to the Company. The interest earned for deferred compensation is determined each year by the Compensation Committee. The current interest rate formula is the average of 90-day Treasury bill rates over the prior year plus 3%. The 2010 rate of 3.13% is not considered to be a preferential return when compared to the applicable long-term federal rate.

In addition, under the deferral program, eligible participants, including executive officers, can choose to defer all or a portion of any cash bonus into a deferral account denominated in Weyerhaeuser common stock equivalent units. The Company

applies a 15% premium to the deferred amounts if payment is delayed for at least five years. The value of the deferred account grows or declines based on the performance of Weyerhaeuser stock (plus dividends). The purpose of the program is to further align executive interests with those of shareholders by providing an incentive linked to the performance of Weyerhaeuser stock. 2010 contributions and year-end account balances can be found in the Non Qualified Deferred Compensation table.

Additional Benefits

Another benefit available to certain Company officers, including executive officers, is additional company-paid life insurance. In addition, the Company has corporate memberships in two clubs that are made available to various officers, including executive officers, for business entertaining only. The Company does not provide vehicles for personal use or personal travel for executives on Company aircraft.

SUPPLEMENTARY COMPENSATION POLICIES

Weyerhaeuser uses additional policies to ensure that the overall compensation structure is responsive to shareholder interests and competitive with the market, including stock ownership requirements.

Stock Ownership Requirements

Stock ownership requirements for executive officers have been in place since 1996. Each executive officer is required to acquire over a five-year period after becoming an executive officer a multiple of his or her base salary in shares of Weyerhaeuser stock. Minimum ownership levels are based on the executive’s salary grade and range from one to three times base salary. The CEO is required to hold stock valued at three times his base salary. The named executive officers are required to hold stock valued at two times each of their base salaries. The ownership requirement may be satisfied by direct ownership of common shares, the value of amounts deferred into a stock equivalent account (through the voluntary deferral program described above) and shares of Company stock held in the Company’s 401(k) plan. As a result of the decline in the value of the company’s stock price in recent years, as of February 18, 2011, Mr. Fulton and Ms. Bedient were in compliance with the ownership requirements. Mr. Chandrasekaran and Mr. Burrows have not been executive officers for five years.

OTHER FACTORS AFFECTING COMPENSATION

Limitations on Deductibility of Compensation

Section 162(m) of the Internal Revenue Code generally limits the tax deductibility of compensation paid by a public company to its CEO and certain other highly compensated executive officers to $1 million in the year the compensation becomes taxable to the executive. There is an exception to the limit on deductibility for performance-based compensation that meets certain requirements.

In establishing total compensation for the CEO and the named executive officers, the Compensation Committee considered the effect of Section 162(m) of the Internal Revenue Code. However, the Company believes that it is important to preserve flexibility in administering compensation programs in a manner designed to attract, retain and reward high-performing executives or promote varying corporate goals. Accordingly, the Company has not adopted a policy that all compensation must qualify as deductible under Section 162(m). Amounts paid under any of the Company’s compensation programs, including salaries and annual incentive plan bonuses may not qualify under the IRS rules as compensation excluded from the limitation on deductibility. Weyerhaeuser has a salary and deferral plan that permits compensation deferred under the plan to be exempt from the limit on tax deductibility.

For individual tax purposes, the Company typically withholds shares to cover taxes resulting from vesting of performance share awards and restricted stock awards.

Change in Control Agreements

The Company has entered into change in control agreements with each of its executive officers. The Compensation Committee believes that change in control policies are an important element of the executive compensation program, support shareholder value creation and are necessary to attract and retain senior talent in a competitive market. Because the agreements give the executive officers reasonable assurance of transitional employment support, the Compensation Committee believes executive officers are able to maintain a more balanced, shareholder-focused approach to change in control situations. The Compensation Committee believes it is appropriate to have such

agreements provided the agreements are subject to renewal and accordingly, each of the severance agreements generally expires after three years. The Compensation Committee periodically reviews the benefits provided under the agreements to ensure that they serve the Company’s interests in retaining these key executives, are consistent with market practice and are reasonable.

These agreements effective during 2010 provided for specified payments and other benefits if the officer’s employment was terminated by the Company or its successor during the period beginning on the effective date of a change in control of the Company and ending 24 months after a change in control. Change in control payments are not made if the termination is for cause, retirement, disability or death. Change in control payments also may be required if the officer leaves voluntarily because of significant changes in the officer’s circumstances following the change in control. See the description of the specific factors that would result in a change in control payment and the amounts that can be received in connection with a change in control in “Potential Payments Upon Termination or Change in Control” below. The changes triggering a change in control payment and the amounts paid are intended to give the executive officers reasonable assurance of a long-term employment opportunity, enable them to have a balanced perspective in making overall business decisions, and be competitive within overall market practices.

In addition, the Company’s long-term incentive plans provide that in the event officer is terminated during the period beginning the effective date of a change in control and ending 24 months after a change in control of the Company, all outstanding options held by the officer become exercisable and restricted stock units are vested and released for sale. The accelerated vesting and payout of equity grants in the event of a change in control are intended to allow the executives to recognize the value of their contributions to the Company and not affect management decisions following termination.

Severance Agreements

The Company has severance agreements with each of its executive officers. Under these agreements, the executive receives severance benefits upon termination unless the termination is for cause, is a result of the Company’s mandatory retirement

policy, is because of the death or disability of the executive or is because the executive leaves or retires voluntarily. The specific amounts that executive officers would receive as severance payments are described in “Potential Payments Upon Termination or Change in Control” below. The Compensation Committee believes that severance policies are an essential component of the executive compensation program and are necessary to attract and retain senior talent in a competitive market. The Compensation Committee believes it is appropriate to have such agreements provided the agreements are subject to renewal and accordingly, each of the severance agreements expires after a limited term. The Compensation Committee periodically reviews the benefits provided under the agreements to ensure that they serve the Company’s interests in retaining these key executives, are consistent with market practice and are reasonable.

Pre-Set Diversification Plans

Weyerhaeuser and the Compensation Committee have authorized the Company’s executive officers to enter into pre-set diversification plans established according to Section 10b5-1 of the Securities Exchange Act with an independent broker-dealer. These plans include specific instructions for the broker to exercise options or sell stock on behalf of the officer if the Company’s stock price reaches a specified level or certain events occur. The officer no longer has control over the decision to exercise or sell the securities in the plan. The purpose of such plans is to enable executive officers to recognize the value of their compensation and diversify their holdings of Company stock during periods in which the officer would be unable to buy or sell Company stock because important information about the Company had not been publicly released. Whenever Company executive officers establish such plans they are publicly disclosed in a current report to the SEC. As of January 6, 2011, none of the Company’s executive officers had such a plan.

COMPENSATION COMMITTEE

The Compensation Committee of the board of directors is comprised entirely of directors who are not employees of the Company and who are independent within the meaning of the listing requirements of the New York Stock Exchange.

The Compensation Committee is responsible for reviewing and approving:

The Compensation Committee’s compensation decisions are based on these factors:

In addition, the Compensation Committee reviews and recommends to the board compensation for serving as a director.

The Compensation Committee currently retains Mercer to advise the Committee on compensation strategy, plan design and executive compensation levels. Mercer also advises the Committee on compensation practices for directors. Weyerhaeuser’s human resources organization serves as the management liaison to the Committee and provides additional counsel, data and analysis as requested by the Committee.

The Compensation Committee formulates an annual agenda for its activity and reviews it periodically. The agenda is designed to cover necessary regular approvals as well as special topics. As part of its agenda, the Committee regularly reviews market

trends, changes in competitive practices, and alignment of the Company’s compensation programs with the strategy and needs of the business.

The Compensation Committee Charter includes an overview of the membership, purpose, goals and responsibilities, structure and operations of the Committee, and can be found on the Company’s website at www.weyerhaeuser.com under “Company” at the top of the page, “Investors,” and then under the “Governance” link. Paper copies may be obtained by written request to Claire S. Grace, Vice President and Corporate Secretary, Weyerhaeuser Company, P.O. Box 9777, Federal Way, WA 98063-9777 or by email at CorporateSecretary@Weyerhaeuser.com

RELATIONSHIPS WITH COMPENSATION COMMITTEE CONSULTANT

The Compensation Committee has the sole authority from the board of directors for the appointment, compensation and oversight of the Company’s outside compensation consultant. The Committee has retained Mercer, a wholly-owned subsidiary of Marsh & McLennan Companies, Inc. (“MMC”), as its consultant to assist the Committee with its responsibilities related to the Company’s executive and board of director compensation programs. Mercer’s fees for executive compensation consulting to the Committee in fiscal year 2010 were $185,878. The executive compensation services provided include assisting in defining the Company’s executive compensation strategy, providing market benchmark information, supporting the design of incentive compensation plans, advising on the competitiveness of board of director compensation, and providing regulatory and governance guidance.

During the fiscal year, Mercer and its MMC affiliates were retained by Company management to provide services unrelated to executive compensation, including insurance brokerage and actuarial services for the Company’s pension plans. The aggregate fees paid for those other services in fiscal 2010 were $1,817,971. The Committee did not review or approve the other services provided by Mercer and its affiliates to the Company, as those services were approved by management in the normal course of business. Based on policies and procedures implemented by the Committee and by Mercer to ensure the objectivity of Mercer’s

individual executive compensation consultant, the Committee believes that the consulting advice it receives from Mercer is objective and not influenced by Mercer’s or its affiliates’ other relationships with the Company.

COMPENSATION COMMITTEE REPORT

The Compensation Committee acts on behalf of the board of directors to establish and oversee the Company’s executive compensation program in a manner that serves the interests of Weyerhaeuser and its shareholders. For a discussion of the Compensation Committee’s policies and procedures, see “Compensation Committee” above.

Management of the Company has prepared the Compensation Discussion and Analysis of the compensation program for the named executive officers in the Summary Compensation Table. The Compensation Committee has reviewed and discussed with management the Compensation Discussion and Analysis included in this proxy statement. Based on this review and discussions, the Committee recommended to the board of directors that the Compensation Discussion and Analysis be included in the proxy statement for the Company’s 2011 annual meeting of shareholders.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Ms. Cafaro, Mr. Kieckhefer, Mr. Murdy and Ms. Williams served as members of the Compensation Committee during 2010. None of the members of the Compensation Committee was an officer of the Company or any of its subsidiaries during 2010 or any prior period. No executive officer of the Company served as a member of the compensation committee or as a director of any company where an executive officer of such company is a member of the Compensation Committee or is a director of the Company.

AUDIT COMMITTEE REPORT

The Audit Committee is comprised of independent directors as defined by the rules of the New York Stock Exchange and acts under a written charter. The current charter for the Committee can be found on the Company’s website at www.weyerhaeuser.com under “Company” at the top of the page, “Investors,” and then under the “Governance” link. If you would like a paper copy, you may request one by writing to Claire S. Grace, Vice President and Corporate Secretary, Weyerhaeuser Company, P.O. Box 9777, Federal Way, WA 98063-9777 or by sending an email to CorporateSecretary@Weyerhaeuser.com.

Management is responsible for the Company’s internal controls and the financial reporting process. KPMG LLP is the Company’s independent registered public accounting firm and is responsible for performing an independent audit of the Company’s consolidated financial statements in accordance with generally accepted auditing standards and for issuing audit reports on the consolidated financial statements and the assessment of the effectiveness of internal controls over financial reporting. The Committee’s responsibility is to monitor and oversee these processes on behalf of the board of directors.

In this context, the Committee has discussed with KPMG LLP the matters required to be discussed by Statement on Auditing Standards No. 61, Communications with Audit Committees, as amended. In addition, the Committee has received the written disclosures and the letter from the independent auditors required by Independence Standards Board Standard No. 1 and has reviewed, evaluated and discussed with that firm the written report and its independence from the Company.

The Committee discussed with the Company’s internal and independent auditors the overall scope and plans for their respective audits. The Committee meets with the internal and independent auditors, with and without management present, to discuss the results of their examinations, the evaluations of the Company’s internal controls and the overall quality of the Company’s financial reporting. The Committee also has reviewed and discussed the audited financial statements with management.

Based on the reviews and discussions described above, the Committee recommended to the board of directors that the audited financial statements and assessment of internal controls over financial reporting be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010. The Committee has selected KPMG LLP as the Company’s independent registered public accounting firm for 2011.

REVIEW, APPROVAL OR RATIFICATION OF TRANSACTIONS WITH RELATED PERSONS

POLICY

The board of directors recognizes that related party transactions can present a heightened risk of potential or actual conflicts of interest and may create the appearance that Company decisions are based on considerations other than the best interests of the Company and its shareholders. As a result, the board prefers to avoid related party transactions. However, the board recognizes that there are situations where related party transactions may be in, or may not be inconsistent with, the best interests of the Company and its shareholders. For example, this would be true if the Company would be able to obtain products or services of a nature, quality or quantity on terms that are not readily available from other sources, or when the Company provides products or services to related persons on an arm’s-length basis and on the same kind of terms provided to unrelated third parties. As a result, the board has delegated to the Audit Committee the responsibility to review related party transactions. The committee has the authority to approve a related party transaction if the committee determines that the transaction is on terms that are not inconsistent with the best interest of the Company and its shareholders.

RELATED PARTY TRANSACTIONS

The board has defined related party transactions as any arrangement or relationship with the Company when the amount of the transaction or the amount of combined similar transactions is greater than $120,000 and when a related person has a

material interest. A related person is anyone who is:

APPROVAL AND CONTINUING REVIEW

The director or executive who is a related person or has a family member who is a related person must tell the Company’s Corporate Secretary about any proposed related party transaction and give the Corporate Secretary all the facts and circumstances of the proposed transaction. If the Corporate Secretary investigates and decides the transaction would be a related party transaction, the transaction is brought to the Audit Committee for review. The committee reviews all the facts and circumstances, including the potential effect on a director’s independence if the Company enters into the transaction. The committee approves the transaction only if it decides that the transaction is not inconsistent with the best interests of the Company and its shareholders. The chair of the Audit Committee has the authority to approve transactions on behalf of the committee in between committee meetings if it is not practical to wait until the next committee meeting for a review.

Whenever a member of the committee is a related person, the transaction is reviewed only by the disinterested members of the ommittee. If multiple members of the committee, including the chair of the committee, are related persons, the disinterested members of the board of directors review the transaction rather than the committee. Any related party transaction approved by the chair of the committee between meetings must be reported to the committee. Material related party transactions that are approved by the committee must be reported to the board.

The committee also reviews any related party transactions of which the Company becomes aware that were not approved by the committee in advance. The committee evaluates the transaction using the same process and standards it would use to approve a transaction before it is entered into.

The committee decides whether to ratify the transaction or require an amendment of the terms of the transaction or to terminate the transaction. At its first meeting each year, the committee reviews any ongoing related party transaction in which the amount of the transaction is still greater than $120,000. The committee decides if the transaction is still in the best interests of the Company or if the transaction should be modified or terminated.

CODE OF ETHICS

The Company’s first Code of Ethics was issued in 1976. The Code of Ethics currently is in its eighth edition and is issued to all directors and employees. It also is available to customers, contractors, suppliers and the public. The current edition of the Code of Ethics is available on the Company’s web site at www.weyerhaeuser.com under “Company” at the top of the page, “Investors,” and then under the “Governance” link. If you would like to receive a paper copy, you may request one by writing to Claire S. Grace, Vice President and Corporate Secretary, Weyerhaeuser Company, P.O. Box 9777, Federal Way, WA 98063- 9777 or by sending an email to CorporateSecretary@Weyerhaeuser.com.