BOISE CASCADE CO
10-Qs and 10-Ks
PROXIES
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to §240.14a-12
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BOISE CASCADE COMPANY
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(Name of Registrant as Specified in its Charter)
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(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
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Notice of
Annual Shareholders' Meeting
and Proxy Statement
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2018
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Boise Cascade Company
1111 West Jefferson Street, Suite 300
Boise, ID 83702-5389
NOTICE OF OUR ANNUAL MEETING
OF SHAREHOLDERS
To be held May 3, 2018
To Our Shareholders:
I am pleased to invite you to attend our Annual Meeting of Shareholders (Annual Meeting) of Boise Cascade Company (Company), a Delaware Corporation. The Annual Meeting will be held at the Payette Meeting Room in the Hampton Inn & Suites, 495 S. Capitol Boulevard, Boise, Idaho 83702, at 9:30 a.m. Mountain Daylight Time on May 3, 2018. The purposes of the Annual Meeting, as more fully described in the proxy statement accompanying this notice, are:
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1.
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To elect four directors to serve as Class II directors to the Company's board of directors;
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2.
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To hold an advisory vote to approve compensation of the Company's named executive officers (say-on-pay);
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3.
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To ratify the appointment of KPMG LLP as the Company's independent registered public accounting firm for the year ending December 31, 2018; and
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4.
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To conduct other business properly presented at the meeting.
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Shareholders owning our common stock at the close of business on March 6, 2018 (the Record Date) are entitled to vote at the Annual Meeting in person or by returning the proxy card provided with this proxy statement. Each non-treasury share is entitled to one vote on each matter to be voted upon at the Annual Meeting. If you plan to attend the Annual Meeting in person, please bring photo identification, as well as your Notice of Annual Shareholder Meeting; your brokerage statement reflecting your ownership of Boise Cascade common stock; a copy of the voting instructions card provided by your broker, trustee or nominee; or similar evidence of share ownership as of the Record Date.
Details regarding admission to the Annual Meeting and the business to be conducted are described in the Notice of Internet Availability of Proxy Materials (Notice) you received in the mail and in this proxy statement. We have also made available a copy of our 2017 Annual Report with this proxy statement which includes our audited financial statements and provides information about our business.
We have elected to provide access to our proxy materials over the Internet under the U.S. Securities and Exchange Commission’s “notice and access” rules. We are constantly focused on improving the ways people connect with information, and believe that providing our proxy materials over the Internet increases the ability of our stockholders to connect with the information they need, while reducing the environmental impact of our Annual Meeting.
Thirty-eight percent of Boise Cascade’s shareholders received their 2017 proxy materials and annual report electronically. If we mailed you a notice of Internet availability of proxy materials or a
printed copy of our proxy statement and annual report, we encourage you to help us in our sustainability goals and sign up to receive these materials by email in the future. You can choose this option by:
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following the instructions provided on your proxy card or voting instruction form if you received a paper copy of the proxy materials;
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following the instructions provided when you vote over the Internet; or
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reaching out to your broker for their specific instructions.
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Thank you for being a shareholder.
John T. Sahlberg
Senior Vice President, Human Resources and General Counsel
Boise, Idaho
BOISE CASCADE COMPANY
NOTICE OF 2018 ANNUAL SHAREHOLDERS' MEETING
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Time and Date:
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9:30 a.m. Mountain Daylight Time
Thursday, May 3, 2018 |
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Place:
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Hampton Inn & Suites, Payette Meeting Room
495 South Capitol Boulevard
Boise, Idaho 83702
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Record Date:
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March 6, 2018
We will begin mailing our Notice of Internet Availability of Proxy Materials to shareholders of record on or before March 23, 2018. |
Please consider the issues presented in this proxy statement, and vote your shares as promptly as possible. For your convenience, we have provided a summary of the items to be voted on at the Annual Meeting and a summary of the governance and compensation changes made in 2017, beginning on page 1.
Thank you,
John T. Sahlberg
Senior Vice President, Human Resources and General Counsel
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Table of Contents
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Page #
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i
PROXY STATEMENT SUMMARY
This summary highlights information contained elsewhere in this proxy statement. This summary does not contain all of the information you should consider, and you should read the entire proxy statement carefully before voting. As used in this proxy statement, unless the context otherwise indicates, the references to "Boise Cascade," the "Company," "we," "our," or "us" refer to Boise Cascade Company.
Our proxy statement and 2017 Annual Report are available on our website at www.bc.com by selecting
Investors,
then
Annual Shareholders' Meeting.
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Meeting Agenda and Voting Matters
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Board Vote
Recommendation
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Election of four directors to serve as Class II directors and to hold office for a three-year term expiring at the annual meeting in 2021.
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FOR
EACH DIRECTOR
NOMINEE
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Advisory vote on our executive compensation (say-on-pay).
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FOR
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Ratification of the appointment of KPMG LLP as our independent registered public accounting firm for the year ending December 31, 2018.
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FOR
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Transaction of other business properly presented at the meeting.
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All shareholders as of the Record Date, or their duly appointed proxies, may attend the meeting upon presentation of proper identification. Registration and seating will begin at 11:00 a.m. Eastern Time (9:00 a.m. Mountain Daylight Time). Cameras, recording devices and other electronic devices will not be permitted at the meeting. You may obtain directions to the meeting place by calling our corporate offices at (208) 384-6161.
A quorum is necessary to hold a valid meeting. A quorum will exist if shareholders holding a majority of the shares of our common stock outstanding and entitled to vote at the Annual Meeting are present in person or by proxy. Shareholders have no right to cumulative voting as to any matter, including the election of directors. Abstentions and broker nonvotes will be treated as shares of common stock that are present and entitled to vote for purposes of determining the presence of a quorum. A broker nonvote occurs when a broker does not have discretionary voting power for that particular item and has not received voting instructions from the beneficial owner or when it has discretionary power but declines to use it. Brokers do not have discretionary voting power on nonroutine matters. Proposal No. 3, the ratification of the appointment of our independent registered public accounting firm for the year ending December 31, 2018, is the only routine matter for consideration at the Annual Meeting. The following table illustrates how abstentions and broker nonvotes will be counted.
1
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Proposal No. 1
Election of Directors
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If you do not provide voting instructions, your broker may not vote on this matter.
Each director nominee receiving the affirmative vote of a majority of the shares present or represented by proxy and entitled to vote in the election of directors will be elected as a director. Abstentions will have the same effect as voting against the nominees. Broker nonvotes will have no effect on the outcome of this proposal.
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Proposal No. 2
Advisory Approval of Our Executive Compensation
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If you do not provide voting instructions, your broker may not vote on this matter.
The advisory vote approving executive compensation will be determined by the affirmative vote of a majority of shares present or represented by proxy and entitled to vote at the Annual Meeting. Abstentions will have the same effect as voting against this proposal. Broker nonvotes will have no effect on the outcome of this proposal.
Although this advisory vote is nonbinding, the compensation committee and our board of directors will review the results of the vote. The compensation committee will consider our shareholders' preferences and take them into account in making future determinations concerning the compensation of our executives.
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Proposal No. 3
Ratification of Independent Registered Public Accounting Firm
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If you do not provide voting instructions, your broker is permitted to exercise its discretion in voting.
The proposal to appoint KPMG LLP as our independent registered public accounting firm for the year ending December 31, 2018 will be ratified by the affirmative vote of a majority of shares present or represented by proxy and entitled to vote at the Annual Meeting. Abstentions (including broker nonvotes) will have the same effect as voting against this proposal. |
Director Nominees
Our board of directors consists of three staggered classes of directors, designated as Class I, Class II, and Class III. The four members of Class II, Thomas K. Corrick, Richard H. Fleming, Mack L. Hogans and Christopher J. McGowan, are standing for election as directors at the Annual Meeting, to hold office for three-year terms expiring in 2021. The following table provides summary information about each of these director-nominees. During 2017, Messrs. Corrick, Fleming, Hogans and McGowan were directors for the entire year and attended 100% of the board and committee meetings on which they served. Our board of directors recommends a
FOR
vote for each director nominee because it believes each is qualified to serve as a director and has made and will continue to make positive contributions to the board.
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Director Name
and Age
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Director
Since
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Occupation
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Independent
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Committee Memberships
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Other
Public
Company
Boards
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Audit
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Compensation
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Nominating & Corporate Governance
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Thomas K. Corrick
Age - 62
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2016
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Chief Executive Officer, Boise Cascade
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Richard H. Fleming
Age - 70
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2013
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Retired Executive VP & CFO, USG Corporation
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X
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X
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Columbus McKinnon Corp.
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Mack L. Hogans
Age - 69
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2014
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Retired Sr. VP of Corporate Affairs, Weyerhaeuser Co.
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X
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X
Lead Independent Director
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Christopher J. McGowan
Age - 46
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2013
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General Partner CJM Ventures, LLC/OPTO Holdings, L.P.
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X
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X
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Executive Compensation Advisory Vote
We are asking shareholders to approve, on a nonbinding advisory basis, the overall executive compensation for our named executive officers. Our board of directors recommends a
FOR
vote because it believes the compensation of our executive officers supports our goal of aligning our officers' pay with Company performance and, thus, shareholder interests.
Executive Compensation Elements
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We target annual base pay at the 50th percentile of the comparable market compensation data. We believe this enables us to effectively attract and retain talented and experienced officers to manage and lead the Company.
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We provide at-risk pay opportunities in the form of short-term and long-term incentives. These compensation elements are also structured so target opportunities are set at or near the 50th percentile of the market. These short-term and long-term incentives comprise a significant portion of each officer's total compensation opportunity since they are designed to motivate and reward our officers for growing the Company and maximizing shareholder value.
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Long-term performance is the most important measure of our success because we manage our operations and business affairs for the long-term benefit of our shareholders. For 2017, our named executive officers received long-term equity incentive compensation opportunities in a combination of Performance Stock Units (PSUs) and Restricted Stock Units (RSUs).
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Under our clawback policy, the board is able to clawback both short-term and long-term incentive awards in the event of a substantial restatement of financial statements or officer or employee intentional misconduct or malfeasance.
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3
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Our annual incentive compensation opportunities are tied to achievement of corporate and, in some cases, divisional financial goals.
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We provide limited perquisites, including only those benefits that are consistent with market practice.
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We prohibit our officers from participating in any hedging, pledging, or monetizing transaction to lock in the value of our common stock that they hold.
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2017 Business Highlights
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We continued improvement of our safety programs across our business, including reinforcing, "Nobody Gets Hurt," which enabled our Wood Products' business to finish the year with the lowest incident rate since the Company's foundation.
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We continued to increase overall sales to over $4.4 billion. Building Materials Distribution sales increased by approximately $500
million, or 17%, year-over-year. Sales in Wood Products of approximately $1.3 billion (including sales to our Building Materials Distribution business), increased more than $90 million, or 7%, year-over-year.
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▪
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We earned net income of $82.9 million and Adjusted EBITDA
(1)
of $222
million.
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We ended 2017 with $177.1 million of cash and cash equivalents and $379.8 million of undrawn committed bank line availability for a total liquidity of $556.9 million to support continued growth in 2018.
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▪
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We declared and paid our first quarterly dividend of $0.07 per share in fourth quarter 2017.
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Our Building Materials Distribution business had its first billion dollar sales quarter in third quarter 2017.
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Our Building Materials Distribution business opened a new branch in St. Louis, Missouri and continued its organic expansion in other metropolitan markets.
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Key Compensation Activities by the Compensation Committee in 2017
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Reviewed the annual advisory vote regarding our executive compensation (say-on-pay).
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Continued working with Frederic W. Cook & Co. Inc. (Frederic Cook) to assist them and our board in a comprehensive review of our executive compensation.
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With the assistance of Frederic Cook, continued reviewing all components of our executive compensation and made adjustments in some cases moving our executives from below median to closer to median.
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Continued conducting a detailed review of the short-term incentive plans for our executive officers.
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With assistance of Frederic Cook, reviewed and updated our peer group for compensation purposes, removed paper products and packaging companies due to lack of similarity with our business, removed Nortek, Inc. because it was acquired and is no longer a publicly listed company, and added American Woodwork.
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Reviewed and updated officer and director stock ownership guidelines to increase requirements for our chief executive officer to five times base salary and other senior officers to two times base salary.
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4
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Evaluated the potential risks arising from our compensation policies and practices to ensure they reflect current and anticipated business conditions and that the performance targets are sufficiently challenging.
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Reviewed and approved changes to our deferred compensation plan for 2018 and 2019 to allow for in-service distribution accounts.
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Recommended, and the board approved, changes to directors’ future stock awards to provide for vesting and distribution of RSUs one year from the date of grant.
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Reviewed and analyzed our short term incentive plans.
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Reviewed committee charter and composition of compensation committee.
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Reviewed proxy advisory firms’ compensation metrics and scores.
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__________
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(1)
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EBITDA is defined as income before interest (interest expense and interest income), income tax provision (benefit), and depreciation and amortization and is not required by or presented in accordance with generally accepted accounting principles (GAAP) in the United States. Adjusted EBITDA further adjusts EBITDA to exclude the change in fair value of interest rate swaps and loss on extinguishment of debt (Adjusted EBITDA is a metric used by the Company for incentive plan purposes). Management uses EBITDA and Adjusted EBITDA to evaluate ongoing operations and believes they are useful to investors because they enable them to perform meaningful comparisons of past and present operating results.
For a reconciliation of these non-GAAP measures to the most directly comparable GAAP measure (net income), please refer to page 26 of our 2017 Annual Report, Item 6. Selected Financial Data.
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The following table sets forth the 2017 compensation for each of our named executive officers, as determined under Securities and Exchange Commission (SEC) rules, and highlights that a significant portion (stock awards and non-equity incentive plan compensation) is considered "at risk." The SEC's calculation of total compensation includes several items driven by accounting and actuarial assumptions, which are not necessarily reflective of compensation actually realized by our named executive officers in 2017. For a complete description of our named executive officers' compensation for the years ended December 31, 2015, 2016 and 2017, please refer to the
Executive Compensation
section in this proxy statement.
5
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Name and
Principal Position
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Base Salary
($)
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Stock
Awards
($)
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Bonus
($)
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Non-Equity
Incentive
Plan
Compensation
($)
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Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
($)
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All Other
Compensation
($)
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Total
($)
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Thomas K. Corrick
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$
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819,038
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$
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1,821,277
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—
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$
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1,318,652
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$
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78,586
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$
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109,364
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$
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4,146,917
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Chief Executive Officer
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Wayne M. Rancourt
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481,962
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528,746
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—
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581,969
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145,909
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58,072
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1,796,658
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Executive Vice President,
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Chief Financial Officer &
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Treasurer
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Nick Stokes
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462,308
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587,499
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—
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702,708
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121,674
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77,323
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1,951,512
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Executive Vice President,
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Building Materials
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Distribution
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Dan Hutchinson
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416,731
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587,499
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—
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473,406
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39,917
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50,530
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1,568,083
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Executive Vice President,
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Wood Products
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John T. Sahlberg
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444,846
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470,021
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—
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465,531
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42,249
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55,651
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1,478,298
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Senior Vice President,
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Human Resources, General
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Counsel & Secretary
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Ratification of Independent Registered Accounting Firm
As a matter of good corporate governance, we are asking our shareholders to ratify the appointment of KPMG LLP as our independent auditor for the year ending December 31. 2018. Our board of directors recommends a
FOR
vote for the appointment of KPMG LLP.
INFORMATION ABOUT OUR ANNUAL SHAREHOLDERS' MEETING AND VOTING
Internet Availability of Proxy Materials, Annual Reports, and Other Reports and Policies
You may view a complete copy of our proxy statement and 2017 Annual Report by visiting our website at www.bc.com and selecting
Investors
, and
then
Annual Shareholders' Meeting.
You may view complete copies of all of our SEC filings, including Annual Reports on Form 10-K, quarterly reports on Form
10-Q, current reports on Form 8-K, and certain financial information, by visiting our website at www.bc.com and selecting
Investors
and
then
SEC Filings.
6
Record Date and Voting at Our 2018 Annual Shareholders' Meeting
Shareholders owning our common stock at the close of business on March 6, 2018 (the Record Date), may vote at the Annual Meeting. On the Record Date, 38,864,547
shares of our common stock were outstanding. Each share is entitled to one vote on each matter to be voted upon at the Annual Meeting.
All valid proxies properly executed and received by us prior to our Annual Meeting will be voted as you direct. If you do not specify how you want your shares voted, they will be voted:
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▪
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FOR
the election of the four director-nominees to serve as Class II directors and hold office for a three-year term expiring at the Annual Meeting in 2021;
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▪
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FOR
the nonbinding advisory approval vote of our executive compensation; and
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▪
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FOR
the ratification of the appointment of KPMG LLP as our independent registered public accounting firm for the year ending December 31, 2018.
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Your shares will also be voted on any other matters presented for a vote at the Annual Meeting in accordance with the judgment of the persons acting under the proxies. You may revoke your proxy and change your vote at any time before the Annual Meeting by submitting a written notice to our corporate secretary, by mailing a later-dated and properly executed proxy, or by voting in person at the Annual Meeting.
Independent Tabulator
We have appointed Broadridge Financial Solutions Inc. (Broadridge) as our independent tabulator to receive and tabulate all votes cast at the Annual Meeting. Broadridge will determine whether a quorum is present.
Independent Inspector of Election
We have appointed Cydni J. Waldner, of Hawley Troxell Ennis & Hawley LLP, as our independent inspector of election to certify the vote results. A quorum is necessary to hold a valid meeting. A quorum will exist if shareholders holding a majority of the shares of our common stock outstanding and entitled to vote at the Annual Meeting are present in person or by proxy. Abstentions and broker nonvotes will be treated as shares of stock that are present and entitled to vote for purposes of determining the presence of a quorum. A broker nonvote occurs when a broker does not have discretionary voting power for that particular item and has not received voting instructions from the beneficial owner. The table set forth on page 2 of this proxy statement sets forth how abstentions and broker nonvotes will be counted.
Proxy Solicitation
Our board of directors is soliciting your proxy. We do not intend to retain a proxy solicitor; however, our employees and directors may solicit proxies by mail, telephone, email, or in person. Our employees and directors will not receive additional compensation for these activities and the entire cost of this solicitation will be borne by us.
7
Householding of Annual Meeting Materials
Some banks, brokers, and other record holders may be participating in the practice of “householding” proxy materials. This means that only one copy of our proxy materials or Notice of Internet Availability of Materials may have been sent to multiple shareholders in your household. We will promptly deliver a separate copy of such documents to you if you contact the Broadridge Householding Department at the following address:
Broadridge Householding Department
51 Mercedes Way
Edgewood, NY 11717
Toll-Free Number: 1-800-542-1061
If you want to receive multiple copies of our proxy materials or Notice of Internet Availability of Materials in the future, or if you are receiving multiple copies and would like to receive only one copy for your household, you should contact your bank, broker, or other record holder, or you may contact the Broadridge Householding Department at the address and phone number shown.
Shareholder Proposals for Inclusion in Next Year's Proxy Statement
According to SEC rules, to be considered for inclusion in next year's proxy statement, our corporate secretary must receive shareholder proposals at the address shown below no later than November 26, 2018.
Boise Cascade Company
Attention
: Corporate Secretary
1111 West Jefferson Street, Suite 300
Boise, ID 83702
Additionally, our bylaws require that our corporate secretary must receive notice of any nominations for director or other business a shareholder proposes to bring before our next annual meeting no earlier than January 2, 2019, and no later than February 1, 2019.
Please refer to Article II, Section
11 of our bylaws for an outline of the information a shareholders' notice must include regarding director-nominees and other business to be brought before a shareholders' meeting.
You may view a complete copy of our bylaws by visiting our website at www.bc.com and selecting
Investors
,
Leadership and Governance
and then
Bylaws
.
If You Plan to Attend
If you plan to attend the Annual Meeting in person, please bring photo identification, as well as your Notice of Annual Shareholder Meeting; your brokerage statement reflecting your Boise Cascade common stock; a copy of the voting instruction card provided by your bank, broker, trustee, or nominee; or similar evidence of share ownership as of the Record Date.
8
PROPOSALS TO BE VOTED ON
Proposal No.
1 - Election of Four Directors
Our board of directors consists of three staggered classes of directors, designated as Class I, Class II, and Class III. The director members of, and the term expiration dates for, each class are:
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Class
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Director Members
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Term Expiration Date
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I
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Duane C. McDougall
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2020 annual shareholders' meeting
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Thomas E. Carlile
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Kristopher J. Matula
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II
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Thomas K. Corrick
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2018 annual shareholders' meeting
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Richard H. Fleming
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Mack L. Hogans
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Christopher J. McGowan
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III
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Karen E. Gowland
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2019 annual shareholders' meeting
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David H. Hannah
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Steven C. Cooper
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At each succeeding annual shareholders' meeting, successors to the class of directors whose term expires at that annual meeting will be elected for a three-year term. Each director will hold office for the term to which he or she is elected and until his or her successor is duly elected and qualified or until his or her earlier death, disqualification, resignation, or removal.
Nominees
Four nominees, Messrs. Corrick, Fleming, Hogans and McGowan are standing for election as directors at the Annual Meeting to hold office for a three-year term expiring in 2021.
Your shares will be voted according to your instructions. If you do not provide voting instructions, your broker may not vote on this matter. For 2018, our director nominees are running unopposed. Therefore, to be elected to our board of directors in 2018, each director-nominee must receive a majority of the votes cast by our shareholders present in person or by proxy and entitled to vote.
The four director-nominees have confirmed their availability for election. If any of the director-nominees becomes unavailable to serve as a director for any reason prior to the Annual Meeting, our board of directors may substitute another person as a director nominee. In that case, if you have voted for the original nominee, your shares will be voted
FOR
the substitute director nominee.
Additional information follows for the four director-nominees and the directors continuing in office, particularly concerning their business experience and qualifications, as well as attributes and skills that led our board to conclude that person should serve as a director of the Company. During the past ten years, none of our directors has been a party to any legal or bankruptcy proceedings reportable under SEC rules.
Our board of directors unanimously recommends shareholders vote FOR Messrs. Corrick, Fleming, Hogans and McGowan, our four director nominees.
9
Nominee Directors
Thomas K. Corrick, 62 - Nominee
Mr. Corrick became one of our directors in February 2016. He is not an independent director.
Business Experience
Mr. Corrick has served as our chief executive officer since March 6, 2015. Prior to that he served in various roles including chief operating officer, executive vice president of our Wood Products segment, senior vice president of engineered wood products in our Wood Products segment, and various other management and financial positions.
Education
B.B.A., Texas Christian University, Fort Worth, TX
MBA, Texas Christian University, Fort Worth, TX
Attributes and skills that led our board to conclude Mr. Corrick should serve as a director of the Company
Over 35 years of experience with the Company and its predecessor enables Mr. Corrick to provide valuable insight on the Company, its culture, and the governance and financial controls in the Company.
As chief executive officer, he is also able to provide operational and financial information important to board discussions.
Richard H. Fleming, 70 - Nominee
Mr. Fleming became one of our directors in February 2013 in connection with our initial public offering. Mr. Fleming is an independent director and currently serves as a member of our audit committee.
Business Experience
Mr. Fleming was the executive vice president and chief financial officer of USG Corporation from 1999 until his retirement in 2012. USG is a leading manufacturer of high performance building systems for the construction and remodeling industries. Prior to joining USG, Mr. Fleming was employed by Masonite Corporation, which was acquired by USG in 1984. During his 39-year career with Masonite and USG, Mr. Fleming held various operating and finance positions and was USG's chief financial officer for approximately 18 years.
Education
B.S. in economics, University of the Pacific, Stockton, CA
MBA with finance specialization, Tuck School of Business at Dartmouth College, Hanover, NH
Current public company or registered investment company directorships, other than Boise Cascade Company
Columbus McKinnon Corporation
10
Attributes and skills that led our board to conclude Mr. Fleming should serve as a director of the Company
Provides strong financial skills to our board of directors, has relevant industry experience and has served as a director since 2013, which provides him with knowledge of our history as a public company.
Mack L. Hogans, 69 - Nominee
Mr. Hogans became one of our directors in July 2014. Mr. Hogans is an independent director and currently serves as the chair of our corporate governance and nominating committee and as our lead independent director.
Business Experience
Mr. Hogans was senior vice president of corporate affairs with Weyerhaeuser Company until his retirement in 2004. Weyerhaeuser is one of the world’s largest private owners of timberlands and one of the largest manufacturers of wood and cellulose fibers products. Mr. Hogans currently operates a consulting services business. Prior to joining Weyerhaeuser in 1979, Mr. Hogans was employed by the U.S. Forest Service, Maryland National Capital Parks & Planning Commission, and the National Park Service.
Education
B.S. in forestry and natural resources, University of Michigan, Ann Arbor, MI
M.S. in forest resources, University of Washington, Seattle, WA
Graduate of Stanford University Graduate School of Business Executive Program (SEP), Stanford, CA
Attributes and skills that led our board to conclude Mr. Hogans should serve as a director of the Company
Has relevant industry experience and provides strong corporate governance and compliance skills to our board of directors.
Christopher J. McGowan, 46 - Nominee
Mr. McGowan has been one of our directors since our February 2013 initial public offering. Mr. McGowan is an independent director and currently serves as the chair of our audit committee. Prior to February 2013, he was a director of our former parent company from 2004 to 2013.
Business Experience
Mr. McGowan served as one of Boise Cascade Holdings, L.L.C.’s directors from October 2004 until its dissolution in September 2014. He became a Boise Cascade Company director in February 2013 in connection with our initial public offering. In August 2014, he became a general partner of CJMV-GMC-AHSS, L.P. (d/b/a Autism Home Support Services, Inc.). In 2012, Mr. McGowan served as a faculty adviser to The University of Chicago Booth School of Business and currently serves as an Adjunct Professor, Entrepreneur in Residence, and Senior Adviser there. In September 2011, he became a general partner of CJM Ventures, L.L.C. and OPTO Holdings, L.P. (d/b/a/ OPTO International, Inc.). From 1999 until 2011, he was employed by Madison Dearborn Partners, L.L.C. and served as a managing director concentrating on investments in the basic industries sector. Prior to joining Madison Dearborn, Mr. McGowan was with AEA Investors, Inc. and Morgan Stanley & Co. Incorporated.
11
Education
B.A., Columbia University, Theoretical Mathematics, New York, NY
M.B.A., Harvard Graduate School of Business, Boston, MA
Current public company or registered investment company directorships, other than Boise Cascade Company
Cedar Capital, LLC (a registered investment adviser that operates registered investment companies)
Prior directorships held during past five years at any public company or registered investment company
Smurfit Kappa Group Ltd. (formerly known as Jefferson Smurfit Group)
Attributes and skills that led our board to conclude Mr. McGowan should serve as a director of the Company
Provides strong financial and governance skills to our board of directors and has served as a director since 2013, which provides him with knowledge of our history as a public company.
Directors Continuing in Office
Steven C. Cooper, 55
Mr. Cooper became one of our directors in February 2015. Mr. Cooper is an independent director and currently serves as a member of our audit committee.
Business Experience
Mr. Cooper is currently a director and chief executive officer of TrueBlue, Inc., a New York Stock Exchange-listed company based in Tacoma, Washington. TrueBlue is a global supplier of specialized workforce solutions, placing 750,000 people annually in more than 130,000 businesses. TrueBlue has been repeatedly recognized as one of Forbes Magazine’s “Most Trustworthy Companies” for its solid corporate governance and accounting transparency. Prior to joining TrueBlue in 1999, Mr. Cooper held various professional positions at Arthur Andersen, Albertsons, and Deloitte.
Education
B.A. in business administration, Idaho State University, Pocatello, ID
Current public company or registered investment company directorships, other than Boise Cascade Company
TrueBlue, Inc.
Attributes and skills that led our board to conclude Mr.
Cooper should serve as a director of the Company
12
Experience as a chief executive officer and director provides insight on strategic and operational issues and valuable business knowledge. Also provides strong accounting and financial expertise and experience in workforce management to our board.
Thomas E. Carlile, 66
Mr. Carlile began serving as board chairman in March 2015, has been one of our directors since our initial public offering in February 2013, and was a director of our former parent company from 2009-2013. He is not an independent director and serves on no committees.
Business Experience
Before his retirement in 2015, Mr. Carlile served as the Company’s chief executive officer from 2009 to 2015, and as a director of Boise Cascade Holdings, L.L.C. from August 2009 until its dissolution in September 2014. He became a Boise Cascade Company director in February 2013, in connection with our initial public offering, and board chairman in March 2015. Mr. Carlile previously served as our executive vice president and chief financial officer from February 2008 to August 2009, following the divestiture of our paper and packaging businesses. From October 2004 to January 2008, he served as our senior vice president and chief financial officer.
Education
B.S. in accounting, Boise State University, Boise, ID
Stanford Executive Program, Stanford, CA
Current public company or registered investment company directorships, other than Boise Cascade Company
IDACORP, Inc. and its primary subsidiary Idaho Power Company
Attributes and skills that led our board to conclude Mr.
Carlile should serve as a director of the Company
Position as our former chief executive officer with 42 years experience with the Company and its predecessors allows him to advise the board of directors on operational and industry matters affecting the Company.
Karen E. Gowland, 59
Ms.
Gowland became one of our directors in January 2014. Ms. Gowland is an independent director and currently serves as the chair of the compensation committee and as a member of our corporate governance and nominating committee.
Business Experience
Before her retirement in March 2014, Ms. Gowland was the senior vice president, general counsel and corporate secretary for Boise Inc. from August 2010 until its acquisition by Packaging Corporation of America in late 2013. Boise Inc. was a manufacturer of a wide variety of packaging and paper products. From February 2008 to July 2010, she served as Boise Inc.'s vice president, general counsel and secretary. From October 2004 to February 2008, Ms. Gowland served as vice president, general counsel and corporate secretary of Boise Cascade, L.L.C. During her 30 years in the forest products industry,
13
Ms. Gowland held various legal and compliance positions, which included over 15 years of experience as a corporate secretary for various public and private entities in the forest products industry.
Education
B.S. in accounting, University of Idaho, Moscow, ID
J.D., University of Idaho, Moscow, ID
Attributes and skills that led our board to conclude Ms.
Gowland should serve as a director of the Company
Has relevant industry and company experience and provides strong corporate governance and compliance skills to our board of directors.
David H. Hannah, 66
Mr. Hannah became one of our directors in November 2014. He is an independent director and currently serves as a member of our compensation and corporate governance and nominating committees.
Business Experience
Mr. Hannah is currently a director and formerly the CEO and executive chairman of Reliance Steel & Aluminum Co., a New York Stock Exchange, Fortune 500 company, based in Los Angeles, California. Reliance is the largest operator of metals service centers in North America, with over 300 locations in 39 states. Reliance also operates in 12 foreign countries. Prior to joining Reliance in 1981, Mr. Hannah held various professional positions at Ernst & Whinney, a predecessor firm to Ernst & Young, LLP. Mr. Hannah is a certified public accountant.
Education
B.S. in finance and accounting, University of Southern California, Los Angeles, CA
Current public company or registered investment company directorships, other than Boise Cascade Company
Reliance Steel & Aluminum Co.
Attributes and skills that led our board to conclude Mr.
Hannah should serve as a director of the Company
Experience as a chief executive officer of a major products distribution company provides valuable insight on operational and industry issues. Also provides strong accounting and financial expertise to our board.
Kristopher J. Matula, 55
Mr. Matula became one of our directors in July
2014. He is an independent director and currently serves as a member of our compensation and governance and nominating committees.
14
Business Experience
Mr. Matula retired from Buckeye Technologies Inc. in 2012, where he served as president and chief operating officer and a director. He is currently a private consultant. Buckeye, a large, publicly traded producer of cellulose-based specialty products, was acquired by Georgia-Pacific in 2013. During his career at Buckeye, Mr. Matula also served as chief financial officer and head of Buckeye’s nonwovens business. Prior to joining Buckeye in 1994, Mr. Matula was employed by Procter & Gamble Company.
Education
B.S. in mechanical engineering, Purdue University, West Lafayette, IN
M.S. in aerospace engineering, University of Cincinnati, Cincinnati, OH
M.B.A. in finance and production, University of Chicago Graduate School of Business, Chicago, IL
Prior directorships held during past five years at any public company or registered investment company
Buckeye Technologies Inc.
Attributes and skills that led our board to conclude Mr.
Matula should serve as a director of the Company
Has relevant industry experience and provides strong corporate governance and compliance skills to our board of directors.
Duane C. McDougall, 66
Mr. McDougall has been one of our directors since our February 2013 initial public offering. He is an independent director and currently serves on our audit and compensation committees.
Business Experience
Mr. McDougall was the board chairman of Boise Cascade Holdings, L.L.C. from December 2008, and also a director of Boise Cascade Holdings, L.L.C. from 2005 until its dissolution in September 2014. He became a Boise Cascade Company director and board chairman in February 2013 in connection with our initial public offering. Mr. McDougall also served as an interim chief executive officer of Boise Cascade, L.L.C. from December 2008 to August 2009. Prior to joining our company, Mr. McDougall was president and chief executive officer of Willamette Industries, an international paper and forest products company, until its sale in 2002. During his 23-year career with Willamette, Mr. McDougall held numerous operating and finance positions before becoming president and chief executive officer.
Education
B.S. in accounting, Oregon State University, Corvallis, OR
University of Virginia Darden Executive Program, Charlottesville, VA
Current public company or registered investment company directorships, other than Boise Cascade Company
The Greenbrier Companies, Inc.
15
Prior directorships held during past five years at any public company or registered investment company
Cascade Corporation
StanCorp Financial Group, Inc.
Attributes and skills that led our board to conclude Mr.
McDougall should serve as a director of the Company
Experience as a chief executive officer of a major forest products company provides our board of directors with valuable insight on operational and industry issues. Also provides strong accounting and financial expertise to our board.
Proposal No. 2 - Advisory Approval of Our Executive Compensation
We are providing our shareholders with the opportunity to cast a nonbinding advisory vote regarding the compensation of our named executive officers. Our compensation philosophy is designed to emphasize a focus on total compensation, with a large portion of our named executive officers' pay being performance-based and considered variable, "at risk," and aligned with shareholder interests. We seek to pay for performance so that we can recruit and retain the talented employees necessary to drive superior financial and operational results. We view our compensation program as a strategic tool that supports the successful execution of our business strategy and reinforces a performance-based culture.
As a result of the recently adopted rules under the Dodd-Frank Act, beginning with our 2018 proxy statement, the SEC will require disclosure of the CEO-to-median-employee pay ratio.
Shareholders are urged to read the
Compensation Discussion and Analysis
section in this proxy statement, which discusses how our compensation policies and procedures implement our compensation philosophy. The compensation committee and our board of directors believe these policies and procedures are effective in implementing our compensation philosophy and in achieving its goals. Our board of directors has determined the best way to allow shareholders to vote on our executive compensation is through the following resolution:
RESOLVED, that the compensation paid to the Company's named executive officers, as disclosed in the
Compensation Discussion and Analysis
, compensation tables, and narrative discussion in this proxy statement, is hereby APPROVED.
Your vote is important to us.
Although this advisory vote is nonbinding, the compensation committee and our board of directors will review the results of the vote. The compensation committee will consider our shareholders' preferences and take them into account in making future determinations concerning our executive compensation.
Our board of directors unanimously recommends shareholders vote, on a nonbinding advisory basis, FOR the approval of the resolution set forth above approving the compensation of our named executive officers.
Proposal No. 3 - Ratification of Independent Accountant for the Year Ending December 31, 2018
The audit committee of our board of directors is responsible for the engagement of our independent auditor and has appointed KPMG LLP (KPMG) in that capacity, effective February 21,
2018.
16
Although ratification is not required by our bylaws or otherwise, our board of directors is submitting the selection of KPMG to our shareholders for ratification because we value our shareholders' views on our independent registered public accounting firm and as a matter of good corporate practice. If the appointment of KPMG is not ratified, the audit committee will evaluate the basis for the shareholders
’
vote when determining whether to continue the firm
’
s engagement, but may ultimately determine to continue the engagement of the firm or another audit firm without resubmitting the matter to shareholders. Even if the selection of KPMG is ratified, the audit committee may, in its sole discretion, change the appointment at any time during the year if it determines a change would be in the best interests of the Company and our shareholders.
It is expected that one or more representatives of KPMG will be present at our Annual Meeting to answer questions. They will also have the opportunity to make a statement if they desire to do so.
For information on the services KPMG has provided for us in 2017, please refer to the following table:
|
2017
|
||||
|
Audit Fees
|
$
|
2,189,996
|
|
|
|
Audit-Related Fees
|
9,500
|
|||
|
Tax Fees
|
55,400
|
|||
|
All Other Fees
|
—
|
|
||
|
Total
|
$
|
2,254,896
|
|
|
Our board of directors unanimously recommends shareholders vote FOR the ratification of the appointment of KPMG as our independent registered public accounting firm for the year ending December 31, 2018.
CORPORATE GOVERNANCE
Code of Ethics for Our Board of Directors
We have adopted a Boise Cascade Company Code of Ethics (Code of Ethics) that applies to our directors and all of our employees. We have a toll-free reporting service available that permits employees to confidentially report violations of our Code of Ethics or other issues of significant concern. We have an email link to our board on our website by selecting
Contact
at the top of the page and then
Board of Directors
in the drop down box. Communications sent by email are not confidential and are first reviewed by the Company's general counsel and chief financial officer.
If we amend or grant a waiver of one or more of the provisions of our Code of Ethics, we intend to satisfy the requirements under Item 5.05 of Form 8-K regarding the disclosure of amendments to or waivers from provisions of our Code of Ethics by posting the required information on our website.
You may view a copy of our Code of Ethics by visiting our website at www.bc.com and selecting
Investors
at the bottom of the page,
then
Code of Ethics.
Corporate Governance Guidelines
Our board of directors has adopted Corporate Governance Guidelines (Guidelines) to assist the board in exercising its responsibilities. The Guidelines reflect our board's commitment to monitor the effectiveness of policy and decision making, both at the board and management levels. Our board of directors believes the Guidelines will enhance our ability to achieve our goals and long-term success and
17
will assist us in increasing shareholder value. The Guidelines are in addition to and are not intended to change or interpret any federal or state law or regulation, including the Delaware General Corporation Law, our Certificate of Incorporation or bylaws, or the rules of the New York Stock Exchange (the NYSE). Our board of directors may modify the Guidelines from time to time on the recommendation of the corporate governance and nominating committee and as deemed appropriate by our board of directors.
You may view a complete copy of the Guidelines by visiting our website at www.bc.com and selecting
Investors,
then
Leadership and Governance
, and then
Corporate Governance Guidelines.
Director Independence
Our directors believe board independence is important and is key for the board to function properly, allowing it to provide appropriate oversight and maintain managerial accountability.
We list our common stock on the NYSE. The NYSE rules require that a majority of our directors be independent from management and all members of our board committees be independent. For a director to be independent under the NYSE's rules, our board must determine affirmatively that he or she has no material relationship with us. Additionally, he or she cannot violate any of the bright line independence tests set forth in the NYSE listing rules that would prevent our board of directors from determining that he or she was independent. These rules contain heightened independence tests for members of our audit and compensation committees. Our board of directors will broadly consider all relevant facts and circumstances to determine the independence of any director, in accordance with the NYSE listing rules.
To assist in making this determination, our board adopted the NYSE's independence standards, set forth in the NYSE listing rules and Rules 10A-3 and 10C-1 under the Exchange Act. For purposes of these standards, we include Boise Cascade Company and its consolidated subsidiaries.
Our board has determined that Ms. Gowland and Messrs. Cooper, Fleming, Hannah, Hogans, Matula, McDougall and McGowan are independent directors as defined under the NYSE's listing standards. These directors constitute a majority of our board of directors and represent all of our committee members. In making its independence determination, our board considered the relationships disclosed in the
Related-Person/Party Transactions
section below.
Additionally, our board of directors has determined that (i) each member of the audit committee meets the heightened independence standards for audit committee service under the NYSE listing rules and Rule 10A-3 under the Exchange Act; and (ii) each member of the compensation committee meets the heightened independence standards for compensation committee service under the NYSE listing rules and Rule 10C-1 under the Exchange Act.
Our board of directors and its committees can retain, at their sole discretion and at our expense, independent financial, legal, compensation, or other advisors to represent the independent interests of our board of directors or its committees.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires our officers, directors, and persons who beneficially own more than ten percent of our common stock to file reports of securities ownership and changes in such ownership with the SEC. Officers, directors, and greater than ten percent beneficial owners also are required by rules promulgated by the SEC to furnish us with copies of all Section 16(a) forms they file.
18
Based on a review of such reports, we believe that in 2017, all Section 16(a) filing requirements were complied with by our officers, directors and greater than ten percent beneficial owners, except for one transaction by Duane McDougall relating to a donation of shares he made to a 501(c)(3) charitable entity on September 1, 2016. The applicable Form 5 was not filed within the filing deadline, but a Form 4 was filed on June 15, 2017 reflecting the donation.
Related-Person/Party Transactions
Family Relationships
No family relationships exist between any of our directors and executive officers.
Affiliated-Company Transactions
Mr. Cooper, one of our directors, is the president and chief executive officer of TrueBlue, Inc. (TrueBlue), an industrial staffing company. In 2017, the Company leased commercial drivers and used other temporary labor services from TrueBlue and its subsidiaries and paid approximately $482,000 for those services
.
Policies and Procedures for Related-Person/Party Transactions
Our written policy regarding transactions with related persons requires that a "related person" (as defined in paragraph (a) of Item 404 of Regulation S-K) must promptly disclose to our general counsel any "related person transaction" (defined as any transaction that is reportable by us under Item 404(a) of Regulation S-K in which we are or will be a participant and the amount involved exceeds $120,000 and in which any related person has or will have a direct or indirect material interest) in which such related person has or will have a direct or indirect material interest and all material facts with respect thereto. The general counsel will promptly communicate such information to our audit committee or another independent body of our board of directors. No related-person transaction will be entered into without the approval or ratification of our audit committee or another independent body of our board of directors. It is our policy that directors recuse themselves from any discussion or decision affecting their personal, business or professional interests. Our policy does not specify the standards to be applied by our audit committee or another independent body of our board of directors in determining whether to approve or ratify a related-person transaction. We accordingly anticipate that these determinations will be made in accordance with Delaware law
.
Role of Compensation Consultant
The compensation committee has retained Frederic Cook as its independent, compensation consultant to assist the committee in discharging its responsibilities. Prior to retaining Frederic Cook, the compensation committee considered that Frederic Cook does not provide any other services to the Company or its executive officers and determined that there was no conflict of interest according to the factors the compensation committee determined to be relevant including the independence factors enumerated by the NYSE.
19
Role of Board of Directors in Our Risk Management Processes
Our board of directors oversees the risk management activities designed and implemented by our management. The board of directors executes its oversight responsibility for risk management both directly and through its committees. Through our enterprise risk management review and with general meeting content, the board of directors also considers specific risk topics, including risks associated with our strategic plan, business operations, and capital structure. In addition, the board of directors receives detailed regular reports from members of our senior management and other personnel that include assessments and potential mitigation of the risks and exposures involved with their respective areas of responsibility.
Our board of directors delegates to the audit committee oversight of our risk management process. Our other board committees also consider and address risk as they perform their respective committee responsibilities. All committees report to the full board of directors as appropriate, including when a matter rises to the level of a material- or enterprise-level risk.
Our internal audit department annually develops a risk-based audit plan that is reviewed with the audit committee, along with the results of internal audit reviews and activities. The internal audit department also maintains a high level assessment of risks and controls for key operations, functions, processes, applications, and systems within the Company. The audit committee meets a number of times each year with our director of internal audit, our chief financial officer, and our controller.
We also have in place a number of independent assurance activities responsible for assessing whether our risk response activities are in place and working effectively. These assurance activities include, but are not limited to, corporate legal audits, corporate security, environmental audits, and safety audits.
Risk Analysis of Employee Compensation Policies and Practices
We reviewed our compensation policies and practices for our employees and determined these policies and practices do not induce our employees to take unacceptable levels of business risk for the purpose of increasing their incentive plan awards at the expense of shareholder interests. Some of the considerations in making this determination were:
|
▪
|
None of our businesses presents a high risk profile because a very large percentage of our revenues and income is derived from commodity products;
|
|
▪
|
Our incentive pay structure rewards performance in both the short and long term (i.e., short-term incentives are not paid out at the expense of long-term shareholder value);
|
|
▪
|
Our incentive pay program has both minimum and maximum caps designed to take into account short- and long-term affordability measures;
|
|
▪
|
The compensation committee reserves the right to reduce or eliminate any awards, in its discretion, with respect to our incentive pay programs;
|
|
▪
|
We have adopted a clawback policy for our equity-based Long Term Incentive Plan (LTIP) and our cash-based Short Term Incentive Plan (STIP) that enables our board to recoup any or all of any award predicated on substantially restated financial results where the employee engaged in intentional misconduct or malfeasance leading to the restatement and would have received a lower payment under the restatement; and
|
20
|
▪
|
Our executive compensation does not encourage our management to take unreasonable risks relating to the business.
|
Director Selection Process
Our corporate governance and nominating committee is responsible for, among other matters:
|
•
|
identifying individuals qualified to become members of our board of directors, consistent with criteria approved by our board of directors;
|
|
•
|
recommending to our board a slate of director nominees for election or re-election at the Annual Meeting; and
|
|
•
|
recommending to our board of directors persons to fill board and committee vacancies.
|
Through this process, members of the corporate governance and nominating committee consult with our board chair and accept nominee recommendations from other directors and/or shareholders in accordance with the terms of our Certificate of Incorporation and our bylaws. The invitation to join our board of directors is extended by our board of directors through our board chair. Our lead independent director serves as the chair of our corporate governance and nominating committee.
Suitability of Candidates
In evaluating the suitability of candidates, our board of directors and corporate governance and nominating committee consider many factors, including a candidate's:
|
•
|
experience as a senior officer in a public or substantial private company or other comparable experience;
|
|
•
|
experience as a director of a public company;
|
|
•
|
breadth of knowledge about issues affecting the Company and/or its industry;
|
|
•
|
expertise in finance, logistics, manufacturing, law, human resources or marketing or other areas that our board determines are important areas of needed expertise; and
|
|
•
|
personal attributes that include integrity and sound ethical character, absence of legal or regulatory impediments, absence of conflicts of interest, demonstrated track record of achievement, ability to act in an oversight capacity, appreciation for the issues confronting a public company, adequate time to devote to our board of directors and its committees, and willingness to assume broad/fiduciary responsibilities on behalf of all shareholders.
|
The corporate governance and nominating committee is committed to nondiscrimination in its selection practices and makes decisions primarily on the basis of skills, qualifications, and experience.
Consideration of Diversity in Nomination Process
Our current board has a rich mixture of educational, professional, and experiential diversity. As opportunities to appoint new directors become available in the future, in addition to the factors set forth above, our board of directors will consider gender, racial, ethnic, and global diversity for director recruitment.
21
Shareholder Nominations for Directors
The corporate governance and nominating committee has not adopted a formal policy regarding shareholder nominations for directors because the corporate governance and nominating committee does not believe such a policy is necessary for the equitable treatment of shareholder nominations. In accordance with our bylaws, however, the corporate governance and nominating committee will consider shareholder nominations for directors (please refer to the
Shareholder Proposals for Inclusion in Next Year's Proxy Statement
section in this proxy statement for related instructions). We did not receive any shareholder nomination or recommendation for director in connection with the Annual Meeting.
Board and Committee Self-Evaluations
Our directors conduct annual self-evaluations of our board of directors and its committees. These evaluations assess the overall effectiveness of our board of directors. The chairman of the board reviews the directors' responses and provides the individual board members, the corporate governance and nominating committee, and full board with an assessment of the performance of the board and its committees. The directors then discuss the results in executive session. The purpose of the evaluation is to increase the effectiveness of our board, its committees, and our directors.
Board Governance
The board believes that wider perspective and best practices learned by board members serving in other public directorships must be balanced against the time commitment that service on boards entails. Therefore, our Corporate Governance Guidelines (Guidelines) include an overboarding policy whereby our non-employee directors are limited to no more than three public boards, in addition to ours, and our chief executive officer to one additional public board. You can view the Guidelines by visiting our website at www.bc.com and selecting
Investors
,
Leadership and Governance
and then
Corporate Governance Guidelines
.
Communications with Our Board of Directors
You may contact our board of directors by writing to the chairman of the corporate governance and nominating committee, in care of the chief financial officer at the address or email address shown below. All correspondence will be referred to the chairman of the governance and nominating committee, the chairman of the board, and our general counsel.
Boise Cascade Company
Attention
: Chairman of the Corporate Governance and Nominating Committee
c/o Chief Financial Officer
1111 West Jefferson Street, Suite 300
Boise, ID 83702
Email:
legaldepartment@bc.com
You may also contact our board of directors by email by going to our website, www.bc.com, and selecting
Contact
at the top of the page, then selecting
Board of Directors
in the drop down box.
22
BOARD STRUCTURE
Board Leadership Structure
Currently the positions of chairman and chief executive officer are filled separately. Our board of directors believes that this structure is appropriate for the Company at this time. Mr. Carlile
’
s (our chairman of the board) experience as our former chief executive officer provides our board of directors with valuable insight on operational and industry issues.
On February 4, 2013, our corporate governance and nominating committee and our board of directors adopted the Guidelines to serve as a flexible framework within which the board conducts business. The committee and board routinely review the Guidelines with the most recent review occurring on February 22, 2018. On October 28, 2015, our board formalized our practice that the chair of the governance and nominating committee serves as the lead independent director. Our lead independent director presides over all meetings of the independent directors and works collaboratively with our chairman and chief executive officer regarding board governance, process, and establishing meeting agendas for our board.
Executive Sessions and Independent Director Sessions
Our board of directors and each of our committees routinely meet in executive sessions outside the presence of management. Mr. Carlile, our chairman of the board, presides over the executive sessions of our board of directors, and each committee chair presides over the executive sessions of each respective committee. Mr. Hogans, the chair of our corporate governance and nominating committee and our lead independent director, presides over the sessions of our independent board members who meet outside the presence of our non-independent directors at least twice per year to discuss matters as they deem appropriate.
2017 Overall Meeting Attendance Rates
During 2017, our board of directors met four times in person and once by telephone conference. Our board also acted pursuant to written resolution on one occasion during 2017. In addition to meetings of the full board, our board committees met a total of 14 times. As a group, our directors had an overall attendance rate of 100%.
Under the Guidelines, our directors are expected to attend our Annual Meeting to be held on May 3, 2018. All of the directors on the board attended the 2017 Annual Meeting.
Committees
Our board of directors has established the following three standing committees:
Audit Committee
Compensation Committee
Corporate Governance and Nominating Committee
The composition, duties, and responsibilities of these committees are outlined in written charters adopted by our board of directors. Each committee charter is reviewed annually by its respective committee to ensure ongoing compliance with applicable laws and sound governance practices and reviewed
23
periodically by outside legal counsel. Each committee enacts any recommended changes to its charter coming out of such reviews and reports the changes to our board of directors
.
You may view copies of our committee charters by visiting our website at www.bc.com and selecting
Investors
at the bottom of the page and then
Leadership and Governance.
You are then able to select any of the committee charters.
Audit Committee
|
Committee Members
(1)
|
2017 Committee Meeting
Attendance Rate
(2)
|
|
Christopher J. McGowan,
committee chair
(3)
|
100%
|
|
Steven C. Cooper
(3)
|
100%
|
|
Richard H. Fleming
(3)
|
100%
|
|
Duane C. McDougall
(3) (4)
|
100%
|
|
(1)
|
All members of the audit committee are independent as defined under the applicable NYSE listing standards and in accordance with Rule 10A-3 under the Exchange Act, as determined by our board of directors.
|
|
(2)
|
The audit committee met two times in person and three times telephonically during 2017.
|
|
(3)
|
Our board of directors has determined that Messrs. McGowan, Cooper, Fleming and McDougall are audit committee financial experts, as defined in Item 407(d)(5) of Regulation S-K under the Securities Act.
|
|
(4)
|
Mr. McDougall was elected to serve on this committee effective May 4, 2017, and attended 100% of committee meetings thereafter.
|
The audit committee of our board of directors is responsible for matters including the following:
|
▪
|
Reviewing and discussing with management and the independent auditors:
|
|
◦
|
the Company’s annual audited financial statements and quarterly unaudited financial statements;
|
|
◦
|
major issues regarding accounting principles, financial statement presentations, and the adequacy and effectiveness of the Company’s internal controls;
|
|
◦
|
significant financial reporting issues and judgments including the effects of alternative GAAP methods on the financial statements; and
|
|
◦
|
the effect of regulatory and accounting initiatives on the Company’s financial statements;
|
|
▪
|
Discussing with management our overall risk assessment and risk management policies;
|
|
▪
|
Reviewing disclosures made by our chief executive officer and chief financial officer regarding any significant deficiencies or material weakness in the design or operation of the Company
’
s internal control over financial reporting and any fraud involving management or employees who have a significant role over financial reporting;
|
|
▪
|
Establishing procedures for the receipt, retention, and treatment of complaints or confidential submissions regarding accounting, internal accounting controls, or auditing matters;
|
|
▪
|
Overseeing such portions of the Code of Ethics as our board of directors may designate from time to time;
|
24
|
▪
|
Discussing with management and/or our general counsel any legal matters that may have a material impact on our financial statements;
|
|
▪
|
Selecting, overseeing, and determining the compensation of the Company
’
s independent auditors;
|
|
▪
|
Approving audit fees paid to independent auditors, preapproving all audit services (and non-audit services to be performed for the Company by the independent auditors) and considering whether the provision of non-audit services is compatible with maintaining the auditor
’
s independence;
|
|
▪
|
Annually evaluating the qualifications, performance, and independence of the independent auditors;
|
|
▪
|
Annually preparing a report to be included in our proxy statement and submitting such report to our board of directors for approval;
|
|
▪
|
Reviewing the scope and staffing of the independent auditors annual audit, discussing all matters required by PCAOB auditing Standard No. 16, and discussing any audit problems or difficulties and management
’
s response;
|
|
▪
|
Reviewing internal audit department activities and approving the internal audit department projects and annual budget; and
|
|
▪
|
Reviewing with the senior internal auditing executive the significant reports to management prepared by the internal auditing department and management's responses.
|
For a complete description of our audit committee's responsibilities, you may view a copy of our audit committee charter by visiting our website at www.bc.com and selecting
Investors
at the bottom of the page and then
Leadership and Governance.
You are then able to select the audit committee charter.
Compensation Committee
|
Committee Members
(1)
|
2017 Committee Meeting
Attendance Rate
(2)
|
|
Karen E. Gowland,
committee chair
|
100%
|
|
David H. Hannah
|
100%
|
|
Kristopher J. Matula
|
100%
|
|
Duane C. McDougall
(3)
|
100%
|
|
(1)
|
All members of the compensation committee are independent as defined under the applicable NYSE's listing standards, as determined by our board of directors.
|
|
(2)
|
The compensation committee met four times in person and once by telephone conference in 2017.
|
|
(3)
|
Mr. McDougall was elected to serve on this committee effective May 4, 2017 and attended 100% of committee meetings thereafter.
|
The compensation committee of our board of directors is responsible for matters including the following:
|
▪
|
Assisting our board of directors in discharging its responsibilities relating to compensation of our board members, chief executive officer, and other executive officers;
|
25
|
▪
|
Reviewing and approving employment agreements and other similar arrangements between the Company and our chief executive officer and other executive officers;
|
|
▪
|
Reviewing and evaluating the Company's overall compensation philosophy and overseeing the Company's equity, incentive, and other compensation and benefits plans; and
|
|
▪
|
Preparing the compensation committee report on executive officer compensation required by the SEC for inclusion in the Company
’
s annual proxy statement or Annual Report
.
|
For a complete description of our compensation committee's responsibilities, you may view a copy of our compensation committee charter by visiting our website at www.bc.com and selecting
Investors
at the bottom of the page and then
Leadership and Governance.
You are then able to select the compensation committee charter.
Corporate Governance and Nominating Committee
|
Committee Members
(1)
|
2017 Committee Meeting
Attendance Rate
(2)
|
|
Mack L. Hogans,
committee chair
|
100%
|
|
Karen E. Gowland
|
100%
|
|
David H. Hannah
|
100%
|
|
Kristopher J. Matula
|
100%
|
|
(1)
|
All members of the corporate governance and nominating committee are independent as defined under the applicable NYSE's listing standards, as determined by our board of directors.
|
|
(2)
|
The corporate governance and nominating committee of our board of directors met in person four times during 2017.
|
The corporate governance and nominating committee of our board of directors is responsible for matters including the following:
|
▪
|
Identifying and assessing persons qualified to become board members, consistent with the qualification standards and criteria approved by the board;
|
|
▪
|
Recommending to the board a slate of director nominees for election or re-election at the Annual Meeting;
|
|
▪
|
Recommending to the board the structure and membership of board committees;
|
|
▪
|
Recommending to the board persons to fill board and committee vacancies;
|
|
▪
|
Overseeing annual evaluations of the board and committees of the board;
|
|
▪
|
Reviewing periodically the Guidelines applicable; and
|
|
▪
|
Making other recommendations to the board relative to corporate governance issues.
|
For a complete description of our corporate governance and nominating committee's responsibilities, you may view a copy of our corporate governance and nominating committee charter by visiting our website at www.bc.com and selecting
Investors
at the bottom of the page and then
Leadership and Governance.
You are then able to select the corporate governance and nominating committee charter
.
26
BOARD COMPENSATION
Director compensation is benchmarked against market data and our peer group, which was selected with the assistance of Frederic Cook. Employee board members do not receive compensation for their service on our board of directors. Mr. Corrick is currently our only employee board member. Nonemployee board members in 2017 were entitled to receive the compensation described below under "2017 Director Fees."
Director Compensation Table
The following table presents compensation information for each of our nonemployee directors for the year ended December
31, 2017:
|
Name
|
Fees Earned or Paid in Cash
($)
(1)
|
Stock
Awards
($)
(2)
|
Change in Pension Value/
Nonqualified
Deferred
Compensation
Earnings
($)
(3)
|
All Other
Compensation ($)
|
Total
($)
|
|||||||||||||||
|
Thomas E. Carlile
|
$
|
160,000
|
|
$
|
114,990
|
|
$
|
—
|
|
$
|
—
|
|
$
|
274,990
|
|
|||||
|
Steven C. Cooper
|
70,000
|
|
89,995
|
|
7,775
|
|
—
|
|
167,770
|
|
||||||||||
|
Richard H. Fleming
|
70,000
|
|
89,995
|
|
—
|
|
—
|
|
159,995
|
|
||||||||||
|
Karen E. Gowland
|
80,000
|
|
89,995
|
|
5,024
|
|
—
|
|
175,019
|
|
||||||||||
|
David H. Hannah
|
70,000
|
|
89,995
|
|
—
|
|
—
|
|
159,995
|
|
||||||||||
|
Mack L. Hogans
|
97,500
|
|
89,995
|
|
—
|
|
—
|
|
187,495
|
|
||||||||||
|
Kristopher J. Matula
|
70,000
|
|
89,995
|
|
8,792
|
|
—
|
|
168,787
|
|
||||||||||
|
Duane C. McDougall
|
70,000
|
|
89,995
|
|
—
|
|
—
|
|
159,995
|
|
||||||||||
|
Christopher J. McGowan
|
85,000
|
|
89,995
|
|
—
|
|
—
|
|
174,995
|
|
||||||||||
|
(1)
|
The fees earned reported above include fees that directors have deferred. See note (3) below.
|
|
(2)
|
On February 23, 2017, our chairman of the board was awarded 4,251 time-vested restricted stock units with a grant date fair value of $114,990. Our other board members were awarded 3,327 time-vested restricted stock units with a grant date fair value of $89,995.
|
|
(3)
|
We do not provide our directors with pension benefits. Our director-deferred compensation plan was open for contributions in 2016, and Messrs. Cooper and Matula, and Ms. Gowland participated. The amounts reported in the third column include all 2017 interest earned on compensation deferrals.
|
Compensation Committee Interlocks and Insider Participation
During 2017, the compensation committee consisted of Ms. Gowland, Mr. Hannah, Mr. Matula and, following appointment to the committee on May 4, 2017, Mr. McDougall. None of our executive officers currently serves, or in the past year has served, as a member of the board of directors or compensation
27
committee of any entity that has one or more executive officers serving on our board of directors or compensation committee
.
2017 Director Fees
Beginning in January 2017, our fee schedule for nonemployee directors was:
|
Director Fees
|
2017
|
||||||
|
Director Fees (Annual):
|
|
||||||
|
Cash Retainer
|
$
|
70,000
|
|
||||
|
Equity Award
|
$
|
90,000
|
|
||||
|
Committee Chair Fees (Annual):
|
|
||||||
|
Audit
|
$
|
15,000
|
|
||||
|
Compensation
|
$
|
10,000
|
|
||||
|
Corporate Governance and Nominating
|
$
|
7,500
|
|
||||
|
Lead Independent Director
|
$
|
20,000
|
|
||||
|
Chairman
|
|||||||
|
Additional Cash Retainer
|
$
|
90,000
|
|
||||
|
Additional Equity Award
|
$
|
25,000
|
|
||||
2017 Director Restricted Stock Unit Awards
Upon recommendation of the compensation committee, our board of directors on February 23, 2017 approved the granting of RSUs with a grant date fair value equal to $89,995 (or 3,327 units) to each of our nonemployee directors plus additional RSUs with a grant date fair value equal to $24,995 (or 924 units) to our board chairman. These 2017 RSU awards are service-condition vesting awards that vested in full and were distributed on February 23, 2018.
2018 Director Fees
The fee schedule for nonemployee directors for the year ending December 31, 2018, is unchanged from the schedule for 2017 set forth above.
Directors Deferred Compensation Plan
We maintain a "nonqualified" deferred compensation plan offered to our nonemployee directors. The plan is an unfunded plan intended to help participants supplement their retirement income while providing them an opportunity to invest a portion of their cash compensation. Under the plan, each director who receives cash compensation for board service may elect to defer all or a portion of his or her cash compensation in a calendar year. Amounts deferred are credited with imputed interest at a rate equal to 130% of Moody's Composite Average of Yields on Corporate Bonds. Participants elect the form and timing of distributions of their deferred compensation balances. Participants may receive payment in cash in a lump sum or in annual installments following their service on our board of directors. The plan was closed for contributions in 2013 but was reopened for participation effective January 1, 2014. Ms.
28
Gowland and Messrs. Matula and Cooper have elected to defer cash compensation in 2016 and 2017 under this plan. We do not anticipate making any changes to this plan in 2018.
STOCK OWNERSHIP
Stock Ownership Guidelines for Our Directors
In February 2014, our board of directors established Company stock ownership guidelines for our directors which are intended to ensure that our directors acquire and maintain an equity stake in the Company and more closely align their interests with those of our shareholders.
Our director stock ownership guidelines provide that, within five years from becoming a director, each director should acquire and maintain stock ownership in the Company equal to five times his or her annual cash retainer. As of March 2018, all of our board of directors met the ownership guidelines.
Stock Ownership Guidelines for Our Officers
Our board established officer stock ownership guidelines in February 2014 and updated them in November 2017. The ownership targets within the guidelines vary by officer level with the chief executive officer
’
s target at five times salary, executive vice presidents
’
and senior vice presidents
’
target at two times salary, and vice presidents
’
target at one times salary. Officers are expected to achieve their respective target within five years of the board
’
s adoption of the guidelines or of becoming an officer, whichever is later.
Security Ownership of Certain Beneficial Owners and Management
Except as otherwise noted, the following table sets forth certain information with respect to the beneficial ownership of our common stock as of March 6, 2018 by: (1) each of the named executive officers in the Summary Compensation Table; (2) each of our directors and director-nominees; (3) all directors and executive officers as a group; and (4) each person or entity known to us to be the beneficial owner of more than five percent of our outstanding shares of common stock. All information with respect to beneficial ownership has been furnished to us by the respective director, director nominee, executive officer or five percent beneficial owner, as the case may be. Unless otherwise noted below, the address of each beneficial owner is c/o Boise Cascade Company, 1111 West Jefferson Street, Suite 300, Boise, ID 83702. Unless otherwise indicated, each person or entity named below has sole voting and investment power with respect to the number of shares set forth opposite his, her or its name.
29
|
Name and Address of Beneficial Owner
and Nature of Beneficial Ownership
|
Column
|
||||||||
|
A
|
B
|
C
|
|||||||
|
Shares
Owned
as of
3/6/18
(#)
(1)
|
Right to Acquire Within 60 Days of 3/6/18
(#)
(1)
|
Percent
of
Class
(%)
(2)
|
|||||||
|
Persons Owning Greater Than 5% of Our Outstanding Common Stock:
|
|||||||||
|
BlackRock, Inc.
(3)
|
5,187,573
|
|
—
|
|
13.3%
|
||||
|
The Vanguard Group
(4)
|
3,903,620
|
|
—
|
|
10.0%
|
||||
|
Dimensional Fund Advisors LP
(5)
|
2,940,368
|
|
—
|
|
7.5%
|
||||
|
Nonemployee Directors:
|
|||||||||
|
Thomas E. Carlile
|
49,945
|
|
9,847
|
|
(6)
|
*
|
|||
|
Steven C. Cooper
|
3,327
|
|
7,647
|
|
(7)
|
*
|
|||
|
Richard H. Fleming
|
8,327
|
|
12,309
|
|
(8)
|
*
|
|||
|
Karen E. Gowland
|
3,327
|
|
10,286
|
|
(7)
|
*
|
|||
|
David H. Hannah
|
3,327
|
|
8,479
|
|
(7)
|
*
|
|||
|
Mack L. Hogans
|
3,402
|
|
9,187
|
|
(7)
|
*
|
|||
|
Kristopher J. Matula
|
4,727
|
|
9,187
|
|
(7)
|
*
|
|||
|
Duane C. McDougall
|
16,127
|
|
12,309
|
|
(8)
|
*
|
|||
|
Christopher J. McGowan
|
25,540
|
|
12,309
|
|
(8)
|
*
|
|||
|
Named Executive Officers:
|
|||||||||
|
Thomas K. Corrick
|
85,850
|
|
5,923
|
|
(9)
|
*
|
|||
|
Wayne M. Rancourt
|
37,260
|
|
9,872
|
|
(9)
|
*
|
|||
|
Dan Hutchinson
|
29,190
|
|
2,962
|
|
(9)
|
*
|
|||
|
Nick Stokes
|
31,376
|
|
5,923
|
|
(9)
|
*
|
|||
|
John T. Sahlberg
|
31,506
|
|
—
|
|
*
|
||||
|
All Directors and Executive Officers as a Group
(15 Persons)
|
347,335
|
|
120,354
|
|
1.2%
|
||||
*
Less than 1%
|
(1)
|
Under SEC rules, a person is considered to beneficially own any shares over which they exercise sole or shared voting and/or investment power (Column A) plus any shares they have the right to acquire within 60 days of March 6, 2018 (Column B).
|
|
(2)
|
Percent of class (Column C) is calculated by dividing the number of shares beneficially owned (Column A plus Column B) by the Company's total number of outstanding shares on March 6, 2018 (38,864,547 shares) plus the number of shares such person has the right to acquire within 60 days of March 6, 2018 (Column B).
|
|
(3)
|
Pursuant to Schedule 13G/A, Amendment No. 4, dated December 31, 2017, and filed with the SEC on January 19, 2018, by BlackRock, Inc. (BlackRock). BlackRock's principal business is at 55 East 52nd Street, New York, NY 10055.
|
|
(4)
|
Pursuant to Schedule 13G/A, Amendment No. 4, dated January 31, 2018, and filed with the SEC on February 12, 2018, by The Vanguard Group (Vanguard). Vanguard's principal business is at 100 Vanguard Blvd., Malvern, PA 19355.
|
|
(5)
|
Pursuant to Schedule 13G/A, Amendment No. 1, dated December 31, 2017, and filed with the SEC on February 9, 2018, by Dimensional Fund Advisors LP (Dimensional). Dimensional's principal business is at Dimensional Place Building One, 6300 Bee Cave Road, Austin, TX 78746.
|
|
(6)
|
Mr. Carlile's reported amount includes 2,903 restricted stock units which vested on February 25, 2016 and 6,944 shares that vested on February 24, 2017; which will be delivered to the subject director six months and one day after his
|
30
termination as a director (or other employee) of the Company.
|
(7)
|
Reported amount includes 2,639, 832, 1,540, and 1,540 restricted stock units which vested on February 27, 2015, for Ms. Gowland and Messrs. Hannah, Hogans, and Matula, respectively, 2,212 restricted stock units which vested on February 25, 2016, and 5,435 restricted stock units that vested on February 24, 2017; each of which will be delivered to the subject director six months and one day after his/her termination as a director (or other employee) of the Company. Mr. Cooper received 2,212 restricted stock units which vested on February 25, 2016 and 5,435 restricted stock units that vested on February 24, 2017, and will be delivered six months and one day after his termination as a director of the Company.
|
|
(8)
|
Reported amount includes 2,023, 2,639, 2,212, and 5,435 restricted stock units which vested on February 26, 2014, February 27, 2015, February 25, 2016, and February 24, 2017, respectively; which will be delivered to the subject director six months and one day after his termination as a director (or other employee) of the Company.
|
|
(9)
|
Represents shares issuable upon exercise of options that are currently exercisable.
|
AUDIT COMMITTEE REPORT
Dear Fellow Shareholders:
The following is the report of the audit committee with respect to the Company's audited financial statements for the year ended December
31, 2017.
Audit Committee Charter and Responsibilities
The audit committee assists the board of directors in its oversight of the quality and integrity of the Company's financial statements and its accounting and financial reporting practices. The audit committee's responsibilities are more fully set forth in its charter, which you can view by visiting our website at www.bc.com and selecting
Investors
at the bottom of the page, then
Leadership and Governance
and then
Committee Charters.
Then select the audit committee charter.
In fulfilling its oversight responsibilities, the audit committee reviewed and discussed the Company's annual audited and quarterly consolidated financial statements for the 2017 calendar year with management and KPMG, the Company's independent auditor. The audit committee has discussed with KPMG the matters required to be discussed by the Statement on Auditing Standards No. 61, as amended (AICPA,
Professional Standards
, Vol. 1, AU section 380), as adopted by the Public Company Accounting Oversight Board (PCAOB) in Rule 3200T and as approved by the SEC. The audit committee has also received the written disclosures and the letter from KPMG required by PCAOB regarding KPMG's communications with the audit committee concerning independence, and has discussed with KPMG its independence from the Company and its management.
Audit Committee Financial Experts
The board of directors has determined that the audit committee chair, Christopher J. McGowan, and each of the other audit committee members, Richard H. Fleming, Duane C. McDougall and Steven C. Cooper, are audit committee financial experts, as defined in Item 407(d)(5) of Regulation S-K under the Securities Act. Our board of directors has also determined that Mr.
McGowan and the other members of the audit committee are independent in accordance with the applicable NYSE listing rules.
Recommendation of Financial Statements
Based on the review and discussions with management and KPMG, the audit committee recommended to the Company's board of directors that the Company's audited financial statements be included in the Company's Annual Report for the year ended December
31, 2017, for filing with the SEC.
31
Respectfully submitted,
The Audit Committee
Christopher J. McGowan
, committee chair
Steven C. Cooper
Duance C. McDougall
Richard H. Fleming
Fees Paid to KPMG
The following table presents the aggregate fees billed by KPMG to us for services rendered for the years ended December
31, 2016 and 2017, as approved by the audit committee:
|
|
2016
($)
|
2017
($)
|
|||||
|
Audit Fees
(1)
|
$
|
2,082,324
|
|
$
|
2,189,996
|
|
|
|
Audit-Related Fees
(2)
|
9,000
|
|
9,500
|
|
|||
|
Tax Fees
(3)
|
85,000
|
|
55,400
|
|
|||
|
All Other Fees
|
—
|
|
|||||
|
Total
|
$
|
2,176,324
|
|
$
|
2,254,896
|
|
|
|
(1)
|
KPMG's Audit Fees consisted of fees for the audit of our 2016 and 2017 year-end financial statements included in the Company's Form 10-K, the 2016 and 2017 audits of our internal control over financial reporting, reviews of our interim financial statements included in our quarterly reports on Form 10-Q, and other filings with the SEC.
|
|
(2)
|
KPMG's
Audit-Related Fees
consisted of fees in connection with the issuance of financial assurance letters.
|
|
(3)
|
KPMG's tax fees in 2016 and 2017 consisted of support services in connection with the Company's eligibility for federal and state research and development credits.
|
Policies and Procedures for Preapproval of Audit and Non-audit Services
The audit committee's charter provides that all audit and non-audit services to be performed for us by KPMG be preapproved. Our controller monitors services provided by KPMG and overall compliance with the preapproval policy and reports periodically to the audit committee on the status of outstanding engagements, including actual services provided and associated fees. Our controller must promptly report any noncompliance with the preapproval policy to the chair of the audit committee.
During 2017, all services by our independent registered public accounting firm were preapproved by the audit committee in accordance with this policy.
EQUITY COMPENSATION PLAN INFORMATION
Boise Cascade became a public company on February 6, 2013. Our board of directors adopted the 2013 Incentive Plan on February 4, 2013, in anticipation of the consummation of our initial public offering. From 2013 through April 2016, our compensation committee approved all equity grants made under the 2013 Incentive Plan. Following shareholder approval of our 2016 Incentive Plan, all grants are made under that plan, and no awards may be granted under the 2013 Incentive Plan. The following table provides information about our equity compensation plans as of December 31, 2017:
32
|
Plan Category
|
Number of Securities
to Be Issued Upon Exercise of
Outstanding
Options, Warrants,
and Rights
|
Weighted Average Exercise Price
of Outstanding Options, Warrants,
and Rights
|
Number of Securities Remaining Available
for Future Issuance
Under Equity
Compensation Plans (Excluding Securities Reflected in the First Column)
|
||||||||
|
Equity compensation plans approved by shareholders
(1)
|
1,081,223
|
|
(2)
|
$
|
27.19
|
|
(3)
|
2,732,755
|
|
(4)
|
|
|
Equity compensation plans not approved by shareholders
|
—
|
|
—
|
|
—
|
|
|||||
|
Total
|
1,081,223
|
|
$
|
27.19
|
|
2,732,755
|
|
||||
|
(1)
|
Includes securities to be issued upon exercise of options and other equity grants, as well as shares of common stock remaining for future issuance under both the 2013 Incentive Plan and the 2016 Incentive Plan.
|
|
(2)
|
As of December 31, 2017, the number of shares of common stock to be issued upon exercise of outstanding options, warrants, and rights consists of 72,839
nonqualified stock options, 498,593
performance stock units (2015 and 2016 PSUs at actual, 2017 PSUs at target), and 509,791
restricted stock units awarded under the incentive plans. The actual 2017 PSUs awarded at the February 22, 2018, meeting of the compensation committee were at 1.35 times target for officers.
|
|
(3)
|
Applicable only to nonqualified stock options granted in 2013 as the unvested PSUs and RSUs do not have an exercise price.
|
|
(4)
|
The maximum number of shares to be issued under the 2016 Incentive Plan was 3,700,000 shares, less shares granted under the 2013 Incentive Plan after December 31, 2015, plus shares that had been reserved for awards that were forfeited, expired, terminated or settled in cash under both 2013 and 2016 Incentive Plans all after December 31, 2015, plus shares withheld for taxes for both 2013 and 2016 Incentive Plans.
|
As of December 31, 2017, Boise Cascade had 38,580,732
shares of common stock outstanding. Outstanding, full-value awards (RSUs and PSUs) constituted 1,008,384 shares or 2.5% of our fully diluted common stock outstanding.
Outstanding stock options of 72,839
shares with a weighted average exercise price of $27.19 and a weighted average remaining term of 5 years constituted .2% of our fully diluted common stock outstanding.
EXECUTIVE COMPENSATION
Compensation Committee Report
Dear Fellow Shareholders:
As the compensation committee of the board of directors of Boise Cascade Company (Company), we have reviewed and discussed the following Compensation Discussion and Analysis (CD&A) required by Item 402(b) of Regulation S-K with the Company’s management. Based on this review and discussion, the compensation committee recommends to the Company’s board of directors that the CD&A be included in this proxy statement and referenced in the Company’s Annual Report for the year ended December 31, 2017.
33
Respectfully submitted,
The Compensation Committee
Karen E. Gowland,
committee
chair
David H. Hannah
Kristopher J. Matula
Duane C. McDougall
Compensation Discussion and Analysis
This CD&A describes the 2017 compensation program for our executive officers, particularly our Named Executive Officers who are listed below, along with the positions they held with the Company as of December 31, 2017:
Thomas K. Corrick - Chief Executive Officer
Wayne M. Rancourt - Executive Vice President, Chief Financial Officer, and Treasurer
Dan Hutchinson - Executive Vice President, Wood Products
Nick Stokes - Executive Vice President, Building Materials Distribution
John T. Sahlberg
(1)
- Senior Vice President, Human Resources and General Counsel
|
(1)
|
Mr. Sahlberg also held the position of Secretary until August 3, 2017, when Jill M. Twedt was promoted to that position.
|
In this CD&A, we use a number of abbreviations or definitions to describe components of the compensation packages. While each component is defined again and described in more detail in the following discussions, we are providing this abbreviation or definition summary to aid in reading our CD&A:
|
Abbreviation or Definition
|
Full Name
|
|
BCPP
|
The Boise Cascade Pension Plan
|
|
Compensation Committee
|
Refers to the Company’s Compensation Committee
|
|
BMD
|
The Company’s Building Materials Distribution business
|
|
CD&A
|
Compensation Discussion and Analysis
|
|
Company
|
Boise Cascade Company
|
|
Frederic Cook
|
Frederic W. Cook & Co., Inc., the Compensation Committee’s consultant
|
|
EBITDA
|
Earnings Before Interest (interest expense and interest income), Taxes, Depreciation and Amortization
|
|
LTIP
|
Long-Term Incentive Plans
|
|
MEP
|
The 2004 Management Equity Plan
|
|
Named Executive Officers
|
The five officers identified in the first paragraph of the CD&A
|
|
Officers
|
Executive officers of the Company
|
|
PRONWC
|
Pre-tax Return On Net Working Capital
|
|
PSUs
|
Performance Stock Units
|
|
ROIC
|
Return on Invested Capital
|
|
RSUs
|
Restricted Stock Units
|
|
STIP
|
The Short-Term Incentive Plan
|
|
Cash-Based LTIP
|
The cash-based, Long-Term Incentive Plan in effect through 2012
|
|
SERP
|
The frozen, non-qualified Supplemental Early Retirement Plan
|
|
SPP
|
Salaried Pension Plan
|
|
SUPP
|
The frozen, non-qualified Supplemental Pension Plan
|
34
|
Wood Products
|
The Company’s Wood Products manufacturing business
|
|
2013 Incentive Plan
|
Boise Cascade Company 2013 Incentive Compensation Plan, adopted in connection with the Company
’
s initial public offering which has been replaced by the Boise Cascade Company 2016 Incentive Plan
|
|
2016 Incentive Plan
|
The 2016 Boise Cascade Omnibus Incentive Plan approved by our shareholders at the 2016 Annual Meeting
|
Our Compensation Objectives and Philosophy
We want to attract, retain, and incent the management talent we believe is essential to achieving the Company’s strategic objectives, which are to grow the Company prudently and to increase long-term shareholder value. As a guiding philosophy, we target all forms of compensation at the 50
th
percentile of comparable market compensation data, taking into account each person’s performance, contributions to the Company’s success, level of experience, and other distinguishing characteristics. In some instances and for the purpose of internal equity, we have established similar compensation ranges for officer positions with similar scopes of responsibility and other similar characteristics even if such ranges may differ from comparable positions in other companies.
As a newly public company, 2014 was the first year that we had nonbinding advisory shareholder votes on executive compensation. The first vote was on the frequency of holding an advisory approval of our executive compensation, and the shareholders advised a preference for an annual vote. At the July 2014 board meeting, the board agreed to an annual vote on "say-on-pay." In each subsequent year, our shareholders have approved our executive compensation with over 90% voting in favor and, in 2017, our shareholders approved our executive compensation with over 93% voting in favor. The Compensation Committee and the board intend to continue to take these advisory votes into account regarding future compensation decisions. For 2018, shareholders will again vote on whether to approve our executive compensation as set out in this document.
Use of Market Data to Determine Amount and Allocation of Compensation
The Compensation Committee believes that an important criterion for the determination of the aggregate value of the Company's compensation program and the allocation of the value among the various elements of its compensation plans is market data, where available, on the amounts, allocations, and structures utilized by similarly situated peer companies for positions of comparable responsibility.
Management and the Compensation Committee have utilized compensation and benefits surveys to ascertain market levels of aggregate compensation and the allocation of that compensation among specific compensation elements for its Named Executive Officers. Aggregate compensation and compensation for each of the major elements (base salary, short-term incentive compensation, and long-term incentive compensation) for the Company's Named Executive Officers has generally been targeted at the 50th percentile of the surveyed peer-group companies. However, the specific aggregate compensation (and the allocation among the elements of the total compensation) paid to any of our Named Executive Officers may be below or above the 50
th
percentile target levels, depending on subjective judgments made by the Compensation Committee based on factors such as the specific officer's tenure with the Company and in his or her position, responsibilities that vary from the benchmark position, historical performance in the job, and other distinguishing characteristics.
Since 2011, the Compensation Committee has retained periodically the services of Frederic Cook, a compensation consultant, to prepare a comprehensive analysis of the compensation packages for our Named Executive Officers and to compare the specific elements of compensation and the aggregate value with a group of peer companies recommended by the consultant.
35
Frederic Cook conducted the 2017 annual review of our peer companies with our Compensation Committee at its August meeting and recommended that paper and packaging companies be removed due to lack of similarity with our business, Nortek Inc. be removed because it was acquired and is no longer a publicly listed company, and American Woodwork be added. The Compensation Committee agreed with the recommendation.
During 2017, the Compensation Committee reviewed the officer severance agreements, the Company's STIP plans and the proposed peer group for 2018 compensation discussions. The Compensation Committee re-approved double-trigger, officer severance agreements containing no additional compensation or benefits for officers and reviewed and re-approved its compensation philosophy as it appears in this Proxy Statement. The Compensation Committee also reviewed Frederic Cook's fees. Finally, the Compensation Committee adopted a modified 2018 peer group as follows:
American Woodwork
Armstrong World Industries
Beacon Roofing Supply, Inc.
BlueLinx Corporation
Builders FirstSource, Inc.
Eagle Materials Inc.
Gibraltar Industries Corporation
Louisiana Pacific Corporation
Masonite International Corporation
NCI Building Systems Company
Ply Gem Holdings, Inc.
Quanex Building Products Corporation
Simpson Manufacturing Company, Inc.
Universal Forest Products, Inc.
USG Corporation
Summary of Key Events Affecting our Named Executive Officers' Compensation in 2017
For 2017, our Compensation Committee again chose to grant 50% of the long-term incentive grant value in RSUs and 50% in PSUs. The RSUs vest and distribute one-third each year over a three-year period. The PSUs, however, are designed to have a one-year ROIC target (rather than EBITDA which is used for the STIP performance target) and a three-year cliff distribution (rather than a one-third distribution over three years) to better align with the long-term interests of shareholders.
The Compensation Committee also made salary adjustments for our executive officers to reflect several promotions, the changing median pay in our peer companies, and individual officer performance.
Executive Compensation Elements
The five elements of the Company's executive compensation are:
|
▪
|
Base salary;
|
|
▪
|
STIP;
|
|
▪
|
Ad hoc discretionary bonus awards;
|
|
▪
|
LTIPs; and
|
|
▪
|
Other compensation and benefit plans.
|
36
Role of Management in Setting Executive and Director Compensation
As described below, the Compensation Committee increased the compensation of our executives, including our chief executive officer, in 2017. Management did not participate in such decision. However, the Company's chief executive officer makes, and in 2017 made, recommendations to the Compensation Committee with respect to base salaries and performance targets made for the Company's STIP and LTIP for officers other than himself. The Compensation Committee makes all decisions regarding each Named Executive Officer’s base salary, LTIP and STIP targets, the overall performance targets of the plans, and the potential and actual payouts under each plan. Management does not participate in setting director compensation.
Base Salary
Our Compensation Committee has historically reviewed base salaries for our Named Executive Officers on an annual basis and at the time of promotions or other changes in responsibilities. In November 2017, the Compensation Committee approved general wage increases for the Named Executive Officers to continue to move them, as determined appropriate, toward the 50th percentile based upon Frederic Cook's 2017 study. The 2017 changes in executive salaries were in line with market data provided by Frederic Cook. The salaries for our Named Executive Officers over the last three years can be found in the Summary Compensation Table.
STIP
The STIP is designed to recognize and reward the contributions that Named Executive Officers and other participants make to the Company's annual performance. Payout of the STIP is based on achievement of performance measures that are tied to the Company's annual financial performance. We offer this plan to encourage and reward conduct that will lead to better performance of our businesses as measured by the performance criteria. Each Named Executive Officer’s participation in the plan, along with the criteria for calculation of the payout, is established annually by action of our Compensation Committee and communicated to the participants in an STIP award notice. A determination of the amount payable under the plan based on actual performance is made by the Compensation Committee generally in February of the following year, and resulting payments or awards are made to participants.
2017 STIP Compensation
For 2017, each of our Named Executive Officers participated in the STIP. The plan provided for awards to be determined based on the extent to which the financial goals and performance objectives were met during the year, and on the exercise of the Compensation Committee's discretion. The 2017 annual incentive award targets for our Named Executive Officers were as follows:
|
Officer
|
Target Award as a Percentage
of Actual Base Earnings
(2)
|
|
Thomas K. Corrick
|
100%
|
|
Wayne M. Rancourt
|
75%
|
|
Nick Stokes
(1)
|
80%
|
|
Dan Hutchinson
(1)
|
80%
|
|
John T. Sahlberg
|
65%
|
|
(1)
|
Messrs. Stokes' and Hutchinson's target award as a percentage of base earnings was 75% in 2016.
|
37
|
(2)
|
The target award is applied to the actual base earnings for the year which, given the Fall 2017 base salary increases, is less than the base salary.
|
T
he actual awards may be less than or greater than the target incentive amounts depending on the achievement of pre-determined financial goals and performance objectives and the exercise of the Compensation Committee's discretion. For 2017, the Compensation Committee set a threshold of 25% of the target award as the minimum award to be granted under the program. The Compensation Committee also set a maximum of 225% of the target award based on financial goals for 2017 and approved a payout graph with a payout line whereby once the level of performance is determined the award multiplier can be determined. The dollar amount of the threshold, target, and maximum award payable to each of our Named Executive Officers is set out in the table found under "Grants of Plan-Based Awards" in this section of this proxy statement.
The annual financial goals required for each of our Named Executive Officers under our 2017 STIP were as follows:
|
Officer
|
Financial
Criteria
|
Requirement
For
Threshold Payment
$ or %
|
Requirement
For
Target Payment
$ or %
|
Requirement
For Maximum
Payment
$ or %
|
||||||
|
(in millions, except PRONWC)
|
||||||||||
|
Thomas K. Corrick
|
100% Corporate EBITDA
|
$
|
86
|
|
$
|
176
|
|
$
|
271
|
|
|
Wayne M. Rancourt
|
100% Corporate EBITDA
|
$
|
86
|
|
$
|
176
|
|
$
|
271
|
|
|
Nick Stokes
|
25% Corporate EBITDA
|
$
|
86
|
|
$
|
176
|
|
$
|
271
|
|
|
37.5% BMD EBITDA
|
$
|
66
|
|
$
|
101
|
|
$
|
136
|
|
|
|
37.5% BMD PRONWC
(1)
|
19.4
|
%
|
32.7
|
%
|
45.4
|
%
|
||||
|
Dan Hutchinson
|
25% Corporate EBITDA
|
$
|
86
|
|
$
|
176
|
|
$
|
271
|
|
|
75% Wood Products EBITDA
|
$
|
42
|
|
$
|
100
|
|
$
|
160
|
|
|
|
John T. Sahlberg
|
100% Corporate EBITDA
|
$
|
86
|
|
$
|
176
|
|
$
|
271
|
|
|
(1)
|
Pre-tax Return On Net Working Capital (PRONWC) is calculated by dividing Building Materials Distribution’s (BMD’s) net operating income by the average net working capital reported as of each month-end during a 13-month period running from December 2016 through December 2017, adjusted in each case for special items. The Compensation Committee includes PRONWC as a portion of Mr. Stokes
'
performance criteria because it reflects BMD’s control of working capital, which is a critical financial measure in our distribution business.
|
At the board meeting in February 2018, our Compensation Committee confirmed the payment to each of our Named Executive Officers of an STIP award for 2017 that was calculated in accordance with the plan's metrics. The specific amounts approved by the committee for payment to each of the Named Executive Officers pursuant to the 2017 plan are reported in the column titled Non-Equity Incentive Plan Compensation in the Summary Compensation Table.
2018 STIP Compensation
At the board meeting in February 2018, both the board and the Compensation Committee approved details of the Company's 2018 STIP. No changes were made to the plan document or the methods for calculating the financial criteria to be used in determining each Named Executive Officer's award under the plan.
38
2017 Ad Hoc Discretionary Bonus Awards
From time to time, the Compensation Committee may elect to grant a discretionary
bonus to one or more of the Named Executive Officers or to other employees to recognize and reward exemplary performance providing value to the Company beyond what is recognized by the structure of the Company's STIP. These bonus payments are not governed by any formal plan, and no Named Executive Officer has any contractual entitlement or expectation of any such payment. The amount and timing of the grant of any such bonus to Named Executive Officers are determined by the Compensation Committee at its sole discretion. No such bonus was awarded in 2017.
LTIPs (2013 Incentive Plan and 2016 Incentive Plan - collectively the "Plans")
The Boise Cascade Company board of directors approved the 2013 Incentive Plan before our initial public offering. The 2013 Incentive Plan was replaced by the 2016 Incentive Plan by shareholder vote at our 2016 Annual Meeting. Both Plans were designed to align executive and shareholder interests and to drive long-term business results.
We made equity grants to certain of our directors and executive officers in 2015 and 2016 under the 2013 Incentive Plan, and in 2017 under the 2016 Incentive Plan.
The 2016 Incentive Plan provides for grants of stock options, stock appreciation rights, restricted stock, other stock-based awards, other cash-based compensation, and performance awards. Directors, officers, and other employees, as well as others performing consulting or advisory services are eligible for grants under the 2016 Incentive Plan. The purpose of the 2016 Incentive Plan is to provide incentives that will attract, retain, and motivate high-performing officers, directors, employees, and consultants by providing them a proprietary interest in our long-term success or compensation based on their performance in fulfilling their responsibilities to our Company.
Both Plans are administered by our Compensation Committee as designated by our board of directors. The Compensation Committee has full authority to administer and interpret the Plans, to grant discretionary awards under the 2016 Incentive Plan, to determine the persons to whom awards will be granted, to determine the types of awards to be granted, to determine the terms and conditions of each award, to determine the number of shares of common stock to be covered by each award, to make all other determinations in connection with the Plans and the awards as the Compensation Committee deems necessary or desirable, and to delegate authority under the 2016 Incentive Plan to our executive officers.
The Plans provide that awards granted under the Plans are subject to any recoupment policy we may have, including the clawback of "incentive-based compensation" under the Exchange Act or under any applicable rules and regulations promulgated by the SEC. This summary does not include all of the provisions of the Plans. For further information about the Plans, we refer you to the complete copies of our 2013 Incentive Plan and 2016 Incentive Plan, which we incorporated by reference as exhibits 10.26 and 10.30, respectively, to our 2016 Form 10-K.
In February 2017, the Compensation Committee and the board of directors approved equity grants under the 2016 Incentive Plan. The amount and structure of the grants were based on a study conducted by Frederic Cook and the recommendations Frederic Cook made as a result of the study. Officer participants under the 2016 Incentive Plan received two types of grants: RSUs and PSUs.
Beginning in 2016, Frederic Cook recommended, and the Compensation Committee continued, to set a dollar target rather than a percentage-of-salary target to facilitate the calculation of the RSU and PSU
39
grants on the day of the award after market close. The following 2017 targets for both RSU and PSU grants were set for our Named Executive Officers:
|
Officer
|
Dollar Value of
Target Award
|
|
Thomas K. Corrick
|
$1,550,000
|
|
Wayne M. Rancourt
|
$450,000
|
|
Nick Stokes
|
$500,000
|
|
Dan Hutchinson
|
$500,000
|
|
John T. Sahlberg
|
$400,000
|
Half of the value of the target award was granted in RSUs with a grant date fair value of $27.05, the closing price of our common stock on the NYSE on February 23, 2017. The RSUs awarded vest over a three-year period with one-third vesting on March 1 for 2018, 2019, and 2020, with share distribution the following day.
|
Officer
|
RSU Shares
|
|
Thomas K. Corrick
|
28,651
|
|
Wayne M. Rancourt
|
8,318
|
|
Nick Stokes
|
9,242
|
|
Dan Hutchinson
|
9,242
|
|
John T. Sahlberg
|
7,394
|
The other half of the target award was made in target PSUs with a grant date fair value of $27.05, the closing price of our common stock on the NYSE on February 23, 2017.
|
Officer
|
PSU Target Shares
|
|
Thomas K. Corrick
|
28,651
|
|
Wayne M. Rancourt
|
8,318
|
|
Nick Stokes
|
9,242
|
|
Dan Hutchinson
|
9,242
|
|
John T. Sahlberg
|
7,394
|
The 2017 PSUs awarded are earned based on a one-year ROIC performance established by the Compensation Committee. If ROIC is below the threshold noted below, no PSUs are earned. At the threshold, 50% of the PSUs are earned and at the maximum 200% of the PSUs are earned. The Compensation Committee approved an award graph so that at any level between the threshold and maximum, the Compensation Committee can determine the actual PSUs to be awarded. The actual amount of each award, based on the Company’s ROIC for the year 2017, was determined by our board of directors on February 22, 2018.
The annual financial goals required for each of our Named Executive Officers with respect to their 2017 PSU grants under our 2016 Incentive Plan were as follows:
40
|
Officer
|
Financial
Criteria
|
Requirement
For
Threshold PSUs
|
Requirement
For
Target PSUs
|
Requirement
For Maximum
PSU
|
|||
|
Thomas K. Corrick
|
100% Corporate ROIC
|
1.8
|
%
|
5.7
|
%
|
9.7
|
%
|
|
Wayne M. Rancourt
|
100% Corporate ROIC
|
1.8
|
%
|
5.7
|
%
|
9.7
|
%
|
|
Nick Stokes
|
100% Corporate ROIC
|
1.8
|
%
|
5.7
|
%
|
9.7
|
%
|
|
Dan Hutchinson
|
100% Corporate ROIC
|
1.8
|
%
|
5.7
|
%
|
9.7
|
%
|
|
John T. Sahlberg
|
100% Corporate ROIC
|
1.8
|
%
|
5.7
|
%
|
9.7
|
%
|
Other Compensation and Benefit Plans
The Company's Named Executive Officers receive additional compensation under a few other compensation and benefit plans. These plans and benefits, except those that are frozen or closed to new entrants, are provided to create an aggregate compensation and benefits package that is competitive in the marketplace, thereby helping us to attract and retain the management talent needed to achieve the Company's strategic objectives.
Boise Cascade Pension Plan
Effective December 31, 2009, the Compensation Committee froze the pension benefit for all of our salaried employees including our Named Executive Officers. The frozen benefit is now in the Boise Cascade Pension Plan (BCPP). On December 31, 2009, the Compensation Committee also froze our supplemental pension plans in which all of our Named Executive Officers participated. Since December 31, 2009, none of our Named Executive Officers has earned any additional pension benefit.
The BCPP entitles each vested employee to receive an annual pension benefit at normal retirement age as determined by a formula involving the average of the highest five consecutive years of the employee’s compensation out of the last 10 years of employment through December 31, 2009 (Average High Five) times an annual factor for each year of service. Under the BCPP, "compensation" is defined as the employee's taxable base salary plus any taxable amounts earned under our annual variable incentive compensation programs. For each year of service prior to December 31, 2003, the annual factor was equal to 1.25%, and for each year of service from January 1, 2004 through December 31, 2009, the annual factor was equal to 1%. The value of the pension benefit is determined by adding the products of: 1) the Average High Five times the number of years of service prior to December 31, 2003, times 1.25% and; 2) the Average High Five times the number of years of service between January 1, 2004 and December 31, 2009, times 1%. Under this formula, benefits are computed on a straight-line annuity basis and are not offset by Social Security or other retirement benefits. An employee is 100% vested in the pension benefit after five years of unbroken service. As noted previously
,
the Compensation Committee froze the Company's salaried pension plans effective December 31, 2009, and no further benefits have been earned by salaried employees including our Named Executive Offices since that date.
The Supplemental Pension Plan
While the pension plan was in effect, if an employee earned income in excess of the limits provided under the Internal Revenue Code for qualified plans, or if income was deferred under the Company's deferred compensation plan and not taxed (and, therefore, not counted for purposes of the benefit amount calculation under the qualified BCPP), the additional benefits were accrued and will be paid from the Company's general assets under our unfunded, nonqualified Supplemental Pension Plan (SUPP).
41
Because the benefit definition in the SUPP is derivative of that contained in the BCPP described above, the benefit freeze adopted for the qualified plan at year-end 2009 effected a similar freeze in further benefit accruals under the SUPP as of the same date. All of our Named Executive Officers have a benefit under the SUPP.
The Supplemental Early Retirement Plan
Under our unfunded, non-qualified Supplemental Early Retirement Plan (SERP), an officer was eligible for benefits under the plan if the officer: (i) was an officer of OfficeMax immediately prior to the 2004 Forest Products Acquisition; (ii) is 55 years old or older (or 58 years old or older for officers elected on or after June 1, 2004, and before October 29, 2004); (iii) has ten or more years of service; (iv) has served as an officer for at least five full years; and (v) retires before the age of 65 (or in certain cases age 62). Eligible officers retiring prior to age 65 receive an early retirement benefit from the SERP which, in combination with their benefit under the BCPP and the SUPP, equals the benefit calculated under the BCPP and the SUPP without reduction due to the officer's early retirement. Because the benefit definition in the SERP is derivative of that contained in the BCPP described above, the benefit freeze adopted for the pension at year-end 2009 effected a similar freeze in further benefit accruals under the SERP. Benefits payable under the SERP are offset in part by benefits payable under a similar plan maintained by OfficeMax. Mr. Rancourt will become eligible for benefits under the SERP when he reaches age 58 and Mr. Stokes is now eligible under the SERP. Messrs. Corrick, Hutchinson, and Sahlberg do not participate in the SERP.
The Present Value of Pension Benefits
The aggregate, present value of pension defined benefits as of December 31, 2017, for each of our Named Executive Officers under each plan are disclosed in the table found under the heading "Pension Benefits" of this CD&A. Changes in the present value for the pension benefits for each Named Executive Officer are disclosed in footnote 6 to the "Summary Compensation Table."
The Boise Cascade Company Savings Plan
The Company maintains a 401(k) defined-contribution savings plan for all of its U.S. salaried employees, including its Named Executive Officers. Under the plan, eligible employees electing to participate may contribute up to 50% of their pretax income, subject to Internal Revenue Service (IRS) rules limiting an individual's total contributions and the application of IRS tests designed to ensure that the plan does not discriminate in favor of highly compensated employees.
Since January 2013, the Company has provided a contribution to each salaried employee's 401(k) account for each pay period in an amount equal to 4% of the employee's eligible wages (base salary and short-term incentive compensation) for the period. If the Company's EBITDA meets or exceeds targets specified by the Compensation Committee and the board of directors, the Company is able to make additional discretionary contributions in an amount equal to up to 2%, 3%, or 4% of the employee's wages, depending on the affected employee's number of years of service. For 2017, the Compensation Committee and the board set two EBITDA targets ($175 million and $225 million). The Company achieved the first target but did not achieve the second target and, consequently, in February 2018 a payout for 2017 occurred on the first target. Amounts in excess of IRS annual limitations on the amount of income on which Company contributions may be made to qualified defined contribution retirement plans are paid to participants as taxable cash compensation and/or credited to the participant's deferred compensation account. All of our Named Executive Officers participate in the plan
.
Amounts deferred under this plan by Named Executive Officers are included in the salary disclosure in the "Summary Compensation Table," and amounts contributed by the Company to the account of a Named Executive Officer under the plan are included in the "All Other Compensation" column in the "Summary Compensation Table."
42
Nonqualified Deferred Compensation Plan
Our Deferred Compensation Plan is an unfunded, nonqualified, defined contribution plan that was reopened for participation effective January 1, 2014. Under the deferred compensation plan, participating employees irrevocably elect each year to defer receipt of a portion of their base salary and incentive compensation. A participant's account is credited with an amount equal to what the Company's 401(k) contribution would have been if the money had not been deferred and with imputed interest at a rate equal to 130% of Moody's Composite Average of Yields on Corporate Bonds. Participants may receive payment of their deferred compensation plan balance in a lump sum or in monthly installments over a specified period of years following the termination of their employment with the Company. Each of our Named Executive Officers is a participant in our Deferred Compensation Plan. Amounts deferred under this plan in any relevant year or contributed to the account under the plan by any of our Named Executive Officers are disclosed in the "Summary Compensation Table."
Agreements with Named Executive Officers
The Company does not have employment agreements with any of its Named Executive Officers other than the limited agreements described in this section.
Severance Agreements with Messrs. Corrick, Rancourt, Stokes, Hutchinson, and Sahlberg
The Company entered into severance agreements with each of the Named Executive Officers (except Mr. Hutchinson) in February 2008 to maintain operating continuity in the event of a change of control. The Company entered into revised severance agreements with each of its Named Executive Officers in December 2012 and in August 2016 solely to bring the agreements into technical compliance with Internal Revenue Code Section 409A and into an agreement in 2014 with Mr. Hutchinson due to his promotion.
The severance agreements are effective for three years from the February anniversary date, but unless the Company gives notice 60 days prior to the second anniversary or each anniversary thereafter, the term of each severance agreement will be automatically extended for an additional year. Notice was not given prior to the anniversary date in February 2018. Accordingly, the term of such agreements has now been extended to February 22, 2020.
The severance agreements for the Named Executive Officers provide that in the event of a "qualifying termination" (meaning any termination with the exception of a termination (i) by the Company for cause or disability; (ii) by the employee other than for good reason (as described in the severance agreement); or (iii) as a result of the employee's death), an employee will be entitled to receive (a) his or her full base salary through the date of termination, a STIP payment for the year of termination based on the plan's actual payout for the year and pro-rated to reflect the portion of the year expired, and all other compensation to which he or she is then entitled; (b) a lump-sum severance payment equal to two times the sum of the employee's annual base salary plus target STIP for the year in which the termination occurs; and (c) a lump-sum amount equal to the value of such employee's unused and accrued time off, less any advanced time off, in accordance with the applicable time-off policy in effect on the termination date. Additionally, the severance agreements provide, in the event of a qualifying termination, for full maintenance of healthcare and insurance benefits for a period of 12 or 18 months following the termination date (subject to payment of required contributions), payment of the premium under the Company's Supplemental Life Plan for 12 or 24 months following the termination date, and if applicable, receipt of the monthly benefit that such employee would have been entitled to receive under the SERP as if such employee had satisfied the age and service requirements under the SERP as of his or her termination date. The higher levels of severance benefits are generally reserved for those officers at the level of senior vice president and higher, which includes all of our Named Executive Officers.
43
In the event of a change in control, the agreements require a second trigger of termination from employment before benefits are payable.
The severance agreements provide that in the event of a non-qualifying termination, the employee will be entitled to receive his or her full base salary through the date of termination, plus all other compensation to which he or she is then entitled. In the event of a failure to perform duties as a result of incapacity due to physical or mental illness or injury, the employee will be entitled to continue to receive the full base salary until such time as employment is terminated due to disability. No severance payments or continuation of healthcare benefits beyond the date of termination are provided for under such circumstances.
In consideration of the severance payments described above, each severance agreement contains confidentiality and non-solicitation provisions, and a general release of all claims against the Company and its affiliates, as a condition of payment of benefits under the severance agreement.
Salaried Employee Life Insurance Plan and Officers' Supplemental Life Plan
The Company maintains two plans under which Company-paid life insurance is made available to its officers. Under its Salaried Employee Life Insurance Plan for which all of our salaried employees participate, the Company provides, at its expense during each salaried employee's period of employment, life insurance in an amount equal to the employee's base salary. Messrs. Corrick, Hutchinson, Rancourt, and Sahlberg participate in this plan.
Mr. Stokes participates in our Officers' Supplemental Life Plan, which is closed to new participants, and under which a Company-paid life insurance benefit during employment is provided in an amount equal to two times the Officer's base salary.
Amounts paid by the Company for the coverage provided to each of our Named Executive Officers is reported in the column titled "All Other Compensation" in the "Summary Compensation Table."
Summary Compensation Table
The following table presents compensation information for Messrs. Corrick, Rancourt, Stokes, Hutchinson, and Sahlberg for 2017, 2016, and 2015:
44
|
Name and
Principal Position
|
Year
|
Salary
($)
(1)
|
Stock
Awards
($)
(2)
|
Option
Awards
($)
|
Bonus
($)
(3)
|
Non-Equity
Incentive
Plan
Compensation
($)
(4)
|
Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
($)
(5)
|
All Other
Compensation
($)
(6)
|
Total
($)
|
||||||||||||||
|
|
|||||||||||||||||||||||
|
Thomas K. Corrick
|
2017
|
$
|
819,038
|
|
$
|
1,821,277
|
|
—
|
|
—
|
|
$
|
1,318,652
|
|
$
|
78,586
|
|
$
|
109,364
|
|
$
|
4,146,917
|
|
|
Chief Executive Officer and former Chief Operating Officer
|
2016
|
779,615
|
|
2,278,524
|
|
—
|
|
—
|
|
912,150
|
|
104,279
|
|
47,417
|
|
4,121,985
|
|
||||||
|
2015
|
701,923
|
|
1,222,475
|
|
—
|
|
—
|
|
379,038
|
|
14,652
|
|
58,133
|
|
2,376,221
|
|
|||||||
|
Wayne M. Rancourt
|
2017
|
481,962
|
|
528,746
|
|
—
|
|
—
|
|
581,969
|
|
145,909
|
|
58,072
|
|
1,796,658
|
|
||||||
|
Executive Vice President, Chief Financial
Officer & Treasurer
|
2016
|
466,731
|
|
661,503
|
|
—
|
|
—
|
|
409,556
|
|
75,329
|
|
26,999
|
|
1,640,118
|
|
||||||
|
2015
|
452,308
|
|
366,772
|
|
—
|
|
—
|
|
183,185
|
|
5,940
|
|
47,513
|
|
1,055,718
|
|
|||||||
|
Nick Stokes
|
2017
|
462,308
|
|
587,499
|
|
—
|
|
—
|
|
702,708
|
|
121,674
|
|
77,323
|
|
1,951,512
|
|
||||||
|
Executive Vice President, Building Materials Distribution
|
2016
|
442,308
|
|
661,503
|
|
—
|
|
—
|
|
516,256
|
|
43,786
|
|
45,220
|
|
1,709,073
|
|
||||||
|
2015
|
427,308
|
|
366,772
|
|
—
|
|
—
|
|
310,065
|
|
5,033
|
|
52,473
|
|
1,161,651
|
|
|||||||
|
Dan Hutchinson
|
2017
|
416,731
|
|
587,499
|
|
—
|
|
—
|
|
473,406
|
|
39,917
|
|
50,530
|
|
1,568,083
|
|
||||||
|
Executive Vice President, Wood Products
|
2016
|
401,731
|
|
661,503
|
|
—
|
|
—
|
|
307,324
|
|
20,704
|
|
21,501
|
|
1,412,763
|
|
||||||
|
2015
|
357,692
|
|
366,772
|
|
—
|
|
48,288
|
|
36,216
|
|
14,839
|
|
32,225
|
|
856,032
|
|
|||||||
|
|
|||||||||||||||||||||||
|
John T. Sahlberg
|
2017
|
444,846
|
|
470,021
|
|
—
|
|
—
|
|
465,531
|
|
42,249
|
|
55,651
|
|
1,478,298
|
|
||||||
|
Senior Vice President, Human Resources, General Counsel & Secretary
|
2016
|
431,500
|
|
587,985
|
|
—
|
|
—
|
|
328,156
|
|
15,673
|
|
24,989
|
|
1,388,303
|
|
||||||
|
2015
|
404,615
|
|
325,974
|
|
—
|
|
—
|
|
142,020
|
|
11,076
|
|
41,355
|
|
925,040
|
|
|||||||
|
(1)
|
Includes amounts deferred under our savings plan. See "Boise Cascade Company Savings Plan" under "Other Compensation and Benefit Plans" in the "CD&A"
in this proxy statement.
|
|
(2)
|
Includes the total value of the RSU and PSU awards granted in 2015, 2016 and 2017. The grant date value for the 2015 RSU awards is $36.17 per share, for the 2016 RSU awards is $16.56 per share, and the 2017 RSU awards is $27.05 per share. The 2015 PSUs are valued at $36.17 per share, grant date fair value at .63 times target. The 2016 PSUs were awarded by the Compensation Committee at .97 times target with a grant date fair value of $16.56 per share. The 2017 PSUs were awarded by the Compensation Committee at 1.35 times target with a grant date fair value of $27.05 per share. As discussed previously, the amount for 2016 consists of a regular award and a one-time transition award, as the LTIP payouts moved from one-third a year over three years vesting to cliff vesting after three years. The one-time transition awards increase the regular award by 50%, with one third vested and distributed in 2017 and two thirds vested and distributed in 2018 in order to keep the annual earning opportunity the same while moving to three-year cliff vesting to better align with long-term shareholder interests.
|
|
(3)
|
This column represents discretionary bonuses made by the Compensation Committee. In 2015, the Compensation Committee awarded Mr. Hutchinson a discretionary bonus. No discretionary bonuses were given in 2016 or 2017.
|
|
(4)
|
Represents total payment of awards under our STIP for each year reported. The specific financial goals and performance objectives at corporate and business unit levels of the STIP are described under "STIP" in the "CD&A." The amounts reported in this column include amounts deferred under our savings plan. See "Boise Cascade Company Savings Plan" under "Other Compensation and Benefit Plans" in the "CD&A" in this proxy statement for a description of this plan.
|
45
(5)
Amounts disclosed in this column include the following:
|
Name
|
Year
|
Change in
Pension Value
(a)
|
Nonqualified Deferred Compensation Earnings
(b)
|
|||||||
|
Thomas K. Corrick
|
2017
|
$
|
44,244
|
|
$
|
34,342
|
|
|||
|
2016
|
79,863
|
|
24,416
|
|
||||||
|
2015
|
(11,469
|
)
|
14,652
|
|
||||||
|
Wayne M. Rancourt
|
2017
|
140,314
|
|
5,595
|
|
|||||
|
2016
|
68,694
|
|
6,635
|
|
||||||
|
2015
|
(25,667
|
)
|
5,940
|
|
||||||
|
Nick Stokes
|
2017
|
116,932
|
|
4,742
|
|
|||||
|
2016
|
38,163
|
|
5,623
|
|
||||||
|
2015
|
(23,332
|
)
|
5,033
|
|
||||||
|
Dan Hutchinson
|
2017
|
17,381
|
|
22,536
|
|
|||||
|
2016
|
(17,984
|
)
|
20,704
|
|
||||||
|
2015
|
(53,836
|
)
|
14,839
|
|
||||||
|
John T. Sahlberg
|
2017
|
24,459
|
|
17,790
|
|
|||||
|
2016
|
(20,879
|
)
|
15,673
|
|
||||||
|
2015
|
(67,299
|
)
|
11,076
|
|
||||||
|
(a)
|
Pension benefits for officers have been frozen since December 31, 2009, and no additional benefits are being earned. The changes reported in this column reflect the changes in actuarial assumptions that increase or decrease the present value of the Named Executive Officers' benefits under all pension plans established by the Company using interest rate and mortality rate assumptions consistent with those used in the Company's financial statements. Years with decreases in the present value of pension amounts are treated as $0 so only the nonqualified deferred compensation earnings appear in the Summary Compensation Table.
|
|
(b)
|
The amounts reported in this column reflect the above-market portion of the interest earned on deferred compensation for our Named Executive Officers.
|
For more information concerning the pension plans and deferred compensation plans in which our Named Executive Officers participate, see "Boise Cascade Pension Plan" and "Nonqualified Deferred Compensation" under "Other Compensation and Benefit Plans" in this proxy statement.
46
|
(6)
|
Amounts disclosed in this column include the following:
|
|
Name
|
Year
|
Company
Contributions
to Savings
Plans
(a)
|
Company-Paid
Portion of
Executive
Officer Life Insurance
(b)
|
Reportable Perquisites
|
Tax Reimbursements, Gross-Ups, and Other
|
Total
|
||||||||||||||
|
Thomas K. Corrick
|
2017
|
$
|
103,871
|
|
$
|
2,034
|
|
$
|
3,459
|
|
—
|
|
$
|
109,364
|
|
|||||
|
Wayne M. Rancourt
|
2017
|
53,491
|
|
1,482
|
|
3,099
|
|
—
|
|
58,072
|
|
|||||||||
|
Nick Stokes
|
2017
|
58,714
|
|
10,935
|
|
7,674
|
|
—
|
|
77,323
|
|
|||||||||
|
Dan Hutchinson
|
2017
|
43,443
|
|
3,498
|
|
3,589
|
|
—
|
|
50,530
|
|
|||||||||
|
John T. Sahlberg
|
2017
|
46,380
|
|
2,034
|
|
7,237
|
|
—
|
|
55,651
|
|
|||||||||
|
(
a)
|
See "Boise Cascade Company Savings Plan" under "Other Compensation and Benefit Plans" in "CD&A" in this proxy statement for a description of this plan. Amounts included in the contributions reported in this column that exceeded IRS annual limitations on Company contributions to qualified defined contribution retirement plans were paid to the Named Executive Officer as taxable cash compensation.
|
|
(b)
|
See "Salaried Employee Life Insurance Plan and Officers' Supplemental Life Plan" under "Agreements with Named Executive Officers" in this proxy statement for a description of the Company-paid life insurance plans under which these costs were incurred.
|
47
Grants of Plan-Based Awards
The following table presents information concerning each grant of a non-equity and equity award made to our Named Executive Officers in 2017 under our STIP and 2016 Incentive Plan.
|
Estimated Future Payouts
Under Non-Equity
Incentive Plan Awards
|
Estimated Future Payouts
Under Equity
Incentive Plan Awards
|
Grant Date
Fair Value
of Stock
or Option
Awards
($)
(3)
|
||||||||||||||||||||||
|
Named Executive Officer
and Award Type
|
Grant
Date
|
Threshold
($)
|
Target
($)
|
Maximum
($)
|
Threshold
(#)
|
Target
(#)
|
Maximum
(#)
|
|||||||||||||||||
|
Thomas K. Corrick
|
||||||||||||||||||||||||
|
Non-Equity Award
(1)
|
2/23/17
|
$
|
204,760
|
|
$
|
819,038
|
|
$
|
1,842,836
|
|
—
|
|
—
|
|
—
|
|
$ —
|
|
||||||
|
Equity Award - Performance Units
(2)
|
2/23/17
|
—
|
|
—
|
|
—
|
|
7,162
|
|
28,651
|
|
57,302
|
|
775,010
|
|
|||||||||
|
Equity Award - Restricted Units
(3)
|
2/23/17
|
—
|
|
—
|
|
—
|
|
—
|
|
28,651
|
|
—
|
|
775,010
|
|
|||||||||
|
Wayne M. Rancourt
|
||||||||||||||||||||||||
|
Non-Equity Award
(1)
|
2/23/17
|
90,368
|
|
361,471
|
|
813,310
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||||||
|
Equity Award - Performance Units
(2)
|
2/23/17
|
—
|
|
—
|
|
—
|
|
2,079
|
|
8,318
|
|
16,636
|
|
225,002
|
|
|||||||||
|
Equity Award - Restricted Units
(3)
|
2/23/17
|
—
|
|
—
|
|
—
|
|
—
|
|
8,318
|
|
—
|
|
225,002
|
|
|||||||||
|
Nick Stokes
|
||||||||||||||||||||||||
|
Non-Equity Award
(1)
|
2/23/17
|
92,462
|
|
369,846
|
|
832,154
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||||||
|
Equity Award - Performance Units
(2)
|
2/23/17
|
—
|
|
—
|
|
—
|
|
2,310
|
|
9,242
|
|
18,484
|
|
249,996
|
|
|||||||||
|
Equity Award - Restricted Units
(3)
|
2/23/17
|
—
|
|
—
|
|
—
|
|
—
|
|
9,242
|
|
—
|
|
249,996
|
|
|||||||||
|
Dan Hutchinson
|
||||||||||||||||||||||||
|
Non-Equity Award
(1)
|
2/23/17
|
83,346
|
|
333,385
|
|
750,116
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||||||
|
Equity Award - Performance Units
(2)
|
2/23/17
|
—
|
|
—
|
|
—
|
|
2,310
|
|
9,242
|
|
18,484
|
|
249,996
|
|
|||||||||
|
Equity Award - Restricted Units
(3)
|
2/23/17
|
—
|
|
—
|
|
—
|
|
—
|
|
9,242
|
|
—
|
|
249,996
|
|
|||||||||
|
John T. Sahlberg
|
||||||||||||||||||||||||
|
Non-Equity Award
(1)
|
2/23/17
|
72,288
|
|
289,150
|
|
650,588
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||||||
|
Equity Award - Performance Units
(2)
|
2/23/17
|
—
|
|
—
|
|
—
|
|
1,848
|
|
7,394
|
|
14,788
|
|
200,008
|
|
|||||||||
|
Equity Award - Restricted Units
(3)
|
2/23/17
|
7,394
|
|
—
|
|
200,008
|
|
|||||||||||||||||
|
(1)
|
Reflects the potential threshold, target, and maximum incentive awards for the Named Executive Officers for 2017
under our STIP as described above in "STIP" in this proxy statement. The Named Executive Officers' actual incentive awards earned in 2017 are disclosed in the "Non-equity Incentive Plan Compensation" column of the "Summary Compensation Table." All awards earned under this plan were paid in February 2018 calculated on the actual salary earned in 2017.
|
|
(2)
|
Reflects the potential threshold, target, and maximum incentive awards for the Named Executive Officers for 2017 PSUs under the 2016 Incentive Plan. One hundred percent of the PSUs time vest on March 1, 2020. For further information on the terms of these incentive awards (which were awarded in 2017), refer to "2016 Incentive Plan" in this proxy statement. The Named Executive Officers' actual PSU awards earned in 2017 under the 2016 Incentive Plan are disclosed in footnote 2 to the "Stock Awards" column of the "Summary Compensation Table."
|
|
(3)
|
The values listed in this column represent the accounting grant date fair value of the target RSUs and the target PSUs (at $27.05 per share) at the time of award.
|
Outstanding Equity Awards at Year-End
The following table presents information concerning the 2015, 2016 and 2017 awards made to our Named Executive Officers under the 2013 and 2016 Incentive Plans that had not vested as of December 31, 2017.
48
|
Stock Awards
|
||||||
|
Named Executive Officer and Equity Type
|
Number of Shares or Units of Stock That Have Not Vested
(#)
|
Market Value of Shares or Units of Stock That Have Not Vested
($)
(5)
|
||||
|
Thomas K. Corrick
|
||||||
|
2017 PSUs
(1)
|
28,651
|
|
$
|
1,143,175
|
|
|
|
2017 RSUs
(4)
|
28,651
|
|
1,143,175
|
|
||
|
2016 PSUs
(2)
|
45,396
|
|
1,811,300
|
|
||
|
2016 Transition PSUs
(2)
|
30,264
|
|
1,207,534
|
|
||
|
2016 RSUs
(4)
|
31,200
|
|
1,244,880
|
|
||
|
2015 PSUs
(3)
|
4,354
|
|
173,725
|
|
||
|
2015 RSUs
(4)
|
6,911
|
|
275,749
|
|
||
|
Wayne M. Rancourt
|
||||||
|
2017 PSUs
(1)
|
8,318
|
|
331,888
|
|
||
|
2017 RSUs
(4)
|
8,318
|
|
331,888
|
|
||
|
2016 PSUs
(2)
|
13,179
|
|
525,842
|
|
||
|
2016 Transition PSUs
(2)
|
8,786
|
|
350,561
|
|
||
|
2016 RSUs
(4)
|
9,058
|
|
361,414
|
|
||
|
2015 PSUs
(3)
|
1,306
|
|
52,109
|
|
||
|
2015 RSUs
(4)
|
2,073
|
|
82,713
|
|
||
|
Nick Stokes
|
||||||
|
2017 PSUs
(1)
|
9,242
|
|
368,756
|
|
||
|
2017 RSUs
(4)
|
9,242
|
|
368,756
|
|
||
|
2016 PSUs
(2)
|
13,179
|
|
525,842
|
|
||
|
2016 Transition PSUs
(2)
|
8,786
|
|
350,561
|
|
||
|
2016 RSUs
(4)
|
9,058
|
|
361,414
|
|
||
|
2015 PSUs
(3)
|
1,306
|
|
52,109
|
|
||
|
2015 RSUs
(4)
|
2,073
|
|
82,713
|
|
||
|
Dan Hutchinson
|
||||||
|
2017 PSUs
(1)
|
9,242
|
|
368,756
|
|
||
|
2017 RSUs
(4)
|
9,242
|
|
368,756
|
|
||
|
2016 PSUs
(2)
|
13,179
|
|
525,842
|
|
||
|
2016 Transition PSUs
(2)
|
8,786
|
|
350,561
|
|
||
|
2016 RSUs
(4)
|
9,058
|
|
361,414
|
|
||
|
2015 PSUs
(3)
|
1,306
|
|
52,109
|
|
||
|
2015 RSUs
(4)
|
2,073
|
|
82,713
|
|
||
|
John T. Sahlberg
|
||||||
|
2017 PSUs
(1)
|
7,394
|
|
295,021
|
|
||
|
2017 RSUs
(4)
|
7,394
|
|
295,021
|
|
||
|
2016 PSUs
(2)
|
11,715
|
|
467,429
|
|
||
|
2016 Transition PSUs
(2)
|
7,809
|
|
311,579
|
|
||
|
2016 RSUs
(4)
|
8,051
|
|
321,235
|
|
||
|
2015 PSUs
(3)
|
1,161
|
|
46,324
|
|
||
|
2015 RSUs
(4)
|
1,843
|
|
73,536
|
|
||
49
|
(1)
|
On February 23, 2017, our Compensation Committee awarded our Named Executive Officers the 2017 PSUs listed above which are presented based on target shares and value and include the unvested portions of these awards as of December 31, 2017.
|
|
(2)
|
On February 24, 2016, our Compensation Committee awarded our Named Executive Officers the 2016 PSUs and 2016 Transition PSUs listed above which represent the actual earned at .97 times target and include the unvested portion of these awards as of December 31, 2017. The regular PSUs vest and distribute on March 1, 2019, and the transition PSUs vested one-third on March 1, 2017 and the remaining two-thirds vested on March 1, 2018.
|
|
(3)
|
On February 25, 2015, our Compensation Committee awarded our Named Executive Officers the 2015 PSUs listed above which are presented at the actual earned amount of .63 times target and include the unvested portion of these awards as of December 31, 2017. The first third vested March 1, 2016, a second third vested on March 1, 2017, and the remaining third vested on March 1, 2018.
|
|
(4)
|
On February 23, 2017, our Compensation Committee awarded our Named Executive Officers the 2017 RSUs listed above. One-third vested on March 1, 2018, one-third will vest on March 1, 2019, and the final one-third will vest on March 1, 2020. On February 24, 2016, our Compensation Committee awarded our Named Executive Officers the 2016 RSUs listed above. One third vested on March 1, 2017, the second third vested March 1, 2018, and the final third will vest on March 1, 2019. On February 25, 2015, our Compensation Committee awarded the 2015 RSUs listed above. One third vested on March 1, 2016, the second third vested on March 1, 2017, and the final third vested on March 1, 2018.
|
|
(5)
|
Market value based on the closing price for Boise Cascade Company stock on December 29, 2017, of $39.90 per share.
|
Options Exercised and Stock Vested
The following table reflects the number of shares acquired and value realized upon vesting of stock awards that were vested and distributed in 2017.
|
Option Awards
|
Stock Awards
|
||||||
|
Name
|
Number of Shares Acquired on
Exercise (#)
|
Value Realized
on Exercise ($)
|
Number of Shares Acquired
on Vesting (#)
|
Value Realized
on Vesting ($)
(1)
|
|||
|
Thomas K. Corrick
|
0
|
0
|
24,013
|
|
$
|
684,371
|
|
|
Wayne M. Rancourt
|
0
|
0
|
8,026
|
|
228,741
|
|
|
|
Nick Stokes
|
0
|
0
|
8,026
|
|
228,741
|
|
|
|
Dan Hutchinson
|
0
|
0
|
8,200
|
|
233,700
|
|
|
|
John T. Sahlberg
|
0
|
0
|
7,288
|
|
207,708
|
|
|
|
(1)
|
Calculated using closing price of our common stock on the New York Stock Exchange on vest date of March 1, 2017 ($28.50).
|
Pension Benefits
Pension benefits for officers are frozen, and no additional benefits are being earned. The following table reflects the present value of accumulated benefits payable to Messrs. Corrick, Rancourt, Stokes, Hutchinson, and Sahlberg, including the number of years of service credited to each of them under our defined benefit pension plans. No amounts were distributed to any of them during 2017 under the BCPP, the SUPP, or the SERP. Messrs. Corrick, Hutchinson, and Sahlberg do not participate in the SERP. For more information concerning our pension plans, see "Boise Cascade Pension Plan" under "Other
50
Compensation and Benefit Plans" above in this proxy statement.
|
Name
|
Plan Name
|
Number of Years Credited Service
(#)
(1)
|
Present Value of Accumulated Benefit
($)
(2)
|
|||||
|
Thomas K. Corrick
|
SPP
|
29
|
$
|
1,777,967
|
|
|||
|
SUPP
|
29
|
503,675
|
|
|||||
|
Wayne M. Rancourt
|
SPP
|
25
|
708,876
|
|
||||
|
SUPP
|
25
|
232,560
|
|
|||||
|
SERP
|
25
|
351,676
|
|
|||||
|
Nick Stokes
|
SPP
|
31
|
1,057,373
|
|
||||
|
SUPP
|
31
|
593,997
|
|
|||||
|
SERP
|
31
|
268,145
|
|
|||||
|
Dan Hutchinson
|
SPP
|
29
|
785,497
|
|
||||
|
SUPP
|
29
|
163,308
|
|
|||||
|
John T. Sahlberg
|
SPP
|
27
|
1,001,235
|
|
||||
|
SUPP
|
27
|
195,968
|
|
|||||
|
(1)
|
Number of years credited service for Messrs. Corrick, Rancourt, Stokes, Hutchinson, and Sahlberg include amounts attributable to employment with OfficeMax prior to the Forest Products Acquisition.
|
|
(2)
|
These values were calculated on the same basis and using the same assumptions used in the Company's financial statements, except that the assumed retirement age for Messrs. Rancourt and Stokes were the later of their current age or the earliest age at which they could qualify for retirement under the SERP.
|
Nonqualified Deferred Compensation
As noted previously, with the Company becoming a "C" corporation in February 2013, the 2004 Deferred Compensation Plan was reopened for contributions effective January 1, 2014. Earnings on contributions and preexisting plan balances continued to accrue during 2017 in accordance with the terms of the plan. No withdrawals or distributions were made from the plan by any of our Named Executive Officers during 2017. In 2017, contributions to the deferred compensation plan received from the Company included a 4% base contribution and applicable discretionary contribution to simulate the base contribution and discretionary contribution in the 401(k) plan. Aggregate earnings and year-end plan balances for each of our Named Executive Officers are disclosed in the table below:
|
Name
|
Aggregate Earnings
in Last FY
($)
(1)
|
Aggregate Balance
at FYE
($)
|
||||||
|
Thomas K. Corrick
|
$
|
87,360
|
|
$
|
1,925,788
|
|
||
|
Wayne M. Rancourt
|
14,120
|
|
279,853
|
|
||||
|
Nick Stokes
|
11,965
|
|
237,152
|
|
||||
|
Dan Hutchinson
|
57,099
|
|
1,219,768
|
|
||||
|
John T. Sahlberg
|
45,084
|
|
978,610
|
|
||||
51
|
(1)
|
The above-market portion of these amounts is included in the 2017 "Change in Pension Value and Nonqualified Deferred Compensation Earnings" column of the "Summary Compensation Table
.
"
|
For more information concerning our nonqualified deferred compensation plan, see "Nonqualified Deferred Compensation" under "Other Compensation and Benefit Plans" above in this proxy statement.
Potential Payments upon Termination or Change in Control
The following tables reflect an estimate of the compensation the Company would have been required to pay to each of its Named Executive Officers under the compensation plans, contracts, agreements, and arrangements between each such individual and the Company for:
|
▪
|
Voluntary termination with good reason;
|
|
•
|
A change in control without adoption of a replacement plan or assumption of the existing obligations;
|
|
▪
|
Involuntary termination without cause;
|
|
▪
|
For-cause termination or voluntary termination without good reason;
|
|
▪
|
Termination as a result of sale of a division; or
|
|
▪
|
Death or disability; or
|
|
▪
|
Retirement where applicable.
|
The amounts shown assume that such termination or change in control was effective as of December 31, 2017. The actual amounts the Company would have been required to pay on other dates may be determined only at the time of separation from the Company or the change in control and will accordingly vary from those disclosed here, which are based on a hypothetical December 31, 2017, termination. Our paid vacation is earned on a current basis ratably throughout each payroll year. Earned and unused amounts at year-end are forfeited to the extent they exceed a maximum permitted carry-over of 80 hours. The amounts disclosed here do not include amounts earned by the Named Executive Officer through that time as base salary, any bonuses approved by the Compensation Committee prior to that date, and payments earned prior to that date as 2017 awards earned pursuant to our STIP because neither their amount nor the timing of the payment is affected by the fact or the nature of the termination of employment. In addition, the disclosure does not include amounts payable pursuant to the 401(k), deferred compensation, or pension plans, which are disclosed elsewhere in this CD&A. Disclosure of amounts earned during 2017 as base salary, bonuses, and awards under the 2017 STIP may be found in the "Summary Compensation Table." Pension benefits and deferred compensation arrangements are described in footnote 5 of the "Summary Compensation Table" and under "Nonqualified Deferred Compensation" of this proxy statement, respectively.
The availability of severance payments and continued healthcare and insurance benefits beyond termination of employment is contractually conditioned for each of our Named Executive Officers on their provision to the Company of a release of claims arising from their employment and the termination thereof and their performance of contractual confidentiality, non-solicitation, and non-disparagement obligations contained in their employment or severance agreements with the Company, as well as payment of applicable contributions for healthcare and insurance benefits. The payments described in the tables and textual materials that follow are provided by severance agreements and the terms of the 2013 Incentive Plan and the 2016 Incentive Plan. For a description of these contractual arrangements, see "LTIPs and "Agreements with Named Executive Officers" in CD&A.
52
Thomas K. Corrick
|
Benefit
|
Voluntary Termination With Good Reason
|
Change in Control
|
Involuntary Termination without Cause
|
For-Cause Termination or Voluntary Termination Without Good Reason
|
Death or Disability
(1)
|
Retirement
(2)
|
||||||||||||
|
Base salary
(2 x base salary of $850,000)
|
$
|
1,700,000
|
|
$
|
—
|
|
$
|
1,700,000
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
|
STIP
|
1,700,000
(2 x target)
|
|
—
|
|
1,700,000
(2 x target)
|
|
—
|
|
—
|
|
—
|
|
||||||
|
LTIP
|
—
|
|
—
|
|
—
|
|
—
|
|
6,999,538
|
|
3,716,486
|
|
||||||
|
Insurance - healthcare, disability, and accident
(for 18 months)
|
16,742
|
|
—
|
|
16,742
|
|
—
|
|
—
|
|
—
|
|
||||||
|
Financial counseling (for 18 months)
|
15,000
|
|
—
|
|
15,000
|
|
—
|
|
—
|
|
—
|
|
||||||
|
Unused paid time off (26 hours)
|
10,625
|
|
—
|
|
10,625
|
|
10,625
|
|
10,625
|
|
10,625
|
|
||||||
|
TOTAL
|
$
|
3,442,367
|
|
$
|
—
|
|
$
|
3,442,367
|
|
$
|
10,625
|
|
$
|
7,010,163
|
|
$
|
3,727,111
|
|
|
(1)
|
In the event of death or disability, LTIP unvested awards vest immediately in full. Value represents sum of end of year market value for unvested award presented under “Outstanding Equity Awards at Year-End.”
|
|
(2)
|
In the event of retirement, pursuant to the respective award agreements: (i) the 2015 LTIP unvested awards vest immediately in full, and (ii) the 2016 and 2017 LTIP unvested awards vest on a prorated basis according to the number of months that have elapsed in the vesting period prior to retirement. Value represents the value of prorated units that would vest if he had retired on December 31, 2017, using the December 29, 2017 stock price.
|
53
Wayne M. Rancourt
|
Benefit
|
Voluntary Termination With Good Reason
|
Change in Control
|
Involuntary Termination without Cause
|
For-Cause Termination or Voluntary Termination Without Good Reason
|
Death or Disability
(1)
|
||||||||||
|
Base salary
(2 x base salary of $497,000)
|
$
|
994,000
|
|
$
|
—
|
|
$
|
994,000
|
|
$
|
—
|
|
$
|
—
|
|
|
STIP
|
745,500
(2 x target)
|
|
—
|
|
745,500
(2 x target)
|
|
—
|
|
—
|
|
|||||
|
LTIP
|
—
|
|
—
|
|
—
|
|
—
|
|
2,036,415
|
|
|||||
|
Insurance - healthcare, disability, and accident
(for 18 months)
|
15,914
|
|
—
|
|
15,914
|
|
—
|
|
—
|
|
|||||
|
Financial counseling (for 18 months)
|
15,000
|
|
—
|
|
15,000
|
|
—
|
|
—
|
|
|||||
|
Unused paid time off (80 hours)
|
19,115
|
|
—
|
|
19,115
|
|
19,115
|
|
19,115
|
|
|||||
|
TOTAL
|
$
|
1,789,529
|
|
$
|
—
|
|
$
|
1,789,529
|
|
$
|
19,115
|
|
$
|
2,055,530
|
|
|
(1)
|
In the event of death or disability, LTIP unvested awards vest immediately in full. Value represents sum of end of year market value for unvested award presented under “Outstanding Equity Awards at Year-End.”
|
Nick Stokes
|
Benefit
|
Voluntary Termination With Good Reason
|
Change in Control
|
Involuntary Termination without Cause
|
Involuntary Termination in Connection with Sale of Division
|
For-Cause Termination or Voluntary Termination Without Good Reason
|
Death or Disability
(1)
|
||||||||||||
|
Base salary
(2 x base salary of $480,000)
|
$
|
960,000
|
|
$
|
—
|
|
$
|
960,000
|
|
$
|
960,000
|
|
$
|
—
|
|
$
|
—
|
|
|
STIP
|
768,000
(2 x target)
|
|
—
|
|
768,000
(2 x target)
|
|
768,000
(2 x target)
|
|
—
|
|
—
|
|
||||||
|
LTIP
|
—
|
|
—
|
|
—
|
|
2,110,151
|
|
—
|
|
2,110,151
|
|
||||||
|
Insurance premiums - term life (for 24 months)
|
21,870
|
|
—
|
|
21,870
|
|
21,870
|
|
—
|
|
—
|
|
||||||
|
Insurance - healthcare, disability, and accident (for 18 months)
|
13,826
|
|
—
|
|
13,826
|
|
13,826
|
|
—
|
|
—
|
|
||||||
|
Financial counseling (for 18 months)
|
10,011
|
|
—
|
|
10,011
|
|
10,011
|
|
—
|
|
—
|
|
||||||
|
Unused paid time off (2 hours)
|
462
|
|
—
|
|
462
|
|
462
|
|
462
|
|
462
|
|
||||||
|
TOTAL
|
$
|
1,774,169
|
|
$
|
—
|
|
$
|
1,774,169
|
|
3,884,320
|
|
$
|
462
|
|
$
|
2,110,613
|
|
|
|
(1)
|
In the event of involuntary termination in connection with sale of division or death or disability, LTIP unvested awards vest immediately in full. Value represents sum of end of year market value for unvested award presented under “Outstanding Equity Awards at Year-End.”
|
54
Dan Hutchinson
|
Benefit
|
Voluntary Termination With Good Reason
|
Change in Control
|
Involuntary Termination without Cause
|
Involuntary Termination in Connection with Sale of Division
|
For-Cause Termination or Voluntary Termination Without Good Reason
|
Death or Disability
(1)
|
Retirement
(2)
|
||||||||||||||
|
Base salary
(2 x base salary of $430,000)
|
$
|
860,000
|
|
$
|
—
|
|
$
|
860,000
|
|
$
|
860,000
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
|
STIP
|
688,000
(2 x target)
|
|
—
|
|
688,000
(2 x target)
|
|
688,000
(2 x target)
|
|
—
|
|
—
|
|
|||||||||
|
LTIP
|
—
|
|
—
|
|
—
|
|
2,110,151
|
|
—
|
|
2,110,151
|
|
1,103,754
|
|
|||||||
|
Insurance - healthcare, disability, and accident (for 18 months)
|
18,938
|
|
—
|
|
18,938
|
|
18,938
|
|
—
|
|
—
|
|
—
|
|
|||||||
|
Financial counseling (for 18 months)
|
15,000
|
|
—
|
|
15,000
|
|
15,000
|
|
—
|
|
—
|
|
—
|
|
|||||||
|
Unused paid time off (80 hours)
|
16,538
|
|
—
|
|
16,538
|
|
16,538
|
|
16,538
|
|
16,538
|
|
16,538
|
|
|||||||
|
TOTAL
|
$
|
1,598,476
|
|
—
|
|
$
|
1,598,476
|
|
$
|
3,708,627
|
|
$
|
16,538
|
|
$
|
2,126,689
|
|
$
|
1,120,292
|
|
|
|
(1)
|
In the event of involuntary termination in connection with sale of division or death or disability, LTIP unvested awards vest immediately in full. Value represents sum of end of year market value for unvested award presented under “Outstanding Equity Awards at Year-End.”
|
|
(2)
|
In the event of retirement, pursuant to the respective award agreements: (i) the 2015 LTIP unvested awards vest immediately in full, and (ii) the 2016 and 2017 LTIP unvested awards vest on a prorated basis according to the number of months that have elapsed in the vesting period prior to retirement. Value represents the value of prorated units that would vest if he had retired on December 31, 2017, using the December 29, 2017 stock price.
|
55
John T. Sahlberg
|
Benefit
|
Voluntary Termination With Good Reason
|
Change in Control
|
Involuntary Termination without Cause
|
For-Cause Termination or Voluntary Termination Without Good Reason
|
Death or Disability
(1)
|
Retirement
(2)
|
||||||||||||
|
Base salary
(2 x base salary of $459,000)
|
$
|
918,000
|
|
$
|
—
|
|
$
|
918,000
|
|
$
|
—
|
|
$
|
—
|
|
—
|
|
|
|
STIP
|
596,700
(2 x target)
|
|
—
|
|
596,700
(2 x target)
|
|
—
|
|
—
|
|
—
|
|
||||||
|
LTIP
|
—
|
|
—
|
|
—
|
|
—
|
|
1,810,145
|
|
962,947
|
|
||||||
|
Insurance - healthcare, disability, and accident (for 18 months)
|
16,742
|
|
—
|
|
16,742
|
|
—
|
|
—
|
|
—
|
|
||||||
|
Financial counseling (for 18 months)
|
15,000
|
|
—
|
|
15,000
|
|
—
|
|
—
|
|
—
|
|
||||||
|
Unused paid time off (50 hours)
|
11,034
|
|
—
|
|
11,034
|
|
11,034
|
|
11,034
|
|
11,034
|
|
||||||
|
TOTAL
|
$
|
1,557,476
|
|
$
|
—
|
|
$
|
1,557,476
|
|
$
|
11,034
|
|
$
|
1,821,179
|
|
$
|
973,981
|
|
|
(1)
|
In the event of death or disability, LTIP unvested awards vest immediately in full. Value represents sum of end of year market value for unvested award presented under “Outstanding Equity Awards at Year-End.”
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(2)
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In the event of retirement, pursuant to the respective award agreements: (i) the 2015 LTIP unvested awards vest immediately in full, and (ii) the 2016 and 2017 LTIP unvested awards vest on a prorated basis according to the number of months that have elapsed in the vesting period prior to retirement. Value represents the value of prorated units that would vest if he had retired on December 31, 2017, using the December 29, 2017 stock price.
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Pay Ratio Disclosure
As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(u) of Regulation S-K, we are providing the following information about the relationship of the annual total compensation of our employees and the annual total compensation of Thomas K. Corrick, our chief executive officer:
For 2017, our last completed fiscal year:
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•
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the annual total compensation of our median employee (excluding our chief executive officer and our employees in Canada) was $45,930; and
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•
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the annual total compensation of our chief executive officer, as reported in the Summary Compensation Table above, was $4,146,917.
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Based on this information, we estimate that the annual total compensation of Mr. Corrick, our chief executive officer, was approximately 90 times that of our median employee in 2017.
We identified our median employee by preparing a list of all our employees (excluding our chief executive officer and our employees in Canada) as of December 31, 2017. We then collected the information necessary to calculate Medicare taxable income for the year ended December 31, 2017 as will be reported to the IRS on Form W-2 for the employees included in such list. To the amount of Medicare taxable income, we added the discretionary additional contribution we made in 2018 to our U.S.-based employees’ 401(k) accounts as a result of the Company achieving certain performance goals in 2017. Even though the
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discretionary contribution was paid in 2018, we added it to calculate the annual total compensation of our median employee for the year ended December 31, 2017 because it was included to calculate our chief executive officer’s annual total compensation reported in the Summary Compensation Table as compensation earned in 2017. See the section entitled “The Boise Cascade Company Savings Plan” in this proxy statement for more information on discretionary 401(k) contributions.
We did not include our employees in Canada or the United Kingdom in determining our median employee, as they accounted for less than 5% of our total employee population as of December 31, 2017. As of December 31, 2017, we had a total of 6,315 employees, comprised of 6,195 U.S.-based employees, 119 employees in Canada, and 1 employee in England.
The pay ratio included above is a reasonable estimate calculated in a manner consistent with SEC rules based on our payroll and the methodology described above. The SEC rules for identifying the median-compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their compensation practices. As such, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies may have different employment and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.
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VOTE BY INTERNET - www.proxyvote.com
Use the Internet to transmit your voting instructions and for electronic delivery of information. Vote by 11:59 P.M. ET on 05/02/2018. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
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BOISE CASCADE COMPANY
1111 WEST JEFFERSON STREET
SUITE 300
BOISE, ID 83702-5389
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ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS
If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years.
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VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions. Vote by 11:59 P.M. ET on 05/02/2018. Have your proxy card in hand when you call and then follow the instructions.
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VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
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TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
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KEEP THIS PORTION FOR YOU RECORDS
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DETACH AND RETURN THIS PORTION ONLY
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THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
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The Board of Directors recommends you vote FOR
the following:
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1.
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Election of Directors
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Nominees
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For
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Against
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Abstain
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1A Thomas K. Corrick
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¨
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¨
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¨
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1B Richard H. Fleming
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¨
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¨
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¨
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1C Mack L. Hogans
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¨
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¨
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¨
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1D Christopher J. McGowan
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¨
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¨
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¨
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For
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Against
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Abstain
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2.
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To provide a non-binding advisory vote approving the Company's executive compensation.
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¨
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¨
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¨
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NOTE:
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS GIVEN, WILL BE VOTED AS THE BOARD RECOMMENDS.
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3.
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To ratify the appointment of KPMG as the Company's external auditors for the year ending December 31. 2018.
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¨
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¨
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¨
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For address change/comments, mark here. (see reverse for instructions)
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¨
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Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer.
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Signature [PLEASE SIGN WITHIN BOX]
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Date
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Signature [Joint Owners]
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Date
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Boise Cascade Company
ANNUAL MEETING OF SHAREHOLDERS
Thursday, May 3, 2018
9:30 A.M. Mountain Daylight Time
Hampton Inn & Suites
Payette Meeting Room
495 South Capitol Boulevard
Boise, Idaho 83702
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Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice and Proxy Statement and our Annual Report on Form 10-K are available at www.proxyvote.com
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Boise Cascade Company
1111 West Jefferson Street
Suite 300
Boise, ID 83702
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This proxy is solicited by the board of directors for use at the Annual Meeting on May 3, 2018.
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If no choice is is specified, the proxy will be voted "FOR" items 1, 2, and 3.
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By signing the proxy, you revoke all prior proxies and appoint John Sahlberg, Kelly Hibbs, and Wayne Rancourt, and each of them with full power of substitution, to vote your shares on the matters shown on the reverse side and any other matters which may come before the Annual Meeting and all adjournments.
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Address change/comments:
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(If you noted any address changes and/or comments above, please mark corresponding box on reverse side.)
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See reverse for voting instructions
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TABLE OF CONTENTS
PROXY STATEMENT SUMMARYINFORMATION ABOUT OUR ANNUAL SHAREHOLDERS MEETING AND VOTINGPROPOSALS TO BE VOTED ONProposal No. 1 - Election of Four DirectorsprintProposal No. 2 - Advisory Approval of Executive Comp ProgramprintProposal No. 3 - Ratification of Independent Accountant for the Year Ending December 31, 2018printCORPORATE GOVERNANCECode of Ethics for Our Board of DirectorsprintCorporate Governance GuidelinesprintDirector IndependenceprintSection 16(a) Beneficial Ownership Reporting ComplianceprintRelated-Person/Party TransactionsprintRole of Board of Directors in Our Risk Management ProcessesprintRisk Analysis of Employee Compensation Policies and PracticesprintDirector Selection ProcessprintBoard and Committee Self-EvaluationsprintCommunications With Our Board of DirectorsprintBOARD STRUCTUREBoard Leadership StructureprintExecutive Sessions and Independent Director Sessionsprint2017 Overall Meeting Attendance RatesprintCommitteesprintBOARD COMPENSATIONDirector Compensation TableprintSTOCK OWNERSHIPAUDIT COMMITTEE REPORTEQUITY COMPENSATION PLAN INFORMATIONEXECUTIVE COMPENSATIONCompensation Committee ReportprintCompensation Discussion and AnalysisprintSummary Compensation TableprintGrants of Plan-Based AwardsprintOutstanding Equity Awards at Year-EndprintOptions Exercised and Stock VestedprintPension BenefitsprintNonqualified Deferred CompensationprintPotential Payments Upon Termination or Change in Controlprint