<PAGE>
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
BUILDING MATERIALS HOLDING CORPORATION
- - --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing party:
------------------------------------------------------------------------
(4) Date filed:
------------------------------------------------------------------------
<PAGE>
[BMHC LOGO]
ONE MARKET PLAZA, STEUART TOWER
26TH FLOOR, SUITE 2650
SAN FRANCISCO, CA 94105-1475
- - ------------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MAY 5, 1999
- - ------------------------------------------------------------------------------
DEAR SHAREHOLDER:
YOU ARE INVITED TO ATTEND BUILDING MATERIALS HOLDING CORPORATION'S 1999
ANNUAL MEETING OF SHAREHOLDERS ("ANNUAL MEETING"), WHICH WILL BE HELD AT THE
WORLD TRADE CLUB IN THE WORLD TRADE CENTER, SAN FRANCISCO, CALIFORNIA, ON
WEDNESDAY, MAY 5, 1999, AT 1:30 P.M. PACIFIC DAYLIGHT TIME FOR THE FOLLOWING
PURPOSES:
1. ELECT DIRECTORS TO SERVE FOR THE 1999 FISCAL YEAR AND UNTIL THEIR
SUCCESSORS ARE ELECTED.
2. TRANSACT SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE
MEETING OR ANY ADJOURNMENT OF THE MEETING.
OUR BOARD OF DIRECTORS HAS ESTABLISHED THE CLOSE OF BUSINESS ON MONDAY,
MARCH 22, 1999, AS THE RECORD DATE FOR DETERMINING THE SHAREHOLDERS ENTITLED TO
NOTICE OF AND TO VOTE AT THE ANNUAL MEETING.
WE HOPE YOU WILL BE ABLE TO ATTEND. BUT IF YOU ARE UNABLE TO ATTEND, WE
NEED YOUR VOTE. VOTING BY PROXY WILL NOT PREVENT YOU FROM VOTING IN PERSON AT
THE MEETING, BUT IT WILL ASSURE THAT YOUR VOTE IS COUNTED IF YOU ARE UNABLE TO
ATTEND THE ANNUAL MEETING.
IF YOU PLAN ON VOTING AT THE ANNUAL MEETING AND YOUR SHARES ARE HELD BY
A BROKER, BANK, OR OTHER PERSON, YOU MUST BRING TWO ADDITIONAL ITEMS TO THE
ANNUAL MEETING: (I) A LETTER FROM THAT ENTITY WHICH CONFIRMS YOUR BENEFICIAL
OWNERSHIP OF SHARES, AND (II) A PROXY ISSUED IN YOUR NAME.
YOUR VOTE IS IMPORTANT TO US REGARDLESS OF THE NUMBER OF SHARES YOU
OWN. PLEASE SIGN AND DATE THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE
ENCLOSED SELF-ADDRESSED, POSTAGE-PAID ENVELOPE. IF YOU ATTEND THE ANNUAL
MEETING, YOU MAY VOTE EITHER IN PERSON OR BY YOUR PROXY.
IF YOU HAVE ANY QUESTIONS, PLEASE DO NOT HESITATE TO CONTACT US.
PAUL S. STREET
SENIOR VICE PRESIDENT,
GENERAL COUNSEL AND SECRETARY
SAN FRANCISCO, CALIFORNIA
MARCH 31, 1999
<PAGE>
BUILDING MATERIALS HOLDING CORPORATION
ONE MARKET PLAZA, STEUART TOWER
26TH FLOOR, SUITE 2650
SAN FRANCISCO, CA 94105-1475
- - ------------------------------------------------------------------------------
PROXY STATEMENT
- - ------------------------------------------------------------------------------
TABLE OF CONTENTS
<TABLE>
<S> <C>
INTRODUCTION......................................................................................................1
INFORMATION CONCERNING VOTING.....................................................................................1
General Information......................................................................................1
Date, Time and Place of Annual Meeting...................................................................1
Record Date; Shares Entitled to Vote.....................................................................1
Market for BMHC's Common Stock...........................................................................1
Quorum; Required Vote....................................................................................2
Revocability of Proxies..................................................................................2
Solicitation.............................................................................................2
PROPOSAL 1 - ELECTION OF BOARD OF DIRECTORS.......................................................................3
Nominees for Election as Directors.......................................................................3
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS.................................................................5
Audit Committee..........................................................................................5
Compensation Committee...................................................................................5
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS...................................................................6
EXECUTIVE COMPENSATION AND OTHER INFORMATION......................................................................8
Summary of Cash and Certain Other Compensation...........................................................8
Stock Option Grants in the Last Fiscal Year.............................................................10
Aggregated Stock Options ...............................................................................11
Compensation of Directors...............................................................................11
Severance and Change of Control Agreements..............................................................12
Compensation Committee Interlocks and Insider Participation.............................................12
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION..........................................................13
PERFORMANCE GRAPH................................................................................................16
CERTAIN RELATIONSHIPS AND OTHER TRANSACTIONS.....................................................................17
Indemnification of Executive Officers and Directors.....................................................17
SHAREHOLDER PROPOSALS............................................................................................18
SHAREHOLDER NOMINATION OF DIRECTORS..............................................................................18
OTHER MATTERS....................................................................................................18
</TABLE>
-ii-
<PAGE>
INTRODUCTION
Building Materials Holding Corporation, a Delaware corporation ("BMHC"
or the "Company"), is a holding company formed in 1997, and engages in the
distribution of building materials through its subsidiaries. BMHC sells
materials primarily to professional contractors and to professional repair and
remodel contractors, as well as to project-oriented customers. BMHC's executive
office is in San Francisco, California.
INFORMATION CONCERNING VOTING
GENERAL INFORMATION
We have sent you the enclosed proxy because BMHC's Board of Directors
is soliciting your proxy to vote your shares at the Annual Meeting. This proxy
statement is designed to provide you with information to assist you in voting
your shares. It summarizes information that we are required to provide to you
under the rules of the Securities and Exchange Commission. The purpose of the
Annual Meeting is for the shareholders of BMHC's common stock to consider and
vote on the following proposals:
1. Elect directors to serve for the 1999 fiscal year and until their
successors are elected.
2. Transact such other business as may properly come before the
meeting or any adjournment of the meeting.
DATE, TIME AND PLACE OF ANNUAL MEETING
The Annual Meeting will be held on Wednesday, May 5, 1999, at 1:30 p.m.
Pacific Daylight Time, at the World Trade Club in The World Trade Center in San
Francisco, California. BMHC intends to mail this Proxy Statement and
accompanying proxy card on or about April 1, 1999, to all shareholders entitled
to vote at the Annual Meeting.
RECORD DATE; SHARES ENTITLED TO VOTE
BMHC's Board of Directors fixed the close of business on Monday,
March 22, 1999, as the record date (the "Record Date") for determining BMHC's
shareholders entitled to vote at the Annual Meeting. Only the holders of record
of BMHC's common stock on the Record Date will be entitled to notice of and to
vote at the Annual Meeting. At the close of business on March 22, 1999, there
were 12,656,109 shares of common stock outstanding.
MARKET FOR BMHC'S COMMON STOCK
BMHC's common stock is listed for quotation on the Nasdaq Market System
under the symbol "BMHC." On the Record Date, the fair market value of BMHC's
common stock as reported by the Nasdaq Market System at the close of trading was
$10.625.
- 1 -
<PAGE>
QUORUM; REQUIRED VOTE
On the Record Date, there were 12,656,109 shares of outstanding common
stock of BMHC. You are entitled to one vote for each share of common stock of
BMHC that you hold as of the Record Date on each of the matters to be voted on
at the Annual Meeting. You do not have cumulative voting rights. A quorum
consisting of at least 6,328,055 shares is necessary to hold a valid meeting. If
at least 6,328,055 shares of the total 12,656,109 shares entitled to vote at the
Annual Meeting are cast, either in person or by proxy, a quorum will exist.
The inspectors of election appointed for the Annual Meeting will
tabulate all votes. They will separately tabulate affirmative and negative
votes, abstentions, and broker non-votes. Abstentions and broker non-votes will
be included in determining the number of shares present and voting at the Annual
Meeting. Abstentions will count toward the quorum requirement, and they will
have the same effect as negative votes. Broker non-votes will be counted toward
a quorum but will not be counted in determining whether a matter is approved.
REVOCABILITY OF PROXIES
You may revoke your proxy at any time before it is voted. You may
revoke your proxy by filing a written notice of revocation or a duly executed
proxy with a later date with the Secretary of BMHC at its executive office
located at One Market Plaza, Steuart Tower, 26th Floor, Suite 2650, San
Francisco, CA 94105-1475, or by attending the Annual Meeting and voting in
person. Your attendance at the Annual Meeting will not, by itself, revoke your
proxy.
SOLICITATION
BMHC will pay the entire cost for solicitation of proxies. Copies of
the solicitation materials will be sent to banks, brokerage houses, fiduciaries,
and custodians holding in their names shares of BMHC's common stock beneficially
owned by others to forward to such beneficial owners. BMHC may reimburse persons
representing beneficial owners of common stock for their costs of forwarding
solicitation materials to the beneficial owners. Directors, executive officers,
or other regular BMHC employees may supplement the original solicitation of
proxies. BMHC will not pay its directors, executive officers or regular
employees any additional compensation for this service.
- 2 -
<PAGE>
PROPOSAL 1
ELECTION OF BOARD OF DIRECTORS
BMHC's Board of Directors has nominated nine people to fill the nine
Board positions authorized in BMHC's Bylaws. The nine nominees served as BMHC's
directors during 1998. Each nominee will be elected to hold office until the
next annual meeting of shareholders and until a successor is elected and has
qualified, or until a director's earlier death, resignation, or removal.
If elected, each nominee has agreed to serve, and the Board has no
reason to believe that any nominee will be unable to serve. If a nominee is
unable to stand for election as a result of an unexpected occurrence, the Board
may substitute a nominee and allocate the voted shares for another person of its
choice. It is intended that the executed proxies be voted for the election of
the nine nominees, unless the authority to do so is withheld. The nine nominees
receiving the highest number of affirmative votes at the Annual Meeting will be
elected as BMHC directors. References in terms of officers and directors include
BMHC and BMC West Corporation.
NOMINEES FOR ELECTION AS DIRECTORS
GEORGE E. MCCOWN - Mr. McCown (63) is Chairman of BMHC's Board of Directors and
has been a director since 1987. He was co-founder and has been a Managing
General Partner of the MDC Management Companies, the general partner of McCown
De Leeuw & Co., since 1984, and was instrumental in financing and executing the
leveraged buy-out of the Company in 1987. Mr. McCown currently serves as the
Vice-Chairman of the Board of Directors of Vans, Inc. and as a director of the
following publicly held companies: FiberMark, Inc. and Dimac. Mr. McCown also
serves as a director of several privately held companies.
ROBERT E. MELLOR - Mr. Mellor (55) is the President and Chief Executive Officer
of BMHC, and has served as a director since 1991. Mr. Mellor was previously Of
Counsel with the law firm of Gibson, Dunn & Crutcher LLP from 1990 through
February 15, 1997. He previously served as the Executive Vice President and
Chief Administrative Officer, and as a director of Di Giorgio Corporation from
1987 to 1990. He joined Di Giorgio Corporation in 1976. He also serves as a
director of Coeur d'Alene Mines Corporation.
DONALD S. HENDRICKSON - Mr. Hendrickson (68) retired as President and Chief
Executive Officer of BMC West in 1998. He has served as a director since 1987.
Mr. Hendrickson currently serves as a director of Albertson College of Idaho and
as a Director-at-Large for the Western Building Materials Association.
ALEC F. BECK - Mr. Beck (42) has served as a director since 1996. He joined
Stripling-Blake Lumber Company, Inc. ("SBLC"), an Austin, Texas building
materials retailer, in 1974, and served as President from 1983 until 1995
when certain assets were sold to the Company.
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<PAGE>
H. JAMES BROWN - Dr. Brown (58) has served as a director since 1991. He is
currently the President and Chief Executive Officer for the Lincoln Institute of
Land Policy. Dr. Brown was a professor at the Kennedy School of Government,
Harvard University from 1970 to 1996, and served as the director of the Joint
Center for Housing Studies at Harvard University. He also serves as a director
of American Residential Investment Trust.
WILBUR J. FIX - Mr. Fix (71) has served as a director since 1991. He served as
Chairman and Chief Executive Officer of The Bon Marche from 1980 until his
retirement in February 1993. Mr. Fix is a member of the Board of Advisors of the
Corporate Council of the Arts-Seattle. He is also a member of the advisory
council for the Institute of Retail Studies for the College of the Desert in
Palm Desert, California. He currently serves as a director of Vans, Inc., and
several privately held companies.
ROBERT V. HANSBERGER - Mr. Hansberger (78) has served as a director since 1988.
He is Chairman of the Board of Directors and past Chief Executive Officer of
Futura Corporation, a privately held diversified holding company. Mr.
Hansberger, a founder of Boise Cascade Corporation, served as its President,
Chief Executive Officer and Chairman of the Board of Directors from 1957 to
1972. He currently serves as a director of MK Gold Corporation and SCP Global
Technologies and several privately held companies.
GUY O. MABRY - Mr. Mabry (72) has served as a director since 1991. He previously
served as Executive Vice President of Owens-Corning Fiberglas Corporation from
1986 until his retirement in 1990. Mr. Mabry was a Senior Vice President of
Owens-Corning from 1980 to 1986.
PETER S. O'NEILL - Mr. O'Neill (61) has served as a director since 1993. He is
the founder of O'Neill Enterprises, Inc., a residential development and home
building company, and has served as its President since 1989. He previously
founded River Run Development Company in 1979, which received the Award for
Excellence from the Urban Land Institute in 1990. Mr. O'Neill has served as a
director of various local and national economic and urban development
organizations. He currently serves on the Board of Directors and Executive
Committee of Albertson College of Idaho and The Nature Conservancy of Idaho. He
is a member of the Urban Land Institute and is currently serving as a director
of Idaho Power Company.
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<PAGE>
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
During the fiscal year ended December 31, 1998, the Board of Directors
met five times. In addition to the full Board meetings, some directors also
attended meetings of Board committees. The Board of Directors has an Audit
Committee and a Compensation Committee.
AUDIT COMMITTEE
The Audit Committee is authorized by the Board of Directors to review
and supervise the financial controls of BMHC. This includes selecting BMHC's
independent public accountants, acting upon recommendations of the independent
public accountants, reviewing BMHC's proposed budgets, and taking such further
actions as the Committee deems necessary. Mr. Hendrickson was appointed to the
Audit Committee to replace Mr. O'Neill who transferred to the Compensation
Committee. The Audit Committee consists of Messrs. Fix, Chairman, Beck, Brown,
and Hendrickson, and met twice during the fiscal year ended December 31, 1998.
COMPENSATION COMMITTEE
The Compensation Committee is authorized by the Board of Directors to
set salaries and incentive compensation, stock options and retirement plans for
BMHC's executive officers and employees. The Compensation Committee consists of
Messrs. Hansberger, Chairman, Mabry, and O'Neill, and met four times during the
fiscal year ended December 31, 1998.
During the fiscal year ended December 31, 1998, all of the directors
attended at least 75% of all of the meetings of the Board of Directors and those
committees on which they served during the fiscal year.
For information regarding compensation received by a director, see
"Executive Compensation and Other Information-Compensation of Directors" and
"Certain Relationships and Other Transactions."
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE IN FAVOR
OF PROPOSAL 1.
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<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
This table details the amount of BMHC's common stock owned as of March
22, 1999, by each person who is known by BMHC to beneficially own more than 5%
of BMHC's common stock. The table also shows information concerning beneficial
ownership by all directors, each executive officer named in the Summary
Compensation Table, and by all directors and executive officers as a group.
BENEFICIAL OWNERSHIP TABLE
- - ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP(1)
------------------------------
NUMBER OF PERCENT OF
BENEFICIAL OWNER SHARES TOTAL(2)
- - ---------------- ---------- ----------
<S> <C> <C>
Becker Capital Management 1,038,532 8.2%
1211 Southwest Fifth Avenue, Suite 2185
Portland, OR 97204
ICM Asset Management, Inc. 987,900 7.8%
601 Main Avenue, Suite 917
Spokane, WA 99201
1838 Investment Advisors 971,707 7.6%
Five Radnor Corporate Center
100 Matsonford, Ste 320
Radnor, PA 19087-4571
Dimensional Fund Advisors 863,500 6.8%
1299 Ocean Ave., 11th Floor
Santa Monica, CA 90401
Directors and Executive Officers:
George E. McCown, Chairman of the Board of Directors 109,720 *
Robert E. Mellor, President and Chief Executive Officer
and Director(4,5) 57,582 *
Richard F. Blackwood, Senior Vice President of Operations(4,5) 55,338 *
President, Intermountain Division - BMC West
Ellis C. Goebel, Senior Vice President - Finance(4,5)
and Treasurer 53,474 *
Steven H. Pearson, Vice President of Human Resources(4,5) 40,330 *
William E. Smith, President, SouthCentral Division - BMC West(4,5) 2,014 *
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<PAGE>
Alec F. Beck, Director(5) 10,869 *
H. James Brown, Director(5) 21,000 *
Wilbur J. Fix, Director(5) 24,000 *
Robert V. Hansberger, Director(3,5) 37,500 *
Donald S. Hendrickson, Director(4,5,7) 133,078 1.0%
Guy O. Mabry, Director(5) 16,000 *
Peter S. O'Neill, Director(5) 21,000 *
All directors and executive officers as a group (13 persons):(6) 581,905 4.5%
</TABLE>
- - --------------------------------------------
* Represents holdings of less than 1%.
(1) This table is based upon information supplied by officers, directors,
and principal shareholders and Schedule 13G, if any, filed with the
Securities and Exchange Commission ("SEC"). Unless otherwise indicated
in the footnotes to this table and subject to the community property
laws where applicable, each of the shareholders named in this table has
sole voting and investment power regarding the shares shown as
beneficially owned by the shareholder.
(2) The percentage of stock ownership is based on 12,656,109 outstanding
shares of BMHC's common stock, adjusted as required by the rules
promulgated by the SEC.
(3) Includes 16,500 shares held of record by Mr. Hansberger's wife. Mr.
Hansberger disclaims beneficial ownership of these shares.
(4) Includes shares purchased through BMHC's 401(k) Plan and held indirectly
during 1998: Mr. Mellor, 102.9; Mr. Hendrickson, 1,138.9; Mr. Blackwood,
967.6; Mr. Goebel, 825.8; Mr. Pearson, 825.8; and Mr. Smith, 14. These
figures represent the shares purchased through BMHC's 401(k) Plan and
held indirectly as of 1998. The shares to be issued for the 1999 fiscal
year have not been allocated as of the date of this Proxy Statement.
(5) Includes the shares which certain BMHC directors and executive officers
have the right to acquire within 60 days after the date of this table
pursuant to outstanding options. The shares which these directors and
executive officers are eligible to acquire are as follows: Mr. Mellor,
39,480; Mr. Blackwood, 45,246; Mr. Goebel, 29,212; Mr. Pearson, 19,505;
Mr. Beck, 6,750; Mr. Brown, 19,000; Mr. Fix, 21,000; Mr. Hansberger,
21,000; Mr. Hendrickson, 90,690; Mr. Mabry, 13,500; Mr. O'Neill, 21,000;
and Mr. Smith, 2,000; all directors and executive officers as a group,
328,383.
(6) Includes shares described in the notes above.
(7) Mr. Hendrickson has disclaimed beneficial ownership of 34,000 shares.
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<PAGE>
EXECUTIVE COMPENSATION AND OTHER INFORMATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
This table details certain summary information concerning compensation
paid to or accrued by BMHC on behalf of BMHC's chief executive officer and each
of BMHC's other executive officers (determined as of the end of the last fiscal
year) (the "Named Executive Officers") for the fiscal years ended December 31,
1996, December 31, 1997, and December 31, 1998.
SUMMARY COMPENSATION TABLE
- - ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Long-Term
Compensation
----------------
Annual Compensation Awards(3)
- - -----------------------------------------------------------------------------------------------------------------------
Other
Name Annual Securities All Other
and Compen- Underlying Compen-
Principal sation Options sation
Position Year Salary($) Bonus($)(1) ($)(2) (#) ($)(5)
- - -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Robert E. Mellor 1998 275,000 278,094 -- 14,900(4) 37,350
President and Chief
Executive Officer 1997 240,624 181,240 -- 100,000(6) 18,213
1996 N/A N/A N/A N/A N/A
- - -----------------------------------------------------------------------------------------------------------------------
Richard F. Blackwood 1998 187,083 158,048 50,200 6,860(4) 28,058
Senior Vice President of
Operations and President - 1997 155,000 70,412 -- 6,000(4) 30,773
Intermountain Division -
BMC West 1996 150,000 99,704 -- 6,000(4) 21,239
- - -----------------------------------------------------------------------------------------------------------------------
Ellis C. Goebel 1998 170,500 172,418 -- 6,160(4) 25,056
Senior Vice President -
Finance and Treasurer 1997 140,500 75,763 -- 4,040(4) 22,932
1996 118,333 74,698 -- 2,685(4) 15,817
- - -----------------------------------------------------------------------------------------------------------------------
Steven H. Pearson 1998 136,667 139,310 83,671 5,060(4) 18,613
Vice President of Human
Resources 1997 120,000 55,355 -- 4,000(4) 22,391
1996 116,667 73,646 38,970 2,630(4) 15,790
- - -----------------------------------------------------------------------------------------------------------------------
William E. Smith 1998 175,000 132,125 -- -- 3,913
President - SouthCentral
Division - BMC West 1997(7) 23,000 8,158 -- 5,000 130
1996 N/A N/A N/A N/A N/A
- - -----------------------------------------------------------------------------------------------------------------------
</TABLE>
- - --------------------------------------------
(1) Each year BMHC has adopted a bonus plan for its key management personnel,
including executive officers. For the fiscal year ended December 31, 1998,
327 of BMHC's 4,037 employees were eligible to participate in the bonus
plan. The Compensation Committee determines the final size of the bonus
pool. Distribution of the bonus pool is based on each person's salary and
each individual officer's performance against predetermined objectives.
The President and Chief Executive Officer of BMHC also participates in the
same bonus plan as other executive officers. In 1998, Mr. Mellor received a
bonus of $278,094 and none of his performance stock options vested.
(2) Consists of proceeds received on the exercise of options equal to the
difference between the exercise price and the market price on the exercise
date. Certain incidental personal benefits that are furnished to BMHC's
executive officers (not otherwise disclosed in this Proxy Statement) may
result from expenses incurred in attracting and retaining qualified
personnel. For fiscal year 1998, the incremental cost to BMHC to provide
these incidental personal benefits did not exceed the lesser of $50,000 or
10% of the compensation reported in
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<PAGE>
the Summary Compensation Table for any Named Executive Officer, or, with
respect to all executive officers as a group, the lesser of $50,000
multiplied by the number of persons in such group or 10% of the compensation
reported in the table for the group.
(3) BMHC has no stock appreciation rights (SARs). The awards consist of stock
options granted under the 1992 Non-Qualified Stock Option Plan, as amended
("1992 Plan"). Options vest at a rate of 20% per year, unless, pursuant to
the terms of the plan, the vesting schedule is accelerated by the
Compensation Committee of the Board of Directors.
(4) The awards consist of stock options granted under the 1993 Employee Stock
Option Plan, as amended ("1993 Plan"). Options vest at a rate of 20% per
year unless, pursuant to the terms of the plan, the vesting schedule is
accelerated by the Compensation Committee of the Board of Directors.
(5) Consists of BMHC's matching payments under its savings and retirement plan
(the "401(k) Plan"). The 401(k) Plan is intended to qualify under Section
401(a) of the Internal Revenue Code of 1986, as amended (the "Code"), and
has a cash or deferred arrangement intended to qualify under Section 401(k)
of the Code. Under the 401(k) Plan's cash or deferred arrangement, eligible
employees may elect to contribute on a tax-deferred basis from 1% to 15% of
their total compensation, subject to statutory limitations. Prior to April
1, 1997, BMHC matched 50% of the first 2% of an employee's contribution and
25% of the next 3% of an employee's contribution. Since April 1, 1997, BMHC
has matched 50% of the first 3% and 25% of the next 2% of each employee's
contribution. Plan participants invest their individual accounts in selected
investment alternatives made available under the 401(k) Plan. BMHC's
matching contributions during the last fiscal year to its Named Executive
Officers were as follows: Robert E. Mellor, $4,403; Richard F. Blackwood,
$4,237; Ellis C. Goebel, $4,333; Steven H. Pearson, $2,733; and William E.
Smith, $3,913.
Effective January 1, 1993, BMC West adopted a supplemental employee
retirement plan ("SERP") to supplement the 401(k) Plan. The goal of the SERP
is to provide an overall plan enabling employees to retire at age 65 with 30
years of service at an income level of at least 60% of pre-retirement pay.
The retirement value target takes into consideration Social Security and
401(k) Plan benefits. In 1998, BMHC agreed to fund the SERP for executive
officers with funds between 11.35%-12.73% of each executive officer's
current base salary (these contributions are included in the table).
Contributions are based on a percentage of BMHC's earnings after taxes, up
to an amount not to exceed 15% of base salaries.
Contributions made with respect to participants who are not considered
highly compensated individuals under IRS regulations are used to acquire
shares of BMHC's common stock. These contributions are allocated based upon
individual base salary in excess of $20,000 and are added to the
participants' 401(k) Plan accounts. Highly compensated individuals
participate in a non-qualified, unfunded plan in which they receive a number
of units determined by dividing the allocated contribution by the average
year-end closing price of BMHC's common stock for the prior five years. The
value of such a participant's account at any time is equal to the number of
units multiplied by the five-year average stock price as of the immediately
preceding fiscal year-end. BMHC funds distributions by purchasing cash value
life insurance on participants, which is owned by BMHC. BMHC maintains a
qualifying trust, which is subject to claims of creditors, in order to
otherwise assure payment of benefits to participants.
(6) During 1997, as an additional incentive to attract a member of senior
management, the Board of Directors granted options under the Plan for 50,000
shares to Mr. Mellor. These options vest at a rate of 20% annually for a
period of five years. On February 5, 1997, Mr. Mellor was also granted
options to purchase an additional 50,000 shares outside of BMHC's stock
option plans. These options are not exercisable until BMHC achieves certain
stock price levels designated by the Compensation Committee. To date, none
of these options have vested; however, the options will vest in the year
2002 regardless of stock price levels. In 1998, Mr. Mellor received an
option for 14,900 shares of common stock at the fair market value on the
grant date which vest 20% each year.
(7) Mr. Smith was hired in November 1997 and only received compensation for
the last two months of 1997.
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<PAGE>
STOCK OPTION GRANTS IN THE LAST FISCAL YEAR
In 1998, the Board of Directors granted stock options under BMHC's 1993
Plan. BMHC has reserved 725,000 shares of common stock to be issued on the
exercise of options granted to select directors, executive officers, and key
employees. The 1993 Plan is administered by the Compensation Committee. The
Compensation Committee is authorized to determine who receives options, the
number of shares in each option, when the options may be exercised, and the
exercise price. The table below details information about the stock options
granted during 1998 to the Named Executive Officers under the 1993 Plan.
OPTION GRANTS IN LAST FISCAL YEAR
- - -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Individual Grants
--------------------------------------------------------------------
% of Total
Number of Options
Securities Granted to
Underlying Employees Exercise
Options in Fiscal Price Expiration Grant Date
Name Granted (#)(1) Year(2) ($/SH)(3) Date Present Value ($)(4)
---- -------------- ---------- --------- ---------- --------------------
<S> <C> <C> <C> <C> <C>
Robert E. Mellor 14,900 9.9 12.375 02/17/08 $91,933
Richard F. Blackwood 6,860 4.6 12.375 02/17/08 $42,326
Ellis C. Goebel 6,160 4.1 12.375 02/17/08 $38,007
Steven H. Pearson 5,060 3.4 12.375 02/17/08 $31,220
</TABLE>
- - --------------------------------------------
(1) Options vest at a rate of 20% a year, unless the vesting schedule is
accelerated by the Compensation Committee of the Board of Directors,
according to the terms of the 1993 Plan. In the event of a change of
control, as defined in the 1993 Plan, all outstanding options become
exercisable immediately. Options expire 90 days after an optionee's
employment with BMHC is terminated for any reason, unless the termination
results from optionee's death, permanent disability, or retirement. In the
case of an optionee's death or disability, a vested option does not expire
until one year after optionee's death or disability. However, if an
optionee retires, a vested option does not expire until three years after
optionee's retirement. Options expire 10 years from the grant date. As of
December 31, 1998, 20% of the options granted to executive officers and key
employees in the last fiscal year were vested and are fully exercisable.
(2) During the 1998 fiscal year, 86 of BMHC's 4,073 employees were granted
options under the 1993 Plan and one (1) employee was granted options under
the 1992 Plan. During the 1998 fiscal year, the total number of shares
granted to executive officers and key employees was as follows: 147,970
shares from the 1993 Plan and 2,000 shares from the 1992 Plan.
(3) Represents the closing market price of BMHC's common stock on the day
immediately preceding the grant date.
(4) BMHC used the Black-Scholes model of option valuation to determine grant
date present value. BMHC does not advocate or necessarily agree that the
Black-Scholes model can properly determine the value of an option. The
actual value that an executive officer realizes depends on the market value
of BMHC's stock at a future date and may be more or less than the amount
calculated. Estimated values under the Black-Scholes model are based on (a)
an expected life of six years; (b) an interest rate that represents the
interest rate on a similar
- 10 -
<PAGE>
maturity 0 coupon, U.S. Treasury Bond; (c) volatility calculated using
weekly stock prices for six years prior to the grant date; and (d) a zero
future dividend yield.
AGGREGATED STOCK OPTIONS
The table below provides information concerning aggregated unexercised
stock options held as of the 1998 fiscal year-end and the stock options
exercised during the 1998 fiscal year by the Named Executive Officers.
AGGREGATED OPTIONS/ EXERCISES IN LAST FISCAL YEAR AND FY END OPTION VALUES
- - ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number of Securities Underlying Value of Unexercised
Unexercised Options at In-the-Money Options at
December 31, 1998(1) December 31, 1998(1,2)
----------------------------------- ------------------------------
Shares
Acquired Value
Name On Exercise Exercised Exercisable Unexercisable Exercisable Unexercisable
- - ---- ----------- --------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Robert E. Mellor ----- ----- 39,480 91,920 48,413 0
Richard F. Blackwood 5,000 50,200 45,246 12,101 293,516 0
Ellis C. Goebel ----- ----- 29,212 8,908 180,538 0
Steven H. Pearson 6,438 83,671 19,505 7,982 77,523 0
William E. Smith ---- ---- 2,000 3,000 376 564
</TABLE>
- - --------------------------------------------
(1) The table includes options vested under BMHC's stock option plans as of
December 31, 1998, and from outside BMHC's stock option plans. The
options are valued at the closing market price of the stock on December
31, 1998.
(2) The values in these columns are the aggregate amount by which the market
price per share of $12.13 on December 31, 1998, exceeded the respective
exercise prices of each of the options.
COMPENSATION OF DIRECTORS
In 1998, BMHC paid its non-employee directors a quarterly fee of $2,500
for their services on the Board of Directors, together with a fee of $2,000
for each meeting of the Board of Directors they attended. The non-employee
directors were also paid a fee of $2,000 for each committee meeting of the
Board of Directors they attended ($1,000 if the committee meeting was held in
conjunction with a Board of Directors meeting, or was held by telephone and
lasted less than four hours). All of the directors are reimbursed for their
expenses for each Board of Directors and committee meeting attended.
In 1998, George E. McCown received a fee of $150,000 for his service as
Chairman of the Board of Directors. Mr. McCown does not receive quarterly or
meeting fees or stock options from BMHC's Non-Employee Director Stock Option
Plans.
BMHC has a one-year Consulting Agreement with Donald S. Hendrickson,
which began in April 1998, for $150,000. As of December 31, 1998, Mr.
Hendrickson received $100,000 for his consulting services under the Consulting
Agreement.
- 11 -
<PAGE>
SEVERANCE AND CHANGE OF CONTROL AGREEMENTS
Each of the Named Executive Officers and certain other officers have
entered into Severance Agreements with BMHC or BMC West and its Subsidiaries
(the "Severance Agreement"). Under the terms of the Severance Agreement, a
participating executive will be entitled to receive benefits if the
executive's employment is terminated by BMHC without cause or by the executive
for good reason within three years following a change in control of BMHC.
The benefits payable to the Named Executive Officers under the Severance
Agreement consist of a lump sum cash payment equal to 2.99 times the sum of
(i) the executive's compensation (measured by the higher of the amount in
effect at the time of termination or Change in Control), plus (ii) the highest
cash bonus and profit sharing plan contribution during the three years prior
to the Change in Control. In addition, under BMHC's stock option plans, the
options vest upon a Change in Control.
The Severance Agreement includes all district managers, location
managers, and all other key employees whose total annual compensation exceeds
$60,000. This group of district managers, location managers and eligible
employees are eligible to receive one year's severance upon a Change in
Control.
A "Change in Control" includes: (i) a merger or consolidation of BMHC in
which BMHC is not the continuing entity or the holders of BMHC's voting stock
immediately prior to the transaction have less than the same proportionate
interest in the continuing entity after the transaction; (ii) a sale or
exchange of all or substantially all of the assets of BMHC; (iii) approval of
a plan of liquidation or dissolution; (iv) a change, over a two-year period or
less, in a majority of the Board of Directors that has not been approved by
two-thirds of the directors in office at the beginning of the period; and (v)
the acquisition by certain persons of 50% or more of BMHC's outstanding stock.
A Change in Control does not include a transaction initiated by the Board of
Directors and approved by a majority of independent directors (as defined in
the Severance Agreement).
The term "Cause" is defined as the commission of certain felonies,
willful dereliction of duties, malicious conduct, and habitual neglect of
duties. An executive's termination is for "Good Reason" if any of the
following occur within six months of such termination: (i) material change in
the executive's duties or position; (ii) a material decrease in compensation
or benefits; (iii) certain relocations; and (iv) breach of the Severance
Agreement.
The Severance Agreement has an initial term of two years and thereafter
is automatically renewed for a similar period, subject to cancellation or
amendment by BMHC on or before a subsequent renewal date. If benefits under
the Severance Agreement would exceed those permitted under Section 280G of the
Internal Revenue Code, the benefits are reduced to a level so that they do not
exceed the applicable limits.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
As noted above, BMHC's Compensation Committee consists of Robert V.
Hansberger, Guy O. Mabry, and Peter S. O'Neill. None of BMHC's executive
officers serves as a director of another corporation in a case where an
executive officer of such other corporation serves as a director of BMHC.
- 12 -
<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee, which consists of three Non-employee
Directors, decides on the compensation of BMHC's executive officers. The full
Board of Directors reviews all decisions by the Compensation Committee
relating to the compensation of BMHC's executive officers, except for awards
under BMHC's 1992 Plan and 1993 Plan, which grant discretion to either the
Compensation Committee or the Board of Directors.
The Compensation Committee uses independent compensation consultants and
studies to compare BMHC's compensation plans in general with compensation
plans in BMHC's industry and with comparable sized companies in similar
industries. In December 1998, the Compensation Committee reviewed both
industry and national compensation surveys, with the assistance of AON
Consulting, to measure the competitiveness of officer base salaries and total
compensation. The Compensation Committee established goals for compensation
plans for both executive officers and key employees for direct and deferred
compensation.
The Compensation Committee has considered the provisions to the Internal
Revenue Code denying deductions for annual compensation to certain executives
in excess of $1 million, subject to certain exceptions. BMHC's compensation
structure has been such that it is not likely that the $1 million cap will
affect BMHC in the near future. In the event any annual compensation to
executives approaches the $1 million cap, BMHC will evaluate and comply with
the regulations.
COMPENSATION POLICIES FOR EXECUTIVE OFFICERS. Compensation policies for
executive officers follow the compensation policies for all employees. The
policies emphasize the principle that compensation should be competitive as
well as commensurate with both an individual's and BMHC's performance.
BMHC's compensation policies for executive officers are structured to
provide competitive compensation levels that integrate compensation with all
BMHC's annual and long-term performance goals, reward above-average corporate
performance, recognize an individual's initiative and achievements, provide
mechanisms for the executive officers to provide for their own retirement, and
assist BMHC in attracting and retaining qualified executives. Targets for
total compensation are set at levels the Compensation Committee believes are
consistent with others in BMHC's industry and comparable sized companies in
similar industries. Actual compensation in any particular year may be above or
below BMHC's competitors or comparable sized companies in similar industries,
depending upon BMHC's performance. The Compensation Committee believes stock
ownership is beneficial in aligning BMHC's and shareholders' interests in
enhancing shareholder value.
RELATIONSHIP OF PERFORMANCE UNDER COMPENSATION PLANS. Compensation paid
to the executive officers in 1998, as reflected in the foregoing tables,
consisted of the following elements: base salary, bonus, the value of stock
options that were granted and which vested in 1998, and retirement plans.
Base salary in 1998 was adjusted for the executive officers to compare
more closely to salaries of executives holding similar positions of
responsibility in related industries. Any additional compensation paid to
executive officers is based on BMHC's earnings, which results in aligning
executive officers' and shareholders' interests with BMHC's profitability.
BMHC's annual bonuses to its executive officers, except for Richard F.
Blackwood and William E. Smith, reported in the third column of the Summary
Compensation Table on page 8 are
- 13 -
<PAGE>
based on BMHC's earnings per share (EPS) and return on equity (ROE). The
bonus of each division president is based on his division's earnings, return
on net working capital and overall earnings per share of BMHC. The
Compensation Committee sets performance targets in these areas with minimum
performance hurdles combined with increasing bonus pay opportunities which
are in direct correlation to the division's and BMHC's financial performance.
In addition to financial performance, an officer's bonus is determined by his
individual performance against predetermined objectives. The bonuses paid to
executive officers who were employed by BMHC during 1997 and 1998 were up 95%
from the prior year. The increased bonuses reflect BMHC's significantly
improved EPS performance, up 54% and ROE up 44% over the prior year.
The Compensation Committee reviews and adjusts annually, if necessary,
the targets and proposed amounts to be paid in bonuses to the executive
officers. The Compensation Committee made changes in 1998 to tailor
compensation more closely to individual goals as well as BMHC's financial
results.
BMHC's stock option plans are designed to reinforce long-term focus on
both BMHC's performance and its stock performance. BMHC has granted stock
options to executive officers under several option plans. In 1998, the
Compensation Committee approved the grant of BMHC's common stock to its
executive officers and key employees. Of the grants, 147,970 shares were from
the 1993 Plan, and 2,000 shares were from the 1992 Plan. The options generally
vest at a rate of 20% per year commencing on December 31, 1998, and expiring
10 years from the grant date.
The executive officers also participate in other employee benefit
programs, including health insurance, group life insurance, and a 401(k) Plan.
In 1998, BMHC matched 50% of the first 3% of salary and 25% of the next 2% of
salary contributed by the employee to the 401(k) Plan. To supplement BMHC's
401(k) Plan, BMHC also provides a supplemental employee retirement plan
("SERP") in which the executive officers participate. The goal of the SERP is
to provide an overall plan enabling employees to retire at age 65 after 30
years of service at an income level of at least 60% of pre-retirement pay. In
1998, BMHC funded the SERP for executive officers with funds between the range
of 11.35%-12.73% of each executive officer's 1998 base salary. The Named
Executive Officers participate in an unfunded plan in which they receive a
number of units determined by dividing the allocated contribution by the
average year-end closing price of BMHC's common stock for the prior five
years. The value of each executive officer's account at any time is equal to
the number of units multiplied by the five-year average stock price as of the
immediately preceding year end. BMHC funds distributions from the purchase of
cash value life insurance which BMHC owns on participants.
CHIEF EXECUTIVE OFFICER'S 1998 COMPENSATION. The Compensation Committee's
general approach to the Chief Executive Officer's ("CEO's") annual
compensation is to establish a competitive annual base salary and to provide
for additional compensation based on BMHC's actual performance during the
year. This approach coincides with BMHC's general philosophy of providing
compensation commensurate with the individual's and BMHC's performance. As a
result, the CEO's compensation may fluctuate from year to year.
The President and Chief Executive Officer of BMHC also participates in
the same bonus plan as other executive officers. In 1998, Mr. Mellor received
an option for 14,900 shares of common stock at the fair market value on the
grant date. In 1997, Mr. Mellor was granted an option for 50,000 shares of
common stock at the fair market value on the grant date which vests five years
from the grant date with accelerated vesting if BMHC's stock reaches certain
price levels. In 1998, Mr. Mellor received a bonus of $278,094 and none of his
performance based stock options vested.
- 14 -
<PAGE>
The Compensation Committee's approach to the CEO's long-term compensation
is to provide for retirement planning through BMHC's 401(k) Plan, the SERP
discussed above, and through stock option plans implemented by BMHC to
emphasize its long-term performance and its stock. The CEO participates in
BMHC's three stock option plans. In May 1998, in connection with the grant of
options under the 1993 Plan to other executive officers and key employees, the
CEO was granted options to acquire 14,900 shares of BMHC's common stock. The
options generally vest at a rate of 20% per year commencing on December 31,
1998, and expire 10 years from the grant date.
The Compensation Committee believes that this approach to the CEO's bonus
relates a substantial part of the CEO's annual compensation to BMHC's annual
performance results by aligning the CEO's compensation with shareholders'
interests.
COMPENSATION COMMITTEE
Robert V. Hansberger, Chairman
Guy O. Mabry
Peter S. O'Neill
- 15 -
<PAGE>
PERFORMANCE GRAPH
The graph below compares BMHC's cumulative total return with the Nasdaq
Market Index and a Peer Group Index from January 1, 1994, through December 31,
1998. Total return is based on an investment of $100 on January 1, 1994, and
reinvestment of dividends through December 31, 1998. The Peer Group Indexes
include publicly held building material distributors and similarly sized
distributors of other products to the construction industry.(1)
<TABLE>
<CAPTION>
FISCAL YEAR ENDING
-------------------------------------------------------------------------------------
COMPANY/INDEX/MARKET 12/28/1993 12/28/1994 12/29/1996 12/31/1996 12/31/1997 12/31/1998
- - -------------------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Building Materials 100.00 69.29 74.33 61.73 52.91 61.10
Customer Selected Stock List 100.00 74.09 44.51 52.12 54.09 56.04
NASDAQ Market Index 100.00 104.99 136.18 169.23 207.00 291.96
</TABLE>
ASSUMES $100 INVESTED ON JANUARY 1, 1994
ASSUMES DIVIDENDS REINVESTED
FISCAL YEAR ENDING DECEMBER 31, 1998
(1) The 1998 Peer Group Index is composed of the following issuers:
Wickes, Inc. and Wolohan Lumber Co.
- 16 -
<PAGE>
CERTAIN RELATIONSHIPS AND OTHER TRANSACTIONS
Section 16(a) of the Securities Exchange Act of 1934 requires BMHC's
executive officers, directors, and persons owning more than 10% of a
registered class of BMHC's equity securities to file reports of ownership and
changes in ownership with the Securities and Exchange Commission ("SEC") and
the National Association of Securities Dealers. Executive officers, directors,
and greater than 10% shareholders are required by SEC regulations to furnish
BMHC with copies of all Section 16(a) forms they file. Based solely on its
review of such forms and written representations from certain reporting
persons that they have complied with the relevant filing requirements, BMHC
believes that all filing requirements applicable to its executive officers,
directors, and greater than 10% shareholders were complied with as of December
31, 1998.
INDEMNIFICATION OF EXECUTIVE OFFICERS AND DIRECTORS
BMHC's Bylaws provide that BMHC will indemnify its directors and
executive officers and may indemnify its other officers, employees, and other
agents to the fullest extent not prohibited by law. BMHC believes that
indemnification under its Bylaws covers at least negligence and gross
negligence by indemnified parties, and requires BMHC to advance litigation
expenses in the case of shareholder derivative actions or other actions
against an undertaking by the indemnified party to repay such advances if it
is ultimately determined that the indemnified party is not entitled to
indemnification. BMHC is also empowered under its Bylaws to enter into
indemnification contracts with its directors and executive officers and to
purchase insurance on behalf of any person whom it is required or permitted to
indemnify. In accordance with this provision, BMHC has entered into indemnity
agreements with each of its directors and executive officers. BMHC also has in
effect directors and executive officers liability insurance coverage.
BMHC's Certificate of Incorporation provides that, under Delaware law,
its directors will not be liable for monetary damages for breach of the
directors' fiduciary duty of care to BMHC and its shareholders. This provision
in the Certificate of Incorporation does not eliminate the duty of care, and
in appropriate circumstances equitable remedies such as injunctive or other
forms of nonmonetary relief will remain available under Delaware law. In
addition, each director will continue to be subject to liability for breach of
the director's duty of loyalty to BMHC, for acts or omissions not in good
faith or involving intentional misconduct, for knowing violations of law, for
actions leading to improper personal benefit to the director, and for payment
of dividends or approval of stock repurchases or redemptions that are unlawful
under Delaware law. The provision also does not affect a director's
responsibilities under any other laws, such as the federal securities laws or
state or federal environmental laws.
Currently, there is no pending litigation or proceeding involving a
director, executive officer, employee, or other BMHC agent where
indemnification is sought. BMHC is not aware of any threatened litigation that
may result in indemnification claims by any director, executive officer,
employee, or other agent.
Any future transactions between BMHC and its executive officers,
directors, and affiliates will be on terms no less favorable to BMHC than can
be obtained from unaffiliated third parties, and any material transactions
with such persons will be approved by a majority of BMHC's disinterested
directors.
- 17 -
<PAGE>
SHAREHOLDER PROPOSALS
Under Section 5(b) of BMHC's Bylaws, proposals by BMHC shareholders must
be given in writing to BMHC's Secretary in a timely manner. A timely manner is
defined as being delivered to or mailed and received at BMHC's principal
executive office not less than 120 days prior to the date BMHC's proxy
statement is released to shareholders in connection with the previous year's
annual meeting of shareholders. No timely proposals were received.
SHAREHOLDER NOMINATION OF DIRECTORS
Under Section 5(c) of BMHC's Bylaws, nominations for election to the
Board of Directors by BMHC's shareholders must be received not less than 120
days prior to the date BMHC's proxy statement is released to shareholders in
connection with the previous year's annual meeting of shareholders. The
nomination must contain the information required by BMHC's Bylaws. No timely
nominations were received.
OTHER MATTERS
The Board of Directors is not aware of any other matters that will be
presented for consideration at the Annual Meeting. If any other matters are
properly presented, persons named as proxies will vote in accordance with
their best judgment on such matters.
By Order of the Board of Directors
Paul S. Street
Senior Vice President,
General Counsel and Secretary
March 31, 1999
A copy of BMHC's Annual Report to the Securities and Exchange Commission
on Form 10-K for the fiscal year ended December 31, 1998, is available without
charge upon written request to:
Shareholder Services
Building Materials Holding Corporation
Attn: Lesa D. Thomas, Assistant Secretary
720 Park Boulevard, Suite 200
Post Office Box 70006
Boise, Idaho 83707-0106
www.BMHC.com
- 18 -
<PAGE>
BUILDING MATERIALS HOLDING CORPORATION
PROXY FOR THE ANNUAL MEETING OF SHAREHOLDERS ON MAY 5, 1999
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Robert E. Mellor, Ellis C. Goebel, and Paul S.
Street, or any of them, attorneys and proxies with full power of substitution in
each of them, in the name, place, and stead of the undersigned to vote as proxy
all the stock of the undersigned in Building Materials Holding Corporation.
Please sign and date on the reverse side and mail promptly. You are encouraged
to specify your choices by marking the appropriate boxes on the reverse side,
but you need not mark any boxes if you wish to vote in accordance with the Board
of Directors' recommendations. If you do not sign and return a proxy or attend
the meeting and vote by ballot, your shares cannot be voted.
(CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE)
<PAGE>
PLEASE DATE, SIGN AND MAIL YOUR
PROXY CARD BACK AS SOON AS POSSIBLE!
ANNUAL MEETING OF SHAREHOLDERS
BUILDING MATERIALS HOLDING CORPORATION
MAY 5, 1999
Please Detach and Mail in the Envelope Provided
A
/X/ PLEASE MARK YOUR
VOTES AS IN THIS
EXAMPLE.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL 1.
<TABLE>
<S><C>
NOMINEES: George E. McCown 2. In their discretion, the
FOR WITHHELD Robert E. Mellor proxies are authorized to vote
1. Election / / / / Alec F. Beck upon such other business as may
of H. James Brown properly come before the
Directors Wilbur J. Fix meeting.
Robert V. Hansberger
Instructions: To withhold Donald S. Hendrickson THIS PROXY WILL BE VOTED ACCORDING
authority to vote for any Guy O. Mabry TO YOUR INSTRUCTIONS. IF YOU SIGN
individual nominee, write that Peter S. O'Neill AND RETURN THE CARD BUT DO NOT VOTE
nominee's name in the space ON THIS MATTER, THEN PROPOSAL 1, IF
provided below: UNMARKED, WILL RECEIVE YOUR VOTES.
PLEASE DATE, SIGN, AND RETURN THIS
PROXY IN THE ENCLOSED ENVELOPE.
YES NO
DO YOU PLAN TO ATTEND / / / /
THE ANNUAL MEETING?
</TABLE>
SIGNATURE(S) ______________________ DATE ____________
SIGNATURE(S) ______________________ DATE ____________
NOTE: Please sign exactly as your name appears hereon. When signing as
attorney, executor, administrator, trustee, guardian, partner, etc., please
indicate your title as such. If shares held by corporation, sign in full
corporate name by authorized officer. If shares held in the name of two or
more persons, all should sign.
