<PAGE> 1
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
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec. 240.14a-11(c) or sec. 240.14a-12
Boise Cascade Corporation
One Jefferson Square
P.O. Box 50
Boise, ID 83728-0001
(Name of Registrant as Specified in its Charter)
A. James Balkins III, Esq.
Boise Cascade Corporation
One Jefferson Square
P.O. Box 50
Boise, ID 83728-0001
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) 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:
--------------------------------------------------------------------
Set forth the amount on which the filing fee is calculated and state how it
was determined.
/ / 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:
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2) Form, Schedule or Registration Statement No.:
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4) Date Filed:
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<PAGE> 2
[LOGO]
BOISE CASCADE
CORPORATION
------------------------------------
ANNUAL MEETING
OF SHAREHOLDERS
BOISE, IDAHO
APRIL 22, 1994
------------------------------------
NOTICE AND PROXY
STATEMENT
<PAGE> 3
NOTICE OF ANNUAL MEETING
[BOISE CASCADE LOGO]
<TABLE>
<S> <C>
One Jefferson Square John B. Fery
P.O. Box 50 Chairman of the Board
Boise, Idaho 83728-0001 Chief Executive Officer
</TABLE>
March 7, 1994
Dear Shareholder:
You are cordially invited to attend Boise Cascade's annual meeting of
shareholders. The meeting will be held at the Company's headquarters, One
Jefferson Square, Boise, Idaho, at 10 a.m., Mountain daylight time, on Friday,
April 22, 1994. Your board of directors and management look forward to greeting
personally those shareholders able to be present. However, if you are unable to
attend, I urge you to return the enclosed proxy card as soon as possible.
The meeting will be held for the following purposes:
1. To elect four directors to serve three-year terms.
2. To consider and act upon a resolution to ratify the action of the
board of directors in appointing Arthur Andersen & Co. as
independent auditors for the Company for 1994.
3. To transact any other business that may properly come before the
meeting.
Shareholders of record on March 3, 1994, will be entitled to vote.
During the meeting, management will review the Company's performance during
the past year and comment on the outlook for the Company. There will be time for
questions shareholders may have about the Company and its operations. Management
representatives will also be on hand to talk individually with shareholders
about our business.
Regardless of the number of shares you own, your vote is important. Unless
you plan to attend the meeting, please sign and return the proxy card in the
enclosed envelope at your earliest convenience.
Sincerely yours,
JOHN B. FERY
- ------------
John B. Fery
<PAGE> 4
PROXY STATEMENT
This statement is being mailed on or about March 7, 1994, to the
shareholders of Boise Cascade Corporation (the "Company"), One Jefferson Square,
P.O. Box 50, Boise, Idaho 83728-0001, in connection with the solicitation of
proxies by the board of directors for the Company's 1994 annual meeting of
shareholders.
A shareholder who executes and returns the enclosed proxy may revoke it at
any time prior to its exercise by delivering to the independent tabulator a
later proxy, by giving the Company written notice of revocation prior to or at
the annual meeting of shareholders, or by voting in person at the meeting.
The Company has a confidential voting policy which provides that an
individual shareholder's votes on a proxy card will not be disclosed to the
Company other than in specified situations. The Company's proxy cards will be
collected and tabulated by the inspector of election for the meeting, Corporate
Election Services, Inc. The tabulator will forward comments written on the proxy
cards to the Company for management's information, but information about
individual shareholders' votes will not be communicated to the Company.
BUSINESS AT THE MEETING
1. ELECTION OF DIRECTORS
Your board of directors presently consists of twelve directors divided into
three classes. Four directors are to be elected at the annual meeting, each to
hold office until the 1997 annual meeting of shareholders and until a successor
has been elected and qualified. All the nominees are presently directors. Eight
directors will continue to serve in accordance with their previous elections.
In the absence of other instructions, shares of the Company's common stock,
Series D, Series E and Series G preferred stock represented by properly executed
proxies will be voted in favor of the nominees. If any nominee becomes
unavailable for election for any reason, either the proxies will be voted for a
substitute recommended by the Nominating Committee and nominated by the board of
directors or the board may make an appropriate reduction in the number of
directors to be elected. Unless the number of directors to be elected has been
so reduced, the four nominees for election as directors at the annual meeting
who receive the greatest number of votes at the meeting will be elected as
directors. Abstentions and broker nonvotes will have no effect on the election
of directors.
NOMINEES FOR DIRECTORS WHOSE TERMS EXPIRE IN 1997
JOHN B. FERY, 64, was elected to the board in 1967. He has
been the chief executive officer of Boise Cascade since 1972
and first became an officer of the Company in 1960. Mr. Fery
became chairman of the board in 1978. He is also a director of
Albertson's, Inc., The Boeing Company, Hewlett-Packard
Company, and West One Bancorp.
- -------------------
GEORGE J. HARAD, 49, became a director in 1991. He was elected
president and chief operating officer of the Company in 1991
and has been an executive officer of the Company since 1982.
Mr. Harad is also a director of Allendale Insurance Co.
- -------------------
1
<PAGE> 5
JAMES A. MCCLURE, 69, became a director in 1991. He served as
a U.S. Senator for Idaho from 1972 through 1990 and was a
member of the Senate Energy and Natural Resources Committee,
the Senate Appropriations Committee, and the Senate Rules
Committee. He is now of counsel to the Boise, Idaho, law firm
of Givens, Pursley & Huntley and president of the Washington,
D.C., consulting firm of McClure, Gerard & Neuenschwander,
Inc. He is also a director of Idaho Power Company, Coeur
d'Alene Mines Corp., and The Williams Companies, Inc.
- -------------------
EDSON W. SPENCER, 67, was elected to the board of directors in
1988. He is the former chairman of the board and chief
executive officer of Honeywell Inc., an electronics
manufacturing company. He is also a director of CBS Inc. and
IDS Mutual Fund Group and is chairman of the board of trustees
of the Mayo Foundation.
- -------------------
Under the terms of the Company's bylaws, Mr. McClure, who will reach age 70
during 1994, must retire as a director of the Company at the annual shareholders
meeting in 1995. Consequently, even though he is being elected to a three-year
term, he will only serve for one year. Any vacancy on the board of directors
will, pursuant to the Company's Certificate of Incorporation and bylaws, be
filled by the remaining directors. The Company has a policy which, subject to
certain exceptions, requires executive officers to retire no later than December
31 of the year in which the officer becomes 65 years of age. Consequently, Mr.
Fery, who will reach age 65 in 1995, is not likely to continue as the Company's
chief executive officer through the entire three-year term of his election as a
director. Mr. Fery may or may not continue as a director of the Company
following his retirement as chief executive officer.
DIRECTORS WHOSE TERMS EXPIRE IN 1996
ROBERT K. JAEDICKE, 65, became a director in 1983. He has been
a member of the business school faculty at Stanford University
for 32 years and served as dean of Stanford's Graduate School
of Business from 1983 to 1990. Professor Jaedicke is also a
director of Wells Fargo & Company, Homestake Mining Company,
Enron Corp., GenCorp Inc., State Farm Insurance Companies, and
California Water Service Company.
- -------------------
PAUL J. PHOENIX, 66, was elected to the board of directors in
1987. He is the former chairman of the board and chief
executive officer of Dofasco Inc., a steel products company.
He is also a director of The Bank of Nova Scotia, Mutual Life
of Canada, and GenCorp Inc.
- -------------------
FRANK A. SHRONTZ, 62, was elected to the board of directors in
1989. He is chairman of the board and chief executive officer
of The Boeing Company, one of the world's major aerospace
firms. He is also a director of Citicorp and Minnesota Mining
& Manufacturing Co.
- -------------------
2
<PAGE> 6
WARD W. WOODS, JR., 51, was elected to the board of directors
in 1992. He is president and chief executive officer of
Bessemer Securities Corporation, a privately held investment
company, and managing general partner of Bessemer Holdings,
L.P. He is chairman of the board of Stant Corporation,
Overhead Door Corporation, and BCP/Essex, Inc. He is also a
director of Freeport-McMoran Inc. and several private
companies.
- -------------------
DIRECTORS WHOSE TERMS EXPIRE IN 1995
ANNE L. ARMSTRONG, 66, was elected to the Company's board for
the second time in 1978. She was originally elected in 1975
but resigned the following year to accept appointment as U.S.
Ambassador to Great Britain. She had served earlier as a
counselor to the President of the United States. Mrs.
Armstrong is chairman of the board of trustees of the Center
for Strategic and International Studies, Washington, D.C. She
is also a director of General Motors Corporation, Halliburton
Company, American Express Company, and Glaxo Holdings p.l.c.
- -------------------
ROBERT E. COLEMAN, 69, became a director in 1982. He is the
former chairman of the board and chief executive officer of
Riegel Textile Corporation. He is also a director of First
Financial Management Corporation.
- -------------------
A. WILLIAM REYNOLDS, 60, was elected to the board of directors
in 1989. He is chairman of the board and chief executive
officer of GenCorp Inc., a diversified manufacturing and
service company. He is also a director of Eaton Corporation
and chairman of the Federal Reserve Bank of Cleveland.
- -------------------
ROBERT H. WATERMAN, JR., 57, was elected to the board in 1987.
He was formerly a senior partner of McKinsey & Company, Inc.,
a management consulting firm. He is the founder and president
of The Waterman Group, Inc., a research, writing, and venture
management firm. Mr. Waterman has authored several books and
essays on business management. He is also a director of AES
Corporation, The ASK Group, and McKesson Corporation.
- -------------------
BOARD MEETINGS AND ATTENDANCE OF DIRECTORS
During 1993, the board of directors held five regular meetings and one
special meeting. All directors attended at least 75 percent of the total
meetings of the board and the committees on which they served.
COMMITTEES OF THE BOARD OF DIRECTORS
The board of directors has a Committee of Outside Directors. This
committee, composed of all ten nonemployee directors of the Company, is
responsible for reviewing the performance of the chief executive officer. This
committee also reviews the performance and processes of the board of directors
3
<PAGE> 7
and communication among the board, management, and shareholders. The Committee
of Outside Directors meets at least once each year, without management directors
present, under the leadership of Mrs. Anne L. Armstrong. During 1993, this
committee held two meetings.
The board of directors has an Executive Committee. The committee can
exercise most of the powers and authorities of the full board in the management
of the business and affairs of the Company. The committee chair is John B. Fery,
and its other members are Mrs. Armstrong and Messrs. Coleman, Harad, Jaedicke,
and Spencer. During 1993, this committee did not meet.
The board of directors has an Executive Compensation Committee, composed of
the Company's nonemployee directors excluding any director who is an executive
officer of another company on whose board of directors any executive officer of
the Company serves. In addition, this committee has no members who are employees
of another company which engages in significant financial transactions with the
Company. The Executive Compensation Committee is responsible for establishing
all executive officer compensation and for administering stock option and
variable compensation programs applicable to officers and directors. The
committee chair is Robert E. Coleman, and its other members are Mrs. Armstrong
and Messrs. Jaedicke, Phoenix, Reynolds, Spencer, Waterman, and Woods. During
1993, this committee held three meetings.
The board of directors has an Audit Committee composed of five members,
none of whom is an officer or an employee of the Company. The committee meets
periodically with management, the Company's Internal Audit staff, and
representatives of the Company's independent auditors to assure that appropriate
audits of the Company's affairs are being conducted. In carrying out these
responsibilities, the committee reviews the scope of internal and external audit
activities and the results of the annual audit. The committee is also
responsible for recommending a public accounting firm to serve as independent
auditors each year. Both the independent auditors and the internal auditors have
direct access to the Audit Committee to discuss the results of their
examinations, the adequacy of internal accounting controls, and the integrity of
financial reporting. The committee chair is Robert K. Jaedicke, and its other
members are Messrs. McClure, Phoenix, Shrontz, and Spencer. During 1993, the
committee held two meetings.
The board of directors also has a Nominating Committee composed of six
members, none of whom is an officer or employee of the Company. The committee
reviews candidates to be considered for nomination to the board of directors and
makes recommendations to the board. The committee chair is Edson W. Spencer, and
its other members are Messrs. McClure, Reynolds, Shrontz, Waterman, and Woods.
During 1993, the committee held three meetings.
The board of directors has established qualifications which the Nominating
Committee uses to evaluate board candidates. These qualifications provide that a
director should have the ability to apply good, independent judgment in a
business situation and should be able to represent the interests of all the
Company's shareholders and constituencies. In addition, the Nominating Committee
will consider candidates based on demonstrated maturity and experience; a
geographic balance; diversity; special expertise in natural resources,
environmental, energy, and health issues; and background as an educator in the
fields of business, economics, or the sciences. A director must be free of any
conflicts of interest which would interfere with his or her loyalty to the
Company and its shareholders.
Shareholders wishing to suggest nominees for the Nominating Committee's
consideration for future elections should write to A. James Balkins III,
Corporate Secretary and Associate General Counsel, One Jefferson Square, P.O.
Box 50, Boise, Idaho 83728-0001, stating in detail the proposed nominee's
qualifications and other relevant biographical information and providing an
indication of the proposed nominee's consent to accept nomination. Shareholders
wishing to nominate directors directly rather than through the Nominating
Committee should review the procedures described in this proxy statement under
"Shareholder Proposals -- Shareholder Nominations for Directors."
DIRECTORS' COMPENSATION
Directors, except those who are also officers of the Company, are paid an
annual retainer of $27,000 plus a fee of $1,500 for each board meeting attended
in person. Committee chairs receive an additional $6,500 per year. Directors
receive $600 for any meeting of the board or of any committee conducted by
telephone, $600 for personal attendance at the meeting of any committee to which
they are assigned,
4
<PAGE> 8
and $600 for any action by consent in lieu of meeting. The directors are
reimbursed for travel and other expenses related to attendance at the meetings.
Nonemployee directors may elect to have any or all of their retainers and
meeting fees paid in the form of stock options, rather than cash, through the
Director Stock Option Plan (the "DSOP"). Under the DSOP, nonemployee directors
must specify by each December 31 the amount or percentage of their cash
compensation to be earned in the following calendar year that they wish to have
paid in the form of stock options. The DSOP has been approved by the Company's
shareholders.
The options are granted at the end of each calendar year to participating
directors and are designed to be equal in value to the amount of compensation
elected by each director to be paid in this form rather than cash compensation.
The options have an exercise price of $2.50 per share, are exercisable six
months following the date of grant, and expire three years following the
director's resignation, retirement, or termination as a director of the Company.
The number of option shares granted to each participating director is based
primarily upon the amount of compensation which he or she has elected not to
receive in cash. Seven of the ten eligible directors participated in the DSOP in
1993, and six directors have elected to participate in the plan in 1994.
The Company also has two deferred compensation plans for nonemployee
directors. The first plan, adopted in 1983, allowed each director to defer a
portion of his or her compensation earned between January 1, 1984, and December
31, 1987. Any director elected after January 1, 1984, could participate for all
subsequent calendar years remaining in the four-year period ending December 31,
1987. A similar plan adopted in 1987, originally effective for a four-year
period from January 1, 1988, to December 31, 1991, provides many of the same
terms and has been extended through December 31, 1995.
Under both plans, a director may defer from a minimum of $5,000 to a
maximum of 100 percent of his or her director's cash compensation in a calendar
year. Under the 1983 plan, interest accrues on the deferred amount at a monthly
rate equal to Moody's Composite Average of Yields on Corporate Bonds plus four
percentage points. Under the 1987 plan, interest accrues on these accounts at a
rate equal to 130 percent of Moody's Composite Average of Yields on Corporate
Bonds. Each plan provides for a minimum death benefit based upon the amount of
the four-year deferral. The Company has purchased corporate-owned life insurance
policies to help offset the expense of the plans. The 1983 and 1987 directors'
deferred compensation plans provide for payment of the Company's obligations
under the plans through a trust in the event of a change in control of the
Company (as defined in the plans). For more information on this trust, see
"Other Benefit Plans -- Deferred Compensation and Benefits Trust." As of
December 31, 1993, three current directors were participating in the 1983 plan,
and seven directors were participating in the 1987 plan.
CONSULTING AGREEMENT
James A. McClure is president of the consulting firm of McClure, Gerard &
Neuenschwander, Inc., located in Washington, D.C. This firm provides consulting
services in the area of governmental and environmental affairs at the national
level. The Company paid $25,000 to the firm for consulting services in 1993 and
has retained the firm's services for 1994.
2. RATIFICATION OF APPOINTMENT OF AUDITORS
Subject to shareholder ratification, the board of directors has appointed
the public accounting firm of Arthur Andersen & Co. to be the Company's
independent auditors for 1994. Representatives of the firm will be available at
the annual meeting to respond to questions from shareholders. They have advised
the Company that they do not presently plan to make a statement at the meeting,
although they will have the opportunity to do so.
In the absence of other instructions, shares represented by properly
executed proxies will be voted "FOR" the ratification of the appointment of
Arthur Andersen & Co. as auditors for 1994.
The Board of Directors Unanimously Recommends a Vote "FOR" Ratification
of the Appointment of Arthur Andersen & Co. as Auditors for 1994.
5
<PAGE> 9
3. OTHER BUSINESS
The Company's management knows of no other matters to be brought before the
meeting for a vote. If, however, other matters are presented for a vote at the
meeting, the proxy holders will vote the shares represented by properly executed
proxies according to their judgment on those matters.
At the meeting, management will report on the Company's business, and
shareholders will have an opportunity to ask questions.
SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
According to information furnished to the Company by the directors,
nominees for director, and executive officers, the shares of Company common
stock beneficially owned by them on December 31, 1993, were as follows:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
AMOUNT AND NATURE OF PERCENT
NAME OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
DIRECTORS(1)
Anne L. Armstrong........................................................... 2,659 *
Robert E. Coleman........................................................... 3,135 *
John B. Fery................................................................ 519,920(2) 1.3%
George J. Harad............................................................. 244,675(2)(3) *
Robert K. Jaedicke.......................................................... 396 *
James A. McClure............................................................ 2,277 *
Paul J. Phoenix............................................................. 1,386 *
A. William Reynolds......................................................... 5,934 *
Frank A. Shrontz............................................................ 1,000 *
Edson W. Spencer............................................................ 10,331 *
Robert H. Waterman, Jr...................................................... 4,666 *
Ward W. Woods, Jr........................................................... 12,927 *
OTHER NAMED EXECUTIVES
Peter G. Danis Jr........................................................... 142,351(2) *
Rex L. Dorman............................................................... 120,466(2) *
John H. Wasserlein.......................................................... 98,802(2) *
All directors, nominees for director,
and executive officers as a group(1)(2)(3)(4)............................. 2,208,717 5.5%
* Less than 1 percent of class
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Beneficial ownership for the directors includes all shares held of record or
in street name, plus options granted but unexercised under the Director
Stock Option Plan ("DSOP"), described under "Election of
Directors -- Directors' Compensation." The number of shares subject to
options under the DSOP included in the beneficial ownership table is as
follows: Mrs. Armstrong, 1,159 shares; and Messrs. Coleman, 1,135 shares;
McClure, 2,027 shares; Phoenix, 1,053 shares; Reynolds, 3,934 shares;
Spencer, 4,281 shares; Woods, 2,927 shares; and directors as a group, 16,516
shares.
(2) As indicated in the following table, the beneficial ownership for these
executive officers includes all shares held of record or in street name,
plus options granted but unexercised under the Key Executive Stock Option
Plan ("KESOP"), described under "Compensation Tables -- Stock Options," and
interests in shares of common stock held by the trustee of the Company's
Savings and Supplemental Retirement Plan ("SSRP"), described under "Other
Benefit Plans -- Savings and Supplemental Retirement Plan." The following
table shows the number of shares of Convertible Preferred Stock, Series D,
held in the Employee Stock Ownership Plan ("ESOP") fund of the SSRP, which
is not included in the beneficial ownership table.
<TABLE>
<CAPTION>
Common Unexercised SSRP ESOP
Shares Option (Common (Preferred
Owned Shares Stock) Stock)
------- ----------- -------- -----------
<S> <C> <C> <C> <C>
John B. Fery................................... 80,213 417,920 21,787 222
George J. Harad................................ 0(3) 237,251 7,424 378
Peter G. Danis Jr.............................. 300 138,284 3,767 222
Rex L. Dorman.................................. 8,098 112,368 -- 222
John H. Wasserlein............................. 0 98,802 -- 222
All executive officers as a group.............. 111,945 1,955,790 96,271 6,321
</TABLE>
(3) Mr. Harad also holds 1,700 depositary shares, representing ownership of 170
shares of the Company's conversion preferred stock, Series E (not included
in the beneficial ownership table).
(4) The executive officers, directors, or nominees for director (individually or
as a group) do not own more than 1 percent of any series of the Company's
preferred stock.
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<PAGE> 10
EXECUTIVE COMPENSATION
The Company is committed to providing a fair and competitive pay package to
all employees. The Company's executive compensation program is designed to
attract, motivate, reward, and retain the broad-based management talent critical
to the Company's achievement of its objectives. During 1993, compensation for
executive officers and key managers was directly linked to the Company's
financial performance through a cash-based annual variable (at-risk) incentive
component and was also linked to the growth in the value of the Company's stock
through a stock option program.
The Executive Compensation Committee of the board of directors, consisting
entirely of nonemployee directors, is responsible for approving the compensation
programs and individual salaries for the Company's executive officers. The
following report is intended to assist shareholders in understanding the basis
for the committee's compensation decisions during 1993.
EXECUTIVE COMPENSATION COMMITTEE REPORT
Compensation for all the Company's employees, including its executive
officers, is based on each employee's responsibilities and on his or her
performance over time. In order to ensure that compensation levels remain
appropriate in light of the compensation program objectives, the Company
subscribes to various published reports on executive compensation and
independently collects information about the compensation practices of other
companies within the industry (principally the companies in the paper and forest
products company index included in the performance graph following this report)
and of other manufacturing companies of similar size. In addition, the Company
and the Executive Compensation Committee utilize information provided by human
resource consulting firms.
The Company's executive compensation program has four principal components:
base salary, annual variable incentive compensation, stock options, and other
compensation plans. The Committee believes these components collectively provide
a fair and competitive pay package and an appropriate relationship between an
executive's compensation and the Company's performance. The committee is
studying the Company's performance-based compensation plans in light of recent
changes in the tax laws which limit the amount of certain types of executive
officer compensation which qualify as a tax-deductible expense. The committee
expects that all the compensation paid to the executive officers for 1994 will
qualify for a federal income tax deduction by the Company.
Base Salary. A salary range is established for each salaried position in the
Company, including each executive officer position. The midpoint of each salary
range is equal to the average salary of equivalent positions at the other
companies which the Company uses for comparison purposes. The Committee
determines each executive officer's base salary by reviewing his or her
sustained performance over time and correspondingly positioning the individual's
salary in the salary range for his or her position.
In 1993, two-thirds of the Company's salaried employees and two-thirds of
the executive officers, including Mr. Fery, did not receive a salary increase.
Mr. Fery has not accepted a salary increase since April 1990. As a result, Mr.
Fery's 1993 annual base salary of $619,500 was below the midpoint of the
designated salary range for the chief executive officer and chairman of the
board. As described above, Mr. Fery's salary range was established by
comparisons with the salaries of chief executive officers with comparable
responsibilities.
Although Mr. Fery has not received a salary increase since 1990, the
Executive Compensation Committee believes Mr. Fery has successfully led the
implementation of the Company's strategy, focusing on growth in business and
printing papers, growth in the commercial channel of office products
distribution, and growth in value-added building products. This has been
accomplished while substantially lowering manufacturing, distribution, and
overhead costs throughout the Company, improving its product mix, and increasing
its fiber self-sufficiency in the Pacific Northwest. Mr. Fery is currently
directing the Company through a very difficult economic environment,
characterized by a severe supply-demand imbalance in the Company's key paper
grades. He is providing leadership to the Company's employees in the pursuit of
process improvement, cost reduction, and customer satisfaction.
Annual Variable Incentive Compensation. The Executive Compensation Committee
establishes criteria for the Company's annual executive officer variable
incentive compensation program, or pay at risk. This plan, together with similar
plans for specific operating divisions or locations, is applicable to about 640
of
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<PAGE> 11
the Company's key managers, including all the executive officers. For 1993, the
criteria for the executive officer plan specified percentages of the
participants' compensation to be paid as additional cash compensation if the
Company's return on shareholders' equity reached specified levels for the year.
Under this plan, approximately one-half of the chief executive officer's
potential annual cash compensation was at risk, depending on the Company's
financial performance. Criteria for certain of the variable incentive
compensation plans applicable to nonofficer employees include factors relating
to performance of an operating division or a specific facility.
The 1993 program for the chief executive officer and chief operating
officer of the Company provided that no variable incentive compensation would be
paid unless the Company earned (subject to certain adjustments) a return on
shareholders' equity of at least 2.9 percent, or $.60 per share. At this level
of performance, payment would have been 10 percent of the chief executive
officer's and chief operating officer's base salary. Since the Company's 1993
financial performance was below this target, no compensation was paid under this
program for 1993. Likewise, no payment was made under the program for 1991 or
1992. For 1993, the maximum potential payment under this program could only have
been paid if the Company's performance had exceeded a return on shareholders'
equity of 20.2 percent, or $5.42 per share.
Stock Options. The Company's long-term incentive compensation for executive
officers and other key managers is provided through grants of stock options. The
stock option plan has been approved by the Company's shareholders and is
administered by the Executive Compensation Committee of the board of directors.
Stock options have generally been granted to plan participants each year. The
number of stock options granted is determined by a competitive compensation
analysis and consultants' recommendation and is based on each individual's
salary range and responsibility. All grants have been made with an exercise
price equal to the fair market value of the Company's common stock on the date
of grant.
During 1993, stock options were granted to the Company's executive officers
and other participating employees. Mr. Fery received a grant of an option to
purchase 77,200 shares of the Company's common stock. In determining the number
of shares to include in Mr. Fery's grant, the committee considered Mr. Fery's
performance, information about stock option grants to chairmen and chief
executive officers of the Company's principal competitors, the number of stock
options Mr. Fery had outstanding, and the size of grants offered to the
Company's other executive officers.
Other Compensation Plans. Each of the Company's executive officers is entitled
to receive additional compensation in the form of payments, allocations, or
accruals under various compensation and benefit plans. Based on advice from the
Company's consultants, the Executive Compensation Committee believes that each
of these plans or programs is an integral part of the overall compensation
program which ensures that executive officers of the Company receive competitive
compensation.
Executive Compensation Committee of the Board of Directors.
Robert E. Coleman, Chairman
Anne L. Armstrong
Robert K. Jaedicke
Paul J. Phoenix
A. William Reynolds
Edson W. Spencer
Robert H. Waterman, Jr.
Ward W. Woods, Jr.
8
<PAGE> 12
PERFORMANCE GRAPH
The following graph provides a comparison of the five-year cumulative total
return (assuming reinvestment of dividends) for the Standard & Poor's 500 index,
the Standard & Poor's paper and forest products company index, and the Company.
<TABLE>
<CAPTION>
Measurement Period Boise Cas- Paper & For- S&P 500
(Fiscal Year Covered) cade Corp est Products Comp-Ltd
<S> <C> <C> <C>
1988 $100.00 $100.00 $100.00
1989 111.14 121.28 131.69
1990 68.50 109.57 127.60
1991 61.72 138.98 166.47
1992 60.36 158.91 179.15
1993 68.91 175.13 197.21
</TABLE>
In 1993, Boise Cascade's total return to shareholders was 14.17 percent,
compared with 10.21 percent for the paper and forest products sector of the
Standard & Poor's 500 and 10.08 percent for the Standard & Poor's 500 itself.
9
<PAGE> 13
COMPENSATION TABLES
The individuals named in the following table were the five most highly
compensated executive officers of the Company during 1993. The table describes
compensation earned by the named individuals during each of the last three
years:
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
---------------------------------------------------------------------------------------------------------------
LONG-TERM
COMPENSATION
AWARDS
ANNUAL COMPENSATION ------------
-------------------------------------- SECURITIES
OTHER UNDERLYING
ANNUAL OPTIONS/ ALL OTHER
SALARY($) BONUS($) COMPENSATION($) SARS(#) COMPENSATION($)
NAME AND PRINCIPAL POSITION YEAR (1) (2) (3) (4) (5)
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
John B. Fery, 1993 $619,500 $0 $ 947 77,200 $65,646
Chairman of the Board and 1992 619,500 0 1,114 0 61,124
Chief Executive Officer 1991 619,500 0 2,103 75,500 59,467
George J. Harad, 1993 435,003 0 669 39,200 18,393
President and Chief 1992 420,000 0 153 28,200 43,747
Operating Officer 1991 348,413 0 2,036 65,000 42,430
Peter G. Danis Jr., 1993 366,000 0 87,437 22,300 40,407
Executive Vice President and 1992 360,750 0 0 16,000 39,392
General Manager, Office 1991 345,000 0 0 21,800 38,671
Products Distribution Division
Rex L. Dorman, 1993 274,008 0 319 19,600 28,127
Senior Vice President and 1992 265,857 0 2,143 14,100 29,863
Chief Financial Officer 1991 241,404 0 1,705 19,200 29,479
John H. Wasserlein, 1993 250,008 0 1,028 14,500 39,643
Senior Vice President and 1992 245,007 0 1,605 10,400 39,247
General Manager, Publishing 1991 230,004 0 2,220 14,200 38,696
and Packaging Paper Division;
President, Boise Cascade
Canada Ltd.
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Includes amounts deferred under the Company's SSRP and 1986 Executive
Officer Deferred Compensation Plan. Messrs. Fery, Danis, Dorman, and
Wasserlein did not receive a salary increase in 1993. The lower amount shown
for Messrs. Danis, Dorman, and Wasserlein in 1992 compared with 1993 is
because their last salary increase was effective in April 1992.
Consequently, three months of salary for 1992 was paid at a lower rate.
(2) Payments, if any, under the Company's variable incentive compensation
program.
(3) The amounts shown in this column reflect the amount of federal income tax
incurred by the named executive and paid by the Company relating to various
executive officer benefits. In addition, for 1993 the aggregate cost to the
Company of providing perquisites received by Peter G. Danis Jr. is also
reported and includes $77,659 of expenses incurred by the Company in
connection with relocating Mr. Danis at the Company's request. The cost of
all the various perquisites incurred by the Company during these years for
each of the named executive officers, except for Peter G. Danis Jr. for
1993, is not included in this column, because the amount did not exceed the
lesser of $50,000 or 10 percent of the executive's compensation during each
year.
(4) Grants under the Company's 1984 Key Executive Stock Option Plan.
(5) Amounts disclosed in this column include the following:
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
COMPANY MATCHING ACCRUALS OF
CONTRIBUTIONS TO ABOVE-MARKET COMPANY-
THE 1986 INTEREST ON 1986 COMPANY PAID PORTION
EXECUTIVE OFFICER EXECUTIVE OFFICER ALLOCATIONS TO OF EXECUTIVE
DEFERRED DEFERRED THE EMPLOYEE OFFICER LIFE
COMPENSATION OR COMPENSATION PLAN STOCK OWNERSHIP INSURANCE
YEAR SSRP PLANS ($) BALANCES ($) PLAN ($) PROGRAMS ($)
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
John B. Fery...................... 1993 $26,019 $31,721 $ 1,600 $ 6,306
1992 26,019 27,523 1,600 5,982
1991 28,966 22,724 2,000 5,777
George J. Harad................... 1993 6,720 6,758 1,600 3,315
1992 17,640 5,493 1,600 19,014
1991 16,145 3,909 2,000 20,376
Peter G. Danis Jr................. 1993 15,372 19,017 1,600 4,418
1992 15,152 15,551 1,600 7,089
1991 16,002 12,420 2,000 8,249
Rex L. Dorman..................... 1993 11,508 12,369 1,600 2,650
1992 11,166 9,954 1,600 7,143
1991 11,262 7,829 2,000 8,388
John H. Wasserlein................ 1993 10,500 13,121 1,600 14,422
1992 10,290 10,742 1,600 16,615
1991 10,730 8,612 2,000 17,354
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
10
<PAGE> 14
Variable Incentive Compensation. Boise Cascade has a variable incentive
compensation plan for executive officers. No awards were paid under this plan
for 1991, 1992, or 1993, as indicated in the "Bonus" column of the Summary
Compensation Table.
As of December 31, 1993, all executive officers were participants in the
plan, and about 610 nonofficer employees were participants in similar variable
incentive plans for other key managers of the Company. Each of these plans
provides for an award based upon the Company's return on equity, subject to
adjustments by the board for major nonrecurring items and, in some cases, based
upon performance of an operating division of the Company.
Stock Options. Under the Company's 1984 Key Executive Stock Option Plan
("KESOP"), the Executive Compensation Committee of the board of directors (see
"Committees of the Board of Directors") may grant options to purchase shares of
the Company's common stock to key employees, including executive officers of the
Company and its subsidiaries. Among other items, the committee fixes the date of
the grant, the duration of the option, the number of shares subject to the
option, vesting requirements, and rights of optionees upon termination. The
exercise price of all options granted under the plan must be no less than the
fair market value of the Company's stock on the date of the grant. The plan will
remain in effect until all stock subject to options has been purchased or the
options expire. Options granted under this plan during 1993 were fully vested
when granted. However, except for specific situations, the options are not
exercisable until one year after the date of the grant. Under the plan, no
options may be granted after July 24, 2004.
The following table provides detailed information regarding option grants
under the KESOP during 1993 to the five executives named in the Summary
Compensation Table:
<TABLE>
<CAPTION>
OPTION/SAR GRANTS IN 1993
- --------------------------------------------------------------------------------------------------------------------
INDIVIDUAL GRANTS POTENTIAL
- ------------------------------------------------------------------------------------------ REALIZABLE VALUE
NUMBER OF AT ASSUMED ANNUAL
SECURITIES PERCENT OF RATES OF STOCK
UNDERLYING TOTAL OPTIONS/ EXERCISE PRICE APPRECIATION
OPTIONS/SARS SARS GRANTED TO OR BASE FOR OPTION TERM(2)
GRANTED EMPLOYEES IN PRICE EXPIRATION -----------------------
NAME (#) FISCAL YEAR ($/SH)(1) DATE 5%($) 10%($)
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
John B. Fery.................... 77,200 8.4% $ 21.25 7/30/03 $1,033,515 $2,608,395
George J. Harad................. 39,200 4.3 21.25 7/30/03 524,790 1,324,470
Peter G. Danis Jr............... 22,300 2.4 21.25 7/30/03 298,541 753,461
Rex L. Dorman................... 19,600 2.1 21.25 7/30/03 262,395 662,235
John H. Wasserlein.............. 14,500 1.6 21.25 7/30/03 194,119 489,919
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Under the KESOP, the exercise price must be the fair market value at the
date of grant.
(2) The dollar amounts in these columns are based on price appreciation
calculations established by the SEC and are not intended to forecast
possible future appreciation of the Company's common stock price. Based on
these price appreciation calculations and an assumed beginning stock value
of $21.25, the Company's outstanding common stock would be trading at $34.64
and $55.04 per share, respectively, which represents in aggregate a
potential realizable increase in stock value for common stock shareholders
of $509 million and $1.284 billion, respectively. The dollar amount shown
for the five named executives is not discounted to present value and is
prior to payment of federal and state taxes.
The following table sets forth information concerning the year-end value of
all unexercised stock options granted under the KESOP to the five executives
named in the Summary Compensation Table. None of the named executives exercised
options during 1993.
<TABLE>
<CAPTION>
AGGREGATE OPTION/SAR EXERCISES FOR 1993 AND 1993 OPTION/SAR VALUES
- ------------------------------------------------------------------------------------------------------------------
NUMBER OF VALUE OF
SECURITIES UNDERLYING UNEXERCISED
UNEXERCISED OPTIONS/ IN-THE-MONEY
SARS AT 12/31/93(#) OPTIONS/SARS AT 12/31/93($)
NAME EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE(1)
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
John B. Fery......................................... 340,720/77,200 $ 0/173,700
George J. Harad...................................... 198,051/39,200 221,575/ 88,200
Peter G. Danis Jr.................................... 115,984/22,300 86,000/ 50,175
Rex L. Dorman........................................ 92,768/19,600 75,788/ 44,100
John H. Wasserlein................................... 84,302/14,500 55,900/ 32,625
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) "Value" in this table indicates the aggregate amount, if any, by which the
common stock share price on December 31, 1993, exceeded the options'
exercise price.
11
<PAGE> 15
OTHER BENEFIT PLANS
Deferred Compensation. The Company has two nonqualified, unfunded, deferred
compensation plans for executive officers. Participation in these plans is
voluntary and requires that participants make an irrevocable deferral of a
portion of their annual compensation.
Under the 1982 Executive Officer Deferred Compensation Plan, individuals
elected as executive officers prior to January 1, 1987, had an opportunity to
defer not less than 6 percent or more than 10 percent of their total
compensation earned during a period of four years. In addition, each participant
could elect to have an amount of up to 3.6 percent of his or her compensation
contributed to the plan by the Company in lieu of the Company matching
contributions to the Company's Savings and Supplemental Retirement Plan
("SSRP"). This plan is not funded, but the cost to the Company is largely offset
by participant salary deferrals. The benefit payable upon retirement at age 65
is determined by the amount of salary deferred, any amounts contributed by the
Company, and the number of years to normal retirement age at the time of
contribution. The benefits are payable in 180 monthly installments. Participants
may also elect to receive their accrued account amount in a lump sum, subject to
a 10 percent penalty and suspension for a specified period of time.
The following table sets forth the contributions and benefits under the
1982 plan for the named individuals participating in the plan as of December 31,
1993.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
YEARS OF SERVICE
UPON ATTAINMENT PARTICIPANT'S ANNUAL BENEFIT
OF AGE 65 DEFERRAL AT AGE 65
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
George J. Harad.............................................. 38 $ 87,225 $ 118,120
Peter G. Danis Jr............................................ 29 91,275 88,152
John H. Wasserlein........................................... 37 61,298 84,636
------------------------------------------------------------------------------------------------------------------
</TABLE>
A similar plan, the 1986 Executive Officer Deferred Compensation Plan, was
amended in 1990 to extend its duration to December 31, 1995. Under the 1986
plan, executive officers may defer not less than 6 percent or more than 20
percent of their total annual compensation earned through December 31, 1995. A
participant may elect to have an amount of up to 4.2 percent of his or her
compensation contributed to the plan by the Company in lieu of the Company
matching allocation under the ESOP fund of the SSRP. This matching contribution
is reported under "All Other Compensation" in the Summary Compensation Table, as
is the amount of "above-market interest" credited to the executives' accounts.
Under the 1986 plan, which is essentially a defined contribution plan, interest
on deferred amounts is accrued monthly at a rate equal to 130 percent of Moody's
Composite Average of Yields on Corporate Bonds.
Pension Plan. The estimated annual benefits payable upon retirement at age 65
under the Company's Pension Plan for Salaried Employees for specified
high-five-year average remuneration and years-of-service classifications are
described in the following table:
PENSION PLAN TABLE
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
YEARS OF SERVICE
--------------------------------------------------------------------------
REMUNERATION 15 20 25 30 35 40
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 200,000 $ 37,500 $ 50,000 $ 62,500 $ 75,000 $ 87,500 $ 100,000
250,000 46,875 62,500 78,125 93,750 109,375 125,000
300,000 56,250 75,000 93,750 112,500 131,250 150,000
400,000 75,000 100,000 125,000 150,000 175,000 200,000
500,000 93,750 125,000 156,250 187,500 218,750 250,000
600,000 112,500 150,000 187,500 225,000 262,500 300,000
700,000 131,250 175,000 218,750 262,500 306,250 350,000
800,000 150,000 200,000 250,000 300,000 350,000 400,000
900,000 168,750 225,000 281,250 337,500 393,750 450,000
1,000,000 187,500 250,000 312,500 375,000 437,500 500,000
- --------------------------------------------------------------------------------------------
</TABLE>
The pension plan entitles each vested employee, including executive
officers, to an annual pension benefit at normal retirement equal to 1 1/4
percent of the highest average of any five consecutive years of
12
<PAGE> 16
salary and other compensation (as defined in the plan) out of the last ten years
of employment, multiplied by the employee's years of service.
The years of service determined under the provisions of the plan as of
December 31, 1993, for each of the executive officers listed in the Summary
Compensation Table were as follows: John B. Fery, 37; George J. Harad, 23; Peter
G. Danis Jr., 26; Rex L. Dorman, 28; and John H. Wasserlein, 24.
For purposes of determining the benefit amount under the pension plan, an
employee's base salary is used, plus amounts earned under the Company's variable
incentive compensation program (only "Salary" and "Bonus" from the Summary
Compensation Table). The Company-provided pension would, as of December 31,
1993, be based on the following compensation amounts, which represent the
highest average of each executive's annual compensation during any five
consecutive years for 1984 through 1993: Messrs. Fery, $850,844; Harad,
$443,644; Danis, $435,768; Dorman, $291,438; and Wasserlein, $300,038.
Benefits are computed (as in the foregoing table) on a straight-life
annuity basis and are not subject to offset by social security or other
retirement-type benefits. An employee is 100 percent vested in his or her
pension benefit after five years of service, except for certain breaks in
service. If an employee is entitled to a pension benefit under the Company's
pension plan in excess of the limitations imposed by the Internal Revenue Code
on tax-qualified plans, the Company has an unfunded Supplemental Retirement
Policy, under which the excess benefits will be paid from the Company's general
assets. The benefit earned under the qualified pension plan is reduced by
deferred compensation under any nonqualified deferred compensation plan of the
Company. The Company's Supplemental Retirement Policy will provide payments to
the extent that participation in these deferred compensation plans has the
effect of reducing an individual's pension benefit under the qualified plan.
The plan provides that in the event of a change in control of the Company
(as defined in the plan), the ability of the Company or its successor to recoup
surplus plan assets, if any, will be restricted. In general, after a change in
control, if (a) the plan is terminated, (b) the plan is merged or consolidated
with another plan, or (c) the assets of the plan are transferred to another
plan, then the surplus assets of the plan, if any, will be allocated among the
participants and beneficiaries on a pro rata basis. This restriction may not be
amended after a change in control without the consent of a majority (in number
and interest) of plan participants and beneficiaries.
Supplemental Early Retirement Plan. The Company also has a Supplemental Early
Retirement Plan for executive officers 55 years of age or older who have ten or
more years of service with the Company and who retire or are requested to retire
at the Company's convenience prior to the normal retirement age of 65. The plan
pays the executive officer an early retirement benefit prior to age 65 equal to
the amount of the officer's benefit calculated under the Pension Plan for
Salaried Employees without reduction due to early retirement.
Savings and Supplemental Retirement Plan. The Company's Savings and
Supplemental Retirement Plan ("SSRP") allows every salaried employee, 21 years
of age or older, who works at least 20 hours per week (an "eligible employee")
to contribute up to 16 percent of his or her compensation to the plan, subject
to limitations prescribed by federal law (both pretax and after-tax
contributions are permitted). Employee contributions are invested by the plan
trustee, at the direction of the employee, in one of four investment funds, one
of which is invested primarily in shares of the Company's common stock.
The SSRP includes a leveraged employee stock ownership plan ("ESOP")
component which holds shares of convertible preferred stock, Series D, of the
Company. Each share of this preferred stock entitles the holder to one vote,
subject to certain limitations, voting as a class together with the holders of
the Company's common stock. Plan participants have the right to instruct the
plan's trustee how to vote their shares and whether to tender the Company stock
allocated to their accounts in the event of a tender offer for the Company's
stock. Participants' voting instructions are held in confidence by the plan
trustee. In accordance with plan provisions, all other shares of Company stock
held by the plan (including unallocated shares and allocated shares for which no
instructions are received) will be voted or tendered by the trustee in
proportion to the instructions received by the trustee.
Executive Officer Agreements. The Company has entered into agreements with all
the executive officers of the Company which formalize the Company's intention to
pay severance benefits in the event that any of those persons' employment with
the Company is terminated subsequent to a change in control of the
13
<PAGE> 17
Company (as defined in the agreements). The board of directors believes that
these executive officers have made and will continue to make substantial
contributions to the Company and its future business prospects. The agreements
are intended to induce the executive officers to remain in the employ of the
Company and to help ensure that the Company and the board of directors will have
the benefit of these executive officers' services without distraction in the
face of a change in control of the Company. The agreements generally protect
benefits the executive officers have already earned or have a reasonable right
to expect, based on existing Company benefit plans, in the event of termination
of employment.
Under the agreements, benefits are paid if, after a change in control, the
Company terminates the employee other than for cause, disability, or retirement
(as defined in the agreements) or if the employee terminates his or her
employment for good reason (as defined in the agreements). These severance
benefits include: (a) the employee's salary through the termination date; (b)
severance pay in accordance with the Company's Severance Pay Policy for
Executive Officers, which is currently an amount equal to the employee's annual
base salary; (c) vacation pay in accordance with the Company's Vacation Policy;
(d) an amount equal to any earned but unpaid bonus under the Key Executive
Performance Plan for the year preceding termination and an award under the Key
Executive Performance Plan equal to the greater of 30 percent of base salary
prorated through the month in which termination occurs or the actual award
through the end of the month prior to termination based upon the award criteria
for the plan in which the employee is participating prorated through the month
in which termination occurs; (e) a cash payment equal to the net value of stock
options held by the employee (as determined in accordance with the agreements),
plus an amount equal to tax offset bonuses, if any, which would be payable upon
exercise of such options; (f) benefits under the Company's Supplemental Early
Retirement Plan; and (g) certain additional retirement and other employee
benefits. The agreements also provide that following such termination of
employment, the Company will maintain, at the Company's expense, in full force
and effect for up to one year, all employee benefit plans and programs in which
the employee was entitled to participate immediately prior to the date of
termination, or will substitute arrangements providing substantially similar
benefits, and will also continue its participation in the Executive Officer Life
Insurance Program until the insurance policy is fully paid. The agreements also
provide that the Company will pay legal fees and expenses incurred by the
employee to enforce his or her rights or benefits under the agreements.
Under the agreements, each executive officer is obligated to remain in the
employ of the Company for a period of six months following the first potential
change in control of the Company (as defined in the agreements). The aggregate
amount of payments and other benefits (not including legal fees, if any) which
would be paid pursuant to the executive officer agreements, if determined as of
December 31, 1993, would be approximately as follows: Messrs. Fery, $1,055,354;
Harad, $1,656,948; Danis, $664,693; Dorman, $521,759; and Wasserlein, $1,028,526
(payments which would be made subsequent to the termination date have been
discounted as of December 31, 1993, in accordance with the requirements of
Section 280G of the Internal Revenue Code, at a rate of 5.83 percent). In the
case of Messrs. Harad and Wasserlein, the aggregate amount of payments under
these agreements would be significantly less if they had attained the age of 55
years and thereby were vested in the Company's Supplemental Early Retirement
Plan. Actual payments at any future date, if made, may vary, depending in part
upon the accruals under the variable compensation plans and benefit plans and
upon the market price of the Company's common stock.
Each agreement continues in effect until December 31, 1996, and is
automatically extended on each January 1 for a new three-year period, unless by
September 30 of the preceding year, the Company gives notice that it does not
wish to extend the agreement. The agreements concisely summarize the Company's
compensation plans, practices, and intent in the event of termination subsequent
to a change in control of the Company. The board of directors believes the
agreements are in the best interests of the Company and the shareholders.
Deferred Compensation and Benefits Trust. The Company has established a
deferred compensation and benefits trust to ensure that participants and their
beneficiaries under several of the Company's nonqualified and unfunded deferred
compensation plans and the executive officer agreements will receive benefits
they have earned and to which they are entitled in the event of a change in
control of the Company (as defined in the plans and the agreements). Under the
terms of the plans and agreements, the trust will be revocably funded in the
event of a potential change in control. Upon any actual change in control, the
funding will be irrevocable, and the trust will make payment to participants
under the plans
14
<PAGE> 18
and agreements on behalf of the Company. The trustee's fees and expenses will be
paid by the Company or out of the trust assets. The trust assets will be
accessible to the claims of creditors of the Company in the event of bankruptcy
or insolvency. The existence and any subsequent funding of the trust will not
increase the benefits to which any individual participants are entitled under
any of the covered plans and agreements.
Indemnification. The Company will indemnify, to the extent permitted by
Delaware law, its directors and officers against liabilities (including
expenses, judgments, and settlements) incurred by them in connection with any
actual or threatened action, suit, or proceeding to which they are or may become
parties and which arises out of their status as directors and officers. The
Company has obtained insurance which insures, within stated limits, the
directors and officers against these liabilities. The aggregate amount of the
premium on the policies for 1993 was $925,159.
INFORMATION AVAILABLE TO SHAREHOLDERS
The Company's 1993 Annual Report is being mailed to shareholders with this
proxy statement. Copies of the 1993 Annual Report to shareholders and the
Company's Annual Report on Form 10-K filed with the Securities and Exchange
Commission may be obtained without charge from the Company's Corporate
Communications Department, One Jefferson Square, P.O. Box 50, Boise, Idaho
83728-0001. Financial statements are also on file with the Securities and
Exchange Commission, Washington, D.C., and with the New York, Chicago, and
Pacific Stock Exchanges.
SHAREHOLDER PROPOSALS
Shareholder Proposals in Company's Proxy Statement. Shareholders wishing to
submit proposals for inclusion in the Company's proxy statement for the 1995
annual meeting of shareholders must submit their proposals for receipt by the
Company not later than November 7, 1994.
Shareholder Proposals Not in Company's Proxy Statement. Shareholders wishing to
present proposals for action at a meeting of the Company's shareholders must do
so in accordance with the Company's bylaws. A shareholder must give timely
notice of the proposed business to the Corporate Secretary. To be timely, a
shareholder's notice must be in writing, delivered or mailed (postage prepaid)
to and received by the Corporate Secretary not less than 60 days or more than 90
days prior to the meeting, provided, however, that if less than 65 days' notice
or prior public disclosure of the date of the meeting is given to shareholders,
notice by the shareholder, to be timely, must be received by the Corporate
Secretary not later than the close of business on the seventh day following the
day on which notice of the date of the meeting was mailed or public disclosure
was made. For each matter the shareholder proposes to bring before the meeting,
the notice to the Corporate Secretary must include: (a) a brief description of
the business desired to be brought before the meeting and the reasons for
conducting the business at the meeting, (b) the name and record address of the
shareholder proposing the business, (c) the class and number of shares of the
Company's stock which are beneficially owned by the shareholder, and (d) any
material interest of the shareholder in the business to be brought before the
meeting.
The chairman of the meeting may, if the facts warrant, determine and
declare that the business was not properly brought before the meeting in
accordance with the Company's bylaws.
Shareholder Nominations for Directors. In accordance with the Company's
Restated Certificate of Incorporation and bylaws, shareholders wishing to
directly nominate candidates for the board of directors must do so in writing,
delivered or mailed (postage prepaid) to and received by the Corporate Secretary
not less than 30 days or more than 60 days prior to any meeting of shareholders
called for the election of directors, provided, however, that if less than 35
days' notice or prior public disclosure of the date of the meeting is given to
shareholders, the nomination must be received by the Corporate Secretary not
later than the close of business on the seventh day following the day on which
the notice of the meeting was mailed. The notice shall set forth: (a) the name
and address of the shareholder who intends to make the nomination, (b) the name,
age, business address and, if known, residence address of each nominee, (c) the
principal occupation or employment of each nominee, (d) the number of shares of
stock of the Company which are beneficially owned by each nominee and by the
nominating shareholder, (e) any other information concerning the nominee that
must be disclosed about nominees in proxy solicitations
15
<PAGE> 19
pursuant to Regulation 14A of the Securities Exchange Act of 1934, and (f) the
executed consent of each nominee to serve as a director of the Company if
elected.
The chairman of the meeting of shareholders may, if the facts warrant,
determine that a nomination was not made in accordance with the proper
procedures. If the chairman does so, the chairman shall so declare to the
meeting and the defective nomination shall be disregarded.
BENEFICIAL OWNERSHIP
The table below sets forth certain information as of December 31, 1993, as
to each person or entity known to the Company to be the beneficial owner of more
than 5 percent of any class of the Company's voting securities:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
NUMBER OF SHARES
NAME AND ADDRESS BENEFICIALLY PERCENT
TITLE OF CLASS OF BENEFICIAL OWNER OWNED OF CLASS
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Common Stock, Dodge & Cox 2,073,578(1) 5.5%
$2.50 Par Value 35th Floor
One Sansome Street
San Francisco, CA 94104
Common Stock, Franklin Resources, Inc. 1,966,920(2) 5.2%
$2.50 Par Value 777 Mariners Island, Blvd.
San Mateo, CA 94404
Common Stock, Sanford C. Bernstein & Co., Inc. 3,399,372(3) 9.0%
$2.50 Par Value One State Street Plaza
New York, NY 10004
Common Stock, State Street Bank and Trust Company* 3,035,655(4) 8.0%
$2.50 Par Value 225 Franklin Street
Boston, MA 02110
---------------------------------------------------------------
Convertible Preferred Stock, State Street Bank and Trust Company, as Trustee for 6,395,047(5) 100%
Series D the Boise Cascade Corporation Employee Stock
Ownership Plan (ESOP)
225 Franklin Street
Boston, MA 02110
---------------------------------------------------------------
Depositary Shares of Conversion Scudder, Stevens & Clark, Inc. 479,600(6) 5.6%
Preferred Stock, Series E 345 Park Avenue
New York, NY 10154
---------------------------------------------------------------
Depositary Shares of Conversion J.P. Morgan & Co., Incorporated 759,500(7) 8.8%
Preferred Stock, Series G 60 Wall Street
New York, NY 10260
Depositary Shares of Conversion Putnam Investments, Inc. 1,016,400(8) 11.8%
Preferred Stock, Series G One Post Office Square
Boston, MA 02109
* Approximately 83.8 percent of these shares are held by State Street Bank and
Trust Company in its capacity as trustee for the Company's employee savings
plans.
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Dodge & Cox reported on a Schedule 13G that it was the beneficial owner of
2,073,578 shares of the Company's common stock. This report indicates that
Dodge & Cox has sole voting power and sole investment power for all
2,073,578 shares.
(2) Franklin Resources, Inc., reported on a Schedule 13G that it was the
beneficial owner of 1,966,920 shares of the Company's common stock. This
report indicates that Franklin Resources, Inc., has sole voting power for
1,913,020 shares, shared voting power for 12,500 shares, and shared
investment power for all 1,966,920 shares.
(3) Sanford C. Bernstein & Co., Inc., reported on a Schedule 13G that it was the
beneficial owner of 3,399,372 shares of the Company's common stock. This
report indicates that Sanford C. Bernstein & Co., Inc., has sole voting
power for 1,985,870 shares and sole investment power for all 3,399,372
shares.
(4) State Street Bank and Trust Company reported on a Schedule 13G that it was
the beneficial owner of 3,035,655 shares of the Company's common stock.
Included in the reported shares were 2,543,129 shares of Boise Cascade
common stock held by State Street Bank and Trust Company as trustee for
three of the Company's defined contribution plans, representing
approximately 6.7 percent of the Company's common stock outstanding on that
date. The trustee, subject to participants' directions, has voting and
investment authority for these shares held in the Company's plans. State
Street Bank and Trust Company has sole voting power for 229,727 shares and
sole investment power for all 492,526 shares not held as trustee for the
Company's benefit plans.
16
<PAGE> 20
(5) State Street Bank and Trust Company, as trustee for the ESOP (described
under "Savings and Supplemental Retirement Plan"), held 6,395,047 shares of
the preferred stock. The shares of preferred stock held by the ESOP
represent approximately 13.9 percent of the Company's voting securities
outstanding as of December 31, 1993. The trustee, subject to participants'
directions, has voting and investment authority for the ESOP shares. The
shares of preferred stock held by the ESOP are convertible into
approximately 5,138,868 shares of the Company's common stock, which would
represent approximately 11.9 percent of the Company's common stock
outstanding on December 31, 1993, assuming the shares of preferred stock
were converted as of that date.
(6) Scudder, Stevens & Clark, Inc., reported on a Schedule 13G that it was the
beneficial owner of 479,600 depositary shares of the Company's conversion
preferred stock, Series E. This report indicates that Scudder, Stevens &
Clark, Inc., has sole voting power for 66,200 depositary shares, shared
voting power for 264,800 depositary shares, and sole investment power for
all 479,600 depositary shares.
(7) J.P. Morgan & Co., Incorporated, reported on a Schedule 13G that it was the
beneficial owner of 759,500 depositary shares of the Company's conversion
preferred stock, Series G. This report indicates that J.P. Morgan & Co.,
Incorporated, has sole voting power for 540,200 depositary shares, shared
voting power for 108,800 depositary shares, sole investment power for
650,700 depositary shares, and shared investment power for 108,800
depositary shares.
(8) Putnam Investments, Inc., reported on a Schedule 13G that it was the
beneficial owner of 1,016,400 depositary shares of the Company's conversion
preferred stock, Series G. This report indicates that Putnam Investments,
Inc., has shared voting power for 8,250 depositary shares and shared
investment power for all 1,016,400 depositary shares.
PROXIES AND VOTING AT THE MEETING
As of March 3, 1994, the record date for the determination of shareholders
entitled to vote at the meeting, 38,030,681 shares of the Company's common
stock; 6,383,223 shares of the Company's convertible preferred stock, Series D;
862,500 shares of the Company's conversion preferred stock, Series E; and
862,500 shares of the Company's conversion preferred stock, Series G, were
outstanding. Each holder of record of the outstanding shares of common stock and
Series D, Series E, and Series G preferred stock on the record date is entitled
to one vote for each share held on every matter submitted to the meeting.
Holders of depositary shares, representing shares of Series E and Series G
preferred stock, are entitled to direct the depositary how to vote the shares of
Series E and Series G preferred stock held by the depositary. For voting
purposes, each depositary share represents one-tenth share of Series E and
Series G preferred stock.
The trustee of the Employee Stock Ownership Plan fund of the Company's
Savings and Supplemental Retirement Plan and the Boise Cascade Corporation
Common Stock Fund of the Company's Savings and Supplemental Retirement Plan,
Qualified Employee Savings Trust (QUEST), and Retirement Savings Plan (RSP) will
vote the shares held in the trust in accordance with the voting instructions of
the participants of the respective plans. Shares not voted by individuals and
shares not yet allocated to individual accounts will be voted by the trustee in
proportion to the instructions received from voting participants.
PROXY SOLICITATION
The cost of soliciting proxies, including the cost of reimbursing brokers
for forwarding proxies and proxy material to their principals, will be borne by
the Company. Proxies also may be solicited personally or by telephone or
electronic transmission by directors, officers, and other employees of the
Company, but these persons will not be specially compensated for this service.
The Company has retained D. F. King and Company Inc. at a fee estimated not to
exceed $22,000, plus expenses, to aid in distributing materials and soliciting
proxies.
YOU ARE REQUESTED TO PROMPTLY SIGN, DATE, AND RETURN THE ENCLOSED PROXY SO THAT
IT WILL BE AVAILABLE FOR USE AT THE MEETING.
A. James Balkins III
Corporate Secretary
March 7, 1994
17
<PAGE> 21
[recycle logo]
This Notice and Proxy Statement is printed on recycled-
content ASPEN TM Lightweight Opaque Offset paper produced by
Boise Cascade's papermakers at its Vancouver, Washington, mill.
<PAGE> 22
[BOISE CASCADE LOGO]
[Boise Cascade Logo]
<PAGE> 23
PROXY
BOISE CASCADE CORPORATION
One Jefferson Square, P.O. Box 50, Boise, Idaho 83728-0001
ANNUAL MEETING OF SHAREHOLDERS, APRIL 22, 1994
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned appoints John B. Fery, George J. Harad, and
John W. Holleran as proxies, each with the power to appoint his
substitute. The proxies are appointed to represent and to vote
all the shares of Boise Cascade Corporation stock held of record
by the undersigned on March 3, 1994, at the annual meeting of
shareholders to be held on April 22, 1994, and any adjournment
thereof. The proxies are appointed with all the powers the
undersigned would possess if personally present to vote upon
matters noted below, as well as with discretionary authority to
vote upon such other matters as may properly come before the
meeting.
The Board of Directors recommends a vote FOR all nominees listed
below and FOR proposal 2.
1. Election of Directors:
JOHN B. FERY GEORGE J. HARAD
JAMES A. McCLURE EDSON W. SPENCER
___ FOR all nominees
___ WITHHOLD AUTHORITY for all nominees
WITHHOLD AUTHORITY for the following nominee(s) only:
write name(s): ___________________________________
___________________________________
2. Appointment of Arthur Andersen & Co. as independent
accountants for 1994.
___ FOR ___ AGAINST ___ ABSTAIN
<PAGE> 24
THIS PROXY WILL BE VOTED ACCORDING TO YOUR INSTRUCTIONS. IF YOU
SIGN AND RETURN THE CARD BUT DO NOT VOTE ON ALL OF THESE MATTERS,
THEN PROPOSALS 1 AND 2, IF UNMARKED, WILL RECEIVE FOR VOTES.
This card provides voting authority for all holdings of Boise
Cascade shares, including depositary shares representing
ownership of Series E preferred stock and Series G preferred
stock.
Please sign exactly as name appears below and date this card.
When shares are held by joint tenants, both should sign. When
signing as an attorney, executor, administrator, trustee, or
guardian, give full title as such. When signing as a
corporation, sign in full corporate name by an authorized
officer. When signing as a partnership, sign in partnership name
by an authorized person.
_____________________________ ___________
Signature of Shareholder Date
_____________________________ ___________
Signature of Shareholder Date
Forward this card to D.F. King (solicitor)
or to Corporate Election Services (independent tabulator),
P.O. Box 1150, Pittsburgh, PA 15230-9954
<PAGE> 25
Dear Shareholder:
The Boise Cascade Corporation annual meeting of shareholders will
be held in the Company's corporate headquarters building in
Boise, Idaho, at 10:00 a.m. MDT, April 22, 1994.
Shareholders of record on March 3, 1994, are entitled to vote, in
person or by proxy, at the meeting. The proxy card attached to
the bottom of this page is for your use in designating proxies
and providing voting instructions.
The attached card serves both as a proxy designation (for
shareholders of record, including those holding shares through
the Dividend Reinvestment Plan) and as voting instructions (for
Boise Cascade employee savings plan participants and holders of
depositary shares representing ownership of Series E preferred
stock and Series G preferred stock).
Please indicate your voting preferences on the card, SIGN and
DATE the card, and return it to the independent tabulator in the
envelope provided. YOUR VOTES ARE COMPLETELY CONFIDENTIAL.
Thank you.
(fold and tear along perforation)
PROXY AND VOTING INSTRUCTION CARD BOISE CASCADE CORPORATION
ANNUAL MEETING OF SHAREHOLDERS
APRIL 22, 1994
The Board of Directors recommends a vote FOR all nominees listed
below and FOR proposal 2.
1. Election of Directors:
JOHN B. FERY GEORGE J. HARAD
JAMES A. McCLURE EDSON W. SPENCER
___ FOR all nominees
___ WITHHOLD AUTHORITY for all nominees
WITHHOLD AUTHORITY for the following nominee(s) only:
write name(s): __________________________________________
__________________________________________
2. Appointment of Arthur Andersen & Co. as independent
accountants for 1994.
___ FOR ___ AGAINST ___ ABSTAIN
____________________________ ___________
Signature of Shareholder Date
____________________________ ___________
Signature of Shareholder Date
Shareholder(s) must sign as name(s) appear in
account registration printed to the left.
Forward this card to Corporate Election Services,
P.O. Box 1150, Pittsburgh, PA 15230-9954
(Instructions on Reverse Side)
<PAGE> 26
Printed on Cascade 60# Cover, which contains 10% postconsumer
recycled fiber and is made at Boise Cascade's St. Helens mill.
PROXY AND VOTING INSTRUCTION CARD BOISE CASCADE CORPORATION
ANNUAL MEETING OF SHAREHOLDERS
APRIL 22, 1994
THIS PROXY AND THESE INSTRUCTIONS ARE SOLICITED ON BEHALF
OF THE BOARD OF DIRECTORS.
The undersigned appoints John B. Fery, George J. Harad, and
John W. Holleran as proxies, each with the powers the undersigned
would possess if personally present and each with the power to
appoint his substitute, to represent and vote all shares of Boise
Cascade Corporation common stock held by the undersigned on
March 3, 1994, at the annual meeting of shareholders to be held
on April 22, 1994, and any adjournment thereof. This proxy also
provides voting instructions for shares held by the undersigned
in employee savings plans and for depositary shares representing
ownership of Series E preferred stock and Series G preferred
stock.
This proxy will be voted according to your instructions. If you
sign and return the card but do not vote on all these matters,
then proposals 1 and 2, if unmarked, will receive FOR votes.
This card also authorizes the proxies to vote, at their
discretion, on any other matters properly coming before the
meeting.
(To be SIGNED on other side)
<PAGE> 27
[LETTERHEAD]
March 7, 1994
Dear Boise Cascade Employee:
You are a shareholder of Boise Cascade stock, through your participation in one
of the company's savings plans: the Savings and Supplemental Retirement Plan
(SSRP) Fund II and/or Fund V (ESOP), the Qualified Employee Savings Trust
(QUEST) Fund III, or the Retirement Savings Plan (RSP) Fund III. You are
entitled to instruct the trustee as to how to vote shares held by the plan in
which you participate at the company's annual meeting of shareholders on
April 22, 1994. Please take this opportunity to vote.
Enclosed is a proxy and voting instruction card that applies to the shares held
through the savings plan you participate in and any other shares of common or
preferred stock you hold of record in the same name. PLEASE MARK YOUR
INSTRUCTIONS ON THE CARD, SIGN, AND RETURN IT IN THE ENCLOSED POSTAGE-PAID
ENVELOPE.
If you do not vote, the trustee will vote your interest in the plan based on
the instructions received from other plan participants.
Your individual voting instructions will be received and tabulated by Corporate
Election Services, Inc., in Pittsburgh, Pennsylvania, an independent tabulator.
Your instructions must be received by Corporate Election Services no later than
8 a.m., Eastern daylight time, on Thursday, April 21, 1994.
YOUR VOTE IS COMPLETELY CONFIDENTIAL. Please take the time to exercise your
right to vote.
Very truly yours,
A. James Balkins III
AJB/MR31222C
Enclosures
