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[LOGO]
1475 Tyrell Lane / / Boise, Idaho 83706
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MAY 13, 1997
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TO THE STOCKHOLDERS:
You are invited to attend the Annual Meeting of Stockholders of BMC West
Corporation. The meeting will be held on Tuesday, May 13, 1997, at 2:30 p.m. at
the Boise Centre on the Grove, 850 Front Street, Boise, Idaho.
We hope you will be able to attend, but whether or not you plan to attend,
it would be very helpful if you would sign the enclosed proxy card and return it
in the envelope provided. Voting by proxy will not prevent you from voting in
person if you attend the meeting, but will assure that your vote will be counted
if you are unable to attend. If you intend to vote at the meeting and your
shares are held of record by a broker, bank, or other person, you must bring to
the meeting a letter from the entity confirming your beneficial ownership of the
shares, and you must bring from such entity a proxy issued in your name.
The meeting is being held for the following purposes:
1. To elect directors to serve for the ensuing year and until their
successors are elected.
2. To ratify the selection of Arthur Andersen LLP as the Company's
independent accountants for the fiscal year ending December 31,
1997.
3. To transact such further or other business as may properly come
before the meeting or any adjournment thereof.
The Board of Directors has established Monday, March 17, 1997, at the close
of business as the record date for the determination of the stockholders
entitled to notice of and to vote at this meeting.
During the meeting management will review the past year's performance and
comment on the Company's future plans. There will be time for any questions
stockholders may have about the Company.
Your vote is important 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, so that your shares may be represented.
If you attend this 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
Secretary and General Counsel
Boise, Idaho
March 28, 1997
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1475 Tyrell Lane / / Boise, Idaho 83706
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PROXY STATEMENT
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
INFORMATION CONCERNING COMPANY DEVELOPMENT............................. 1
Voting Rights and Outstanding Shares.............................. 1
Revocability of Proxies........................................... 1
SOLICITATION........................................................... 2
PROPOSAL 1--ELECTION OF BOARD OF DIRECTORS............................. 2
Nominees for Election as Directors................................ 2
Committees and Meetings of the Board of Directors................. 4
PROPOSAL 2--RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS............. 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....... 13
Compensation Committee Report on Executive Compensation........... 13
Performance Graph................................................. 16
CERTAIN RELATIONSHIPS AND OTHER TRANSACTIONS........................... 17
STOCKHOLDER PROPOSALS.................................................. 18
STOCKHOLDER NOMINATION OF DIRECTORS.................................... 18
OTHER MATTERS.......................................................... 18
</TABLE>
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INFORMATION CONCERNING COMPANY DEVELOPMENT
On February 10, 1997, BMC West Corporation (the "Company") announced its
intent to restructure its existing operations by becoming a subsidiary of a
newly formed holding company. The Company believes that by creating the
holding company it can centralize its responsibilities of managing regional
locations and day-to-day operations and assign the holding company the
responsibilities of financial and strategic management.
The holding company structure will allow each share of the Company's
Common Stock to be converted into a share of the holding company's common
stock and each outstanding option to purchase Company Common Stock to be
exercisable for shares of the holding company Common Stock. Stockholders will
not recognize a gain or loss for federal income tax purposes as a result of
the reorganization. The Company believes that creating the holding company
will allow the Company to continue to participate effectively in the
consolidation of the building materials industry, while continuing its
commitment to individual customer and regional markets.
INFORMATION CONCERNING VOTING
General Information
The enclosed proxy is solicited on behalf of the Board of Directors of
BMC West Corporation, a Delaware corporation (the "Company"), for use at the
Annual Meeting of Stockholders to be held on Tuesday, May 13, 1997, at 2:30
p.m. (the "Annual Meeting"), or at any adjournment thereof, for the purposes
set forth herein and in the accompanying Notice of Annual Meeting of
Stockholders. The Annual Meeting will be held at the Boise Centre on the
Grove, 850 Front Street, in Boise, Idaho. The Company intends to mail this
Proxy Statement and accompanying proxy card on or about April 7, 1997, to all
stockholders entitled to vote at the Annual Meeting.
Voting Rights and Outstanding Shares
Only holders of record of Common Stock at the close of business on March
17, 1997, will be entitled to notice of and to vote at the Annual Meeting. At
the close of business on March 17, 1997, the Company had outstanding and
entitled to vote 11,821,413 shares of Common Stock.
On all matters to be voted upon at the Annual Meeting, each holder of
record of Common Stock on such date will be entitled to one vote for each
share held.
All votes will be tabulated by the inspector of election appointed for
the meeting, who 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
meeting. Abstentions will be counted towards the tabulation of votes cast on
proposals presented to the stockholders and will have the same effect as
negative votes. Broker non-votes are not counted for any purpose in
determining whether a matter has been approved.
Revocability of Proxies
Any stockholder giving a proxy pursuant to this solicitation has the
power to revoke the proxy at any time before it is voted. It may be revoked
by filing with the Secretary of the Company at the Company's principal
executive office, 1475 Tyrell Lane, Post Office Box 8008, Boise, Idaho 83707,
a written notice of revocation or a duly executed proxy bearing a later date,
or it may be revoked by attending the meeting and voting in person.
Attendance at the meeting will not, by itself, revoke a proxy.
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SOLICITATION
The Company will bear the entire cost of solicitation of proxies
including preparation, assembly, printing, and mailing of this Proxy
Statement, the proxy and any additional information furnished to
stockholders. Copies of solicitation materials will be furnished to banks,
brokerage houses, fiduciaries, and custodians holding in their names shares
of Common Stock beneficially owned by others to forward to such beneficial
owners. The Company may reimburse persons representing beneficial owners of
Common Stock for their costs of forwarding solicitation materials to such
beneficial owners. Original solicitation of proxies by mail may be
supplemented by telephone, telegram, or personal solicitation by directors,
executive officers, or other regular employees of the Company. No additional
compensation will be paid to directors, executive officers, or other regular
employees for such services.
PROPOSAL 1
ELECTION OF BOARD OF DIRECTORS
The Board of Directors has nominated nine persons for the nine Board
positions presently authorized in the Company's Bylaws. The nine nominees
served as directors in 1996. Each director to be elected will hold office
until the next annual meeting of stockholders and until a successor is
elected and has qualified, or until such director's earlier death,
resignation, or removal. Each nominee listed below is currently a director of
the Company.
Shares represented by executed proxies will be voted, if authority to do
so is not withheld, for the election of the nine nominees named below. In the
event that any nominee should be unavailable for election as a result of an
unexpected occurrence, such shares will be voted for the election of such
substitute nominee as the Board may propose. Each person nominated for election
has agreed to serve if elected and the Board has no reason to believe that any
nominee will be unable to serve. The nine candidates receiving the highest
number of affirmative votes cast at the meeting will be elected directors of
the Company.
Nominees for Election as Directors
George E. McCown(1)--Mr. McCown (61) is Chairman of the Board of
Directors of the Company 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 the McCown De Leeuw & Co. partnerships,
since 1984, and was instrumental in financing and executing the leveraged
buy-out of the Company in 1987. Mr. McCown currently serves as a director of
three publicly held companies: Nimbus CD International, Inc., Specialty
Paperboard, Inc., and Vans, Inc. Mr. McCown also serves as a director of
several privately held companies.
Robert E. Mellor(2)--Mr. Mellor (53) currently serves as the President
and CEO of the newly formed holding company. 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.
Donald S. Hendrickson(1)--Mr. Hendrickson (66) has served as President,
Chief Executive Officer, and a director of the Company since its inception in
November 1987. Mr. Hendrickson served in several management positions at
Boise Cascade Corporation from 1964 to 1987. Mr. Hendrickson received a B.A.
in economics from the Albertson College of Idaho and an M.B.A. from the
University of Chicago Graduate School of Business. He is also a certified
public accountant in the State of Idaho. Mr. Hendrickson currently serves as
a Trustee for Albertson College of Idaho and as Director-at-Large for the
Western Building Materials Association.
-2-
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Alec F. Beck(5)--Mr. Beck (40) has served as a BMC West director since
1996. He was the Vice President of Operations/South before his
resignation in February 1996. He joined Stripling-Blake Lumber Company, Inc.
("SBLC"), an Austin, Texas building materials retailer, in 1974 and served as
President from 1983 to 1995, when certain assets of SBLC were sold to the
Company. Mr. Beck received a BBA in finance from the University of Texas.
H. James Brown(2)--Dr. Brown (56) is currently the President and Chief
Executive Officer for the Lincoln Institute of Land Management. He was
previously a professor at the John F. Kennedy School of Government at Harvard
University since 1978. Dr. Brown has served as Director of the Joint Center
for Housing Studies at Harvard University since 1984 and as Chairman of the
Harvard University's City and Regional Planning Program since 1981. He
previously served as a director of the State, Local, and Intergovernmental
Center at Harvard University and the MIT/Harvard University Joint Center for
Urban Studies.
Wilbur J. Fix(2)--Mr. Fix (69) has over 42 years' management experience
with Allied Stores Corporation, a retail holding company. Most recently, he
served as Senior Vice President of Allied Stores Corporation from 1987 until
his retirement in February of 1993. He also served as Chairman and Chief
Executive Officer of The Bon Marche, a subsidiary of Allied Stores
Corporation, from 1980 until his retirement. He currently serves as a
director of one publicly held company, Vans, Inc., and several privately held
companies.
Robert V. Hansberger(3)--Mr. Hansberger (76) is Chairman of the Board of
Directors and past Chief Executive Officer of Futura Corporation and its
subsidiaries and affiliates. Mr. Hansberger, a founder of Boise Cascade
Corporation, served as 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 several privately held companies.
Guy O. Mabry(2)--Mr. Mabry (70) 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. He
served as Vice President of the Owens-Corning Insulation Operating Division
from 1976 to 1980 and as Vice President of the Owens-Corning Home Building
Products Division from 1969 to 1976.
Peter S. O'Neill(4)--Mr. O'Neill (60) is the founder of O'Neill
Enterprises, Inc., a residential development 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 for its planned community development of River Run in Boise, Idaho.
Mr. O'Neill has served as a director of various local and national economic
and urban development organizations, including the M.I.T./ Harvard University
Joint Center for Urban Studies. He is a member of the Urban Land Institute, a
director of the Boise Area Chamber of Commerce, a trustee of Albertson
College of Idaho, and is currently serving as a director of Idaho Power
Company.
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(1) Director since 1987
(2) Director since 1991
(3) Director since 1988
(4) Director since 1993
(5) Director since 1996
-3-
<PAGE>
Committees and Meetings of the Board of Directors
During the fiscal year ended December 31, 1996, the Board of Directors
held six meetings. The Board of Directors has an Audit and Budget Committee
and a Compensation Committee.
The Audit and Budget Committee may take any and all actions which may be
taken by the Board of Directors of the Company to review and supervise the
financial controls of the Company, including selecting the Company's
independent public accountants, reviewing the Company's financial statements,
acting upon recommendations of the independent public accountants, reviewing
the Company's proposed budgets, and taking such further actions as the
Committee deems necessary. The 1996 Audit and Budget Committee was composed
of Messrs. Fix, Beck, Brown, and O'Neill, and met three times during the
fiscal year ended December 31, 1996.
The Compensation Committee may take any and all actions which may be
taken by the Board of Directors of the Company with respect to recommending
salaries and incentive compensation for the directors, executive officers,
employees of and consultants to the Company, including, but not limited to,
recommendations concerning the issuance of stock and options of the Company
to such persons or entities. The 1996 Compensation Committee was composed of
Messrs. Hansberger, Mabry, and Mellor, and met three times during the fiscal
year ended December 31, 1996.
During the fiscal year ended December 31, 1996, all directors attended at
least 75% of the aggregate of the meetings of the Board of Directors and all
committees of the Board of Directors of which they were members.
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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PROPOSAL 2
RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has selected Arthur Andersen LLP as the Company's
independent public accountants for the fiscal year ending December 31, 1997,
and has further directed that management submit the selection of independent
public accountants for ratification by the stockholders at the Annual
Meeting. Arthur Andersen LLP has audited the Company's financial statements
since its inception in 1987. Representatives of Arthur Andersen LLP are
expected to be present at the Annual Meeting and will have an opportunity to
make a statement if they so desire and respond to appropriate questions.
Stockholder ratification of the selection of Arthur Andersen LLP as the
Company's independent public accountants is not required by the Company's
Bylaws or otherwise. However, the Board of Directors is submitting the
selection of Arthur Andersen LLP to the stockholders for ratification as a
matter of good corporate practice. If the stockholders fail to ratify the
selection, the Board of Directors will reconsider whether or not to retain
that firm. Even if the selection is ratified, the Board of Directors, in its
discretion, may direct the appointment of a different independent public
accounting firm at any time during the year if the Board of Directors
determines that such a change would be in the best interests of the Company
and its stockholders.
The affirmative vote of the holders of a majority of the shares
represented at the meeting will be required to ratify the selection of Arthur
Andersen LLP. As a result, all shares represented at the meeting but not
voted and all shares voted to abstain have the effect of a negative vote.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE IN FAVOR OF PROPOSAL 2.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information regarding the
beneficial ownership of the Company's Common Stock as of March 17, 1997, by
each person who is known by the Company to own beneficially more than 5% of
the Company'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
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<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP(1)
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NUMBER OF PERCENT OF
BENEFICIAL OWNER SHARES TOTAL(2)
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<S> <C> <C>
Wasatch Advisors, Inc. 1,139,376 9.7
68 South Main Street, Ste. 400
Salt Lake City, UT 84101
ICM Asset Management, Inc. 842,516 7.1
601 Main Avenue, Suite 917
Spokane, WA 99201
Directors and Executive Officers:
George E. McCown, Chairman of the Board of Directors 109,720 *
Donald S. Hendrickson, Director, President & CEO(4),(5),(7) 154,482 1.31
Robert L. Becci, Vice President and Controller(4),(5) 9,161 *
Richard F. Blackwood, Vice President of Operations(4),(5) 50,903 *
Leroy D. Custer, Vice President of Marketing & Purchasing(4),(5) 31,329 *
Ellis C. Goebel, Vice President & Treasurer(4),(5) 47,036 *
Steven H. Pearson, Vice President of Human Resources(4),(5) 40,588 *
Alec F. Beck, Director(5) 6,306 *
H. James Brown, Director(5) 16,500 *
Wilbur J. Fix, Director(5) 22,500 *
Robert V. Hansberger, Director(3),(5) 33,000 *
Guy O. Mabry, Director(5) 11,500 *
Robert E. Mellor, Director(5) 26,500 *
Peter S. O'Neill, Director(5) 16,500 *
All directors and executive officers as a group (14 persons):(6) 576,025 4.9
</TABLE>
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* Represents holdings of less than 1%.
(1) This table is based upon information supplied by officers, directors, and
principal stockholders and Schedules 13D and 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 stockholders named in this table has sole
voting and investment power with respect to the shares shown as
beneficially owned by it.
(2) Applicable percentage of ownership is based on 11,821,413 outstanding
shares of the Company's Common Stock, adjusted as required by rules
promulgated by the SEC.
(3) Includes 16,500 shares held of record by Mr. Hansberger's spouse. Mr.
Hansberger disclaims beneficial ownership of these shares.
(4) Includes shares purchased through the Company's 401(k) Plan and held
indirectly as follows: Mr. Hendrickson, 1,035.972; Mr. Becci, 722.949; Mr.
Blackwood, 864.723; Mr. Custer, 742.944; Mr. Goebel, 722.949; Mr. Pearson,
722.949.
(5) Includes shares which certain directors and executive officers of the
Company have the right to acquire within 60 days after the date of this
table pursuant to outstanding options as follows: Mr. Hendrickson, 78,197;
Mr. Becci, 8,439; Mr. Blackwood, 40,914; Mr. Custer, 13,247; Mr. Goebel,
22,877; Mr. Pearson, 19,866; Mr. Beck, 2,250; Mr. Brown, 16,500; Mr. Fix,
16,500; Mr. Hansberger, 16,500; Mr. Mabry, 9,000; Mr. Mellor, 16,500; Mr.
O'Neill, 16,500; all directors and executive officers as a group, 277,290.
(6) Includes shares described in the notes above.
(7) Mr. Hendrickson has disclaimed beneficial ownership of 11,500 shares.
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<PAGE>
EXECUTIVE COMPENSATION AND OTHER INFORMATION
Summary of Cash and Certain Other Compensation
The following table sets forth certain summary information concerning
compensation paid to or accrued by the Company on behalf of the Company's
Chief Executive Officer and each of the five other most highly compensated
executive officers of the Company (determined as of the end of the last
fiscal year) (the "Named Executive Officers") for the fiscal years ended
December 31, 1994, December 31, 1995, and December 31, 1996.
Summary Compensation Table
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<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM
----------------------------------- COMPENSATION
OTHER AWARDS
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>
Donald S. Hendrickson
President and Chief Executive Officer................ 1996 211,667 244,310 -- 6,070(4) 30,891
1995 181,667 164,657 -- 6,070(3) 29,391
1994 165,000 347,595 -- 6,645(4) 27,991
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Robert L. Becci
Vice President and Controller........................ 1996 118,333 76,664 -- 2,685(4) 15,907
1995 106,667 47,482 -- 2,410(3) 16,925
1994 90,000 117,380 -- 2,415(4) 16,782
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Richard F. Blackwood
Senior Vice President of Operations.................. 1996 150,000 99,704 -- 6,000(4) 21,239
1995 136,667 63,350 -- 3,065(3) 20,098
1994 120,000 156,607 -- 3,225(4) 21,397
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Leroy D. Custer
Vice President of Marketing and Purchasing........... 1996 113,333 66,780 12,948 2,520(4) 15,819
1995 106,667 47,482 -- 2,410(3) 16,280
1994 90,000 117,380 -- 2,415(4) 16,395
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Ellis C. Goebel
Vice President and Treasurer......................... 1996 118,333 74,698 -- 2,685(4) 15,817
1995 106,667 47,482 -- 2,410(3) 16,921
1994 90,000 117,380 -- 2,415(4) 16,782
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Steven H. Pearson
Vice President of Human Resources.................... 1996 116,667 73,646 38,970 2,630(4) 15,790
1995 106,667 47,482 -- 2,410(3) 16,921
1994 90,000 117,380 -- 2,415(4) 16,723
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</TABLE>
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(1) Each year the Company has adopted a bonus plan for key management
personnel, including executive officers. For the fiscal year ended
December 31, 1996, of the Company's 3,156 employees, 287 were eligible to
participate in the bonus plan. In 1996, the aggregate amount available for
allocation to executive officers under the bonus plan was 5.2% of the
Company's net income after taxes and an additional 1.0% for the Company's
President and Chief Executive Officer. The distribution of the pool was
based on each person's salary as a percent of the total, and individual
officer performance against predetermined objectives.
(2) Certain incidental personal benefits furnished to executive officers of the
Company (not otherwise disclosed in this Proxy Statement) may result from
expenses incurred by the Company in the interest of attracting and
retaining qualified personnel. The incremental cost to the Company of
providing such incidental personal benefits did not, for fiscal year 1996,
exceed the lesser of $50,000 or 10% of the compensation reported in the
above 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. Consists of income received in the exercise of
options for the difference between the exercise price and the market price
as of the grant date.
(3) The Company has no stock appreciation rights (SARs). The awards consist of
stock options granted under the Amended and Restated 1992 Non-Qualified
Stock Option 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. 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 the Company'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. During 1996, the Company matched 50% of the first
2% of an employee's contribution. As of April 1, 1997, the Company will
match 50% of the first 3% and 25% of the next 2% of an employee's
contribution. Plan participants invest their individual accounts in
selected investment alternatives made available under the 401(k) Plan.
The Company's matching contributions during the last fiscal year to the
Named Executive Officers were as follows: Donald S. Hendrickson, $4,301;
Robert L. Becci, $2,902; Richard F. Blackwood, $2,800; Leroy D. Custer,
$2,814; Ellis C. Goebel, $2,812; Steven H. Pearson, $2,785.
Each year the Company has adopted an incentive plan (the "Incentive Plan")
in which all employees are eligible for participation, subject to certain
restrictions. In 1993, the Incentive Plan was amended to exclude executive
officers, and executive officers no longer participate in the Incentive
Plan.
Effective January 1, 1993, the Company adopted a supplemental employee
retirement plan ("SERP") to supplement the Company's 401(k) Plan. The
goal 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. For 1996, the Company has agreed
to fund the SERP for executive officers with funds between 8%-9% of each
executive officer's 1995 base salary (these contributions are included in
the table). Contributions are based on a percentage of the Company'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 the Company's Common Stock. These contributions are allocated
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<PAGE>
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 the Company'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. The Company funds
distributions by purchasing cash value life insurance on participants,
which will be owned by the Company. The Company maintains a qualifying
trust, which is subject to claims of creditors, in order to otherwise
assure payment of benefits to participants.
Stock Option Grants in the Last Fiscal Year
During 1996, the Board of Directors granted stock options under the
Company's Amended and Restated 1993 Non-Qualified Stock Option Plan (the
"1993 Plan"). The Company has reserved 375,000 shares of its Common Stock for
issuance upon exercise of options granted to selected directors, executive
officers and key employees of the Company under the 1993 Plan. The 1993 Plan
is administered by the Compensation Committee of the Board of Directors. The
Compensation Committee has the authority to determine to whom options shall
be granted, the number of shares subject to each option, when the options may
be exercised, and the exercise price. The 1993 Plan expires on October 14,
2004.
The following table contains information concerning the stock options
granted to the Named Executive Officers under the Company's 1993 Plan during
the last fiscal year.
OPTION GRANTS IN LAST FISCAL YEAR
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Individual Grants
------------------------------------------------------
% OF TOTAL
NUMBER OF OPTIONS
SECURITIES GRANTED TO
UNDERLYING EMPLOYEES EXERCISE GRANT DATE
OPTIONS IN FISCAL PRICE EXPIRATION PRESENT VALUE
NAME GRANTED (#)(1) YEAR(2) ($/SH)(3) DATE ($)(4)
- ---------------------------------------------- --------------- ------------- ----------- ----------- -----------------
<S> <C> <C> <C> <C> <C>
Donald S. Hendrickson......................... 6,070 7.8 19.50 04/30/06 59,972
Robert L. Becci............................... 2,685 3.4 19.50 04/30/06 26,528
Richard F. Blackwood.......................... 6,000 7.7 19.50 04/30/06 59,280
Leroy D. Custer............................... 2,520 3.2 19.50 04/30/06 24,898
Ellis C. Goebel............................... 2,685 3.4 19.50 04/30/06 26,528
Steven H. Pearson............................. 2,630 3.4 19.50 04/30/06 25,984
</TABLE>
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(1) Options vest at a rate of 20% a year, unless, pursuant to the terms of the
1993 Plan, the vesting schedule is accelerated by the Compensation
Committee of the Board of Directors. 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
the Company is terminated for any reason, unless the termination is by
reason of the optionee's death or permanent disability, in which case the
options, to the extent vested, do not expire until one year after such
termination. Options expire 10 years from the grant date. As of December
31, 1996, 20% of the options granted to executive officers and key
employees in the last fiscal year were vested and are fully exercisable.
(2) Of the Company's 3,156 employees, 81 were granted options under the 1993
Plan. During the 1996 fiscal year, a total of 78,305 shares were granted to
executive officers and key employees.
(3) Represents the closing market price of the Company's Common Stock on the
day immediately preceding the grant date.
(4) As suggested by the SEC's rules on executive compensation disclosure, the
Company used the Black-Scholes model of option valuation to determine grant
date present value. The Company does not advocate or necessarily agree that
the
-10-
<PAGE>
Black-Scholes model can properly determine the value of an option. The
actual value that an executive officer may realize will depend on the
market value of the Company'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 option term of 10 years; (b) an interest rate
that represents the interest rate on a U.S. Treasury Bond with a maturity
date corresponding to that of the options term; (c) volatility calculated
using monthly stock prices since the initiation of trading in August 1991
to the grant date; and (d) a zero future dividend yield.
Aggregated Stock Options
The following table provides information concerning aggregated
unexercised stock options held as of the end of the last fiscal year and
exercises of options during the last 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
December 31, 1996(1) at December 31, 1996(1),(2)
----------------------------- -----------------------------
SHARES
ACQUIRED VALUE
NAME ON EXERCISE EXERCISED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------------------------- ------------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Donald S. Hendrickson...................... -- -- 78,197 12,485 686,910 0
Robert L. Becci............................ -- -- 8,439 5,043 23,392 0
Richard F. Blackwood....................... -- -- 40,914 8,573 352,338 0
Leroy D. Custer............................ 1,200 12,943 14,547 4,911 89,984 0
Ellis C. Goebel............................ -- -- 22,877 5,043 182,787 0
Steven H. Pearson.......................... 3,000 38,970 19,866 4,999 149,667 0
</TABLE>
- ------------------------
(1) The table includes options vested under the 1991 Senior Original
Shareholders Management Plan, the 1991 Field Management Plan, the 1992
Amended and Restated Stock Option Plan, and the 1993 Employee Stock Option
Plan as of December 31, 1996, and valued at the closing market price of the
stock on December 31, 1996.
(2) Value in this table is the aggregate amount by which the market price per
share of $12.25 at December 31, 1996, exceeded the following exercise
prices:
<TABLE>
<CAPTION>
OPTION PLAN GRANTS OPTION PRICE
- ----------------------------------------- -----------------------------------------
<S> <C>
1991 Senior Original Shareholders
Management and Field Management Plans.. $ 1.21
Amended and Restated 1992 Non-Qualified
Stock Option Plan grants in 1992....... $ 5.67
Amended and Restated 1992 Non-Qualified
Stock Option Plan grants in 1993....... $16.17
1993 Employee Stock Option Plan grants
in 1994................................. $29.75
Amended and Restated 1992 Non-Qualified
Stock Option Plan grants in 1995....... $14.25
Amended and Restated 1993 Non-Qualified
Stock Option Plan grants in 1996....... $19.50
</TABLE>
Compensation of Directors
In 1996, the Company paid directors who are not employees of the Company
a quarterly fee of $2,500 for services on the Board of Directors, together
with a fee of $2,000 for each meeting of the Board of Directors they
attended. In addition, the directors were 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 via 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.
-11-
<PAGE>
George E. McCown received a fee of $100,000 in 1996 for his service as
Chairman of the Board of Directors. Mr. McCown does not receive quarterly or
meeting fees. See "Certain Relationships And Other Transactions" for a
description of the fee paid by the Company to MDC Management Company, the
general partner of McCown De Leeuw & Co., for management, consulting, and
financial services.
On October 28, 1993, the Board of Directors adopted and the Company's
stockholders subsequently ratified the 1993 Nonemployee Director Stock Option
Plan (the "1993 Director Plan"). The 1993 Director Plan provides for
nondiscretionary automatic grants of nonstatutory stock options of 2,250
shares of Common Stock annually to nonemployee directors. Additional options
for 2,250 shares will be automatically granted to nonemployee directors at
the annual meeting and at each annual meeting thereafter. The number of
shares of the Company's Common Stock authorized to be subject to options
granted under the 1993 Director Plan may not exceed 97,500 shares. Each
option expires 10 years after the grant date. The exercise price per share
under the 1993 Director Plan is the fair market value of a share on the grant
date. The first grant of options occurred on October 28, 1993. The options
become exercisable on the earlier of the first anniversary of the grant date
or the day immediately prior to the next annual meeting of stockholders,
provided the optionee continues to serve as a director. The options may be
accelerated in the event of a change of control as defined in the 1993
Director Plan. If an option granted under the 1993 Director Plan expires or
terminates without being exercised, the shares not purchased pursuant to such
option will be available for options thereafter granted under the 1993
Director Plan. The term during which options may be granted under the 1993
Director Plan expires on October 28, 1998. The Board of Directors may alter,
suspend, or discontinue the 1993 Director Plan; however, the approval of the
holders of a majority of the Company's Common Stock is required for any
alteration or amendment of the 1993 Director Plan that would operate to
increase the total number of shares reserved for purposes of the 1993
Director Plan or would extend the term of the 1993 Director Plan or the
maximum option period.
Severance and Change of Control Agreements
Effective July 20, 1993, each of the Named Executive Officers entered
into an agreement with the Company under a Severance Plan for Certain
Executive Officers, Senior Management, and Key Employees of the Company and
its Subsidiaries (the "Severance Plan"). Under the terms of the Severance
Plan, a participating executive will generally become entitled to receive
benefits if the executive's employment is terminated by the Company without
Cause or by the executive for Good Reason within three years following a
Change in Control. A "Change in Control" includes: (i) a merger or
consolidation of the Company in which the Company is not the continuing
entity or the holders of the Company'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 the Company; (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 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 the Company'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 Plan). The
term "Cause" is defined to mean the commission of certain felonies, willful
dereliction of duties, malicious conduct, and habitual neglect of duties. An
executive's termination is deemed to have been 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
agreement. The benefits payable under the Severance Plan 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 the Company's stock option plans, the options
vest upon a Change in Control. Other benefits include the addition of a
number of years of credited service under the Company's retirement plans. The
Severance Plan has an initial term of two years and thereafter is
automatically renewed for a similar period, subject to cancellation or
amendment by the Company on or before a subsequent renewal date. If benefits
under the Severance Plan 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.
-12-
<PAGE>
Compensation Committee Interlocks and Insider Participation
As noted above, the Company's Compensation Committee consists of Robert
V. Hansberger, Guy O. Mabry, and Robert E. Mellor. In 1997, Mr. Mellor was
appointed the President and CEO of BMC Holdings, Inc. During 1996, Mr. Mellor
was Of Counsel with the law firm of Gibson, Dunn & Crutcher LLP, which
provided legal services to the Company. The fees paid to the law firm in 1996
did not exceed the amount required to be disclosed by the SEC rules. The
Company believes that such services were obtained on terms which were as
favorable as would have been obtained from an unaffiliated party.
Compensation Committee Report on Executive Compensation
Decisions on compensation of the Company's executive officers are made by
the three-member Compensation Committee of the Board of Directors. Each
member of the Compensation Committee is a nonemployee director. All decisions
by the Compensation Committee relating to the compensation of the Company's
executive officers are reviewed by the full Board of Directors, except for
awards under the Company's 1992 Amended and Restated Stock Option Plan and
1993 Employee Stock Option Plan, which grants discretion to either the
Compensation Committee or the Board of Directors.
The Compensation Committee uses independent compensation consultants and
studies to compare the Company's compensation plans in general with
compensation plans in the Company's industry and with comparable sized
companies in similar industries. In 1996, the Committee reviewed both
industry and national compensation surveys to measure the competitiveness of
officer base salaries and total compensation. The Committee established goals
for compensation plans for both executive officers and key employees for
direct and deferred compensation.
The Compensation Committee has considered the recent amendments to the
Internal Revenue Code denying deductions for annual compensation to certain
executives in excess of $1 million, subject to certain exceptions. The
Company's compensation structure has been such that it does not believe that
it is likely that the $1 million cap will affect the Company in the near
future. In the event any annual compensation to executives approaches the $1
million cap, the Company will evaluate and comply with the regulations.
COMPENSATION POLICIES FOR EXECUTIVE OFFICERS. The Compensation
Committee's compensation policies for executive officers follow the
compensation policies for all employees. The policies emphasize the principle
that compensation should be commensurate with performance of the individual
and the Company.
The Company's compensation policies for executive officers are structured
to provide competitive levels of compensation that integrate compensation
with the Company's annual and long-term performance goals, reward above
average corporate performance, recognize individual initiative and
achievements, provide mechanisms for the executive officers to provide for
their own retirement, and assist the Company in attracting and retaining
qualified executives. Targets for total compensation are set at levels that
the Compensation Committee believes to be consistent with others in the
Company's industry and comparable sized companies in similar industries.
Actual compensation in any particular year may be above or below the
Company's competitors or comparable sized companies in similar industries,
depending upon the Company's performance. The Compensation Committee believes
that stock ownership is beneficial in aligning the Company's and
stockholders' interests in the enhancement of stockholder value.
RELATIONSHIP OF PERFORMANCE UNDER COMPENSATION PLANS. Compensation paid
to the executive officers in 1996, 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 1996, and retirement plans.
Base salary in 1996 was conservative for the executive officers when
compared to salaries of executives holding similar positions in the Company's
industry. Any additional compensation paid to executive officers is based
-13-
<PAGE>
on the earnings of the Company, which results in the executive officers' and
the stockholders' interests in the profitability of the Company being aligned.
The Company's annual bonuses to its executive officers reported in the
third column of the Summary Compensation Table are based on the Company's
earnings after taxes ("EAT"). In 1996, the bonus pool was based on 5.2% of
EAT, and the distribution of the pool was based on each person's salary as a
percent of the total, and individual officer performance against
predetermined objectives. The President and Chief Executive Officer was
eligible for an additional bonus of 1.0% of the Company's EAT. The 1996 bonus
percentages of EAT were a reduction from the prior year reflecting an
adjustment in the mix of officers' compensation by revising their base
salaries with a corresponding reduction in their bonus potentials. The change
was made to shift the base salaries over time to industry norms to assist in
recruiting key employees as the Company grows. The actual total amounts paid
to the executive officers for 1996 was greater than paid for the previous
year because of increased earnings of the Company.
The Compensation Committee reviews and adjusts annually, if necessary,
the percentage of EAT paid in bonus to the executive officers. The Committee
made changes in 1996 to tailor compensation more closely to individual goals
as well as the financial results of the Company.
The Company's stock option plans are designed to reinforce long-term
focus on both the performance of the Company and the performance of its
stock. The Company has granted stock options to executive officers under
several option plans. In 1996, the Compensation Committee approved the grant
of 78,305 shares of the Company's common stock to executive officers and key
employees pursuant to the 1993 Plan. The options generally vest at a rate of
20% per year commencing December 31, 1996, and expire 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. During 1996, under the 401(k) Plan, the Company matched 50% of the
first 2% of salary and 25% of the next 3% of salary contributed by the
employee. The Company also provides a supplemental employee retirement plan
("SERP") in which the executive officers participate to supplement the
Company's 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. For 1996, the Company has agreed
to fund the SERP for executive officers with funds between the range of 8-9%
of each executive officer's 1995 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 the Company'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. The Company funds distributions from the
purchase of cash value life insurance on participants which is owned by the
Company.
CHIEF EXECUTIVE OFFICER'S 1996 COMPENSATION. The Compensation Committee's
general approach to the Chief Executive Officer's ("CEO's") annual
compensation is to establish a conservative annual base salary and to provide
for additional compensation based on the Company's actual performance during
the year. This approach coincides with the Company's general philosophy of
providing compensation commensurate with the individual's and Company's
performance. As a result, the CEO's compensation may fluctuate from year to
year.
THE CEO PARTICIPATES IN A BONUS PLAN FOR EXECUTIVE OFFICERS. In 1996,
the bonus under the plan was based on a pool of 5.2% of EAT and distributed
based on each executive officer's salary as a percent of the total and
individual officer performance against predetermined objectives. In addition,
the CEO received a bonus in 1996 of 1.0% of EAT. This percentage of EAT
payable as bonus to the CEO is reviewed annually and adjusted based on
projected earnings of the Company as it grows through acquisitions and
internal growth. The total bonus paid to the CEO in 1996 was $244,310, which
is an increase of 33% over the prior year's bonus due to increased earnings
of the Company. This increase in bonus reflects an increase in the Company's
EAT in 1996 of 37.1% over EAT in 1995. The Compensation Committee believes
that this approach to bonus relates a substantial part
-14-
<PAGE>
of the CEO's annual compensation to the annual performance of the Company
which results in aligning the CEO's compensation with the interests of
stockholders.
The Compensation Committee's approach to the CEO's long-term compensation
is to provide for retirement planning through the Company's 401(k) Plan, the
SERP discussed above, and through stock option plans implemented by the
Company to emphasize long-term performance of the Company and its stock. The
CEO participates in three stock option plans of the Company. In May 1996, 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 6,070
shares of the Company's common stock. The options generally vest at a rate of
20% per year commencing on December 31, 1996, and expire 10 years from the
grant date.
COMPENSATION COMMITTEE
Robert V. Hansberger, Chairman
Guy O. Mabry
Robert E. Mellor
-15-
<PAGE>
Performance Graph
The graph presented below compares the cumulative total return of the
Company, the NASDAQ Market Index and a Peer Group Index from August 22,
1991, when the Company's Common Stock became publicly traded, through
December 31, 1996. Total return is based on an investment of $100 on
August 22, 1991, and reinvestment of dividends through December 31, 1996.
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 1991 1992 1993 1994 1995 1996
- -------- ----- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C>
BMC WEST CORP 100 102.78 330.56 229.05 245.71 204.96
PEER GROUP 100 134.14 105.92 77.64 44.87 47.08
BROAD MARKET 100 100.98 121.13 127.17 164.96 204.98
</TABLE>
ASSUMES $100 INVESTED ON DEC. 28, 1991
ASSUMES DIVIDEND REINVESTED
FISCAL YEAR ENDING DEC. 31, 1996
(1) The 1996 Peer Group Index is composed of the following issuers: Payless
Cashways, Wickes Lumber Co., and Wolohan Lumber Co.
-16-
<PAGE>
CERTAIN RELATIONSHIPS AND OTHER TRANSACTIONS
MDC Management Company, the general partner of McCown De Leeuw & Co.,
provided management, consulting, and financial services to the Company for an
annual fee. The management fee paid in 1996 was $100,000. The contract was
terminated effective December 31, 1996.
The Company leases its headquarters office space from the Danken Co., a
general partnership ("Danken"). Danken is composed of three general partners,
each with a one-third partnership interest: Fred P. Thompson, Jr., who has no
other business relationship with the Company, Eugene C. Thomas, a partner in
the law firm that acts as general counsel for the Company, and George E.
McCown, Chairman of the Company and a Managing General Partner of MDC
Management Company, the general partner of McCown De Leeuw & Co. In 1992, the
Company exercised its option to extend the lease for an additional five-year
term, which expires December 31, 1997. The lease provides for an annual
payment of $136,411. The Company believes that the lease contains
commercially reasonable terms and conditions no less favorable to the Company
than could have been obtained from an unaffiliated party.
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's executive officers, directors, and persons who own more than 10% of
a registered class of the Company'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% stockholders are required
by SEC regulations to furnish the Company with copies of all Section 16(a)
forms they file. Based solely on its review of the copies of such forms
received by it and written representations from certain reporting persons
that they have complied with the relevant filing requirements, the Company
believes that all filing requirements applicable to its executive officers,
directors, and greater than 10% stockholders were complied with as of
December 31, 1996.
The Company's Bylaws provide that the Company will indemnify its
directors and executive officers and may indemnify its other executive
officers, employees, and other agents to the fullest extent not prohibited by
law. The Company believes that indemnification under its Bylaws covers at
least negligence and gross negligence by indemnified parties, and requires
the Company to advance litigation expenses in the case of stockholder
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. The Company 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. Pursuant to this
provision, the Company has entered into indemnity agreements with each of its
directors and executive officers. The Company also has in effect directors
and executive officers liability insurance coverage.
In addition, the Company's Certificate of Incorporation provides that,
pursuant to Delaware law, its directors will not be liable for monetary
damages for breach of the directors' fiduciary duty of care to the Company
and its stockholders. 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 the
Company, 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.
At present, there is no pending litigation or proceeding involving a
director, executive officer, employee, or other agent of the Company as to
which indemnification is being sought, nor is the Company aware of any
threatened litigation that may result in claims for indemnification by any
director, executive officer, employee, or other agent.
-17-
<PAGE>
Any future transactions between the Company and its executive officers,
directors, and affiliates will be on terms no less favorable to the Company
than can be obtained from unaffiliated third parties, and any material
transactions with such persons will be approved by a majority of the
Company's disinterested directors.
STOCKHOLDER PROPOSALS
Under Section 5(b) of the bylaws of the Company, proposals by
stockholders of the Company must be given in writing to the Secretary of the
corporation in a timely manner. A timely manner is identified as being
delivered to or mailed and received at the principal executive offices of the
corporation not less than 120 days in advance of the date of the Company's
proxy statement is released to stockholders in connection with the previous
year's annual meeting of stockholders. No timely proposals were received.
STOCKHOLDER NOMINATION OF DIRECTORS
Under Section 5(c) of the bylaws of the Company, nominations for election
to the Board of Directors by stockholders of the Company must be received not
less than 120 days in advance of the date the Company's proxy statement is
released to stockholders in connection with the previous year's annual
meeting of stockholders and must contain the information required by the
bylaws. No timely nominations were received.
OTHER MATTERS
The Board of Directors knows of no other matters that will be presented
for consideration at the Annual Meeting. If any other matters are properly
brought before the meeting, it is the intention of the persons named in the
accompanying proxy to vote on such matters in accordance with their best
judgment.
By Order of the Board of Directors
Paul S. Street
Secretary and General Counsel
March 28, 1997
A COPY OF THE COMPANY'S ANNUAL REPORT TO THE SECURITIES AND EXCHANGE
COMMISSION ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996, IS
AVAILABLE WITHOUT CHARGE UPON WRITTEN REQUEST TO:
Stockholder Services
BMC West Corporation
1475 Tyrell Lane
Post Office Box 8008
Boise, Idaho 83707
-18-
<PAGE>
BMC WEST CORPORATION
PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS ON MAY 13, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Donald S. Hendrickson, 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 BMC West
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.
SEE REVERSE
(Continued and to be signed on the reverse side) SIDE
<PAGE>
A /x/ Please mark your
votes as in this
example.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1 AND 2.
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
FOR WITHHOLD Nominees: George E. McGown FOR AGAINST ABSTAIN
1. Election / / / / Robert E. Mellor 2. Ratification of selection of / / / / / /
of Donald S. Hendrickson Arthur Andersen LLP as
Directors: Alec F. Beck independent public accountants.
H. James Brown
Instructions: To withhold authority Wilbur J. Fix 3. In their discretion, the proxies are authorized to vote upon
to vote for any individual nominee, Robert V. Hansberger such other business as may properly come before the meeting.
write that nominee's name in the Guy C. Mabry
space provided below: Peter S. O'Neill 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 YOUR VOTES.
PLEASE DATE, SIGN, AND RETURN THIS PROXY IN THE ENCLOSED
ENVELOPE.
YES NO
Do you plan to attend the / / / /
Annual Meeting?
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.
</TABLE>
