<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
Boise Cascade Office Products Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
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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(4) Date Filed:
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<PAGE> 2
LOGO
BOISE CASCADE
OFFICE PRODUCTS
CORPORATION
------------------------------------
ANNUAL MEETING
OF SHAREHOLDERS
ITASCA, ILLINOIS
APRIL 22, 1997
------------------------------------
NOTICE AND PROXY
STATEMENT
<PAGE> 3
NOTICE OF ANNUAL MEETING
LOGO
<TABLE>
<S> <C> <C>
800 West Bryn Mawr Avenue George J. Harad BOISE CASCADE
Itasca, Illinois 60143-1594 Chairman of the Board OFFICE PRODUCTS CORPORATION
</TABLE>
March 11, 1997
Dear Shareholder:
You are cordially invited to attend the Boise Cascade Office Products
Corporation annual meeting of shareholders. The meeting will be held at the
Company's headquarters, 800 West Bryn Mawr Avenue, Itasca, Illinois, at 10 a.m.,
Central daylight time, on Tuesday, April 22, 1997. Your board of directors and
management look forward to greeting personally those shareholders able to be
present. Nevertheless, 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 two directors to serve three-year terms.
2. To consider and act upon a resolution to ratify the board of
directors' appointment of Arthur Andersen LLP as independent
auditors for the Company for 1997.
3. To transact any other business that may properly come before the
meeting.
Shareholders of record on February 27, 1997, 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,
LOGO
George J. Harad
<PAGE> 4
PROXY STATEMENT
This statement is being mailed on or about March 11, 1997, to the
shareholders of Boise Cascade Office Products Corporation (the "Company"), 800
West Bryn Mawr Avenue, Itasca, Illinois 60143-1594, in connection with the
solicitation of proxies by the board of directors for the Company's 1997 annual
meeting of shareholders.
A shareholder who signs and returns the enclosed proxy may revoke it at any
time prior to its exercise by delivering a later proxy to the independent
tabulator, 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'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.
BUSINESS AT THE MEETING
1. ELECTION OF DIRECTORS
Your board of directors presently consists of six directors divided into
three classes. Two directors are to be elected at the annual meeting, each to
hold office until the annual meeting of shareholders in 2000. Both the nominees
are presently directors. Four directors will continue to serve in accordance
with their previous elections.
In the absence of other instructions, shares of the Company's common 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 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
two 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 2000
- -------------------
JAMES G. CONNELLY III, 51, was elected to the board of
directors in 1995. He is president and chief operating officer
of Caremark International Inc., a wholly owned subsidiary of
MedPartners, Inc., since September 1996 and a national
provider of health care management and services, and has
served Caremark in that capacity since 1992. From 1990 to
1992, Mr. Connelly was a group vice president of Baxter
International, Inc., a manufacturer and marketer of health
care products. Prior to that time, he was a corporate vice
president of Baxter, responsible for its hospital supply
business group.
- -------------------
PETER G. DANIS JR., 65, was elected a member of the board and
president and chief executive officer of the Company in 1995.
He has served as executive vice president and general manager,
Office Products Distribution of Boise Cascade Corporation,
since 1993 and has been an executive officer of Boise Cascade
Corporation since 1977.
<PAGE> 5
DIRECTORS WHOSE TERMS EXPIRE IN 1999
- -------------------
THEODORE CRUMLEY, 51, was elected to the board of directors in
1995. He is currently senior vice president and chief
financial officer of Boise Cascade Corporation and has been an
executive officer of Boise Cascade Corporation since 1990. Mr.
Crumley is also a director of Hecla Mining Company.
- -------------------
A. WILLIAM REYNOLDS, 63, was elected to the board of directors
in 1995. He is the chief executive of Old Mill Group, a
private investment firm. Mr. Reynolds is the former chairman
of the board and chief executive officer of GenCorp Inc., a
diversified manufacturing and service company. He is also a
director of Boise Cascade Corporation, Eaton Corporation, and
Stant Corporation and former chairman of the Federal Reserve
Bank of Cleveland.
DIRECTORS WHOSE TERMS EXPIRE IN 1998
- -------------------
JOHN B. CARLEY, 63, was elected to the board of directors in
1995. He is a director, chairman of the Executive Committee of
the board of directors, and former president and chief
operating officer of Albertson's, Inc., a retail food and drug
company. Mr. Carley is also a director of Idaho Power Company.
- -------------------
GEORGE J. HARAD, 52, was elected to the board of directors in
1995 and became chairman of the board that same year. He is
chairman of the board and chief executive officer of Boise
Cascade Corporation and has been an executive officer of Boise
Cascade Corporation since 1982. Mr. Harad is also a director
of Allendale Insurance Co.
INFORMATION WITH RESPECT TO MAJORITY SHAREHOLDER
As of December 31, 1996, Boise Cascade Corporation, a Delaware corporation
("Boise Cascade"), headquartered in Boise, Idaho, beneficially owned an
aggregate of 50,750,000 shares, or approximately 81%, of the Company's
outstanding common stock, with sole voting and investment power over all of the
shares. By virtue of their relationship with Boise Cascade, Messrs. Crumley,
Harad, and Reynolds may be deemed to beneficially own the shares of the
Company's common stock owned by Boise Cascade. Each of these three individuals
disclaims any beneficial ownership of the shares owned by Boise Cascade.
BOARD MEETINGS AND ATTENDANCE OF DIRECTORS
During 1996, the board of directors held six meetings. All directors
attended at least 75% of the total meetings of the board and the committees on
which they served.
<PAGE> 6
COMMITTEES OF THE BOARD OF DIRECTORS
The board of directors has an Audit Committee composed of two members,
neither of whom is an officer, employee, or former officer of the Company or a
director or officer of any corporation holding more than 10% of the voting
shares in the capital of the Company. The committee meets periodically with
management, Boise Cascade's Internal Audit staff, and representatives of the
Company's independent auditors to ensure 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 chairman is James G. Connelly III, and its other member
is Mr. Carley. During 1996, this committee held two meetings.
The board of directors has a Compensation Committee composed of the
Company's nonemployee directors, none of whom is an executive officer of another
company on whose board of directors any executive officer of the Company serves
or an officer, employee, or former officer of any corporation holding more than
10% of the voting shares in the capital of the Company. The 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 chairman is A. William Reynolds, and its
other members are Messrs. Carley and Connelly. During 1996, this committee held
three meetings.
The board of directors has a Committee of Independent Directors composed of
two members, neither of whom is an officer, employee, or former officer of the
Company or a director or officer of any corporation holding more than 10% of the
voting shares in the capital of the Company. The Committee of Independent
Directors is responsible for reviewing and approving the terms of all material
agreements and transactions between the Company and any corporation holding more
than 10% of the voting shares in the capital of the Company. This committee also
reviews and evaluates any significant related party transactions between the
Company and any officer, director, or principal shareholder. The committee
chairman is John B. Carley, and its other member is Mr. Connelly. During 1996,
this committee did not hold any meetings.
Shareholders wishing to suggest nominees for the board's consideration for
future elections should write to A. James Balkins III, Corporate Secretary, 1111
West Jefferson Street, 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 board of directors 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 or of Boise
Cascade, are paid an annual retainer of $10,000 plus a fee of $1,000 for each
board meeting which a director attends, including committee meetings held the
same day, and for each committee meeting held on a day other than the board
meeting date. The directors are reimbursed for travel and other expenses related
to attendance at the meetings.
In 1995, the board of directors adopted the Director Stock Option Plan
("DSOP"). Under the DSOP, each individual who is not an employee of the Company
or Boise Cascade will receive a stock option grant on July 31. Directors elected
between August 1 and December 31 will also receive a grant when they are elected
to the board. In 1996, each of the Company's nonemployee directors received an
option to purchase 4,000 shares of the Company's common stock at a price equal
to the market price of the stock on the date the option was granted. The options
are exercisable one year following the date of grant and expire the earlier of
(a) three years following the director's retirement, resignation, death, or
termination as a director of the Company or (b) ten years after the grant date.
The DSOP was approved in February 1995 by Boise Cascade, the Company's sole
shareholder at that time.
3
<PAGE> 7
The Company also has deferred compensation plans for nonemployee directors.
The initial plan, adopted in February 1995, allowed each eligible director to
defer a portion of his cash compensation earned between February 14, 1995, and
December 31, 1995. In mid-1995, a new plan was adopted, similar to the initial
plan, which allows each nonemployee director to defer cash compensation earned
between January 1, 1996, and December 31, 2000.
Under these plans, nonemployee directors may defer from a minimum of $5,000
to a maximum of 100% of their cash compensation in a calendar year. Interest
accrues on deferred compensation at a rate equal to 130% of Moody's Composite
Average of Yields on Corporate Bonds. The initial plan also provides a minimum
death benefit equal to 1.5 times a participant's total deferrals for the period
February 14, 1995, through December 31, 1995. Benefits under these plans are not
funded and are paid out of the Company's general assets. Participants in the
program are unsecured general creditors of the Company with respect to these
benefits. As of December 31, 1996, all three eligible directors were
participating in the deferred compensation plans.
During 1995, the Company entered into a number of transactions with Boise
Cascade which are described under "Related Party Transactions." None of the
transactions constitutes compensation for Messrs. Crumley, Harad, or Reynolds.
2. RATIFICATION OF APPOINTMENT OF AUDITORS
Subject to shareholder ratification, the board of directors has appointed
the public accounting firm of Arthur Andersen LLP as the Company's independent
auditors for 1997. 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 of the Company's common stock
represented by properly executed proxies will be voted "FOR" the ratification of
the appointment of Arthur Andersen LLP as auditors for 1997.
The Board of Directors Unanimously Recommends a Vote "FOR" Ratification
of the Appointment of Arthur Andersen LLP as Auditors for 1997.
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.
4
<PAGE> 8
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, 1996, were as follows:
OWNERSHIP OF COMPANY STOCK
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENT
NAME OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
DIRECTORS(1)
John B. Carley............................................................... 12,000 *
James G. Connelly III........................................................ 9,000 *
Theodore Crumley............................................................. 1,000 *
Peter G. Danis Jr............................................................ 243,800(2) *
George J. Harad.............................................................. 2,000 *
A. William Reynolds.......................................................... 28,000 *
OTHER NAMED EXECUTIVES
Richard L. Black............................................................. 67,294(2) *
Christopher C. Milliken...................................................... 74,051(2) *
Carol B. Moerdyk............................................................. 79,400(2) *
Lawrence E. Beeson........................................................... 57,286(2) *
All directors, nominees for director,
and executive officers as a group(1)(2).................................... 663,709 1.04%
</TABLE>
* Less than 1% of class
- --------------------------------------------------------------------------------
(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: Messrs. Carley, 8,000 shares; Connelly, 8,000 shares; Reynolds,
8,000 shares; and directors as a group, 24,000 shares.
(2) 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 Savings and Supplemental Retirement Plan ("SSRP"), a
defined contribution plan qualified under Section 401(a) of the Internal
Revenue Code. The following table indicates the nature of each executive's
stock ownership.
<TABLE>
<CAPTION>
Common Unexercised SSRP
Shares Option (Common
Owned Shares Stock)
------- ----------- ----------
<S> <C> <C> <C>
Peter G. Danis Jr......................................... 22,000 221,800 0
Richard L. Black.......................................... 1,494 65,800 0
Christopher C. Milliken................................... 8,400 60,400 5,251
Carol B. Moerdyk.......................................... 5,000 74,400 0
Lawrence E. Beeson........................................ 1,250 55,600 436
All executive officers as a group......................... 42,624 562,800 6,285
</TABLE>
5
<PAGE> 9
On December 31, 1996, the Company's directors, nominees for director, and
executive officers beneficially owned the indicated number of shares of Boise
Cascade's common and preferred stock:
OWNERSHIP OF BOISE CASCADE CORPORATION STOCK
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TOTAL
COMMON UNEXERCISED SSRP SHARES ESOP
SHARES OPTION (COMMON COMMON (PREFERRED
NAME OF BENEFICIAL OWNER OWNED SHARES STOCK) STOCK STOCK)(2)
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
DIRECTORS
John Carley.................................... 3,000 0 0 3,000 0
Theodore Crumley............................... 1,180 88,283 7,910 97,373 437
Peter G. Danis Jr.............................. 1,740 92,017 3,951 97,708 404
George J. Harad................................ 3,050 561,650 7,786 572,486 (1) 637
A. William Reynolds............................ 10,000 9,710 0 19,710 0
OTHER NAMED EXECUTIVES
Richard L. Black............................... 0 13,200 0 13,200 0
Christopher C. Milliken........................ 0 2,425 0 2,425 788
Carol B. Moerdyk............................... 0 48,533 41 48,574 230
All directors, nominees for director,
and executive officers as a group............ 20,984 965,984 25,332 1,012,300 (1) 5,312
</TABLE>
- --------------------------------------------------------------------------------
(1) Mr. Harad beneficially owns about 1.1% of Boise Cascade's common stock. All
of the Company's executive officers, directors, or nominees for director (as
a group) beneficially own 1.9% of Boise Cascade's common stock.
(2) The Company's executive officers, directors, or nominees for director
(individually or as a group) do not own more than 1% of any series of Boise
Cascade's preferred stock.
EXECUTIVE COMPENSATION
The 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 1996.
COMPENSATION COMMITTEE REPORT
The Company is committed to providing competitive total compensation 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.
Compensation for all the Company's employees, including its executive
officers, is based on each employee's job responsibilities and on his or her
individual performance over time. In order to ensure that compensation levels
remain competitive in light of the compensation program objectives, the Company
subscribes to various reports on executive compensation and collects information
about the compensation practices of seven other companies within the office
products distribution industry. (All of these companies are included in the
Industry Comparables Index included in the performance graph following this
report.) The companies within the office products distribution industry used for
this purpose are selected primarily because comparable levels of responsibility
can be identified for executives within these companies. The Company also
collects information regarding compensation practices of approximately 107
distribution and retail companies. Collectively, these office products
distribution, general distribution, and retail companies are referred to as
"peer group" companies in this report. In addition to the compensation
information regarding peer group companies, the Company and the Compensation
Committee utilize information regarding executive compensation programs provided
by human resource consulting firms, including, in 1996, Hewitt Associates and
Management Compensation Services.
The Company's executive compensation program has four principal components:
base salary, annual variable incentive compensation, stock options, and other
compensation programs. The committee believes these components collectively
provide competitive compensation and form an appropriate relationship between an
executive's compensation, the executive's performance, and the Company's
performance. The Company's executive compensation plans also reflect the
committee's intent that compensation paid to executive officers will qualify for
federal income tax deduction by the Company.
6
<PAGE> 10
However, the committee recognizes that an element of subjective judgment is
inherent in executive compensation decisions and reserves the authority to make
compensation payments that may not necessarily satisfy federal tax law
requirements regarding deductibility.
During 1996, compensation for executive officers and key managers was
directly linked to the Company's 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.
BASE SALARY. A salary guideline is established for each salaried position
in the Company, including each executive officer position. The midpoint of each
salary guideline is generally equal to the average salary adjusted for company
size (sales) of equivalent positions at the peer group companies. The committee
determines each executive officer's base salary by reviewing his or her
sustained job performance over time, based on individual performance and
performance of the business or staff unit over which the executive officer
exercises responsibility. Business unit performance is assessed against such
measures as economic value added ("EVA"(R)), return on total capital,
achievement of sales or operating targets, effectiveness of cost-containment
measures, progress toward implementation of Total Quality process improvements,
and other factors relevant to each executive officer's position (such as staff
functional objectives to support business goals). The relative weight attributed
to each factor, with respect to each executive officer, is an inherently
subjective judgment.
ANNUAL VARIABLE INCENTIVE COMPENSATION. The Compensation Committee
establishes objective performance criteria for the Company's annual executive
officer variable incentive compensation program, or pay at risk. This program is
applicable to about 100 of the Company's key managers, including all executive
officers. The plan covering executive officers is administered by the
Compensation Committee. The committee has established a target payout for the
chief executive officer which, over time, should average approximately 60% of
the chief executive officer's base salary, assuming satisfactory Company
performance.
For 1996, the criteria for the executive officer plan (including the chief
executive officer) specified percentages of the participants' compensation to be
paid as additional cash compensation based on improvements in the Company's EVA.
Economic value added is determined by calculating the Company's income from
operations and subtracting a cost of capital charge. The cost of capital charge
is intended to represent an estimated average of the Company's weighted pretax
cost of capital. The actual payout under this plan, if any, will vary from year
to year, depending on the Company's financial performance during each year.
Target payout amounts for executive officers also vary depending on each
officer's level of responsibility and competitive compensation practices.
For the chief executive officer, payment under the 1996 program equaled
123.6% of base salary and is reported in the Summary Compensation Table. Amounts
paid under the variable incentive program are reflected in the Summary
Compensation Table.
STOCK OPTIONS. The Company's long-term incentive compensation for
executive officers and other key managers is provided through grants of stock
options. The Company's shareholders have approved the Key Executive Stock Option
Plan, which is administered by the Compensation Committee of the board of
directors. The number of stock options granted is determined by a competitive
compensation analysis and consultants' recommendations and is based on each
individual's salary guideline and responsibility. The committee may also
consider the number and exercise price of options granted to individuals in the
past. Corporate or business unit measures are not used by the committee in
determining the size of individual option grants. 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, except that initial grants made in 1995 were made with an
exercise price equal to the initial public offering price of the Company's
common stock.
During 1996, stock options were granted to the Company's executive officers
and other participating employees. Mr. Danis received a grant of an option to
purchase 87,000 shares of the Company's common stock. In determining the number
of shares to include in Mr. Danis' grant, the committee considered information
about stock option grants to chairmen and chief executive officers of the peer
group companies, including the number of shares granted to other chief executive
officers and the value of those options, as well as the size of grants offered
to the Company's other executive officers.
7
<PAGE> 11
The stock option plan limits the number of shares that can be issued to any
individual over the life of the plan to 20% of the total number of shares
authorized by shareholders for issuance under the plan. This provision reflects
the committee's view that the stock option plan is intended to provide long-term
incentive compensation to a relatively broad spectrum of the Company's
executives.
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, as
described more fully in the footnotes to the Summary Compensation Table and
under the heading "Other Benefit Plans" in this proxy statement. Each of these
plans or programs is an integral part of the Company's overall compensation
program, which is designed to provide competitive compensation, to effectively
motivate superior long-term job performance, and to enable the Company to
continue to attract and retain executives with the abilities to build and manage
the Company into the future.
COMPENSATION OF CHIEF EXECUTIVE OFFICER. For 1996, the committee reviewed
the criteria discussed under "Base Salary" above and established the chief
executive officer's base salary. In 1996, the committee set Mr. Danis' base
salary at $432,000 per year. This reflects Mr. Danis' 29 years of combined
experience with the Company and Boise Cascade, his responsibilities as chief
executive officer, and his role in the Company's strategic growth,
cost-effectiveness programs, and Total Quality evolution. This salary rate is
approximately 0.7% above the midpoint of the designated salary guideline
($429,000) for the Company's chief executive officer. Mr. Danis also received
payments under the Company's incentive compensation plan, as previously
described.
COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS.
A. William Reynolds, Chairman
John B. Carley
James G. Connelly III
8
<PAGE> 12
PERFORMANCE GRAPH
The following graph provides a quarterly comparison of cumulative total
shareholder return from April 7, 1995 (the date that the Company's common stock
began trading on the New York Stock Exchange following its initial public
offering), through December 31, 1996, for the Company, the Standard & Poor's 500
index, and a selected group of office products companies including BT Office
Products, Corporate Express, Office Depot, OfficeMax, Staples, U.S. Office
Products Company, and Viking Office Products. The graph plots the growth in
value of an initial $100 investment over the indicated time period, assuming the
reinvestment of dividends, if any.
<TABLE>
<CAPTION>
Boise Cascade
Measurement Period Office Products Industry
(Fiscal Year Covered) Corporation Comparables Index* S&P 500 Index
<S> <C> <C> <C>
4/7/95 100 100 100
6/95 89 114 108
9/95 111 136 117
12/95 171 124 124
3/96 262 141 130
6/96 277 152 136
9/96 140 153 140
12/96 166 124 152
</TABLE>
<TABLE>
<CAPTION>
BASE
PERIOD RETURN RETURN RETURN RETURN RETURN RETURN RETURN
COMPANY/INDEX NAME 4/7/95 6/95 9/95 12/95 3/96 6/96 9/96 12/96
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Boise Cascade Office Products
Corporation $100 $ 89 $111 $171 $262 $277 $140 $166
Industry Comparables Index* 100 114 136 124 141 152 153 124
S&P 500 Index 100 108 117 124 130 136 140 152
* Industry Comparables Index includes BT Office Products, Corporate Express, Office Depot, OfficeMax, Staples, U.S. Office
Products Company, and Viking Office Products.
</TABLE>
9
<PAGE> 13
COMPENSATION TABLES
The individuals named in the following tables include the Company's chief
executive officer and the four, other, most highly compensated executive
officers of the Company during 1996.
The following table describes compensation earned by the named individuals
during each of the last two years. Because the Company first became publicly
held in April 1995, the compensation figures also include amounts paid to the
individuals during the period from January through March 1995 when the Company
was operating as a division of Boise Cascade.
SUMMARY COMPENSATION TABLE
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
ANNUAL COMPENSATION ------------
-------------------------------------- SECURITIES
OTHER UNDERLYING
ANNUAL OPTIONS/ ALL OTHER
SALARY($) BONUS($) COMPENSATION($) SARS(#) COMPENSATION($)
NAME AND PRINCIPAL POSITION YEAR (2) (3) (4) (5) (6)
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Peter G. Danis Jr., 1996 $422,100 $533,952 $ 0 87,000 $56,935
President and Chief 1995 385,800 398,762 839 134,800 49,684
Executive Officer(1)
Richard L. Black, 1996 209,853 171,399 0 32,000 14,483
President, Reliable Corporation 1995 192,213 157,054 0 33,800 6,608
Christopher C. Milliken, 1996 207,522 199,331 0 32,000 16,228
Senior Vice President, 1995 182,505 158,094 0 42,400 14,444
Operations(1)
Carol B. Moerdyk, 1996 202,257 192,823 0 32,000 24,123
Senior Vice President and 1995 182,067 158,094 0 42,400 22,838
Chief Financial Officer and
Treasurer(1)
Lawrence E. Beeson, 1996 188,760 136,996 0 13,200 11,529
Vice President, Marketing 1995 138,762 128,192 28,318 42,400 5,855
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Mr. Danis is also executive vice president and general manager, Office
Products Distribution, Boise Cascade Corporation. Mr. Milliken is also vice
president, operations, Office Products Distribution, Boise Cascade
Corporation. Ms. Moerdyk is also vice president, finance, Office Products
Distribution, Boise Cascade Corporation.
(2) Includes amounts deferred under the SSRP, Key Executive Deferred
Compensation Plan, and 1995 Executive Officer Deferred Compensation Plan.
Mr. Beeson commenced his employment with the Company on April 1, 1995. His
annual salary for 1995 was approximately $185,000.
(3) Payments, if any, under the Company's variable incentive compensation
program. See "Executive Compensation -- Compensation Committee
Report -- Annual Variable Incentive Compensation."
(4) 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 1995, Mr. Beeson received a moving expense
reimbursement of $28,318. The cost incurred by the Company during these
years for all the various perquisites provided to each of the named
executive officers, except for Mr. Beeson for 1995, is not included in this
column, because the amount did not exceed the lesser of $50,000 or 10% of
the executive's compensation during each year.
(5) Grants under the Company's Key Executive Stock Option Plan.
(6) Amounts disclosed in this column include the following:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMPANY MATCHING ACCRUALS OF ALLOCATIONS TO COMPANY-
CONTRIBUTIONS TO ABOVE-MARKET BOISE CASCADE PAID PORTION
THE DEFERRED INTEREST ON CORPORATION OF EXECUTIVE
COMPENSATION OR DEFERRED EMPLOYEE OFFICER LIFE
SSRP PLANS COMPENSATION PLAN STOCK OWNERSHIP INSURANCE
YEAR ($)(*) BALANCES ($) PLAN ($) PROGRAMS ($)
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Peter G. Danis Jr. .......... 1996 $ 24,626 $ 28,376 $ 0 $ 3,933
1995 21,166 22,336 2,000 4,182
Richard L. Black............. 1996 11,007 2,649 0 827
1995 6,189 419 0 0
Christopher C. Milliken...... 1996 10,968 2,966 0 2,294
1995 9,294 1,562 1,820 1,768
Carol B. Moerdyk............. 1996 10,811 5,356 0 7,956
1995 9,735 3,730 1,450 7,923
Lawrence E. Beeson........... 1996 9,509 1,221 0 799
1995 5,180 87 70 518
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
(*) The Company's Executive Deferred Compensation Plan is an unfunded plan
pursuant to which key executives of the Company, including executive
officers, could irrevocably elect to defer receipt of a portion (6% to 20%
for executive officers) of their 1995 annual base salary until termination
of employment or beyond. The Company's 1995 Executive Officer Deferred
Compensation Plan is an unfunded plan pursuant to which executive officers
may irrevocably elect to defer receipt of a portion (6% to 20%) of their
base salary until termination of employment or beyond. Amounts so deferred
are generally credited with imputed interest at a rate equal to 130% of
Moody's Composite Average of Yields on Corporate Bonds. The SSRP is a
profit-sharing plan qualified under Section 401(a) of the Internal Revenue
Code which contains a cash or deferred arrangement meeting the requirements
of Section 401(k) of the Code.
10
<PAGE> 14
Stock Options. The following table provides detailed information regarding
option grants under the Key Executive Stock Option Plan ("KESOP") during 1996 to
the five executives named in the Summary Compensation Table as well as to all
executive officers as a group and nonofficer employees as a group:
OPTION/SAR GRANTS IN 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
--------------------------------------------------------
NUMBER OF
SECURITIES PERCENT OF GRANT DATE VALUE
UNDERLYING TOTAL OPTIONS/ EXERCISE -----------------
OPTIONS/SARS SARS GRANTED TO OR BASE GRANT DATE
GRANTED EMPLOYEES IN PRICE EXPIRATION PRESENT VALUE
NAME (#) FISCAL YEAR ($/SH)(1) DATE ($)(2)
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Peter G. Danis Jr..................... 87,000 17.4% $ 25.50 1/31/06 $ 794,310
Richard L. Black...................... 32,000 6.4 25.50 1/31/06 292,160
Christopher C. Milliken............... 32,000 6.4 25.50 1/31/06 292,160
Carol B. Moerdyk...................... 32,000 6.4 25.50 1/31/06 292,160
Lawrence E. Beeson.................... 13,200 2.6 25.50 1/31/06 120,516
Executive officers as a group......... 242,600 48.4 25.50 1/31/06 2,214,938
1/31/06-
Nonofficer employees as a group....... 258,600 51.6 25.57 2/12/06 2,366,190
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Under the KESOP, the exercise price must be the fair market value at the
date of grant. Options granted under this plan during 1996 were fully vested
when granted. However, except for specific situations, the options are
exercisable only as follows: one-third of each option is exercisable after
one year from the grant date, two-thirds of each option is exercisable after
two years from the grant date, and the entire option is exercisable after
three years from the grant date. Under the plan, no options may be granted
after February 20, 2005. The exercise price of options granted to nonofficer
employees as a group is the weighted average of options granted during 1996.
The expiration dates are 10 years after the grant date of each option grant.
(2) In accordance with the rules of the Securities and Exchange Commission,
"Grant Date Value" has been calculated using the Black-Scholes model of
option valuation. The model assumes: (a) risk-free interest rate of 5.2%,
(b) expected stock price volatility of 35%, (c) expected option term of 4.2
years, and (d) no dividends. Based on this model, the calculated values of
the options on January 30, 1996 (grant date), are $9.13 per share granted.
The following table sets forth information concerning the exercise of stock
options during 1996 and the year-end value of all unexercised stock options
granted under the KESOP to the five executives named in the Summary Compensation
Table.
AGGREGATE OPTION/SAR EXERCISES FOR 1996 AND 1996 OPTION/SAR VALUES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED
SECURITIES UNDERLYING IN-THE-MONEY
UNEXERCISED OPTIONS/ OPTIONS/SARS AT
SHARES ACQUIRED VALUE SARS AT 12/31/96(#) 12/31/96($)
NAME UPON EXERCISE REALIZED(1) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE(2)
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Peter G. Danis Jr.... 0 $ 0 44,934/176,866 $381,939/763,861
Richard L. Black..... 0 0 11,266/ 54,534 95,761/191,539
Christopher C.
Milliken........... 14,000 295,018 134/ 60,266 1,139/240,261
Carol B. Moerdyk..... 0 0 14,134/ 60,266 120,139/240,261
Lawrence E. Beeson... 0 0 14,134/ 41,466 120,139/240,261
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The "value realized" represents the difference between the option's exercise
price and the value of the Company's common stock at the time of exercise.
(2) This column indicates the aggregate amount, if any, by which the common
stock share price on December 31, 1996, $21.00, exceeded the options'
exercise price.
11
<PAGE> 15
OTHER BENEFIT PLANS
Pension Plan. The Company is a participating employer in the Boise Cascade
Corporation Pension Plan for Salaried Employees (the "Pension Plan"). The
estimated annual benefits payable upon retirement at age 65 under the Pension
Plan for specified levels of average remuneration and years of service are
described in the following table:
PENSION PLAN TABLE
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS OF SERVICE
-------------------------------------------------------------------------------------
REMUNERATION 5 10 15 20 25 30 35
- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
$175,000 $10,938 $ 21,875 $ 32,813 $ 43,750 $ 54,688 $ 65,625 $ 76,563
200,000 12,500 25,000 37,500 50,000 62,500 75,000 87,500
250,000 15,625 31,250 46,875 62,500 78,125 93,750 109,375
300,000 18,750 37,500 56,250 75,000 93,750 112,500 131,250
400,000 25,000 50,000 75,000 100,000 125,000 150,000 175,000
500,000 31,250 62,500 93,750 125,000 156,250 187,500 218,750
600,000 37,500 75,000 112,500 150,000 187,500 225,000 262,500
700,000 43,750 87,500 131,250 175,000 218,750 262,500 306,250
800,000 50,000 100,000 150,000 200,000 250,000 300,000 350,000
- ------------------------------------------------------------------------------------------------------
</TABLE>
The Pension Plan entitles each vested employee, including executive
officers, to an annual pension benefit at normal retirement equal to 1 1/4% of
the highest average of any five consecutive years of 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 Pension Plan as
of December 31, 1996, for each of the executive officers listed in the Summary
Compensation Table were as follows: Peter G. Danis Jr., 29; Richard L. Black, 3;
Christopher C. Milliken, 19; Carol B. Moerdyk, 16; and Lawrence E. Beeson, 2.
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,
1996, be based on the following compensation amounts, which represent the
highest average of each executive's annual compensation during any five
consecutive years for 1987 through 1996: Messrs. Danis, $498,151; Black,
$282,322; Milliken, $207,092; and Beeson, $259,963; and Ms. Moerdyk, $224,849.
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% 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 Pension Plan, 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 Pension Plan will also 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 (as defined in
the plan) of Boise Cascade, the ability of the plan sponsor 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 plan's 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.
12
<PAGE> 16
Early Retirement Plan. The Company also has an Early Retirement Plan for
certain 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 will
pay an eligible 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. Messrs. Danis
and Milliken and Ms. Moerdyk participate in this plan.
Executive Officer Agreements. The Company has entered into agreements with
Messrs. Danis and Milliken and Ms. Moerdyk who are also executive officers (but
not employees) of Boise Cascade. These agreements 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 (as
defined in the agreements) of Boise Cascade. Boise Cascade has entered into
similar agreements with all its executive officers. 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 these 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's majority
shareholder. The agreements provide severance benefits and 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 their
employment is terminated as a consequence of a change in control.
Under the agreements, benefits are paid if, after a change in control, the
Company terminates the executive other than for cause or disability (as defined
in the agreements) or if the executive terminates his or her employment
following certain actions (as specified in the agreements) by the Company which
would adversely affect the executive. These severance benefits include: (a) the
executive's salary through the termination date; (b) severance pay equal to
three times the executive's annual base salary and target incentive pay, reduced
by any severance pay which the executive receives in accordance with the
Company's Severance Pay Policy for Executive Officers, which is currently an
amount equal to the executive'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 (or substitute plan)
for the year preceding termination and an award under the Key Executive
Performance Plan (or substitute plan) equal to the greater of the executive's
target award 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 executive is participating prorated
through the month in which termination occurs; (e) acceleration of the
exerciseability of stock options held by the executive; (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 executive 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 executive to enforce his or her
rights or benefits under the agreements.
Under the agreements, the 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 (as defined in the agreements) of Boise Cascade. The aggregate
amount of payments and other benefits (not including legal fees, if any) which
would be paid pursuant to the executive officer agreements in excess of the plan
benefits to which the executive would be entitled absent the agreements, if
determined as of December 31, 1996, would be approximately as follows: Messrs.
Danis, $2,846,373, and Milliken, $1,472,312, and Ms. Moerdyk, $1,299,381
(payments which would be made subsequent to the termination date have been
discounted as of December 31, 1996, in accordance with the requirements of
Section 280G of the Internal Revenue Code, at a rate of 7.45%). Actual payments
at any future date, if made, may vary, depending in part upon the accruals under
the variable compensation plans and benefit plans.
13
<PAGE> 17
Each agreement continues in effect until December 31, 1999, 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 of the
executives subsequent to a change in control of the Company's majority
shareholder. 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's majority shareholder (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 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 1996 was $100,000.
RELATED PARTY TRANSACTIONS
Boise Cascade currently owns approximately 81% of the outstanding shares of
common stock of the Company. The Company supplies office products to Boise
Cascade and purchases certain paper and paper products from Boise Cascade.
During the year ended December 31, 1996, the Company's sales to Boise Cascade
were $2,047,000, and its purchases from Boise Cascade were $192,837,000. The
Company anticipates that its sales and purchases with Boise Cascade during 1997
will exceed those in 1996.
The Company and Boise Cascade have entered into a number of interrelated
agreements with respect to their ongoing relationships. Because of the
complexity of the various relationships between the Company and Boise Cascade,
there can be no assurance that each of the agreements, or the transactions
provided for therein, considered separately, has been or will be effected on
terms no less favorable to the Company than could have been obtained from
unaffiliated third parties. However, it has been the intention of the Company
and Boise Cascade that these agreements and transactions, taken as a whole,
should accommodate their respective interests in a manner that is fair to all
parties, while continuing certain mutually beneficial joint arrangements.
Additional or modified arrangements and transactions may be entered into by
the Company and Boise Cascade. While any such future arrangements and
transactions are expected to be determined through negotiation between them,
there can be no assurance that conflicts of interest will not occur. Although
the Company has not adopted any formal procedures designed to assure that
conflicts of interest will not occur, the Company intends to seek the approval
of its independent directors for any agreement which its management or any
independent director of the Company believes to be of material importance to the
Company and to involve a significant conflict of interest with Boise Cascade.
The following is a summary of certain arrangements and transactions between
the Company and Boise Cascade or its affiliates.
14
<PAGE> 18
Paper Sales Agreement. The majority of the purchases from Boise Cascade
are pursuant to a Paper Sales Agreement whereby Boise Cascade sells the Company
cutsize paper, including copier and fax paper. The prices paid for this paper by
the Company are based upon a formula meant to approximate prevailing market
prices. The agreement has an initial term of 20 years, commencing April 1, 1995.
It will be automatically renewed for five-year periods, subject to certain
termination rights under specific circumstances.
Administrative Services Agreement. The Company and Boise Cascade also have
an agreement under which Boise Cascade provides various services to the Company.
These services include, among others, financial reporting, cash management,
human resources services, legal and corporate secretarial functions, internal
audit, benefits administration, transfer agent functions, and insurance. These
services are provided for varying periods, from one to five years, and are
subject to renewal or termination from time to time. The rates charged for these
services are consistent with amounts that have been charged to this business by
Boise Cascade in the past and reflect a reasonable approximation of the cost to
Boise Cascade of providing such services to the Company. During 1996, the fees
paid to Boise Cascade under this agreement were $2,362,000.
Tax Matters Agreement. The Company and Boise Cascade have also entered
into an agreement which governs the allocation between the parties of state and
federal tax liabilities and obligations. Since April 1, 1995, the Company has
been responsible for all tax liabilities incurred by it. Boise Cascade has the
obligation to provide tax administration for the Company subject to the
Company's obligation to reimburse Boise Cascade for the administration costs.
Shareholder Agreement. The Company and Boise Cascade have an agreement
relating to certain rights which Boise Cascade has to purchase shares of voting
stock or securities convertible into voting stock which the Company may wish to
sell from time to time. In addition, this agreement gives Boise Cascade certain
registration rights (both demand and participation) for shares of the Company
which it holds.
INFORMATION AVAILABLE TO SHAREHOLDERS
The Company's 1996 Annual Report is being mailed to shareholders with this
proxy statement. Copies of the 1996 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 Investor Relations
Department, 800 West Bryn Mawr Avenue, Itasca, Illinois 60143-1594,
630/775-4228, or through the Company's home page on the Internet at
http://www.bcop.com. Financial statements are also on file with the Securities
and Exchange Commission, Washington, D.C., and with the New York Stock Exchange.
SHAREHOLDER PROPOSALS
Shareholder Proposals in Company's Proxy Statement. Shareholders wishing
to submit proposals for inclusion in the Company's proxy statement for the 1998
annual meeting of shareholders must submit their proposals for receipt by the
Company not later than November 11, 1997.
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 Restated Certificate of
Incorporation. 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 120 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.
15
<PAGE> 19
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 Restated Certificate of Incorporation.
Shareholder Nominations for Directors. In accordance with the Company's
Restated Certificate of Incorporation, 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 60
days or more than 120 days prior to any meeting of shareholders called for the
election of directors, provided, however, that if less than 65 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 record 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 class and 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 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, 1996, as
to each person or entity known to the Company to be the beneficial owner of more
than 5% of any class of the Company's voting securities:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES PERCENT
NAME AND ADDRESS BENEFICIALLY OF
TITLE OF CLASS OF BENEFICIAL OWNER OWNED CLASS
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Common Stock, Boise Cascade Corporation 50,750,000(1) 81%
$.01 Par Value 1111 W. Jefferson Street
P.O. Box 50
Boise, ID 83728
</TABLE>
- --------------------------------------------------------------------------------
(1) Boise Cascade reported on a Schedule 13G that it was the beneficial owner of
50,750,000 shares of the Company's common stock. This report indicates that
Boise Cascade has sole voting and investment power for all 50,750,000
shares.
PROXIES AND VOTING AT THE MEETING
As of February 27, 1997, the record date for the determination of
shareholders entitled to vote at the meeting, 62,888,440 shares of the Company's
common stock were outstanding. Each holder of record of the outstanding shares
of common stock on the record date is entitled to one vote for each share held
on every matter submitted to the meeting.
Participants in the Boise Cascade Office Products Corporation Common Stock
Fund of Boise Cascade's Savings and Supplemental Retirement Plan, Qualified
Employee Savings Trust (QUEST), and Retirement Savings Plan (RSP) are entitled
to instruct the Plans' trustee how to vote the shares held in the trust. Shares
for which voting instructions are not provided by participants will be voted by
the trustee in proportion to the instructions received from participants.
16
<PAGE> 20
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 $4,500, 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 11, 1997
LOGO
This Notice and Proxy Statement is printed on recycled-content
ASPEN(TM) Lightweight Opaque paper produced by Boise Cascade
Corporation's papermakers at its St. Helens, Oregon, mill.
This paper is made with no less than 10% postconsumer fiber.
<PAGE> 21
[MAP DESCRIBING LOCATION OF BOISE CASCADE OFFICE PRODUCTS CORPORATION]
<PAGE> 22
[LOGO] BOISE CASCADE OFFICE PRODUCTS CORPORATION 800 W. Bryn Mawr Avenue
PROXY ANNUAL MEETING OF SHAREHOLDERS, APRIL 22, 1997 Itasca, IL 60143-1594
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned appoints George J. Harad, Peter G. Danis Jr., 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 Office
Products Corporation stock beneficially owned by the undersigned on February 27,
1997, at the annual meeting of shareholders to be held on April 22, 1997, 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.
<TABLE>
<S> <C> <C>
1. Election of Directors: James G. Connelly III Peter G. Danis Jr.
[ ] FOR all nominees [ ] WITHHOLD AUTHORITY WITHHOLD AUTHORITY for the following nominee(s) only:
(except as may be for all nominees write name(s):_______________________________________
indicated) _______________________________________
</TABLE>
2. Appointment of Arthur Andersen LLP as independent accountants for 1997.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
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 beneficial holdings of Boise Cascade
Office Products Corporation shares.
Please sign exactly as the 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 2400, Pittsburgh, PA 15230
<PAGE> 23
[LOGO]
BOISE CASCADE
OFFICE PRODUCTS CORPORATION
Dear Shareholder:
The Boise Cascade Office Products Corporation annual meeting of shareholders
will be held in the Company's corporate headquarters building in Itasca,
Illinois, at 10 a.m., Central daylight time, April 22, 1997.
Shareholders of record on February 27, 1997, 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 in the BCOP Employee Stock Purchase Plan)
and as voting instructions (for Boise Cascade employee savings plan
participants). As "named fiduciaries," participants in the BCOP stock funds of
the employee savings plans are entitled to provide voting instructions to the
Trustee, using this card, for shares in the BCOP stock fund of the savings plan
in which they participate.
Individual proxy/voting instruction cards will be received and tabulated by
Corporate Election Services, Inc., in Pittsburgh, Pennsylvania, an independent
tabulator.
Please indicate your voting preferences on the card, SIGN and DATE the card, and
return it to the independent tabulator in the envelope provided. EMPLOYEE
SAVINGS PLAN PARTICIPANTS' VOTING INSTRUCTIONS ARE COMPLETELY CONFIDENTIAL.
Thank you.
(fold and tear along perforation)
PROXY AND VOTING INSTRUCTION CARD BOISE CASCADE OFFICE PRODUCTS CORPORATION
ANNUAL MEETING OF SHAREHOLDERS
APRIL 22, 1997
The Board of Directors recommends a vote FOR all nominees listed below and FOR
proposal 2.
<TABLE>
<S> <C> <C>
1. Election of Directors: James G. Connelly III Peter G. Danis Jr.
[ ] FOR all nominees [ ] WITHHOLD AUTHORITY WITHHOLD AUTHORITY for the following nominee(s) only:
(except as may be for all nominees write name(s):_______________________________________
indicated) _______________________________________
</TABLE>
2. Appointment of Arthur Andersen LLP as independent accountants for 1997.
[ ] 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
(Instructions on Reverse Side)
<PAGE> 24
Printed on Boise Cascade Corporation's SUMMIT(R) TAG-X, 100# White,
which is made in St. Helens, Oregon.
PROXY AND VOTING INSTRUCTION CARD BOISE CASCADE OFFICE PRODUCTS CORPORATION
ANNUAL MEETING OF SHAREHOLDERS
APRIL 22, 1997
THIS PROXY AND THESE INSTRUCTIONS ARE SOLICITED ON BEHALF
OF THE BOARD OF DIRECTORS.
The undersigned appoints George J. Harad, Peter G. Danis Jr., 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 Office
Products Corporation stock held of record by the undersigned on February
27, 1997, at the annual meeting of shareholders to be held on April 22, 1997
and any adjournment thereof. The proxies are appointed with all the powers the
undersigned would possess if personally present to vote upon matters noted
herein, as well as with discretionary authority to vote upon such other matters
as may properly come before the meeting. This card also provides voting
instructions to the Trustee for shares subject to the undersigned's voting
instructions in employee savings plans.
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.
(To be SIGNED on other side)
