Proxy Statement


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 14A
(Rule 14a-101)
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BOISE INC.
 
(Name of Registrant as Specified in its Charter)
 
 
 
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
 
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Notice of
2012 Annual Shareholders' Meeting
and Proxy Statement




TABLE OF CONTENTS
Page No.
 
 
CHAIR'S LETTER TO SHAREHOLDERS
 
 
 
NOTICE OF 2012 ANNUAL SHAREHOLDERS' MEETING
 
 
 
 
 
 
In this section, you will find information about:
 
 
Ÿ
Internet availability of our proxy materials, annual reports on Form 10-K, and other reports and policies
 
 
Ÿ
Our record date and voting at our annual shareholders' meeting
 
 
Ÿ
Our proxy solicitation practices
 
 
Ÿ
What you can do if you wish to household annual meeting materials
 
 
Ÿ
How to submit a shareholder proposal for inclusion in next year's proxy statement
 
 
 
PROPOSALS TO BE VOTED ON
 
 
 
 
 
 
 
In this section, you will find information about:
 
 
Ÿ
Our Corporate Governance Guidelines
 
 
Ÿ
Our director independence standards
 
 
Ÿ
Board and committee matters, including communicating with our board, our board leadership structure, our board's role in our risk management processes, our risk analysis of employee compensation policies and practices, our board's practice of holding executive sessions, our board members' 2011 meeting attendance rates, and our committee responsibilities
 
 
Ÿ
Our director selection process, including suitability of candidates, our consideration of diversity in our nomination process, and shareholder nominations for our board of directors
 
 
Ÿ
Our board and committee evaluations process
 
 
Ÿ
Our Code of Ethics for our board of directors
 
 
 
In this section, you will find information about:
 
 
Ÿ
Our director compensation, including meeting attendance fees and equity awards
 
 
Ÿ
Our directors deferred compensation plan
 
 
Ÿ
Stock ownership guidelines for our directors
 
 
 
 
 
In this section, you will find information about our stock ownership guidelines and hedging policy for our directors and elected officers
 
 
 
 
 
 
 

i



 
 
EXECUTIVE COMPENSATION
 
 
 
 
In this section, you will find information about our executive compensation program, including:
 
 
Ÿ
An executive summary and other highlights
 
 
Ÿ
Our compensation philosophy
 
 
Ÿ
Data considerations and benchmarking and peer group data
 
 
Ÿ
Our compensation mix, including base pay, short- and long-term incentive awards, dividend equivalent awards, post-employment compensation, and employment and retirement benefits
 
 
Ÿ
Stock ownership guidelines for our elected officers
 
 
Ÿ
The roles of our executive compensation consultant and management in our executive compensation decisions
 
 
Ÿ
Tax considerations in our executive compensation decisions
 
 
Ÿ
Our executive compensation recovery policy
 
 
Risks associated with our compensation policies and practices
 
 
 
 
 
 
 
 
 
 
 
 
 
In this section, you will find information about our related party transactions and our policies and procedures for related-person transactions
 
 
 
 
In this section, you will find information about our policies and procedures for preapproval of audit and nonaudit services and fees we paid to KPMG
 
 
 
 

ii



CHAIR'S LETTER TO SHAREHOLDERS
Dear Fellow Shareholders:
This past year was our most successful since our inception. The goals we set last year were enhancement of shareholder return from operational excellence, growth when strategic opportunities were available at sensible prices, and disciplined allocation of capital. We achieved these goals.
We expanded our packaging business and improved our competitive position through the acquisitions of Tharco Packaging and Hexacomb, delivered record EBITDA, generated strong cash flow, and returned capital to shareholders through dividends and share repurchases. We delivered this performance while maintaining our sharp focus on our core values of safety and customer satisfaction.
While very pleased with our performance last year, we will continue, during 2012 and future years, to focus on producing a superior return on capital, generating value for our shareholders through high performing operations, targeted growth at reasonable prices, and disciplined allocation of capital.
Our declaration of a $0.48 per share dividend, paid March 21, 2012, is consistent with our commitment to producing outstanding shareholder return. This is the third consecutive year in which we have paid a special dividend. With this special dividend, we have returned $249 million in capital to shareholders through dividends and share repurchases during the 16 months from December 2010 through March 2012.
On behalf of your board of directors, I thank and congratulate Alexander Toeldte, our president and chief executive officer, our entire management team, and each of our approximately 5,400 Boise employees for outstanding operating performance and delivering value to our shareholders.
Cordially,
Carl A. Albert
Chair of the Board of Directors




BOISE INC.
NOTICE OF 2012 ANNUAL SHAREHOLDERS' MEETING
Time and Date:
9:00 a.m. Mountain Daylight Time
Wednesday, April 25, 2012
 
 
Place:
Boise Plaza Building
1-West Conference Room
1111 West Jefferson Street
Boise, Idaho 83702-5388
 
 
Record Date:
Friday, March 16, 2012
Please consider the issues presented in this proxy statement, and vote your shares as promptly as possible. For your convenience, a summary of the items to be voted on at the meeting follows.
Thank you.
By order of the board of directors,
Karen E. Gowland
Senior Vice President, General Counsel and Secretary




PROXY STATEMENT SUMMARY
This summary highlights information contained elsewhere in this proxy statement. This summary does not contain all of the information that you should consider, and you should read the entire proxy statement carefully before voting.
Meeting Agenda and Voting Matters
 
Board Vote
Recommendation
 
 
Election of three directors
FOR
EACH DIRECTOR
NOMINEE
 
 
Advisory approval of our executive compensation program
FOR
 
 
Ratification of the appointment of KPMG LLP as our independent registered public accounting firm for 2012
FOR
 
 
Transaction of other business properly presented at the meeting
 
Board Nominees
Our board of directors consists of three staggered classes of directors, designated as Class I, Class II, and Class III. The three members of Class I, Messrs. Albert, Lenz, and Weiss, are standing for election as directors at our 2012 annual shareholders' meeting, to hold office for three-year terms expiring in 2015. The following table provides summary information about each of these director nominees. During 2011, Messrs. Albert, Lenz, and Weiss attended 100%, 93%, and 100% of the board and committee meetings on which they served, respectively.
Name and Age
Director Since
Occupation
Independent
Committee Memberships
Other Public Company Boards
Executive
Audit
Compensation
Governance
Nominating
 
 
 
 
 
 
 
 
 
 
Carl A. Albert
Age - 70
2007
Board Chair & CEO
of Fairchild Venture Capital Corporation
X
X
(Chair)
X
X
X
X
(Chair)
Great Lakes
Dredge &
Dock
Corporation
 
 
 
 
 
 
 
 
 
 
Heinrich R. Lenz
Age - 56
2010
President & CEO
of Sun Chemical Corporation
X
 
X
X
 
 
None
 
 
 
 
 
 
 
 
 
 
Jason G. Weiss
Age - 42
2007
Managing Member & Sole Owner
of Terrapin Palisades Ventures, LLC
X
 
 
X
X
 
Great Lakes
Dredge &
Dock
Corporation
Executive Compensation Advisory Approval
We are asking shareholders to approve, on a nonbinding advisory basis, the overall executive compensation policies and procedures employed by us for our named executive officers. Our board of directors recommends a FOR vote because it believes our compensation policies and practices support our goal of aligning our officers' pay with company performance and, thus, shareholder interests.

1



Executive Compensation Elements
We target annual base pay at the 50th percentile of the market. We believe this enables us to effectively retain and recruit the talented officers we need to achieve strong financial and operational goals.
We provide at-risk pay opportunities linked to achievement of short- and long-term goals that benefit shareholders. These compensation elements are also structured so target payouts are set at the 50th percentile of the market. These short- and long-term incentives comprise a significant portion of each officer's total compensation opportunity, since they are designed to motivate and reward our officers for maximizing shareholder value.
Long-term performance is the most important measure of our success because we manage our operations and business affairs for the long-term benefit of our shareholders. For 2011, our named executive officers received long-term equity incentive compensation opportunities in a mixture of time-vesting restricted stock or restricted stock units, performance units, and stock options.
Our annual incentive compensation opportunities are tied to achievement of financial goals and individual contributions to the company or individual lines of business. Because we are a manufacturing company, we also link a small portion of at-risk annual short-term incentive pay to the achievement of safety goals.
We provide limited perquisites, including only those benefits that are consistent with competitive practice as necessary to attract and retain key executives.
Other Key Compensation Elements
We have an executive compensation recovery (clawback) policy.
We do not have single-trigger change in control agreements, and our executives' severance agreements do not contain gross-up provisions.
We have stock ownership guidelines for our directors and elected officers that require retention of shares until specific targets are met.
We froze our defined benefit pension plan in 2009. For those officers who had benefits under the Supplemental Pension Plan (SUPP) and/or Supplemental Early Retirement Plan (SERP), these were also frozen.
We eliminated the financial counseling allowance for our executive officers effective April 2011.
2011 Business Performance and Compensation Highlights
Our operating income was the highest since our inception as a public company nearly four years ago.
We achieved our best safety performance in our history.
We focused our investments on products driven by packaging demand, acquiring two new packaging-based businesses.
Through dividends and share repurchase programs, we returned $249 million in capital to shareholders during the 16 months from December 2010 through March 2012.
2011 Summary Compensation Table
The following Summary Compensation Table sets forth the 2011 compensation for each of our named executive officers as determined under Securities and Exchange Commission (SEC) rules, and highlights that a significant portion (stock awards, option awards, and non-equity incentive plan compensation) is considered “at risk.” The SEC's calculation of Total compensation includes several items driven by accounting and actuarial assumptions, which are not necessarily reflective of compensation actually realized by our named executive officers in 2011.

2



Named Executive Officer
and Principal Position
Salary
($)
Stock
Awards
($)
Option
Awards
($)
Non-Equity
Incentive Plan
Compensation
($)
Change in
Pension Value and
Nonqualified
Deferred
Compensation
Earnings
($)
All Other
Compensation
($)
Total
($) 
 
 
 
 
 
 
 
 
Alexander Toeldte
President &
Chief Executive Officer
$
803,654

$
1,484,349

$
561,429

$
1,032,718

$
1,738

$
15,552

$
3,899,440

 
 
 
 
 
 
 
 
Samuel K. Cotterell
Senior Vice President &
Chief Financial Officer
381,731

424,873

122,115

308,683

52,727

16,584

1,306,713

 
 
 
 
 
 
 
 
Robert A. Warren
Executive Vice President &
Chief Operating Officer
408,654

471,208

174,454

410,051

111,907

16,032

1,592,306

 
 
 
 
 
 
 
 
Karen E. Gowland
Senior Vice President,
General Counsel &
Secretary
353,654

257,218

90,397

284,630

238,273

47,211

1,271,383

 
 
 
 
 
 
 
 
Judith M. Lassa
Senior Vice President,
Paper & Specialty Products
353,654

260,108

90,397

283,093

239,492

36,239

1,262,983

Auditors
As a matter of good corporate governance, we are asking our shareholders to ratify the appointment of KPMG LLP as our independent auditor for 2012. The following table provides summary information about KPMG 's fees for services provided to us in 2011.
 
 
 
 
Audit Fees
$
1,985,000

 
Audit-Related Fees
4,000

 
Tax Fees

 
All Other Fees

 
Total
$
1,989,000

 
2013 Annual Meeting
According to SEC rules, to be considered for inclusion in next year's proxy statement, our corporate secretary must receive shareholder proposals at the address shown below not later than November 19, 2012.
Boise Inc.
Attention: Corporate Secretary
PO Box 990050
Boise, ID 83799-0050
Additionally, our Bylaws require that our corporate secretary must receive notice of any nominations for director or other business a shareholder proposes to bring before our next annual meeting not less than 120 nor more than 150 days prior to our 2013 annual shareholders' meeting.

3



SOLICITATION OF PROXIES AND VOTING
Internet Availability of Proxy Materials, Annual Reports on Form 10-K, and Other Reports and Policies
You may view a complete copy of our proxy statement and 2011 annual report on Form 10-K by visiting our website at www.boiseinc.com and selecting Investors and then Annual Meeting and Proxy Materials. We will begin mailing our proxy statement, 2011 annual report on Form 10-K, and a proxy card to shareholders of record on or about March 26, 2012.
You may view complete copies of all of our filings with the SEC, including annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, financial information, and other reports and policies, by visiting our website at www.boiseinc.com and selecting Investors and then SEC Filings.
Record Date and Voting at Our 2012 Annual Shareholders' Meeting
Shareholders owning our common stock at the close of business on Friday, March 16, 2012 (the Record Date) may vote at our 2012 annual shareholders' meeting. On the Record Date, 100,471,037 shares of our common stock were outstanding. Each share is entitled to one vote on each matter to be voted upon at our 2012 annual shareholders' meeting.
All valid proxies properly executed and received by us prior to our 2012 annual shareholders' meeting will be voted as you direct. If you do not specify how you want your shares voted, they will be voted:
FOR the election of the three director nominees;
FOR the advisory approval of our executive compensation program; and
FOR the ratification of the appointment of KPMG LLP as our independent registered public accounting firm for 2012.
Your shares will also be voted on any other matters presented for a vote at the meeting in accordance with the judgment of the persons acting under the proxies. You may revoke your proxy and change your vote at any time before our 2012 annual shareholders' meeting by submitting a written notice to our corporate secretary, by mailing a later-dated and properly executed proxy, or by voting in person at our 2012 annual shareholders' meeting.
We have appointed Continental Stock Transfer & Trust Company (Continental Stock) as our independent tabulator to receive and tabulate all votes cast at our 2012 annual shareholders' meeting. Continental Stock will determine whether a quorum is present.
We have appointed Cydni J. Waldner, of Waldner Law Office L.L.C., as our independent inspector of election to certify the vote results.
A quorum is necessary to hold a valid meeting. A quorum will exist if shareholders holding a majority of the shares of our stock issued and outstanding and entitled to vote at the meeting are present in person or by proxy. Abstentions and “broker nonvotes” will be treated as shares of stock that are present and entitled to vote for purposes of determining the presence of a quorum. A “broker nonvote” occurs when a broker does not have discretionary voting power for that particular item and has not received instructions from the beneficial owner. Brokers will NOT have discretionary power with respect to the election of our three director nominees or the advisory vote approving our executive compensation program. Brokers will have discretionary power with respect to the ratification of the appointment of KPMG LLP as our independent registered public accounting firm for 2012.
The three director nominees who receive the greatest number of votes will be elected as directors. Abstentions and broker nonvotes will have no effect on the outcome of this proposal.

4



The advisory vote approving our executive compensation program will be determined by the affirmative vote of a majority of shares present at the meeting. Abstentions will have the same effect as voting against this proposal. Broker nonvotes will have no effect on the outcome of this proposal. Although this advisory vote is nonbinding, the compensation committee and our board of directors will review the results of the vote. The compensation committee will consider our shareholders' preferences and take them into account in making future determinations concerning our executive compensation program.
The proposal to appoint KPMG LLP as our independent registered public accounting firm for 2012 will be ratified by the affirmative vote of a majority of shares present at the meeting. Abstentions will have the same effect as voting against this proposal. Broker nonvotes will have no effect on the outcome of this proposal.
Proxy Solicitation
Our board of directors is soliciting your proxy. We will not retain a proxy solicitor; however, our employees and directors may solicit proxies by mail, telephone, email, or in person. Our employees and directors will not receive additional compensation for these activities and the entire cost of this solicitation will be borne by us.
 
Householding of Annual Meeting Materials
Some banks, brokers, and other record holders may be participating in the practice of “householding” proxy statements and annual reports. This means that only one copy of our proxy statement and 2011 annual report on Form 10-K may have been sent to multiple shareholders in your household. We will promptly deliver a separate copy of these documents to you if you contact the Broadridge Householding Department at the following address:
Broadridge Householding Department
51 Mercedes Way
Edgewood, NY 11717
Toll-Free Number: 1-800-542-1061
If you want to receive separate copies of our proxy statements and annual reports on Form 10-K in the future, or if you are receiving multiple copies and would like to receive only one copy for your household, you should contact your bank, broker, or other record holder, or you may contact Broadridge at the address and phone number shown.
Shareholder Proposals for Inclusion in Next Year's Proxy Statement
According to SEC rules, to be considered for inclusion in next year's proxy statement, our corporate secretary must receive shareholder proposals at the address shown below not later than November 19, 2012.
Boise Inc.
Attention: Corporate Secretary
PO Box 990050
Boise, ID 83799-0050
Additionally, our Bylaws require that our corporate secretary must receive notice of any nominations for director or other business a shareholder proposes to bring before our next annual meeting not less than 120 nor more than 150 days prior to our 2013 annual shareholders' meeting.
Please refer to Article II, Section 4 of our Bylaws for an outline of the information a shareholder's notice must include regarding director nominees and other business to be brought before a shareholders' meeting.
You may view a complete copy of our Bylaws by visiting our website at www.boiseinc.com and selecting Investors, Corporate Governance, and then Bylaws.

5



PROPOSALS TO BE VOTED ON
Proposal No. 1 - Election of Directors
Our board of directors consists of three staggered classes of directors, designated as Class I, Class II, and Class III. The director members of, and the term expiration dates for, each class are:
Class
Director Members
Term Expiration Date
 
 
 
I
Carl A. Albert
Date of 2012 annual shareholders' meeting
 
Heinrich R. Lenz
 
 
Jason G. Weiss
 
 
 
 
II
Jonathan W. Berger
Date of 2013 annual shareholders' meeting
 
Jack Goldman
 
 
 
 
III
Nathan D. Leight
Date of 2014 annual shareholders' meeting
 
Alexander Toeldte
 
At each succeeding annual shareholders' meeting, successors to the class of directors whose term expires at that annual meeting will be elected for a three-year term. Each director will hold office for the term to which he or she is elected and until his or her successor is duly elected and qualified or until his or her earlier death, disqualification, resignation, or removal.
Nominees
Three nominees, Messrs. Albert, Lenz, and Weiss, are standing for election as directors at our 2012 annual shareholders' meeting to hold office for three-year terms expiring in 2015.
Your shares will be voted according to your instructions. If you return your signed proxy card but do not provide voting instructions, your shares will be voted FOR the election of the three director nominees. To be elected to our board of directors, the director nominees must receive a plurality of the votes cast by our shareholders present in person or by proxy and entitled to vote. If a director nominee who is a continuing director is not reelected, he will remain in office until a successor is elected or until his earlier resignation or removal.
The three director nominees have confirmed their availability for election. If any of the director nominees becomes unavailable to serve as a director for any reason prior to our 2012 annual shareholders' meeting, our board of directors may substitute another person as a director nominee. In that case, your shares will be voted FOR the substitute director nominee.
Additional information follows for the three director nominees and the directors continuing in office, particularly concerning their business experience and qualifications, as well as attributes and skills that led our board to conclude that person should serve as a director of the company. During the past ten years, none of our directors has been a party to any legal or bankruptcy proceedings reportable under SEC rules.
Our board of directors unanimously recommends shareholders vote FOR Messrs. Albert, Lenz, and Weiss, our three director nominees.

6



Carl A. Albert, 70 - Nominee
Mr. Albert serves as our board chair. He has served as a director of the company since its inception in 2007.
Business Experience
Since April 2000, Mr. Albert has served as the chair of the board and chief executive officer of Fairchild Venture Capital Corporation, a private investment firm. From 1990 to 2000, he was the majority owner, chair of the board, and chief executive officer of Fairchild Aerospace Corporation and Fairchild Dornier Corporation and chair of the supervisory board of Dornier Luftfahrt, GmbH, all aircraft manufacturing companies. From 1989 to 1990, Mr. Albert was a private investor. After providing start-up venture capital, he served from 1981 to 1988 as chair of the board and chief executive officer of Wings West Airlines, a regional airline that was acquired by AMR Corporation, parent of American Airlines, in 1988. Following the acquisition, Mr. Albert served as president until 1989. Prior to this, he was an attorney practicing business, real estate, and corporate law.
Education
B.A., University of California at Los Angeles
L.L.B., University of California at Los Angeles, School of Law
Current public company directorships, other than Boise Inc.
Great Lakes Dredge & Dock Corporation - provider of global dredging services and domestic commercial and industrial demolition services (Mr. Albert serves as chair of Great Lakes' audit committee and a member of its compensation committee)
Prior directorships held during past five years at any public company or registered investment company
None
Attributes and skills that led our board to conclude Mr. Albert should serve as a director of the company
Extensive experience as a former chief executive officer and board chair of a capital-intensive industry
International business experience
Legal expertise

7



Jonathan W. Berger, 53
Mr. Berger has served as a director of the company since its inception in 2007. Mr. Berger is the cousin of Nathan D. Leight, one of our directors.
Business Experience
Since September 2010, Mr. Berger has been the chief executive officer of Great Lakes Dredge & Dock Corporation, a provider of global dredging services and domestic commercial and industrial demolition services. Prior to that time, and since August 2009, Mr. Berger had been the managing partner of Tellurian Partners, LLC, a consulting and financial advisory business. From December 2001 to July 2009, Mr. Berger was associated with Navigant Consulting, Inc., an NYSE-listed consulting firm, and was the managing director and co-leader of that firm's corporate finance practice. He was also president of Navigant Capital Advisors, L.L.C., Navigant Consulting, Inc.'s registered broker-dealer, from October 2003 to July 2009. From 2000 to 2001, Mr. Berger was president of DotPlanet.com, an Internet services provider. From 1983 to 1999, Mr. Berger was employed by KPMG LLP, an independent public accounting firm, and served as a partner from 1991 to 1999, where he led the corporate finance practice for three of those years.
Education
B.S., Cornell University
M.B.A., Emory University
Current public company directorships, other than Boise Inc.
Great Lakes Dredge & Dock Corporation - provider of global dredging services and domestic commercial and industrial demolition services
Prior directorships held during past five years at any public company or registered investment company
None
Attributes and skills that led our board to conclude Mr. Berger should serve as a director of the company
Extensive accounting background, with over 25 years of accounting experience
Certified public accountant
Holds a masters of business administration

8



Jack Goldman, 71
Mr. Goldman has served as a director of the company since February 2008.
Business Experience
From January 2006 to December 2009, Mr. Goldman was a senior attorney at the law firm of Theodora & Oringher PC in Los Angeles and, in January 2010, became of counsel to the firm. From May 2002 to January 2006, Mr. Goldman was of counsel to the law firm of Miller & Holguin, at which time it merged with his current firm. Mr. Goldman was a partner in the law firm of Arter & Hadden from 1994 to 2000 and thereafter was of counsel to that firm until 2002. During the period April 2001 to December 2007, Mr. Goldman also served as chair and chief executive officer of Business Protection Systems International, Inc., a privately held provider of proprietary software solutions for business continuity and risk management programs for business and public sector clients. He continued to serve as a director through March 2009 when he was elected again as board chair, the position he currently holds. From 1989 to 1994, he was a partner in the law firm of Keck, Mahin & Cate. Mr. Goldman engaged in private practice through his own law firm from 1980 to 1989. Mr. Goldman was general counsel of Superscope, Inc., a multinational manufacturer and distributor of brand name consumer audio products from 1975 to 1980. While at Superscope, he also served as treasurer and vice president of administration. Mr. Goldman was admitted to practice law in California in 1966 and engaged in private practice until 1975, when he became employed by Superscope.
Education
B.A., Lafayette College
J.D., University of California at Los Angeles, School of Law
Current public company directorships, other than Boise Inc.
None
Prior directorships held during past five years at any public company or registered investment company
None
Attributes and skills that led our board to conclude Mr. Goldman should serve as a director of the company
Expertise in business continuity and risk management programs
Extensive experience with corporate governance matters
Legal expertise

9



Nathan D. Leight, 52
Mr. Leight has served as a director of the company since its inception in 2007. Mr. Leight is the cousin of Jonathan W. Berger, one of our directors.
Business Experience
Mr. Leight has been the senior managing member of Terrapin Partners, LLC since 1998 and the managing member and chief investment officer of Terrapin Asset Management, LLC since 2002. Terrapin Partners, LLC is a private investment management firm focused on private equity investing. Terrapin Asset Management, LLC manages alternative investment vehicles, including multi-manager hedge fund portfolios. Mr. Leight was chair of the board of Aldabra Acquisition Corporation, a publicly traded blank check company, from its inception in 2004 until it merged with Great Lakes Dredge & Dock Corporation in 2006. Previously, Mr. Leight served as the chief executive officer of e-STEEL L.L.C., an Internet-based steel market place, and the chief executive officer of VastVideo, Inc., a special interest video content and technology provider.
Education
A.B., Harvard College (cum laude)
Current public company directorships, other than Boise Inc.
Great Lakes Dredge & Dock Corporation - provider of global dredging services and domestic commercial and industrial demolition services (Mr. Leight serves as Great Lakes' board chair and chair of its nominating and corporate governance committee)
Prior directorships held during past five years at any public company or registered investment company
TradeStation Group, Inc. - online brokerage firm serving active trader and certain institutional trader markets
Attributes and skills that led our board to conclude Mr. Leight should serve as a director of the company
Over 25 years of experience in asset and hedge fund management, venture capital, and private equity investing
Expertise in capital markets

10



Heinrich R. Lenz, 56 - Nominee
Mr. Lenz has served as a director of the company since February 2010.
Business Experience
Mr. Lenz has served as president and chief executive officer of Sun Chemical Corporation, a producer of printing inks and pigments, since January 2008. In April 2011, Mr. Lenz assumed additional responsibilities as an executive director of DIC Corporation, Sun Chemical's parent company. From 2002 to 2007, Mr. Lenz served as Sun Chemical's senior vice president and chief financial officer/president, Latin America. From 1997 to 2002, Mr. Lenz was employed by Fairchild Aerospace, a manufacturer of corporate jets and aircraft for regional airlines, serving first as executive vice president and chief financial officer and then as president and chief executive officer of Fairchild Aircraft Inc. From 1980 to 1997, Mr. Lenz was employed by Allied Signal Aerospace in its aerospace, automotive, specialty chemicals, plastics, and engineered materials businesses, ultimately being promoted to vice president, finance. From 1976 to 1980, Mr. Lenz was employed by the German Internal Revenue Service.
Education
B.S. (Finance and Taxes), University of Edenkoben, Germany
M.S. (Business and Administration), University of Wiesbaden, Germany
Current public company directorships, other than Boise Inc.
None
Prior directorships held during past five years at any public company or registered investment company
None
Attributes and skills that led our board to conclude Mr. Lenz should serve as a director of the company
Extensive international business experience
Extensive financial background, with over 30 years of accounting experience
Experience as chief executive officer of a capital-intensive, global company

11



Alexander Toeldte, 52
Mr. Toeldte has served as the company's president and chief executive officer and a director since February 2008.
Business Experience
Mr. Toeldte joined Boise Cascade Holdings, L.L.C., in early October 2005 as president of the company's Packaging and Newsprint segment and, in late October 2005, became its executive vice president, Paper and Packaging and Newsprint segments. From 2004 to 2006, Mr. Toeldte was chair of Algonac Limited, a private management and consulting firm based in Auckland, New Zealand. Mr. Toeldte's previous experience includes: serving as executive vice president of Fonterra Co-operative Group, Ltd., and chief executive officer of Fonterra Enterprises (Fonterra, based in New Zealand, is a global dairy company); previously, Mr. Toeldte served in various capacities with Fletcher Challenge Limited Group (formerly one of the largest companies in New Zealand with holdings in paper, forestry, building materials, and energy), including as chief executive officer of Fletcher Challenge Building and as chief executive officer of Fletcher Challenge Paper, both of which were publicly traded units of the Fletcher Challenge Limited Group; and Mr. Toeldte served as a partner at McKinsey & Company in Toronto, Brussels, Montreal, and Stockholm. Mr. Toeldte is the chairman of the board of directors of the American Forest & Paper Association (AF&PA).
Education
Economics, Albert-Ludwigs-Universität, Freiburg, Germany
M.B.A., McGill University, Montreal, Canada
Current public company directorships, other than Boise Inc.
None
Prior directorships held during past five years at any public company or registered investment company
None
Attributes and skills that led our board to conclude Mr. Toeldte should serve as a director of the company
Previous experience as chief executive officer of a publicly traded company
Previous experience as board chair of a publicly traded company
Extensive international business experience across a wide variety of industries
Extensive experience in capital-intensive industries
Management consulting experience

12



Jason G. Weiss, 42 - Nominee
Mr. Weiss has served as a director of the company since its inception in 2007. Mr. Weiss serves on our board as a designee of the Aldabra Majority Holders (as defined in the Investor Rights Agreement).
Business Experience
Mr. Weiss has been the managing member and sole owner of Terrapin Palisades Ventures, LLC since June 2009. Terrapin Palisades Ventures, LLC is a private investment company and is also a general partner of the Terrapin-Fabbri Management Company LLC, which serves as the general partner of several agricultural investment partnerships. In June 2009, Mr. Weiss sold his interest in Terrapin Partners, LLC, Terrapin Asset Management, LLC, and TWF Management Company LLC, all private equity and asset management companies in which he had been a managing member and the co-founder since 1998. From 2004 to 2006, he was chief executive officer of Aldabra Acquisition Corporation, a publicly traded blank check company, which merged with Great Lakes Dredge & Dock Corporation in 2006. During 2004, Mr. Weiss served as a managing member of American Classic Sanitation LLC. From 1999 to 2000, he served as the chief executive officer and executive vice president of strategy of PaperExchange.com. During 1998 and 2000, Mr. Weiss served as a managing member of e-STEEL LLC.
Education
B.A., University of Michigan (with Highest Distinction)
J.D., Harvard Law School (cum laude)
Current public company directorships, other than Boise Inc.
Great Lakes Dredge & Dock Corporation - provider of global dredging services and domestic commercial and industrial demolition services (Mr. Weiss serves as chair of Great Lakes' compensation committee and a member of its nominating and corporate governance committee)
Prior directorships held during past five years at any public company or registered investment company
None
Attributes and skills that led our board to conclude Mr. Weiss should serve as a director of the company
Extensive experience with private equity and asset management companies
Previous experience as chief executive officer in a variety of industries
Legal expertise

13




Proposal No. 2 - Advisory Approval of Our Executive Compensation Program
We are providing our shareholders with the opportunity to cast a nonbinding advisory vote regarding the compensation of our executive officers. Our compensation philosophy is designed to emphasize a focus on total compensation, with a large portion of our executive officers' pay considered variable, or “at risk,” and thus aligned with shareholder interests. We seek to pay for performance so that we can recruit and retain the talented employees necessary to drive financial and operational results. We view our compensation program as a strategic tool that supports the successful execution of our business strategy and reinforces a performance-based culture.
Our executive compensation decisions over the last 12 months demonstrate our commitment to align executive compensation with company performance and shareholder interests. Some of our highlights include:
Our 2011 net income was $75.2 million, or $0.70 per diluted share, and our operating income was the highest since our inception as a public company nearly four years ago.
In 2011, we achieved our best safety performance in our history, and we believe our recordable incident rate is among the best in the paper and packaging industry.
We focused our investments on products driven by packaging demand, acquiring two new packaging-based businesses.
Through dividends and share repurchase programs, we returned capital to shareholders.
Base salary increases for our named executive officers were minimal. Only our chief financial officer, who was promoted to the position at the beginning of the year, received an increase in excess of 1.5% of his salary.
Short-term incentive award payouts for 2011 were above target, based on solid company financial and safety performance and the strong performance of our individual named executive officers during 2011.
In 2011, we resumed our practice of granting annual long-term equity incentive plan awards to our officers and key managers to reflect our emphasis on long-term compensation and our philosophy of aligning the interests of our executive officers with the interests of our shareholders.
Shareholders are urged to read the Compensation Discussion and Analysis section in this proxy statement, which discusses how our compensation policies and procedures implement our compensation philosophy. The compensation committee and our board of directors believe these policies and procedures are effective in implementing our compensation philosophy and in achieving its goals.
Our board of directors has determined the best way to allow shareholders to vote on our executive compensation program is through the following resolution:
RESOLVED, that the compensation paid to the company's named executive officers, as disclosed in the Compensation Discussion and Analysis, compensation tables, and narrative discussion in this proxy statement, is hereby APPROVED.
Your vote is important to us. Although this advisory vote is nonbinding, the compensation committee and our board of directors will review the results of the vote. The compensation committee will consider our shareholders' preferences and take them into account in making future determinations concerning our executive compensation program.
Our board of directors unanimously recommends shareholders vote, on a nonbinding advisory basis, FOR the approval of the resolution set forth above approving the overall executive compensation policies and procedures employed by us for our named executive officers.

14




Proposal No. 3 - Ratification of Appointment of KPMG LLP as Our Independent Registered Public Accounting Firm for 2012
The audit committee of our board of directors is responsible for the engagement of our independent auditor and appointed KPMG LLP (KPMG) in that capacity effective February 15, 2012.
Although ratification is not required by our Bylaws or otherwise, our board of directors is submitting the selection of KPMG to our shareholders for ratification because we value our shareholders' views on our independent registered public accounting firm and as a matter of good corporate practice. The audit committee will consider the outcome of this vote in its decision to appoint an independent registered public accounting firm but is not bound by our shareholders' vote. Even if the selection of KPMG is ratified, the audit committee may change the appointment at any time during the year if it determines a change would be in the best interests of the company and our shareholders.
Representatives of KPMG will be present at our annual shareholders' meeting to answer questions. They will also have the opportunity to make a statement if they desire to do so.
For information on the services KPMG has provided for us, please refer to the Fees Paid to KPMG section in this proxy statement.
Our board of directors unanimously recommends shareholders vote FOR the ratification of the appointment of KPMG LLP as our independent registered public accounting firm for 2012.

15




CORPORATE GOVERNANCE PRINCIPLES AND BOARD MATTERS
Corporate Governance Guidelines
Our board of directors has adopted Corporate Governance Guidelines (the Guidelines) to assist the board in exercising its responsibilities. The Guidelines reflect our board's commitment to monitor the effectiveness of policy and decision making, both at the board and management levels. Our board of directors believes the Guidelines will enhance our ability to achieve our goals and long-term success and will assist us in increasing shareholder value. The Guidelines are in addition to and are not intended to change or interpret any federal or state law or regulation, including the Delaware General Corporation Law, or our Certificate of Incorporation or Bylaws. Our board of directors may modify the Guidelines from time to time on the recommendation of the governance committee and as deemed appropriate by our board of directors.
You may view a complete copy of the Guidelines by visiting our website at www.boiseinc.com and selecting Investors, Corporate Governance, and then Governance Guidelines.
Director Independence
Our directors believe board independence is crucial and is the key for the board to function properly, allowing it to provide appropriate oversight and maintain managerial accountability.
We list our common stock and other securities on the New York Stock Exchange (NYSE). The NYSE rules require that a majority of our directors be independent from management. For a director to be independent under the NYSE's rules, our board must determine affirmatively that he or she has no material relationship with us.
To assist in making this determination, our board adopted the NYSE's independence standards. For purposes of these standards, we include Boise Inc. and our subsidiaries. An immediate family member includes a spouse, parents, children, siblings, mothers- and fathers-in-law, sons- and daughters-in-law, brothers- and sisters-in-law, and anyone (other than domestic employees) who shares the director's home.
A director is not independent if:
He or she is, or has been within the last three years, or an immediate family member is, or has been within the last three years, one of our executive officers (consistent with NYSE interpretative guidance, a director's prior service as a nonemployee officer of a special purpose acquisition company (SPAC) will not preclude the board from finding the director is independent, as long as the director served as an officer without compensation and resigned his or her position as a SPAC officer upon the acquisition of the operating company);
He or she has received, or an immediate family member has received, during any 12-month period during the last three years, more than $120,000 per year in direct compensation from us, other than director and committee fees or deferred compensation for prior service;
He or she is a current partner or employee of our external auditing firm or he or she has an immediate family member who is a partner of such firm; he or she has an immediate family member who is a current employee of such firm and works personally on our audit; or he or she or an immediate family member was a partner or employee of such firm and worked personally on our audit during the last three years;
He or she or an immediate family member is, or has been within the last three years, employed as an executive officer by another company whose compensation committee includes one or more of our present executive officers;
He or she is a current employee, or an immediate family member is a current executive officer, of a company that makes payments to or receives payments from us for property or services, which in any fiscal year exceed 2% or $1 million, whichever is greater, of the other company's consolidated gross revenues; and


16



He or she is an executive officer of a tax-exempt organization for which our contributions in any of the three preceding years exceeded 2% or $1 million, whichever is greater, of the organization's consolidated gross revenues for such year.
In addition, for purposes of serving on the audit committee, the director may not:
Have accepted, directly or indirectly, any consulting, advisory, or other compensatory fees from us, other than compensation for service as a director; and
Be an “affiliated person” of the company, as the SEC defines that term.
Our board will determine the independence of any director who has a relationship with us that these standards do not cover. These standards are listed in the Guidelines, and you may view them by visiting our website at www.boiseinc.com and selecting Investors, Corporate Governance, and then Governance Guidelines.
Our board has determined that Messrs. Albert, Berger, Goldman, Leight, Lenz, and Weiss are independent directors as defined under the NYSE's listing standards. These directors constitute a majority of our board of directors. In making their determination, our board considered the relationships disclosed in the Related-Person Transactions section in this proxy statement.
Our board of directors and its committees can retain, at their sole discretion and at our expense, independent financial, legal, compensation, or other advisors to represent the independent interests of our board of directors or its committees. 
Board and Committee Matters
Communications with Our Board of Directors
You may contact our board of directors by writing to them in care of our corporate secretary at the address shown below or by emailing them at the email address shown below. All correspondence will be referred to the chair of our board, who is not a member of management. Copies of all complaints or concerns are forwarded to our general counsel and corporate secretary.
Boise Inc.
Attention: Corporate Secretary
PO Box 990050
Boise, ID 83799-0050
Email: directors@boiseinc.com
Board Leadership Structure
Since our inception, the Guidelines have provided that our chief executive officer may not serve concurrently as the chair of our board of directors. Accordingly, we separate our board chair and chief executive officer positions. Mr. Albert, a nonemployee director, serves as our independent board chair, and Mr. Toeldte serves as our chief executive officer. We believe separating the roles of board chair and chief executive officer improves the board's oversight of our management and risk.
Role of Board of Directors in Our Risk Management Processes
We have well-developed processes and structures in place to manage our key strategic, operational, financial, and compliance risks. While our entire board of directors is responsible for monitoring and evaluating the risks we face and our risk management processes, our board has delegated the oversight of this responsibility to the audit committee. We utilize the following risk management processes:


17



Enterprise Risk Management Dashboard - Our enterprise risk management effort includes a COSO-based framework for identifying and assessing key strategic, operational, financial, and compliance risks. We have assigned each key risk to an executive risk owner who is responsible for ongoing risk assessment and management. On a semi-annual basis, the management team completes a formal assessment of enterprise risk. This assessment includes identification of new risks we face, reassessment of known risks, and assessment of our risk response activities and controls. A product of this process is an enterprise risk management dashboard that is used to report the results to the board;
Management of Major Risks - The most critical risk areas we face are reviewed in depth with our board;
Strategic Planning Processes - Our annual strategic planning and budgeting process includes identification of risks and a sensitivity analysis, which is reviewed with our board;
Derivative Risk Management - We maintain a derivative risk committee and processes, and we review derivative/hedging activity with our board several times each year;
Compliance Risk - Risk factors required to be disclosed in our SEC filings are reviewed with our board; and
Internal Audit - Our internal audit department annually develops a risk-based audit plan that is reviewed with the audit committee, along with the results of internal audit reviews and activities. The internal audit department maintains a high level assessment of risks and controls for key operations, functions, processes, applications, and systems within the company. The audit committee meets a number of times each year with our senior internal auditing executive.
We also have in place a number of independent assurance activities responsible for assessing whether our risk response activities are in place and working effectively. These assurance activities include, but are not limited to, corporate legal audits, corporate security, environmental audits, and safety audits.
Risk Analysis of Employee Compensation Policies and Practices
We reviewed our compensation policies and practices for our employees and determined these policies and practices were not reasonably likely to have a material adverse effect on the company. Specifically, we determined that our practices do not induce our employees to take unacceptable levels of business risk for the purpose of increasing their incentive plan awards at the expense of shareholder interests. Some of the considerations in making this determination were:
None of our businesses presents a high risk profile in that a very large percentage of our revenues and income is derived from commodity products (paper and packaging) sold at established or indexed commodity prices;
No single business unit carries a significant portion of our risk profile;
No single operating unit is significantly more profitable than others on a consistent basis (although profitability varies from year to year depending on commodity pricing);
Our incentive pay structure rewards results that benefit us in both the short and long term (i.e., short-term incentives are not paid out at the expense of long-term shareholder value);
Our incentive pay program has both minimum and maximum caps designed to take into account short- and long-term affordability measures;
The compensation committee reserves the right to reduce or eliminate any awards, in its discretion, with respect to our short-term incentive pay program;
We have adopted an executive compensation recovery policy; and
With the implementation of our executive compensation recovery policy and stock ownership guidelines, our executive compensation program does not encourage our management to take unreasonable risks relating to the business.

18



Executive Sessions
Our board of directors and each of our committees regularly meet in executive sessions outside the presence of management. Mr. Albert, our board chair, presides over the executive sessions of our board of directors, and each committee chair presides over the executive sessions of their respective committee.
2011 Overall Meeting Attendance Rates
During 2011, our board of directors met 17 times, which included attendance at our annual shareholders' meeting. In addition to meetings of the full board and attendance at our annual shareholders' meeting, our directors also attended 24 meetings of board committees. Our directors had an overall attendance rate of 94%. Each of our directors attended at least 75% of the meetings of the board and committees on which he served, in the aggregate.
While we do not have a formal policy requiring them to do so, we encourage our directors to attend our annual shareholders' meeting. All of our directors attended our 2011 annual shareholders' meeting.
Committees
Our board of directors has established the following five standing committees:
Executive Committee
Audit Committee
Compensation Committee
Governance Committee
Nominating Committee
The composition, duties, and responsibilities of these committees are outlined in written charters adopted by our board of directors.
You may view copies of our committee charters by visiting our website at www.boiseinc.com and selecting Investors, Corporate Governance, and then Committee Charters.
Executive Committee
Committee Members:
Carl A. Albert, committee chair
Jonathan W. Berger
Jack Goldman
Alexander Toeldte
2011 Committee Meetings: 1
2011 Committee Meeting Attendance Rate:
Carl A. Albert
100
%
Jonathan W. Berger
100
%
Jack Goldman
100
%
Alexander Toeldte
100
%
The executive committee of our board of directors is responsible for exercising all the powers and authority of our board of directors in the management of our business and affairs, subject to the direction of our board of directors and subject to the limitations under Section 141(c) of the Delaware General Corporation Law.
You may view a copy of our executive committee charter by visiting our website at www.boiseinc.com and selecting Investors, Corporate Governance, and then Committee Charters.

19



Audit Committee
Committee Members:
Jonathan W. Berger, committee chair
Carl A. Albert
Jack Goldman
Heinrich R. Lenz
All members of the audit committee are independent as defined under the NYSE's listing standards. Our board of directors has determined that Mr. Berger is an “Audit Committee Financial Expert” under the SEC's definition.
2011 Committee Meetings: 4
2011 Committee Meeting Attendance Rate:
Jonathan W. Berger
100
%
Carl A. Albert
100
%
Jack Goldman
100
%
Heinrich R. Lenz
100
%
The audit committee of our board of directors is responsible for:
Selecting the independent auditor;
Approving the overall scope of the audit;
Annually reviewing the independent auditor's formal written statement describing its internal quality-control procedures, any material issues raised by such review and steps taken to deal with such issues, all relationships between the auditors and the company, and the independence of the auditors;
Establishing clear hiring policies for employees or former employees of the external auditors;
Preapproving all audit services and nonaudit services to be performed for us by the independent auditors; 
Annually obtaining from the independent auditors a formal written statement of fees billed for audit and nonaudit services rendered by the independent auditors for the most recent fiscal year;
Providing oversight of our accounting and financial reporting principles, policies, controls, procedures, and practices and reviewing significant changes as suggested by the independent auditors or management;
Discussing the annual audited financial statements and quarterly financial statements, including matters required to be reviewed under applicable legal and regulatory requirements, with management and the independent auditor;
Recommending to our board of directors the inclusion of our audited financial statements in our annual report on Form 10-K and ensuring the independent auditors have fulfilled their responsibilities under AICPA SAS 114 “The Auditor's Communication with Those Charged with Governance" and SAS 115 "Communicating Internal Control Related Matters in an Audit;"
Annually preparing a report to be included in our proxy statement, as required by SEC rules, and submitting such report to our board of directors for approval;
Discussing with management and the independent auditor, as appropriate, earnings press releases and other financial information provided to the public;

20



Discussing with management and/or our general counsel any legal matters that may have a material impact on our financial statements or that might require disclosure in our financial statements and any material reports or inquiries from regulatory or governmental agencies;
Reviewing with management the appointment and replacement of the senior internal auditing executive and annually evaluating his or her performance; 
Reviewing with the senior internal auditing executive the significant reports to management prepared by the internal auditing department and management's responses;
Reviewing with the senior internal auditing executive, the independent auditor, and management the internal audit department responsibilities, budget, and staffing and the internal audit plan for the coming year;
Establishing procedures for the receipt, retention, and treatment of complaints from our employees on accounting, internal controls, or auditing matters and for confidential, anonymous submissions by our employees of concerns regarding questionable accounting or reporting matters;
Discussing with management our overall risk assessment and risk management policies and reviewing with our board of directors management's effectiveness in identifying and managing key business risks facing the company;
Meeting separately with management, the corporate audit staff, and the independent auditor;
Handling such other matters that are specifically delegated to the audit committee by our board of directors from time to time; and
Reporting regularly to the full board of directors.
You may view a copy of our audit committee charter by visiting our website at www.boiseinc.com and selecting Investors, Corporate Governance, and then Committee Charters.
Compensation Committee
Committee Members:
Jonathan W. Berger, committee chair
Carl A. Albert
Jack Goldman
Heinrich R. Lenz
Jason G. Weiss
All members of the compensation committee are independent as defined under the NYSE's listing standards.
2011 Committee Meetings: 8
2011 Committee Meeting Attendance Rate:
Jonathan W. Berger
100
%
Carl A. Albert
100
%
Jack Goldman
88
%
Heinrich R. Lenz
100
%
Jason G. Weiss*
100
%
*
Mr. Weiss was appointed to serve on the compensation committee of our board of directors effective March 1, 2011. Consequently, Mr. Weiss served for only 5 of the 8 compensation committee meetings held in 2011, and he attended all 5 of those meetings.

21



The compensation committee of our board of directors is responsible for:
Reviewing and approving corporate goals and objectives relevant to the compensation of our chief executive officer and annually evaluating the chief executive officer's performance in light of those goals and objectives;
Reviewing and approving the compensation and incentive opportunities of our elected officers; 
Reviewing and approving employment offers and agreements, severance arrangements, change-in-control arrangements, and other similar arrangements between the company and our elected officers;
Reviewing and approving guidelines covering ownership of our stock by our elected officers;
Reviewing our compensation philosophy and programs as they affect all employees;
Reviewing executive succession plans for executive positions and business and staff organizations;
Producing an annual report on executive compensation for inclusion in our proxy statement;
Reviewing and discussing with management disclosures regarding advisory votes on executive compensation and the frequency of such votes for inclusion in our proxy statement;
Administering our equity incentive plans;
Reviewing, at least annually, a risk assessment of our compensation policies and practices for our employees; and
Handling such other matters that are specifically delegated to the compensation committee by our board of directors from time to time.
You may view a copy of our compensation committee charter by visiting our website at www.boiseinc.com and selecting Investors, Corporate Governance, and then Committee Charters.
Governance Committee
Committee Members:
Jack Goldman, committee chair
Carl A. Albert
Jonathan W. Berger
Jason G. Weiss
All members of the governance committee are independent as defined under the NYSE's listing standards.
2011 Committee Meetings: 3
2011 Committee Meeting Attendance Rate:
Jack Goldman
100
%
Carl A. Albert
100
%
Jonathan W. Berger
100
%
Jason G. Weiss
100
%


22



The governance committee of our board of directors is responsible for:
Annually reviewing and recommending director compensation and benefits;
Recommending to our board of directors the response to any shareholder proposal we receive;
Developing and recommending to our board of directors for approval corporate governance guidelines and a code of ethics applicable to our directors, officers, and employees and reviewing the effectiveness of such guidelines and code of ethics at least annually and recommending changes as necessary;
Developing and recommending to our board of directors for approval an annual self-evaluation process of our board of directors and its committees and annually overseeing the self-evaluations and reporting the findings to our board of directors; and
Reviewing and evaluating our board of directors' criteria for director eligibility and recommending to our board of directors guidelines for determining director independence.
You may view a copy of our governance committee charter by visiting our website at www.boiseinc.com and selecting Investors, Corporate Governance, and then Committee Charters.
Nominating Committee
Committee Members:
Carl A. Albert, committee chair
Jonathan W. Berger
Nathan D. Leight
All members of the nominating committee are independent as defined under the NYSE's listing standards. 
2011 Committee Meetings: 2
2011 Committee Meeting Attendance Rate:
Carl A. Albert
100
%
Jonathan W. Berger
100
%
Nathan D. Leight
100
%
The nominating committee of our board of directors is responsible for:
Identifying and recommending for election individuals who meet the criteria our board of directors has established for board membership; and
Reviewing the committee structure of our board of directors and recommending for our board of directors' approval the composition of each committee.
You may view a copy of our nominating committee charter by visiting our website at www.boiseinc.com and selecting Investors, Corporate Governance, and then Committee Charters.

23



Special Committee
Committee Members:
Carl A. Albert
Nathan D. Leight
Alexander Toeldte
Jason G. Weiss
2011 Committee Meetings: 6
2011 Committee Meeting Attendance Rate:
Carl A. Albert
100
%
Nathan D. Leight
83
%
Alexander Toeldte
67
%
Jason G. Weiss
100
%
This specially appointed committee was responsible for approving the final terms of the company's share repurchase programs.
Other Committees
Our board of directors may establish other committees as it deems necessary or appropriate from time to time.
Director Selection Process
Our board of directors is responsible for selecting the nominees for election to our board. The nominating committee, after consultation with our board chair and the receipt of any nominee recommendations from other directors and/or shareholders, is responsible for identifying and recommending to our board of directors qualified candidates to be nominated for election as directors at our annual shareholders' meeting or to be appointed by our board to fill vacancies occurring between annual shareholders' meetings. The invitation to join our board of directors is extended by our board of directors through our board chair.
Suitability of Candidates
In evaluating the suitability of candidates, our board of directors and nominating committee consider many factors, including a candidate's:
General understanding of elements relevant to the success of a publicly traded company in the current business environment;
Understanding of our business; and
Educational and professional background.
Our board of directors and nominating committee also consider a candidate's judgment, competence, anticipated participation in board activities, experience, geographic location, and special talents or personal attributes. The composition of our board of directors should encompass a broad range of skills, expertise, knowledge, and diversity. When evaluating the suitability of an incumbent director for nomination for reelection, our board of directors and nominating committee also consider the director's past performance, including attendance at meetings and participation in and contributions to the activities of our board of directors, as well as the director's ability to make contributions after any significant change in circumstances (including changes in employment or professional status).

24



Consideration of Diversity in Nomination Process
Our current board has a rich mixture of educational, professional, and experiential diversity. As opportunities to appoint new directors become available in the future, our board of directors will make gender, racial, ethnic, and global diversity a high priority for director recruitment.
Shareholder Nominations for Directors
The nominating committee has not adopted a written policy regarding shareholder nominations for directors. In accordance with our Bylaws, however, the nominating committee will consider shareholder nominations for directors (please refer to the Shareholder Proposals for Inclusion in Next Year's Proxy Statement section in this proxy statement). We did not receive any shareholder nominations or recommendations for director in connection with our 2012 annual shareholders' meeting.
Board and Committee Evaluations
Our directors perform an annual self-evaluation of our board of directors, its committees, and each individual director. These evaluations assess the overall effectiveness of our board of directors. The governance committee reviews the directors' responses and provides the full board with a summary. The purpose of the evaluation is to increase the effectiveness of our board, its committees, and its directors.
Code of Ethics for Our Board of Directors
Our board of directors adopted a Code of Ethics that applies not only to our directors but also to all of our employees, including our chief executive officer, chief financial officer, and principal accounting officer. We have a toll-free reporting service available that permits employees to confidentially report violations of our Code of Ethics or other issues of significant concern.
If we amend or grant a waiver of one or more of the provisions of our Code of Ethics, we will disclose the amendment or waiver by posting the required information on our website.
You may view a copy of our Code of Ethics by visiting our website at www.boiseinc.com and selecting Investors, Corporate Governance, and then Code of Ethics.

25



Director Compensation
Employee board members do not receive compensation for their service on our board of directors. Nonemployee board members are entitled to receive the following compensation for their board service:
Annual cash retainer;
Annual committee membership fees;
Annual equity award; and
Reimbursement for travel and other expenses incurred in connection with their duties.
The governance committee annually reviews our director compensation and recommends changes, if any, to our board of directors. The compensation committee oversees the administration of the director compensation plans.
2011 Director Fees
In 2011, our nonemployee directors received the following compensation for their board service:
Director Fees
2011
 
 
Director Fees (Annual):
 

Cash Retainer
$
75,000

Equity Award
$
100,000

Board Chair Equity Award (1)
$
250,000

 
 
Committee Chair Fees (Annual):
 

Audit
$
25,000

Compensation
$
20,000

Other Committees
$
8,000

 
 
Nonchair Committee Membership Fees (Annual):
 
Audit
$
17,500

Compensation
$
15,000

Other Committees
$
5,000

(1)
The board chair equity award was in addition to the cash retainer, the regular equity award, and the committee chair and nonchair committee membership fees.
2011 Director Equity Awards
We believe our director compensation should encourage ownership of the company's stock. In light of that goal, on March 15, 2011, our nonemployee directors received service-condition vesting awards of restricted stock (2011 Director Restricted Stock), as shown in the following table. The number of restricted stock shares awarded to each nonemployee director was determined by dividing $100,000 ($350,000 in the case of Mr. Albert) by our closing stock price on March 15, 2011 ($8.55 per share). These 2011 Director Restricted Stock awards vested in full on March 15, 2012.
Name
2011 Director Restricted Stock
(#)
 
 
Carl A. Albert
40,936
Jonathan W. Berger
11,696
Jack Goldman
11,696
Nathan D. Leight
11,696
Heinrich R. Lenz
11,696
Jason G. Weiss
11,696

26



2012 Director Fees
Our board of directors has approved the following compensation for board service in 2012:
Director Fees
2012
 
 
Director Fees (Annual):
 
Cash Retainer
$
75,000

Equity Award (1)
$
80,000

Board Chair Equity Award (1)
$
200,000

 
 
Committee Chair Fees (Annual):
 
Audit
$
25,000

Compensation
$
20,000

Other Committees
$
8,000

 
 
Nonchair Committee Membership Fees (Annual):
 
Audit
$
17,500

Compensation
$
15,000

Other Committees
$
5,000

(1)
In the past, our director equity awards (both the regular equity awards and the board chair equity awards) were awarded for a 12-month period, beginning March 15 and vesting March 15 of the following year. Commencing in 2012, the director equity awards will be awarded on a calendar year basis, beginning January 1 and vesting December 31 of the same year. To accommodate this transition to a calendar year, the 2012 director equity awards were prorated to 80% of the annual award values to account for the overlap with the 2011 director equity awards through March 15, 2012. The board chair equity award was in addition to the cash retainer, the regular equity award, and the committee chair and nonchair committee membership fees.
2012 Director Equity Awards
Upon recommendation of the governance committee, our board of directors approved 2012 director equity awards in the form of restricted stock for each nonemployee director valued at $80,000 (2012 Director Restricted Stock). Mr. Albert also received a $200,000 annual board chair equity award. The number of restricted stock shares awarded to each nonemployee director on January 1, 2012, was determined by dividing $80,000 ($280,000 in the case of Mr. Albert) by our closing stock price on December 30, 2011 ($7.12 per share). These 2012 Director Restricted Stock awards are service-condition vesting awards, vesting in full on December 31, 2012.
Name
2012 Director Restricted Stock
(#)
 
 
Carl A. Albert
39,326
Jonathan W. Berger
11,236
Jack Goldman
11,236
Nathan D. Leight
11,236
Heinrich R. Lenz
11,236
Jason G. Weiss
11,236


27



Directors Deferred Compensation Plan
We maintain a “nonqualified” Deferred Compensation Plan offered to our nonemployee directors. The plan is an unfunded plan intended to help participants supplement their retirement income while providing them an opportunity to reinvest a portion of their cash compensation in the company's overall business performance.
Under the plan, each director who receives cash compensation for board service may elect to defer all or a portion of his or her cash compensation in a calendar year. Amounts deferred are credited with imputed interest at a rate equal to 130% of Moody's Composite Average of Yields on Corporate Bonds. Participants elect the form and timing of distributions of their deferred compensation balances. Participants may receive payment in cash in a lump sum or in annual installments following their service on our board of directors.
None of our directors elected to defer their cash compensation in 2011 or 2012 under this plan.
We do not anticipate making any changes to this plan in 2012.
Stock Ownership Guidelines for Our Directors
In late 2010, our board of directors established company stock ownership guidelines for our directors, which are intended to more closely align their interests with those of our shareholders. These guidelines provide that, over time, each director should acquire and maintain stock ownership in the company equal to seven times his annual cash retainer. To achieve this goal, each director is to retain 50% of his after-tax profit shares from our equity compensation programs until achieving stock ownership equal to five times his annual cash retainer and then 25% of such after-tax profit shares to reach and maintain the stock ownership target of seven times his annual cash retainer. All of our nonemployee directors are holding shares in compliance with these guidelines, and all but one hold company stock valued in excess of seven times their annual cash retainers.

28



Director Compensation Table
The following table presents compensation information for each of our nonemployee directors for the fiscal year ended December 31, 2011:
Name
Fees Earned
or Paid in Cash
($) (1)
Stock
Awards
($) (2)
Change in
Pension Value
and Nonqualified
Deferred
Compensation
Earnings
($) (3)
All Other Compensation ($) (4)
Total
($)
 
 
 
 
 
 
Carl A. Albert
$
128,500

$
350,000

$

$
25,641

$
504,141

Jonathan W. Berger
135,000

100,000

618

7,326

242,944

Jack Goldman
120,500

100,000


7,326

227,826

Nathan D. Leight
80,000

100,000


7,326

187,326

Heinrich R. Lenz
107,500

100,000


7,326

214,826

Jason G. Weiss
92,542

100,000


7,326

199,868

(1)
The amounts reported reflect cash payments earned in 2011 by our nonemployee directors for annual retainer and committee chair and nonchair committee membership fees.
 
 
(2)
On March 15, 2011, Mr. Albert was awarded, at no cost, 40,936 shares of restricted stock, and Messrs. Berger, Goldman, Leight, Lenz, and Weiss were each awarded, at no cost, 11,696 shares of restricted stock under the Boise Inc. Incentive and Performance Plan. The amounts reported for these awards reflect the aggregate grant date fair value of the awards computed in accordance with FASB ASC Topic 718. These 2011 director equity awards were service-condition vesting awards, and they represent the aggregate number of restricted stock shares outstanding as of December 31, 2011, for each of our nonemployee directors. For further information on these 2011 director equity awards, please refer to the 2011 Director Equity Awards section in this proxy statement.
 
 
(3)
Change in Pension Value - We do not provide our directors with pension benefits.

Nonqualified Deferred Compensation Earnings - None of our nonemployee directors elected to participate in our Directors Deferred Compensation Plan in 2011. The amount reported for Mr. Berger reflects the above-market portion of the interest he earned on compensation he deferred in 2008.
 
 
(4)
The amounts reported reflect cash dividends paid to our nonemployee directors in March 2011 for their 2010 restricted stock awards that vested March 15, 2011.

29



SECURITY OWNERSHIP
Stock Ownership Guidelines for Our Directors and Elected Officers
Our board of directors has established company stock ownership guidelines for our directors and elected officers, which are intended to ensure that our directors and elected officers acquire and maintain an equity stake in the company and more closely align their interests with those of our shareholders. These guidelines establish annual retainer or salary-based stock ownership targets for our directors and elected officers and require annual retention of a certain ratio of after-tax profit shares from our equity compensation programs until those targets are met. For further information on our stock ownership guidelines for our directors and elected officers, please refer to the Director Compensation - Stock Ownership Guidelines for Our Directors and Compensation Discussion and Analysis - Stock Ownership Guidelines for Our Elected Officers sections in this proxy statement.
Our Hedging Policy
We have in place a director and officer trading policy, which requires that our directors and officers inform our general counsel of any hedging transactions with respect to the company's securities, including transactions involving any derivative security relating to the company's securities. Our general counsel has not been informed of any hedging transactions entered into by any of our directors or officers.

30



Beneficial Ownership of Greater Than 5% of Our Outstanding Common Stock
As of March 16, 2012, we had 100,471,037 shares of our common stock issued and outstanding. Based on a review of SEC filings, the following table sets forth, as of March 16, 2012, the actual beneficial ownership of each person owning greater than 5% of our outstanding common stock:
Name and Address of Beneficial Owner
and Nature of Beneficial Ownership
Amount of
Beneficial Ownership
(#) (1)
Percent of
Class
(%) (2)
 
 
 
Dimensional Fund Advisors LP (Dimensional Fund) (3)
Palisades West, Building One
6300 Bee Cave Road
Austin, TX 78746
7,953,193

7.9
%
 
 
 
Paulson & Co. Inc. (Paulson) (4)
1251 Avenue of the Americas
New York, NY 10020
7,044,300

7.0
%
 
 
 
Joint Filing By: (5)
 
 
TCM MPS Series Fund LP - Partners Series (PS Fund)
TCM MPS Series Fund LP - Crossways Series (Crossways Fund)
Troob Capital Management LLC (Management LLC)
Troob Capital Management (Offshore) LLC (Offshore Management LLC)
Troob Capital Advisors LLC (Advisors LLC)
Douglas M. Troob (D. Troob)
Peter J. Troob (P. Troob)
777 Westchester Avenue, Suite 203
White Plains, NY 10604

And

TCM MPS Ltd. SPC - Partners Segregated Portfolio
(Partners Segregated Portfolio)
Appleby Trust (Cayman) Ltd.
Clifton House, 75 Fort Street
P.O. Box 1350
Grand Cayman KY1-1108, Cayman Islands
6,672,355

6.6
%

31



(1)
Under SEC rules, a person is considered to beneficially own any shares over which they exercise sole or shared voting and/or investment power, or as to which they have the right to acquire beneficial ownership within 60 days of March 16, 2012.
(2)
Percent of class is calculated by dividing the number of shares beneficially owned by the total number of outstanding shares of the company on March 16, 2012, plus the number of shares such person has the right to acquire within 60 days of March 16, 2012.
(3)
Pursuant to Schedule 13G, Amendment No. 1, dated February 10, 2012, and filed with the SEC on February 14, 2012:
 
Voting Power
Investment Power
Name
  Sole  
  Shared  
  Sole  
  Shared  
 
 
 
 
 
Dimensional Fund
7,790,329


7,953,193


(4)
Pursuant to Schedule 13G dated February 14, 2012, and filed with the SEC on February 14, 2012:
 
Voting Power
Investment Power
Name
  Sole  
  Shared  
  Sole  
  Shared  
 
 
 
 
 
Paulson
7,044,300


7,044,300


(5)
Pursuant to Schedule 13G, Amendment No. 1, dated February 8, 2012, and filed with the SEC on February 14, 2012:
 
Voting Power
Investment Power
Name
  Sole  
  Shared  
  Sole  
  Shared  
 
 
 
 
 
PS Fund

2,863,762


2,863,762

Crossways Fund

681,300


681,300

Partners Segregated Portfolio

3,048,693


3,048,693

Management LLC

3,545,062


3,545,062

Offshore Management LLC

3,048,693


3,048,693

Advisors LLC

78,600


78,600

D. Troob

6,672,355


6,672,355

P. Troob

6,672,355


6,672,355


32



Beneficial Ownership of Our Directors and Executive Officers
As of March 16, 2012, we had 100,471,037 shares of our common stock issued and outstanding. Based on a review of SEC filings, the following table sets forth, as of March 16, 2012, the actual beneficial ownership of our outstanding common stock by:
Each of our directors;
Each of our named executive officers; and
All of our directors and executive officers as a group.
None of these shares are pledged as security for any obligation (such as pursuant to a loan arrangement or agreement or a margin account agreement).
The business address for each of our directors and executive officers is c/o Boise Inc., 1111 West Jefferson Street, Suite 200, Boise, ID 83702-5388.
Name and Address of Beneficial Owner
and Nature of Beneficial Ownership
Amount of
Beneficial Ownership
(#) (1)
Percent of
Class
(%) (2)
 
 
 
Carl A. Albert (3)
1,006,418

1.0
%
 
 
 
Jonathan W. Berger (4)
268,305

*

 
 
 
Jack Goldman (5)
283,705

*

 
 
 
Nathan D. Leight (6)
3,557,123

3.5
%
 
 
 
Heinrich R. Lenz (7)
41,247

*

 
 
 
Jason G. Weiss (8)
2,119,668

2.1
%
 
 
 
Alexander Toeldte (9)
1,022,630

1.0
%
 
 
 
Samuel K. Cotterell (10)
86,862

*

 
 
 
Robert A. Warren (11)
168,212

*

 
 
 
Karen E. Gowland (12)
234,146

*

 
 
 
Judith M. Lassa (13)
169,056

*

 
 
 
All directors and executive officers as a group
(13 persons) (14)
9,145,589

9.1
%
* Less than 1%

33



(1)
Under SEC rules, a person is considered to beneficially own any shares over which they exercise sole or shared voting and/or investment power, or as to which they have the right to acquire beneficial ownership within 60 days of March 16, 2012.
 
 
(2)
Percent of class is calculated by dividing the number of shares beneficially owned by the total number of outstanding shares of the company on March 16, 2012, plus the number of shares such person has the right to acquire within 60 days of March 16, 2012.
 
 
(3)
Mr. Albert's shares are held as follows: 144,365 shares are held directly; 23,800 shares are held indirectly by the Albert-Schaefer Trust; and 838,253 shares are held by the Carl A. Albert Trust.
 
 
(4)
Mr. Berger holds his 268,305 shares directly.
 
 
(5)
Mr. Goldman's shares are held as follows: 269,905 shares are held directly; and 13,800 shares are held indirectly in an individual retirement account.
 
 
(6)
Mr. Leight's shares are held as follows: 3,547,123 shares are held directly; and 10,000 shares are held indirectly in an individual retirement account. Mr. Leight disclaims beneficial ownership of 1,724,944 shares of the company's common stock held by Elizabeth Leight TTEE U/A DTD 4/13/1998 Leight Family 1998 Irrevocable Trust of which his wife is a trustee.
 
 
(7)
Mr. Lenz holds his 41,247 shares directly.
 
 
(8)
Mr. Weiss's shares are held as follows: 309,905 shares are held directly; 204,936 shares are held indirectly by the Jason G. Weiss Revocable Trust; and 1,604,827 shares are held indirectly by the Weiss Family Trust.
 
 
(9)
Mr. Toeldte's shares are held as follows: 968,630 shares are held directly; and 54,000 shares are held indirectly by the Toeldte Family Revocable Trust.
 
 
(10)
Mr. Cotterell holds his 86,862 shares directly.
 
 
(11)
Mr. Warren holds his 168,212 shares directly.
 
 
(12)
Ms. Gowland holds her 234,146 shares directly.
 
 
(13)
Ms. Lassa holds her 169,056 shares directly.
 
 
(14)
Included in this total amount are 176,216 shares and 12,001 shares held, respectively, by our two remaining executive officers, Robert E. Strenge (senior vice president) and Bernadette M. Madarieta (vice president and controller). Mr. Strenge holds his 176,216 shares directly, and Ms. Madarieta holds her 12,001 shares directly.

34



EQUITY COMPENSATION PLAN INFORMATION
 
Column
 
A
 
B
 
C
Plan Category
Number of Securities to Be Issued Upon Exercise of Outstanding Options, Warrants, and Rights (a)
 
Weighted Average Exercise Price of Outstanding Options, Warrants, and Rights
 
Number of Securities
Remaining Available for
Future Issuance Under
Equity Compensation
Plans (Excluding
Securities Reflected in
Column A) (b)
 
 
 
 
 
 
Equity compensation plans approved by securityholders
2,857,058

 
$
8.53

 
9,772,192

 
 
 
 
 
 
Equity compensation plans not approved by securityholders
N/A

 
N/A

 
N/A

Total
2,857,058

 
$
8.53

 
9,772,192

(a)
The reported amount includes the following outstanding awards that have been granted under the Boise Inc. Incentive and Performance Plan but not yet earned as of December 31, 2011:

2,336,123 shares issuable upon the vesting of service-condition vesting restricted stock and restricted stock units.

332,534 shares issuable upon the vesting and exercise of nonqualified stock options.

188,401 shares issuable upon the vesting of performance units (at target). The number of shares to be issued will be based on our return on net operating assets (RONOA) over a two-year performance period from January 1, 2011, to December 31, 2012. The actual number of shares issued may be adjusted from 0% to 200% of the performance units awarded, based on our actual RONOA performance during the performance period.
 
 
(b)
The reported amount assumes the performance units are adjusted to the maximum value (200% of target).

35



EXECUTIVE COMPENSATION
Compensation Committee Interlocks and Insider Participation
Messrs. Albert, Berger, Goldman, Lenz, and Weiss served on the compensation committee of our board of directors during 2011.
Our board of directors has determined that all members of the compensation committee are independent directors as defined under the NYSE's listing standards and our Corporate Governance Guidelines.
 
Compensation Committee Report
Dear Fellow Shareholders:
The compensation committee of the board of directors of Boise Inc. has reviewed and discussed the following Compensation Discussion and Analysis with the company's management. Based on this review and discussion, the compensation committee has recommended to the company's board of directors that the Compensation Discussion and Analysis be included in this proxy statement and the company's annual report on Form 10-K for the fiscal year ended December 31, 2011.
Respectfully submitted,
The Compensation Committee
Jonathan W. Berger, committee chair
Carl A. Albert
Jack Goldman
Heinrich R. Lenz
Jason G. Weiss

36



Compensation Discussion and Analysis
This Compensation Discussion and Analysis describes the 2011 compensation program for our executive officers, particularly our "named executive officers," who are as follows:
Alexander Toeldte, president and chief executive officer
Samuel K. Cotterell, senior vice president and chief financial officer
Robert A. Warren, executive vice president and chief operating officer
Karen E. Gowland, senior vice president, general counsel and secretary
Judith M. Lassa, senior vice president, paper and specialty products
Executive Summary
Since the company's inception as a public company in 2008, we have committed to a business model that focuses on the needs of the company's customers, investors, and employees. For 2011, we continued to work safely, serve our customers, contain costs where possible, and return value to our shareholders. Our performance highlights from 2011 include:
Strong financial performance. Our net income for 2011 was $75.2 million or $0.70 per diluted share, and our operating income was the highest since our inception as a public company nearly four years ago.
Commitment to safety as an integral value. In 2011, the company achieved its best safety performance in its history, and we believe our recordable incident rate is among the best in the paper and packaging industry.
Strategic growth and investment. In 2011, the company focused its investments on products driven by packaging demand, building on the company's already significant presence in linerboard, corrugated containers, and specialty label and release products markets. In March, we acquired Tharco Packaging, Inc. Tharco offers an extensive range of corrugated products and services that complements and expands Boise's existing packaging business. In December, the company acquired the Hexacomb® protective packaging business of Pregis Corporation. Hexacomb expands our position in the protective packaging market, provides a platform for further growth, steps up our vertical integration within our containerboard business, and delivers synergies with limited execution risk.
Return of capital to shareholders. Through dividends and share repurchase programs, we returned $249 million in capital to shareholders during the 16 months from December 2010 through March 2012.
Maintained low debt-to-equity ratio. During 2011, we completed two acquisitions and refinanced our debt, which expands our borrowing capacity and extends our debt maturities, while maintaining a low debt-to-equity ratio.
Continued dedication to customers. We earned the top honor from our largest customer, winning the OfficeMax 2011 Supplier of the Year award. In June 2011, we extended our long-term relationship with OfficeMax Incorporated by entering into a new paper purchase agreement. The new agreement recognizes the mutually beneficial commercial partnership.
In line with our business model, the company's compensation program emphasizes a focus on total compensation, with a large portion of our executive officers' pay considered variable, or “at risk.” We consider at risk compensation aligned with our company's performance and, accordingly, the interests of our shareholders. We also closely analyze our compensation elements to make sure we pay competitively in our marketplace so that we can retain and recruit the talented employees necessary to drive financial and operational results. The following chart provides a brief summary of the principal elements of our executive compensation program for 2011, with more details provided later in this Compensation Discussion and Analysis.

37



Compensation Element
Form
Compensation
Objective
Relation to
Performance
Base Salary
Cash, paid biweekly
Attracts and retains talented officers; compensates officers for day-to-day responsibilities
Reflects each officer's responsibilities, performance, skill set, and value in the marketplace
Short-Term Incentive Compensation
Cash bonus, paid annually
Enables total cash compensation to remain competitive within the marketplace for executive talent
Motivates and rewards officers for achieving annual corporate financial and safety results, as well as individual contributions to specific lines of business or the company as agreed to with senior management in the beginning of the year
Long-Term Incentive Compensation
Restricted stock or restricted stock units, with vesting in second and third years after grant
Aligns executive and shareholder interests in driving share price increases; attracts and retains a talented and tenured management team
Encourages and rewards strong financial and operational results that increase our stock price over time
Stock options, with vesting in second and third years after grant and ten-year terms
Aligns executive and shareholder interests in driving share price increases; attracts and retains a talented and tenured management team
Provides value only if our stock price increases over time
Performance units denominated in shares of our common stock, with vesting in second and third years after grant
Focuses management's attention on areas that the compensation committee considers key to the company's long-term success; attracts and retains a talented and tenured management team
Rewards the delivery of long-term business results that benefit our shareholders
Named executive officer compensation for 2011 aligned well with our compensation objectives of focusing on total compensation as compared to our peers and the marketplace for executive compensation, as well as our business performance:
Base salary increases for 2011 were minimal. Only our chief financial officer, who was promoted to the position at the beginning of the year, received an increase in excess of 1.5% of his salary.
Short-term incentive award payouts for 2011 ranged from 123% to 133% of target, based on solid company financial and safety performance and the strong performance of our individual named executive officers during 2011.
In 2011, we resumed our practice of granting annual long-term incentive plan awards to our officers and key managers. The 2011 annual equity awards granted to each of our named executive officers ranged in value from $274,017 to $1,701,965. Resuming annual grants of long-term incentive grants in 2011 reflects our emphasis on long-term compensation and our philosophy of aligning the interests of our executive officers with the interests of our shareholders. The 2011 annual grant values were reduced below fully competitive levels to reflect the multiyear nature of prior awards granted to our officers.

38



We also provide the following additional benefits, primarily for the financial security and well-being of our officers and their families, as described in more detail under Post-Employment Compensation and Employment and Retirement Benefits:
Form of Benefit
Purpose
Health and welfare benefits
Provide for health and well-being
Retirement and deferred compensation plans
Provide postretirement income and encourage long-term employment with the company
Severance agreements
Ensure officers can provide services without distraction in the face of future potential changes and have the ability to provide untainted advice to the board of directors
Limited Perquisites
Provide only those benefits that are consistent with competitive practice as necessary to attract and retain key executives
Other Highlights
We have an executive compensation recovery (clawback) policy.
We do not have single-trigger change-in-control agreements, and our executives' severance agreements do not contain gross-up provisions.
We have stock ownership guidelines for our elected officers that require retention of shares until specific targets are met.
We froze our defined benefit pension plan in 2009. For those officers who had benefits under the Supplemental Pension Plan (SUPP) and/or Supplemental Early Retirement Plan (SERP), these were also frozen.
We eliminated the financial counseling allowance for our executive officers effective April 2011.
Boise Inc. Compensation Philosophy
To attract, retain, and motivate a successful, high-functioning management team and other key talent, our philosophy is to target salary and short- and long-term incentive compensation at the 50th percentile of comparable compensation market data. We also, however, take into account each person's performance, level of experience, and contributions to the company's goals and objectives when making final compensation decisions. We establish similar compensation ranges for positions with similar characteristics and scopes of responsibility, including our named executive officer positions, even if such ranges differ somewhat from comparable positions in other companies.
Balancing competitiveness with internal equity helps support management development, teamwork, and the ability to change assignments throughout the organization as priorities require. Differences in actual compensation between employees in similar positions will reflect individual performance, future potential, and business unit results. This effort also helps us promote talented managers to positions with increased responsibilities and provides meaningful developmental opportunities.
When making decisions, we consider the 50th percentile (median) of market data for our peer group and general industry survey data. We believe taking all of this information into account leads to a competitive target at which the company can effectively recruit, reward, and retain executive talent. We also take into account the general performance of the economy when making recommendations.
For 2011, most of our named executive officers had base salaries within +/- 15% of the median comparable market data.

39



Bonus targets were also very close to the median, so no adjustments were made in 2011, other than the increased target for Mr. Cotterell (as reflected in the Summary Compensation Table), which was effective as of his promotion to chief financial officer.
For the 2011 annual long-term incentive grants, the compensation committee considered the multiyear nature of the 2009 awards in setting target values. Accordingly, while the overall fully competitive award value was targeted at the median, each award was reduced to three-quarters of that number, as described in more detail below, resulting in annual long-term incentive awards for 2011 that were well below the market median.
The compensation committee considered the results of the 2011 shareholder advisory vote on executive compensation as one factor among many during 2011. Over 97% of our shareholders voted favorably on our compensation practices. Because the compensation committee considered this strong favorable vote to be an endorsement of our current executive compensation practices, the compensation committee does not anticipate making material changes to the overall pay structure for 2012 based on the results of the 2011 shareholder vote.
Data Considerations/Benchmarking and Peer Group Data
For our 2011 compensation analysis, the compensation committee worked with Frederic W. Cook & Co., Inc. (Cook & Co.), the compensation committee's independent consultant, to develop a new custom peer group to be used for comparison purposes. The peer group is intended to include companies that:
Operate in similar industries and, to the extent possible, have similar cost structures, business models, and global reach;
Are similarly sized, particularly in terms of revenue and market capitalization;
May be “talent competitors” either in attracting new employees to the organization or in failing to retain individuals who leave for other opportunities;
Shareholders may consider as alternative investment opportunities; and
In totality, provide a reasonable and defensible group for comparison purposes.
When identifying potential peer companies for Boise, Cook & Co. started with an objective set of criteria to filter a large group of companies in related industry and classification sectors down to 40 companies (excluding foreign companies as well as companies trading on pink sheets).
The remaining companies were screened by revenue, which is strongly correlated to compensation levels. Cook & Co. used a broad range of 33% to 300% of Boise's revenue to narrow the group further to 25 companies. With advice from Cook & Co., we evaluated the 25 companies in Boise's revenue range and narrowed them down to a peer group of 17 companies; individual company selection was based on the following considerations, among others:
Boise's competitors as indicated by the company in its 2009 annual report on Form 10-K;
Boise's competitors as indicated by Hoover's online;
Prevalence as an “industry peer” in various analyst reports;
Prevalence in a “peer companies of proposed peers” analysis;
Obtaining an appropriate mix of paper and packaging companies;
Prevalence in Boise's prior executive compensation peer groups (analyzed only to understand the potential impact of consistency in proxy reporting); and
Company size, to create a peer group with summary percentiles reasonably aligned with Boise's revenues, market cap, and enterprise value.

40



The 17-company peer group we used to benchmark 2011 compensation consists of:
Bemis Company, Inc.
Buckeye Technologies Inc.
Clearwater Paper Corporation
Domtar Corporation
Graphic Packaging Holding Company
Greif, Inc.
KapStone Paper and Packaging Corporation
Neenah Paper, Inc.
P.H. Glatfelter Company
Packaging Corporation of America
Rock-Tenn Company
Schweitzer-Mauduit International, Inc.
Smurfit-Stone Container Corporation*
Sonoco Products Company
Temple-Inland Inc.
Verso Paper Corp.
Wausau Paper Corp.
*
For purposes of 2012 compensation determinations, Smurfit-Stone Container Corporation will be excluded from the peer group because it is now a wholly owned subsidiary of Rock-Tenn Company.
Compensation Mix
The key components of our compensation program - base salary, annual short-term incentives, and long-term incentives - have remained substantially the same since the company's inception in 2008, with our program focused chiefly on total compensation rather than the mix of compensation components. The uncertain economy and volatility in the equity markets during this period created complexities that made a formulaic approach to compensation mix impractical, if not impossible, to implement.
Our guiding principle is to align our officers' pay with company performance and, thus, shareholder interests. We also aim to align our compensation program with the marketplace. During late 2010, we began a comprehensive analysis of our compensation philosophy to determine how best to achieve such alignment. Based on this analysis, we adopted the following guidelines:
Target annual base pay at the 50th percentile of the market. We believe this enables us to effectively retain and recruit the talented officers we need to achieve strong financial and operational goals.
Provide at-risk pay opportunities linked to achievement of short- and long-term goals that benefit shareholders. These compensation elements are also structured so target payouts are set at the 50th percentile of the market. These short- and long-term incentives compose a significant portion of each officer's total compensation opportunity, since they are designed to motivate and reward our officers for maximizing shareholder value.
Á 
Long-term performance is the most important measure of our success, because we manage our operations and business affairs for the long-term benefit of our shareholders. For 2011, our named executive officers received long-term incentive compensation opportunities in a mixture of time-vesting restricted stock or restricted stock units, stock options, and performance units.
Á 
Our annual incentive compensation opportunities are tied to achievement of financial goals and individual contributions to the company or individual lines of business. Because we are a manufacturing company, we also link a small portion of at-risk annual short-term incentive pay to the achievement of safety goals.

41



The following chart reflects the allocation for each named executive officer of compensation awarded in 2011 (at target values) among annual long-term incentives, annual short-term incentive pay (bonus), and base salary.
Though we focus primarily on total compensation, the compensation committee believes the allocations among the different forms of compensation should vary based on each officer's position and level of responsibility. The actual compensation mix in any given year may vary from targeted levels, because compensation recognized from the annual short-term incentive and long-term incentive programs is linked strongly to performance and, thus, is inherently variable. The actual amounts paid will be commensurate with the level of achievement of preestablished financial and performance goals. Thus, when the company achieves these goals, we will reward our officers accordingly. Conversely, if the company falls short of achieving its stated goals, payments under these variable programs will decrease commensurate with the level of shortfall.
As previously noted, strong safety, financial, and individual performance in 2011 led to short-term incentive compensation for our named executive officers that was above target. In addition, because the 2011 long-term incentive grants were sized to represent three-quarters of a fully competitive award and thus were below our target values, base salary and short-term incentive compensation carried a relatively higher weight for 2011 than we anticipate for 2012 and beyond.
Base Pay
When determining base pay for our named executive officers for 2011, the compensation committee reviewed our officers' 2010 base pay in relation to the median range of base pay for comparable positions in our peer group and to general industry data provided by Cook & Co. Based on this review, we increased each named executive officer's base pay by $5,000 and increased Mr. Cotterell's base pay to reflect the increased responsibilities associated with his promotion to chief financial officer. No other base pay adjustments were made for 2011, as shown in the table below.
Named Executive Officer
2011 Ending Base Salary
2010 Ending Base Salary
2010 to 2011 Increase
Alexander Toeldte
$
805,000

$
800,000

0.6
%
Samuel K. Cotterell*
385,000

N/A

N/A

Robert A. Warren
410,000

405,000

1.2
%
Karen E. Gowland*
355,000

N/A

N/A

Judith M. Lassa
355,000

350,000

1.4
%
* Mr. Cotterell and Ms. Gowland were not named executive officers in 2010.

42



Short-Term Incentive Compensation
Our short-term incentive plan awards consist of cash awards intended to reward our executive officers for their performance during 2011. The compensation committee believes those executive officers who have a greater ability to influence Boise's performance should have a higher level of at-risk compensation. Accordingly, target bonus levels vary by position. With the exception of Mr. Cotterell, whose target award percentage was increased to better reflect market data and the increased scope of his responsibilities following his promotion to chief financial officer, target award percentages for 2011 remained the same as 2010. As a result, target award percentages based on year-end compensation rates were as follows for 2011:
Named Executive Officer
Target Award as a Percentage of Base Salary
Alexander Toeldte
100%
Samuel K. Cotterell
65%
Robert A. Warren
75%
Karen E. Gowland
65%
Judith M. Lassa
65%
In 2011, we retained our overall short-term incentive plan design but added an individual performance element. A large portion of our named executive officers' annual incentive plan is the same as the plan in which most of our corporate employees participate, except that our officers and high-level managers have a portion of their plan tied to individual performance. Aside from the individual performance portion of the award, the compensation committee maintained the design of our previous years' plans, including the incentive cash flow and safety metrics components. In the compensation committee's view, the plan continued to focus our organization on delivering key financial and safety results and was clearly understood by our employees.
To maintain the tax deductibility of the short-term incentive plan payments to those officers potentially subject to Section 162(m) of the Internal Revenue Code, as described under Tax Considerations below, the compensation committee used a bonus pool approach for its named executive officers and potential named executive officers for 2011. The bonus pool was calculated based on performance goals set by the compensation committee at the outset of the year, with an established maximum payout each participant can receive (based on a percentage of the bonus pool). The compensation committee then assessed business and individual performance and determined the actual amount of each participant's award.
Safety. Safety remains an integral value and is of the highest importance. Because we believe each person in the company is accountable for safety and our named executive officers must set an example for everyone at Boise, we base 10% of our named executive officers' annual incentive compensation plan on safety results at our legacy locations, measured by recordable incident rate. (Tharco and Hexacomb were not integrated into our safety programs for 2011, so their safety performance was not measured for purposes of the officers' short-term incentive plan.) Because the company's actual safety performance at our legacy locations (recordable incident rate of 0.83) far surpassed our target (recordable incident rate of 1.45) and our performance in all prior years, the portion of our named executive officers' short-term incentive compensation plan tied to safety paid out at the maximum, or 2.25 times target.
Company Financial Results. In 2011, we based 65% of our named executive officers' short-term incentive compensation plan on total company financial results because annual performance is critical to maximizing long-term shareholder value. A focus on total company performance also encourages officers to continue to have a sharp focus on financial results and on working as a team. We use “incentive cash flow” as the financial metric (EBITDA (earnings before interest, taxes, and depreciation, amortization, and depletion) minus a working capital charge, with a price buffer that is based on 50% of the unbudgeted change in paper sales prices) because it focuses officers on both profitability and working capital utilization. We incorporate the buffer on paper prices due to the difficulty of predicting and influencing price in a commodity market. We believe the buffer increases management's focus on more controllable elements and thus provides a more appropriate compensation opportunity.

43



Our total company incentive cash flow achievement of $294.5 million exceeded our target incentive cash flow of $287.0 million by nearly 3%. Accordingly, the part of our officers' short-term incentive compensation plan based on financial results paid out at 1.09 times target for 2011.
Individual Performance. Because different officers have influence over different operational and financial variables, we incorporated an individual performance component into our 2011 short-term incentive plan for executive officers. The individual component allows more robust, specific, and measurable goals for each of our officers.
For the part of our short-term incentive compensation plan attributable to individual performance, the compensation committee considered the recommendations of the chief executive officer for all named executive officers (excluding himself) and conducted its own evaluation of the chief executive officer. This assessment evaluated individual performance during the year, as well as performance of any business or function led by the officer, based on goals established at the beginning of the year. For the chief executive officer, those goals were set by the compensation committee; for all other named executive officers, they were determined by the compensation committee working in conjunction with the chief executive officer.
The types of individual performance objectives evaluated for each named executive officer participant included such things as achieving profitability targets and driving key business growth, emphasizing and driving safety performance, raising core business performance while reducing risk, developing and leveraging key leaders while strengthening the overall leadership bench, improving customer experience and retention, reducing manufacturing input costs, and managing the acquisition and integration of new businesses.
Bonus Outcomes. Boise's strong performance in 2011 appropriately resulted in above-target annual incentive compensation payouts for our named executive officers. Total individual cash bonuses paid to each named executive officer for 2011 were as follows:
Named Executive Officer
Target Bonus
Actual Bonus
Percent of Target
Alexander Toeldte
$
805,000

$
1,032,718

128
%
Samuel K. Cotterell
250,250

308,683

123
%
Robert A. Warren
307,500

410,051

133
%
Karen E. Gowland
230,750

284,630

123
%
Judith M. Lassa
230,750

283,093

123
%
Long-Term Incentive Awards
Promotion Award. On January 1, 2011, Mr. Cotterell was awarded a special long-term equity award of 18,000 restricted stock units, scheduled to vest in equal amounts in 2012 and 2013. This award was intended to recognize the responsibilities of his new position as chief financial officer in advance of any annual long-term incentive compensation grant he might be given in March 2011.
Annual Grants. The compensation committee asked Cook & Co. to provide it with an analysis of the value of the 2009 long-term incentive awards to help assist the compensation committee in its decision on the size and structure of the 2011 annual long-term incentive awards. In doing so, Cook & Co. conducted a share-based analysis, looking at our share usage rate in 2009 and comparing it to a typical year for our peer group. Cook & Co. also gave consideration to the amount of compensation actually realized by management since the company's formation in 2008.
In 2009, our share price was extremely depressed, and thus, trying to provide an equity award based on a market-competitive economic value would have resulted in substantial dilution. The compensation committee decided to provide an equity award to all officers and senior management participating in the long-term incentive program equal to 5% of the company's outstanding shares in the aggregate, which equity award totaled 3,864,000 shares. Our named executive officers at the time of award received 54.6% of the total amount of these equity awards. Because our share price at the time of these equity awards was historically low, the compensation committee believed these awards would serve as a multiyear award and provide strong upside potential.

44



Cook & Co. agreed that it would be appropriate for the 2009 awards to be considered front-loaded, multiyear awards. To continue to account for the size of the 2009 awards, Cook & Co. recommended the company provide for a long-term incentive award for its executive officers in 2011 that was structured to deliver target value between 50% and 100% of a fully competitive award for the year. The compensation committee agreed to a three-quarters fully competitive award for 2011.
The compensation committee determined the target total dollar value of annual long-term incentive compensation delivered to each named executive officers based on a combination of the following:
The anticipated contribution by the officer;
The equity awards required from a competitive point of view to attract and/or retain the services of the officer;
The market data for competitive positions provided by Cook & Co.;
The value of previous equity awards granted to that officer;
The overall cost of the equity compensation program; and
The total value of all other forms of compensation relative to the target value of the annual long-term incentives.
The target value actually awarded to each named executive officer was converted into the number of shares subject to each type of award (based on the mix of long-term incentives described below), using the average closing price of our common stock on the 15 trading days prior to and including the date of grant or, for stock options, the Black-Scholes value of our stock options using the average closing price of our common stock on the 15 trading days prior to and including the date of grant. The 15-trading-day period was intended to provide some protection against fluctuations in our stock price on the date of grant. Because the 15-day average closing price of $8.89 per share was higher than the closing price on the date of grant ($8.55 per share), the actual value of the long-term incentive awards granted was as shown in the right-hand column below:
Named Executive Officer
Approximate Fully Competitive Value
Target Value of LTI Award (75% of Fully Competitive Value)
Actual Value of Annual LTI Grant
Alexander Toeldte
$
2,360,000

$
1,770,000

$
1,701,965

Samuel K. Cotterell
515,000

385,000

370,185

Robert A. Warren
735,000

550,000

528,851

Karen E. Gowland
380,000

285,000

274,017

Judith M. Lassa
380,000

285,000

274,017

If the above awards had been granted at the fully competitive values, all of the awards other than the award to the chief executive officer would have fallen near or slightly below our competitive range of +/- 15% of the median. The chief executive officer's award at the fully competitive value was at the median. However, because all of the above awards to the named executive officers were reduced to three-quarters of the fully competitive value based on considerations of the 2009 and prior equity grants, the target value of the annual long-term incentive awards actually granted in 2011 were well below median levels. However, as noted above, Mr. Cotterell received an additional promotion grant of 18,000 restricted stock units in January 2011. His promotion award was worth approximately $143,000 at the time of grant, so his total long-term incentive awards for 2011 were within our targeted competitive range.

45



In designing the 2011 annual long-term incentive awards, the compensation committee intended to create a performance-oriented design in both the mix and structure of the awards. Long-term incentives awarded to our named executive officers consisted of equity compensation allocated as follows, taking into account a recommendation from Cook & Co:
34% restricted stock or restricted stock units;
33% stock options; and
33% performance units.
This allocation was intended by the compensation committee to provide the right mix to meet the motivational needs of our executive officers, introduce the performance-based elements of stock options and performance units, provide a balanced approach in line with our peer company practices, and manage potential dilution to our shareholders.
Each of the 2011 annual long-term incentive plan grants vests in equal installments two and three years after the date of grant. The compensation committee considered a three-year vesting period to provide the right amount of retention value, particularly when viewed in combination with our officer stock ownership guidelines. Unvested awards are forfeited if an officer voluntarily leaves the company and are generally vested pro rata if he or she reaches age 55 and retires prior to the scheduled vesting.
Restricted Stock and Restricted Stock Units. Restricted stock and restricted stock units reward and retain our executive officers by offering them the opportunity to receive shares of our stock on the date the restrictions lapse, so long as they continue to be employed by the company. Generally, our officers are granted restricted stock. However, if an officer is considered retirement-eligible based on our plan definitions, he or she is granted restricted stock units, because restricted stock may have adverse tax consequence for officers who are or become retirement-eligible prior to the award's vesting.
Stock Options. We believe that stock options are an effective means to focus our executive officers on delivering long-term value to our shareholders, because stock options provide value only if our stock price increases over time. The exercise price for all stock option grants is set at the closing price of our common stock on the date of grant. Our stock options have a term of ten years, which the compensation committee considers to be in line with market practices, while encouraging retention and long-term value creation.
Performance Units. As noted above, performance units, at target, constituted 33% of the total dollar value of the annual long-term incentive compensation delivered to each named executive officer for 2011. If the award pays out at target, each performance unit represents the right to receive one full share of our common stock.
In establishing the structure of the 2011 performance units, the compensation committee selected a performance measurement that is intended to reward our executive officers while creating value for our shareholders. The 2011 performance units are measured based on our return on net operating assets, or RONOA. The compensation committee believes that RONOA reminds managers that there is a cost of acquiring and holding assets, and it provides insight into how efficiently management uses its assets to generate earnings. The compensation committee also views RONOA as complementary to stock options and restricted stock grants, which align more directly with total shareholder return.
Taking into account discussions with Cook & Co., the compensation committee decided the RONOA goal should be based on our absolute performance rather than our performance relative to our peers' performance. While the industry swings widely in parallel, the compensation committee believes using our peers' performance would require us to assume we have similar challenges, which may not always be the case.
The overall goal in determining the RONOA targets was to set challenging yet attainable performance targets. The target RONOA of 10.0% for the 2011 awards was based on a review of our historical RONOA performance with the objective of recovering our weighted average cost of capital (WACC) over time. The selected target was higher than our historical averages and fell between the internally and externally calculated WACC. Given the cyclicality of the industry, the compensation committee approved a two-year performance period. Payouts, if any, will be on a sliding scale from threshold (7.9% RONOA) to maximum (13.0% RONOA) based on our average annual RONOA

46



performance for 2011 and 2012. The threshold payout is equal to 30% of the target value (or 0.3 shares of stock for each performance unit); the maximum payout is equal to 200% of the target value (or 2.0 shares of stock for each performance unit).
Future Awards. Beginning in 2012, the compensation committee expects to grant our named executive officers fully competitive long-term incentive awards. Considering Cook & Co.'s recommendation, we intend to provide annual equity awards for the following reasons:
Maintain retention effectiveness on a continuous basis;
Ease pressure on performance goal setting for performance units;
Allow executive officers to build a portfolio of exercise prices for stock options;
Provide more transparency to our executive officers; and
Align the company's long-term incentive program with typical market practice.
Dividend Equivalent Awards
In December 2010 and May 2011, the company paid special cash dividends to its shareholders of record. At the time the dividends were declared, our named executive officers held unvested equity awards, which, pursuant to the terms of the award agreements, did not accrue dividends. To align management and shareholder interests regarding dividend strategy, the compensation committee granted to the named executive officers the following awards during 2011:
For the December 2010 dividend, an equity award scheduled to vest in March 2012 that is equivalent in value to the dividends the officer would have received on common shares;
For the May 2011 dividend and future dividends, if any, a cash payment on restricted stock and restricted stock unit awards equivalent in value to the dividends the officer would have received on common shares to be paid at the time the underlying awards vest; and
Also for the May 2011 dividend and future dividends, if any, a common share payment on unvested stock options equal to the dividends paid on common shares during the period from the grant date to the vest date of the stock options, to be paid at the time the underlying awards vest.
Post-Employment Compensation
We have severance agreements with our named executive officers. These agreements provide severance benefits and protect other benefits in the event of involuntary termination of employment without cause. These severance agreements provide for payment of a multiple of salary and/or target bonus and continuation of benefits in the event of certain specified terminations. We believe that benefits provided under these agreements are in an amount and form that will help ensure we will have the benefit of our named executive officers' services without distraction in the face of future potential changes. The compensation committee believes these agreements are in the best interest of the company and our shareholders. Severance payments and benefits under these severance agreements are detailed in the Severance Tables section in this proxy statement.
Employment and Retirement Benefits
Deferred Compensation. We permit our named executive officers and our other key employees to defer receipt of a portion of their base salary and any earned annual short-term incentive awards. Deferred compensation is held in a notional company account and credited with interest. While the plan participant is employed by Boise, the annualized interest rate on deferred compensation is equal to the Moody's Composite Average of Yields on Corporate Bonds (Moody's) times 130%. If the plan participant separates from service other than through retirement, death, or disability, the interest is reduced to Moody's. The deferred compensation plan is intended to help employees achieve their retirement savings goals, while promoting retention by providing long-term savings on a tax-efficient basis. In addition, because the deferred compensation plan is unfunded and deferred compensation payments are satisfied from the company's general assets, the plan provides a strong incentive for our officers to

47



minimize risks that could jeopardize the long-term financial health of the company. Four of our five named executive officers participate in our deferred compensation plan.
Retirement and Savings Plans. We froze our defined benefit pension plan in 2009. For those officers who had a SUPP and/or SERP, these were also frozen in 2009. We continue to maintain our 401(k) savings plan, which is tax-qualified and available to substantially all U.S. employees. The company makes contributions equal to up to 6% of eligible salary. Alternatively, most participants in the deferred compensation plan, including those of our named executive officers who participate, may elect to have the company's contributions provided to the deferred compensation plan, rather than the 401(k) savings plan.
Insurance Plans. Boise offers medical, prescription drug, dental, and vision benefits to all of our full-time employees, including our named executive officers. These programs are comparable to those provided by our peer companies and are designed to help our employees manage their overall health and wellness. We also provide life insurance and accidental death and dismemberment insurance to all full-time employees. In addition, as described in the Summary Compensation Table section in this proxy statement, certain of our named executive officers also receive supplemental life insurance coverage. The Supplemental Life Plan was provided to elected officers who were officers of OfficeMax Incorporated (formerly Boise Cascade Corporation) prior to July 31, 2003.
Perquisites. Mr. Toeldte and Ms. Gowland have personal country club memberships for which the company pays the country club dues and associated expenses. The company does not provide a tax “gross-up” on these payments. Though the compensation committee does not plan to provide club memberships to new officers, we view club memberships as one element in a competitive compensation package sometimes necessary to attract and retain particular executives. In addition, we maintain a corporate country club membership to which Mr. Warren has access for business and personal purposes. The company does not reimburse Mr. Warren for country club dues or for any expenses incurred at the club for his personal benefit.
Through early 2011, the company provided an allowance to our elected officers for financial counseling services, including investment planning, tax preparation, planning and compliance, and estate planning. The amount available under the program, including the tax gross-up amount, was a maximum of $5,000 each calendar year. Unused amounts up to one year's allowance ($5,000) were allowed to be carried over from year to year. This program was discontinued in April 2011, because the compensation committee no longer considered the allowance necessary to attract and retain top executives.
Stock Ownership Guidelines for Our Elected Officers
In late 2010, our board of directors established company stock ownership guidelines for our elected officers, which are intended to more closely align their interests with those of our shareholders. These guidelines establish annual retainer or salary-based stock ownership targets and require retention of a certain ratio of after-tax profit shares from our equity compensation programs until those targets are met.
As reflected in the following table, the stock ownership guidelines for our elected officers established three tiers - with one tier for our chief executive officer, a second for our executive and senior vice presidents, and a third for our vice presidents, providing that, over time, each should acquire and maintain stock ownership in the company equal to six times, three times, and two times his or her annual base salary, respectively. Common shares directly owned by the elected officer or beneficially owned through a trust or by a spouse are considered qualifying shares for purposes of the stock ownership guidelines. Unvested restricted shares or restricted stock units, unexercised stock options, and unvested performance units do not count toward the guidelines.
To achieve these goals, officers are to retain 50% of their after-tax profit shares from our equity compensation programs until their stock ownership equals four times, two times, and one and one-half times their annual base salaries for tiers one, two, and three, respectively, and then 25% of such after-tax profit shares to reach and maintain their stock ownership targets.

48



 
Level
Executives
Retention Ratio of
After-Tax Profit
Shares Prior to
Meeting Initial
Salary Guideline
Initial Annual
Base Salary
Multiple
Guideline
Retention Ratio of
After-Tax Profit
Shares After
Meeting Initial
Salary Guideline
Final Annual
Base Salary
Multiple
Guideline
 
 
 
 
 
 
 
 
Tier I
CEO
50%
4x
25%
6x
 
 
Tier II
EVP, SVPs
50%
2x
25%
3x
 
 
Tier III
VPs
50%
1.5x   
25%
2x
 
As of March 2012, all of our named executive officers are holding shares in compliance with these guidelines, and three hold sufficient company stock to exceed the final annual base salary multiple guideline.
Role of Executive Compensation Consultant
The compensation committee regularly reviews compensation paid to officers in other comparable companies to make decisions regarding appropriate compensation levels. In late 2010, the compensation committee conducted a review of compensation consulting firms and ultimately chose Cook & Co. as its new, independent compensation consultant to replace its prior consultant, Meridian (formerly Hewitt Associates). Cook & Co. does not provide any other services to Boise other than advisory work on behalf of the compensation committee.
A Cook & Co. representative attends most regularly scheduled meetings of the compensation committee, as well as preparatory meetings with the chair of the compensation committee. Among other tasks assigned by the compensation committee, Cook & Co. assists the compensation committee in its annual review of executive officer compensation by conducting a competitive pay and performance analysis for our executive officer positions that compares our pay practices and company performance results against a composite of data from our custom group of peer companies (described above under the caption Data Considerations/Benchmarking and Peer Group Data) and data reported in published surveys of executive compensation for comparably sized organizations. Cook & Co will also typically review and advise the compensation committee on proposed compensation decisions affecting the company's named executive officers, as well as any presentations to be delivered to the compensation committee. Additionally, a Cook & Co. representative attends executive sessions of the compensation committee as requested by the compensation committee.
Role of Management
Management provides data, analyses, input, and recommendations to the compensation committee through our chief executive officer and our vice president of human resources and corporate affairs. The compensation committee gives significant weight to our chief executive officer's evaluation of each named executive officer's performance and recommendations of appropriate compensation (other than his own).
Tax Considerations
The compensation committee structures and administers our annual and long-term incentive compensation plans and arrangements for our named executive officers to maximize the tax deductibility of the payments as “performance-based” compensation under Section 162(m) of the Internal Revenue Code, to the extent practical. To this end, the compensation committee adopted a bonus pool approach for the 2011 annual short-term incentive awards to comply with the performance-based exception to the deductibility limitations of Section 162(m) for those officers potentially subject to Section 162(m).


49



Executive Compensation Recovery Policy
In February 2011, the compensation committee of our board of directors adopted the following executive compensation recovery policy:
In addition to any other remedies available to the company (but subject to applicable laws), if the board of directors determines it is appropriate, the company may recover (in whole or in part) any incentive payment, unvested equity award, or other compensation received by any current or former elected officer of the company, including forfeiture of the awards or incentives, to the extent that such incentive payment, equity award, or other compensation is or was, in the sole discretion of the compensation committee, based on any financial result or operating metric impacted by the officer's knowing or intentional fraudulent or illegal conduct or other wrongful conduct, including gross negligence, detrimental to the company. This policy, which is effective as of February 23, 2011, may be terminated or amended by the board of directors at any time.
The compensation committee will reevaluate and, if necessary, revise this policy to comply with the Dodd-Frank Wall Street Reform and Consumer Protection Act once the SEC finalizes the rules implementing clawback requirements.
Risks Associated with Our Compensation Policies and Practices
In 2011, as in prior years, we assessed the risks associated with our compensation policies and practices. Based on this assessment, the compensation committee determined these risks were not reasonably likely to have a material adverse effect on our company. Among other things, the compensation committee considered the compensation arrangements and risk mitigation features noted in the Risk Analysis of Employee Compensation Policies and Practices section in this proxy statement.

50



Compensation Tables
The following Summary Compensation Table presents compensation information for the following five executive officers, who we refer to as our named executive officers elsewhere in this proxy statement:
Alexander Toeldte - Compensation information is presented for Mr. Toeldte, our president and chief executive officer, for the fiscal years ended December 31, 2011, 2010, and 2009.
Samuel K. Cotterell - Mr. Cotterell was elected as our senior vice president and chief financial officer effective January 1, 2011. Mr. Cotterell was not one of our named executive officers in our 2010 and 2009 proxy statements. Accordingly, compensation information for Mr. Cotterell is presented only for the fiscal year ended December 31, 2011.
Robert A. Warren - Compensation information is presented for Mr. Warren, our executive vice president and chief operating officer, for the fiscal years ended December 31, 2011, 2010, and 2009.
Karen E. Gowland - Ms. Gowland, our senior vice president, general counsel and secretary, was not one of our named executive officers in our 2010 and 2009 proxy statements. Accordingly, compensation information for Ms. Gowland is presented only for the fiscal year ended December 31, 2011.
Judith M. Lassa - Ms. Lassa, senior vice president of our paper and specialty products operations, was not one of our named executive officers in our 2009 proxy statement. Accordingly, compensation information for Ms. Lassa is presented only for the fiscal years ended December 31, 2011 and 2010.

Summary Compensation Table
 
Named Executive Officer
and Principal Position
Year
Salary
($) (1)
Stock
Awards
($) (2)
Option
Awards
($) (3)
Non-Equity
Incentive
Plan
Compensation
($) (4)
Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
($) (5)
All Other
Compensation
($) (6)
Total
($) 
 
 
 
 
 
 
 
 
 
 
 
Alexander Toeldte
President &
Chief Executive Officer
2011
$
803,654

$
1,484,349

$
561,429

$
1,032,718

$
1,738

$
15,552

$
3,899,440

 
2010
800,000



1,428,800

1,977

25,162

2,255,939

 
2009
793,940

412,800


1,319,992

2,737

25,530

2,554,999

 
 
 
 
 
 
 
 
 
 
 
Samuel K. Cotterell
Senior Vice President &
Chief Financial Officer
2011
381,731

424,873

122,115

308,683

52,727

16,584

1,306,713

 
 
 
 
 
 
 
 
 
 
 
 
Robert A. Warren
Executive Vice President &
Chief Operating Officer
2011
408,654

471,208

174,454

410,051

111,907

16,032

1,592,306

 
2010
365,577

360,000


482,461

72,236

15,212

1,295,486

 
2009
315,247

124,700


348,560

51,891

12,587

852,985

 
 
 
 
 
 
 
 
 
 
 
Karen E. Gowland
Senior Vice President,
General Counsel & Secretary
2011
353,654

257,218

90,397

284,630

238,273

47,211

1,271,383

 
 
 
 
 
 
 
 
 
 
 
 
Judith M. Lassa
Senior Vice President,
Paper & Specialty Products
2011
353,654

260,108

90,397

283,093

239,492

36,239

1,262,983

 
2010
322,115



406,315

154,588

19,822

902,840


51



(1)
2011 Salary - The 2011 amounts reported for our named executive officers represent salaries paid from January 1 through December 31, 2011.

2010 Salary - The 2010 amounts reported for Ms. Lassa and Messrs. Toeldte and Warren represent salaries paid from January 1 through December 31, 2010.

2009 Salary - The 2009 amounts reported for Messrs. Toeldte and Warren represent salaries paid from January 1 through December 31, 2009.
 
 
(2)
2011 Stock Awards - On January 1, 2011, pursuant to the Boise Inc. Incentive and Performance Plan, the compensation committee of our board of directors awarded Mr. Cotterell, at no cost, 18,000 service-condition vesting restricted stock units. This award represented a 2011 special equity incentive plan award upon Mr. Cotterell's election as our senior vice president and chief financial officer effective January 1, 2011.

On March 15, 2011, pursuant to the Boise Inc. Incentive and Performance Plan, the compensation committee of our board of directors awarded Ms. Gowland, Ms. Lassa, and Mr. Toeldte, at no cost, 8,608, 8,946, and 40,212 shares of service-condition vesting restricted stock, respectively, and awarded Messrs. Cotterell and Warren, at no cost, 3,984 and 13,662 service-condition vesting restricted stock units, respectively. These awards represented 2011 special equity incentive plan awards, the values of which were equivalent to the dividends the named executive officers would have received on their restricted stock or restricted stock units held as of the record date (November 17, 2010) for the special cash dividend paid on December 3, 2010. The number of shares awarded to each of our named executive officers was calculated using the company's share price on the respective vesting dates - February 28, 2011, and March 15, 2011. The value of these awards did not include the market-condition vesting portion of the 2008 equity incentive plan awards, which were forfeited on March 1, 2011.

On March 15, 2011, as the first component of their 2011 regular equity incentive plan awards, pursuant to the Boise Inc. Incentive and Performance Plan, the compensation committee of our board of directors awarded Mr. Toeldte, at no cost, 67,694 shares of service-condition vesting restricted stock, and awarded Ms. Gowland, Ms. Lassa, and Messrs. Cotterell and Warren, at no cost, 10,898, 10,898, 14,724, and 21,034 service-condition vesting restricted stock units, respectively. Also on March 15, 2011, as the second component of their 2011 reqular equity incentive plan awards, the compensation committee of our board of directors awarded Ms. Gowland, Ms. Lassa, and Messrs. Toeldte, Cotterell, and Warren, at no cost, 10,578, 10,578, 65,702, 14,290, and 20,416 performance units, respectively.

The amounts reported for these 2011 special and regular equity incentive plan awards reflect the aggregate grant date fair value of the awards computed in accordance with FASB ASC Topic 718.

2010 Stock Awards - Our named executive officers did not receive a regular stock award during 2010. However, upon Mr. Warren's election as our executive vice president and chief operating officer effective November 1, 2010, pursuant to our Boise Inc. Incentive and Performance Plan, the compensation committee of our board of directors awarded Mr. Warren, at no cost, a special service-condition vesting award of 50,000 restricted stock units. The amount reported for Mr. Warren's award reflects the aggregate grant date fair value of the award computed in accordance with FASB ASC Topic 718.

2009 Stock Awards - On March 16, 2009, pursuant to our Boise Inc. Incentive and Performance Plan, the compensation committee of our board of directors awarded Messrs. Toeldte and Warren, at no cost, 960,000 restricted stock shares and 290,000 restricted stock units, respectively. These 2009 stock awards were both service-condition vesting awards. The amounts reported for these awards reflect the aggregate grant date fair value of the awards computed in accordance with FASB ASC Topic 718.

 
 
(3)
2011 Option Awards - On March 15, 2011, as the final component of their 2011 regular equity incentive plan awards, pursuant to the Boise Inc. Incentive and Performance Plan, the compensation committee of our board of directors awarded Ms. Gowland, Ms. Lassa, and Messrs. Toeldte, Cotterell, and Warren, at no cost, 21,472, 21,472, 133,356, 29,006, and 41,438 nonqualified stock options, respectively. The amounts reported for these awards reflect the aggregate grant date fair value of the awards computed in accordance with FASB ASC Topic 718.
 
 
(4)
2011 Non-Equity Incentive Plan Compensation - On February 23, 2011, the compensation committee of our board of directors approved the 2011 short-term incentive award criteria for our named executive officers pursuant to our Boise Inc. Incentive and Performance Plan. Payments were made to our named executive officers under the 2011 awards because our performance objectives were met.

2010 Non-Equity Incentive Plan Compensation - On February 18, 2010, the compensation committee of our board of directors approved the 2010 short-term incentive award criteria for Ms. Lassa and Messrs. Toeldte and Warren pursuant to our Boise Inc. Incentive and Performance Plan. Payments were made to these officers under the 2010 awards because our performance objectives were met.

2009 Non-Equity Incentive Plan Compensation - On February 19, 2009, the compensation committee of our board of directors approved the 2009 short-term incentive award criteria for Messrs. Toeldte and Warren pursuant to our Boise Inc. Incentive and Performance Plan. Payments were made to these officers under the 2009 awards because our performance objectives were met.

52



(5)
Amounts disclosed in the Change in Pension Value and Nonqualified Deferred Compensation Earnings column include the following:
 
Named Executive Officer
Year
Change in
Pension Value
($) (a)
Nonqualified Deferred
Compensation Earnings
($) (b)
 
 
 
 
 
 
Alexander Toeldte
2011
$

$
1,738

 
2010

1,977

 
2009

2,737

 
 
 
 
 
 
Samuel K. Cotterell
2011
51,945

782

 
 
 
 
 
 
 
 
Robert A. Warren
2011
107,202

4,705

 
2010
71,886

350

 
2009
51,891


 
 
 
 
 
 
Karen E. Gowland
2011
234,325

3,948

 
 
 
 
 
 
 
 
Judith M. Lassa
2011
239,110

382

 
2010
154,588


(a)
Mr. Toeldte is not eligible to participate in our pension plans. The amounts reported for Ms. Gowland, Ms. Lassa, and Messrs. Cotterell and Warren reflect the actuarial increase in the present value of their benefits under all of our pension plans using interest rate and mortality rate assumptions consistent with those used in our financial statements and include amounts these officers may not currently be entitled to receive because such amounts are not yet vested. For further information on the valuation method and all material assumptions applied in quantifying these amounts, please refer to our 2011 annual report on Form 10-K, Item 8. Notes to Consolidated Financial Statements, Footnote 9, Retirement and Benefit Plans.
 
 
(b)
The amounts reported for our named executive officers reflect the above-market portion of interest they have earned on compensation they have deferred. The above-market portion represents interest on deferred compensation that exceeds 120% of the applicable federal long-term rates, with compounding at the rate that corresponds most closely to the rate under our plan (130% of Moody's Composite Yields on Corporate Bonds).

53



(6)
Amounts disclosed in the All Other Compensation column including the following:
Named Executive Officer
Year
Company
Contributions to
Savings Plan
($) (a)
Company
Contributions to
Deferred
Compensation
Plan
($) (b)
Company-Paid
Portion of
Executive Officer
Life Insurance
($) (c)
Reportable
Perquisites
($) (d)
 
 
 
 
 
 
Alexander Toeldte
2011
$
14,700

$

$
852

$

2010
13,575


1,512

10,075

2009
6,300

17,718

1,512


 
 
 
 
 
 
Samuel K. Cotterell
2011
14,700


1,884


 
 
 
 
 
 
Robert A. Warren
2011
14,700


1,332


 
2010
13,220


1,992


 
2009
10,595


1,992


 
 
 
 
 
 
Karen E. Gowland
2011
2,990

36,921

7,300


 
 
 
 
 
 
Judith M. Lassa
2011
12,422

15,915

7,902


 
2010
12,275


7,547


(a)
Our Savings Plan is a defined contribution plan intended to be qualified under Section 401(a) of the Internal Revenue Code that contains a cash or deferred arrangement meeting the requirements of Section 401(k) of the Code.
 
 
(b)
Our Deferred Compensation Plan is a nonqualified savings plan offered to our key employees, including our named executive officers. Participants in our Deferred Compensation Plan may choose to have matching contributions made under our Deferred Compensation Plan in lieu of receiving matching contributions under our Savings Plan.
 
 
(c)
We maintain two plans under which company paid life insurance is made available to our officers:

Salaried Employee Life Insurance Plan - Under our Salaried Employee Life Insurance Plan, we provide, at our expense during each salaried employee's period of employment, life insurance in an amount equal to the employee's base salary. All of our salaried employees, including our named executive officers, are covered by this plan.

Supplemental Life Plan - Ms. Gowland and Ms. Lassa are eligible for and participated in our Supplemental Life Plan. This plan is for elected officers who were officers of OfficeMax Incorporated (formerly Boise Cascade Corporation) prior to July 31, 2003. The plan provides participants with an insured death benefit during employment and, in limited cases, after retirement. Participants in this plan can purchase a life insurance policy from a designated insurance carrier, with policy premiums to be paid by us as described in the plan. The plan provides the participant with a target death benefit equal to two times his or her base salary while employed by us and a target postretirement death benefit equal to one times his or her final base salary, both of which are less any amount payable under our group term life insurance policy.
 
 
(d)
The 2011 perquisites for our named executive officers are not reported because the total amounts did not exceed $10,000.

54



Grants of Plan-Based Awards Table
The following table presents information concerning each grant of a non-equity and equity award made to our named executive officers in 2011 under our Boise Inc. Incentive and Performance Plan.
Named Executive Officer
and Type of Award
Grant
Date
Approval
Date
Estimated Future Payouts
Under Non-Equity 
Incentive Plan Awards
 
Estimated Future Payouts
Under Equity 
Incentive Plan Awards
Exercise or
Base Price of
Option Awards
($/Sh)
Grant Date
Fair Value
of Stock
and Option
Awards
($) (7)
Threshold
($)
Target
($)
Maximum
($)
 
Threshold
(#)
Target
(#)
Maximum
(#)
 
 
 
 
 
 
 
 
 
 
 
 
Alexander Toeldte
 
 
 
 
 
 
 
 
 
 
 
Non-Equity Award (1)
2/23/11
$
241,500

$
805,000

$
1,811,250

 



$

$

Special Equity Award - Restricted Stock (2)
3/15/11
2/23/11



 

40,212



343,813

Regular Equity Award - Restricted Stock (3)
3/15/11
3/14/11



 

67,694



578,784

Regular Equity Award - Performance Units (4)
3/15/11
3/14/11



 
19,711

65,702

131,404


561,752

Regular Equity Award - Stock Options (5)
3/15/11
3/14/11



 

133,356


8.55

561,429

 
 
 
 
 
 
 
 
 
 
 
 
Samuel K. Cotterell
 
 
 
 
 
 
 
 
 
 
 
Non-Equity Award (1)
2/23/11
75,075

250,250

563,063

 





Special Equity Award - Restricted Stock Units (6)
1/1/11
12/18/10



 

18,000



142,740

Special Equity Award - Restricted Stock Units (2)
3/15/11
2/23/11



 

3,984



34,063

Regular Equity Award - Restricted Stock Units (3)
3/15/11
3/14/11



 

14,724



125,890

Regular Equity Award - Performance Units (4)
3/15/11
3/14/11



 
4,287

14,290

28,580


122,180

Regular Equity Award - Stock Options (5)
3/15/11
3/14/11



 

29,006


8.55

122,115

 
 
 
 
 
 
 
 
 
 
 
 
Robert A. Warren
 
 
 
 
 
 
 
 
 
 
 
Non-Equity Award (1)
2/23/11
92,250

307,500

691,875

 





Special Equity Award - Restricted Stock Units (2)
3/15/11
2/23/11



 

13,662



116,810

Regular Equity Award - Restricted Stock Units (3)
3/15/11
3/14/11



 

21,034



179,841

Regular Equity Award - Performance Units (4)
3/15/11
3/14/11



 
6,125

20,416

40,832


174,557

Regular Equity Award - Stock Options (5)
3/15/11
3/14/11



 

41,438


8.55

174,454

 
 
 
 
 
 
 
 
 
 
 
 
Karen E. Gowland
 
 
 
 
 
 
 
 
 
 
 
Non-Equity Award (1)
2/23/11
69,225

230,750

519,188

 





Special Equity Award - Restricted Stock (2)
3/15/11
2/23/11



 

8,608



73,598

Regular Equity Award - Restricted Stock Units (3)
3/15/11
3/14/11



 

10,898



93,178

Regular Equity Award - Performance Units (4)
3/15/11
3/14/11



 
3,173

10,578

21,156


90,442

Regular Equity Award - Stock Options (5)
3/15/11
3/14/11



 

21,472


8.55

90,397

 
 
 
 
 
 
 
 
 
 
 
 
Judith M. Lassa
 
 
 
 
 
 
 
 
 
 
 
Non-Equity Award (1)
2/23/11
69,225

230,750

519,188

 





Special Equity Award - Restricted Stock (2)
3/15/11
2/23/11



 

8,946



76,488

Regular Equity Award - Restricted Stock Units (3)
3/15/11
3/14/11



 

10,898



93,178

Regular Equity Award - Performance Units (4)
3/15/11
3/14/11



 
3,173

10,578

21,156


90,442

Regular Equity Award - Stock Options (5)
3/15/11
3/14/11



 

21,472


8.55

90,397


55



(1)
Reflects possible 2011 non-equity incentive plan award payouts for our named executive officers under our Boise Inc. Incentive and Performance Plan, as described in more detail in the Compensation Discussion and Analysis section in this proxy statement. Threshold, Target, and Maximum payouts reported are calculated based on the annual pay rate of our named executive officers in effect at the end of the 2011 calendar year. It is possible to have a zero payout if the award criteria are not met. The actual non-equity incentive plan awards that will be paid in 2012, based on 2011 performance, are shown in the Non-Equity Incentive Plan Compensation column of the Summary Compensation Table in this proxy statement.
 
 
(2)
We declared a special cash dividend payable on December 3, 2010, to shareholders of record on November 17, 2010. On the record date, our named executive officers held unvested restricted stock or restricted stock units that, pursuant to the terms of their award agreements, did not accrue dividends. To align management and shareholder interests regarding dividend strategy, on March 15, 2011, the compensation committee of our board of directors awarded our named executive officers, at no cost, a 2011 special equity incentive plan award of service-condition vesting restricted stock or restricted stock units, the values of which were equivalent to the dividends the named executive officers would have received on their restricted stock or restricted stock units held as of the record date. The number of shares awarded to each of our named executive officers was calculated using the company's share price on the respective vesting dates - February 28, 2011, and March 15, 2011. The value of these awards did not include the market-condition vesting portion of the 2008 equity incentive plan awards, which were forfeited on March 1, 2011. These awards vested March 15, 2012.
 
 
(3)
On March 15, 2011, as the first component of their 2011 regular equity incentive plan awards, the compensation committee of our board of directors awarded our named executive officers, at no cost, shares of service-condition vesting restricted stock or restricted stock units. Fifty percent (50%) of the shares or units will vest March 15, 2013, and the remaining fifty percent (50%) will vest March 17, 2014, subject to the provisions of the Restricted Stock (Restricted Stock Unit) Award Agreements. The Target amounts reported are 100% of the restricted stock or restricted stock unit award amounts and assume our named executive officers remain employed with us until their shares or units vest. The award agreements provide dividend or dividend equivalent rights payable in cash (for restricted stock) or shares (for restricted stock units) at the time the shares underlying the awards vest.
 
 
(4)
On March 15, 2011, as the second component of their 2011 regular equity incentive plan awards, the compensation committee of our board of directors awarded our named executive officers, at no cost, performance units. Fifty percent (50%) of the performance units vest March 15, 2013, and the remaining fifty percent (50%) will vest March 17, 2014, subject to the provisions of the Performance Unit Award Agreements. Each performance unit represents the right to receive one share of our common stock upon vesting of the performance unit. Performance units may be earned based on our return on net operating assets (RONOA) over a two-year performance period from January 1, 2011, to December 31, 2012. The actual number of shares received may be adjusted from 0% to 200% of the performance units awarded, based on our actual RONOA performance during the performance period. The award agreements provide dividend equivalent rights payable in cash (for cash dividends) or shares (for stock dividends) at the time the shares underlying the awards vest. These dividend equivalent rights are also subject to adjustment from 0% to 200% based on our RONOA performance during the performance period.
 
 
(5)
On March 15, 2011, as the final component of their 2011 reqular equity incentive plan awards, the compensation committee of our board of directors awarded our named executive officers, at no cost, nonqualified stock options to purchase shares of our common stock at a price of $8.55 per share. Fifty percent (50%) of the option amount will vest and become exercisable March 15, 2013, and the remaining fifty percent (50%) will vest and become exercisable March 17, 2014, subject to the provisions of the Nonqualified Stock Option Award Agreements. The Target amounts reported are 100% of the option award amounts and assume our named executive officers remain employed with us until their options vest and become exercisable.
 
 
(6)
On January 1, 2011, the compensation committee of our board of directors granted Mr. Cotterell, at no cost, a special 2011 equity incentive plan award upon his election as our senior vice president and chief financial officer effective January 1, 2011. Mr. Cotterell's award consists entirely of service-condition vesting restricted stock units, fifty percent (50%) of which vested March 15, 2012. The remaining fifty percent (50%) will vest March 15, 2013. The Target amount reported is 100% of the award amount and assumes Mr. Cotterell remains employed with us until the remaining 50% of the award vests in 2013.
 
 
(7)
The values reported for our named executive officers' 2011 special and regular equity incentive plan awards reflect the grant date fair value computed in accordance with FASB ASC Topic 718.

56



Outstanding Equity Awards at Fiscal Year-End Table
The following table presents information concerning 2011, 2010, and 2009 equity incentive plan awards made to our named executive officers under our Boise Inc. Incentive and Performance Plan that had not vested as of December 31, 2011.
Named Executive Officer
and Type of Award
Option Awards
 
Stock Awards
Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable
Option
Exercise
Price
($)
Option
Expiration
Date
 
Number of
Share or Units
of Stock
That Have
Not Vested
(#)
Market Value of
Shares or Units
of Stock
That Have
Not Vested
($) (8)
Equity Incentive
Plan Awards:
Number of
Unearned Shares, Units,
or Other Rights
That Have Not Vested
(#) 
Equity Incentive
Plan Awards:
Market or Payout Value of
Unearned Shares, Units,
or Other Rights
That Have Not Vested
($) (8)
 
 
 
 
 
 
 
 
 
Alexander Toeldte
 
 
 
 
 
 
 
 
2011 Special Equity Award - Restricted Stock (1)

$

 
40,212

$
286,309


$

2011 Regular Equity Award - Restricted Stock (2)


 
67,694

481,981



2011 Regular Equity Award - Performance Units (3)


 


65,702

467,798

2011 Regular Equity Award - Stock Options (4)
133,356

8.55

3/15/21
 




2009 Regular Equity Award - Restricted Stock (5)


 
576,000

4,101,120