Stock-Based Compensation

In February 2013, we adopted the 2013 Incentive Compensation Plan (2013 Incentive Plan), which was superseded by the 2016 Boise Cascade Omnibus Incentive Plan (2016 Incentive Plan), which was approved by our stockholders and became effective in April 2016. The 2016 Incentive Plan provides for grants of stock options, stock appreciation rights, restricted stock, other stock-based awards, other cash-based compensation, and performance awards. Directors, officers, and other employees, as well as others performing consulting or advisory services for us, are eligible for grants under the 2016 Incentive Plan. These awards are at the discretion of the Compensation Committee of our board of directors, and they vest and expire in accordance with terms established at the time of grant. All awards under the 2016 Incentive Plan, other than stock options or stock appreciation rights, are eligible to participate in dividend or dividend equivalent payments, if any, which we would accrue to be paid when the awards vest. We issue new shares of common stock upon exercise of stock options and vesting of other stock-based awards. Shares issued pursuant to awards under the 2016 Incentive Plan are from our authorized but unissued shares. The maximum number of shares approved for grant under the 2016 Incentive Plan is 3.7 million shares.

In February 2016, 2015, and 2014, we granted two types of stock-based awards under the 2013 Incentive Plan: performance stock units (PSUs) and restricted stock units (RSUs). After the effective date of the 2016 Incentive Plan in April 2016, no awards may be granted under the 2013 Incentive Plan. Pursuant to the terms of the 2016 Incentive Plan approved by our stockholders, all stock-based awards granted in 2016 under the 2013 Incentive Plan reduced the amount of shares available for issuance under the 2016 Incentive Plan. Therefore, as of December 31, 2016, 3.0 million shares remained available for future issuance under the 2016 Incentive Plan.

PSU and RSU Awards

In 2016, we granted 418,344 PSUs to our officers and other employees, subject to performance and service conditions, at a weighted average grant date fair market value of $16.56. For the officers, the number of shares actually awarded will range from 0% and 200% of the target amount, depending upon Boise Cascade's 2016 return on invested capital (ROIC), determined in accordance with the related grant agreement. For the other employees, the number of shares actually awarded will range from 0% to 200% of the target amount, depending upon Boise Cascade's 2016 EBITDA, defined as income before interest (interest expense and interest income), income taxes, and depreciation and amortization, determined in accordance with the related grant agreement. Because the ROIC and EBITDA components contain a performance condition, we record compensation expense, net of estimated forfeitures, over the requisite service period based on the most probable number of shares expected to vest.

In 2015 and 2014, we granted 116,636 and 100,692 PSUs, at a weighted average grant date fair market value of $36.17 and $30.32, respectively, to our officers and other employees, subject to performance and service conditions. During the 2015 and 2014 performance period, participants earned 63% and 129%, respectively, of the target based on Boise Cascade’s 2015 and 2014 EBITDA, determined by our Compensation Committee in accordance with the related grant agreements.

In 2016, 2015, and 2014, we granted an aggregate of 335,820, 140,167, and 128,497 RSUs, at a weighted average grant date fair market value of $16.73, $36.16, and $30.41, respectively, to our officers, other employees, and nonemployee directors with only service conditions.

The PSUs granted to officers, if earned, generally vest over one to three year periods from the date of grant, while the PSUs granted to other employees vest in three equal tranches each year after the grant date. All PSU grants are subject to final determination of meeting the performance condition by the Compensation Committee of our board of directors. The RSUs granted to officers and other employees vest in three equal tranches each year after the grant date. The RSUs granted to nonemployee directors vest over a one-year period, provided that such vested shares will not be delivered to the directors until six months following termination from the board of directors.

We based the fair value of PSU and RSU awards on the closing market price of our common stock on the grant date, and we record compensation expense over the awards' vesting period. Any shares not vested are forfeited. During the years ended December 31, 2016, 2015, and 2014, the total fair value of PSUs and RSUs vested was $2.8 million, $4.9 million, $4.6 million, respectively.

The following summarizes the activity of our PSUs and RSUs awarded under our incentive plans for the year ended December 31, 2016:



	PSUs				RSUs
	Number of shares		Weighted Average Grant-Date Fair Value		Number of shares			Weighted Average Grant-Date Fair Value
Outstanding, December 31, 2015	134,786		$	35.09	153,343			$	35.41
Granted	418,344		16.56		335,820			16.73
Vested	(56,609	)	33.65		(93,383		)	34.71
Forfeited (a)	(48,021	)	33.50		(8,493		)	19.35
Outstanding, December 31, 2016	448,500		$	18.16	$	387,287		$	19.73

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(a)	Total PSUs forfeited during the year ended December 31, 2016 includes 40,726 shares related to the performance condition adjustment, as participants earned 63% of the target based on Boise Cascade’s 2015 EBITDA.

Stock Options

In February 2013, we granted 161,257 nonqualified stock options to our officers and other employees. Our stock options have a contractual term of ten years, meaning the option must be exercised by the holder before the tenth anniversary of the grant date, subject to earlier expiration for vested options not exercised following termination of employment. The following is a summary of our stock option activity:



	Number of Options		Weighted Average Exercise Price Per Option		Weighted Average Remaining Contractual Life	Aggregate Intrinsic Value
					(years)	(thousands)
Outstanding, December 31, 2015	117,282		$	27.19
Forfeited	(2,359	)	27.19
Outstanding, December 31, 2016	114,923		$	27.19	5.3	$	—
Vested and expected to vest, December 31, 2016	114,923		$	27.19	5.3	$	—
Exercisable, December 31, 2016	114,923		$	27.19	5.3	$	—

There were no stock options exercised during the year ended December 31, 2016. During both the years ended December 31, 2015 and 2014, the total intrinsic value of stock options exercised was $0.1 million. Cash received from stock options exercised was $0.2 million for both the years ended December 31, 2015 and 2014, with an immaterial amount of actual tax benefit realized from stock options exercised.

Compensation Expense

Stock-based compensation expense is recognized only for those awards that are expected to vest, with forfeitures estimated at the date of grant based on our historical experience and future expectations. We recognize the effect of adjusting the estimated forfeiture rates in the period in which we change such estimated rates. We recognize stock awards with only service conditions on a straight-line basis over the requisite service period. Most of our share-based compensation expense was recorded in "General and administrative expenses" in our Consolidated Statements of Operations. Total stock-based compensation recognized from PSUs, RSUs, and stock options net of estimated forfeitures, was as follows:



	Year Ended December 31
	2016		2015		2014
	(thousands)
PSUs	$	4,114	$	2,295	$	3,169
RSUs	3,982		2,995		2,018
Stock options	81		535		729
Total	$	8,177	$	5,825	$	5,916

The related tax benefit was $3.1 million for the year ended December 31, 2016, and $2.2 million for the years ended December 31, 2015 and 2014. As of December 31, 2016, total unrecognized compensation expense related to nonvested share-based compensation arrangements was $8.5 million, net of estimated forfeitures. This expense is expected to be recognized over a weighted-average period of 1.7 years.