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In February 2013, we adopted the 2013 Incentive Compensation Plan (2013 Incentive Plan), which was superseded by the 2016 Boise Cascade Omnibus Incentive Plan (2016 Incentive Plan), which was approved by our stockholders and became effective in April 2016. After the effective date of the 2016 Incentive Plan, no awards were granted under the 2013 Incentive Plan. 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 2017, we granted two types of stock-based awards under the 2016 Incentive Plan: performance stock units (PSUs) and restricted stock units (RSUs). In February 2016 and 2015, we granted two types of stock-based awards under the 2013 Incentive Plan: PSUs and RSUs. As of December 31, 2017, 2.7 million shares remained available for future issuance under the 2016 Incentive Plan.

PSU and RSU Awards

In 2017, we granted 178,021 PSUs to our officers and other employees, subject to performance and service conditions, at a weighted average grant date fair market value of $27.05. For the officers, the number of shares actually awarded will range from 0% and 200% of the target amount, depending upon Boise Cascade's 2017 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 2017 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 over the requisite service period based on the most probable number of shares expected to vest.

In 2016 and 2015, we granted 418,344 and 116,636 PSUs, at a weighted average grant date fair market value of $16.56 and $36.17, respectively, to our officers and other employees, subject to performance and service conditions. During the 2016 performance period, officers and other employees earned 97% and 104%, respectively, of the target based on Boise Cascade’s 2016 ROIC and EBITDA, determined by our Compensation Committee in accordance with the related grant agreement. During the 2015 performance period, participants earned 63% of the target based on Boise Cascade’s 2015 EBITDA, determined by our Compensation Committee in accordance with the related grant agreements.

In 2017, 2016, and 2015, we granted an aggregate of 214,035, 335,820, and 140,167 RSUs, at a weighted average grant date fair market value of $27.10, $16.73, and $36.16, respectively, to our officers, other employees, and nonemployee directors with only service conditions.

The PSUs granted to officers in 2017, if earned, generally vest over a three year period 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.

We based the fair value of PSU and RSU awards on the closing market price of our common stock on the grant date. During the years ended December 31, 2017, 2016, and 2015, the total fair value of PSUs and RSUs vested was $8.5 million, $2.8 million, $4.9 million, respectively.

The following summarizes the activity of our PSUs and RSUs awarded under our incentive plans for the year ended December 31, 2017:



	PSUs				RSUs
	Number of shares		Weighted Average Grant-Date Fair Value		Number of shares			Weighted Average Grant-Date Fair Value
Outstanding, December 31, 2016	448,500		$	18.16	387,287			$	19.73
Granted	178,021		27.05		214,035			27.10
Performance condition adjustment (a)	5,175		16.56		—			—
Vested	(118,138	)	20.44		(182,489		)	20.79
Forfeited (b)	(26,398	)	19.63		(15,581		)	22.41
Outstanding, December 31, 2017	487,160		$	20.76	$	403,252		$	23.06

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(a)	Amount represents additional PSU's earned during the year ended December 31, 2017, based on the performance condition adjustment, as other employees earned 104% of the target based Boise Cascade's 2016 EBITDA.


(b)	Total PSUs forfeited during the year ended December 31, 2017, includes 8,457 shares related to the performance condition adjustment, as officers earned 97% of the target based on Boise Cascade’s 2016 ROIC.

Compensation Expense

We record compensation expense over the awards' vesting period and account for share-based award forfeitures as they occur, rather than making estimates of future forfeitures. Any shares not vested are forfeited. 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 forfeitures, was as follows:



	Year Ended December 31
	2017		2016		2015
	(thousands)
PSUs	$	4,923	$	4,114	$	2,295
RSUs	4,807		3,982		2,995
Stock options	—		81		535
Total	$	9,730	$	8,177	$	5,825

For the years ended December 31, 2017, 2016, and 2015, the related tax benefit was $2.5 million, $3.1 million, and $2.2 million, respectively. As of December 31, 2017, total unrecognized compensation expense related to nonvested share-based compensation arrangements was $10.7 million. This expense is expected to be recognized over a weighted-average period of 1.7 years.