DEF 14A 1 a2015scheddef14-a.htm DEF 14A 2015 Sched DEF 14-A



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
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Definitive Proxy Statement
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Soliciting Material Pursuant to §240.14a-12
 
 
 
Masonite International Corporation 
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NOTICE OF ANNUAL GENERAL MEETING
OF SHAREHOLDERS
AND
PROXY STATEMENT

ANNUAL GENERAL
MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 13, 2015

March 27, 2015









March 27, 2015
Dear Fellow Shareholder:
You are cordially invited to join Masonite International Corporation’s Board of Directors and senior leadership at the 2015 annual general meeting of shareholders, which will be held at 9:00 a.m. local time on Wednesday, May 13, 2015 at the University Club of Tampa, 201 N. Franklin Street, Suite 3800, Tampa, FL, 33602.
The attached notice of the 2015 annual general meeting of shareholders and proxy statement provide important information about the meeting and will serve as your guide to the business to be conducted at the meeting. Your vote is very important to us. We urge you to read the accompanying materials regarding the matters to be voted on at the meeting and to submit your voting instructions by proxy. The Board of Directors recommends that you vote FOR each of the nominees listed in proposal 1 and FOR proposals 2 through 4 listed in the attached notice.
You may submit your proxy either by returning the enclosed proxy card or voting instruction form, to the extent you received hard copies of the proxy materials, or by submitting your proxy over the telephone or the Internet. If you submit your proxy before the meeting but later decide to attend the meeting in person, you may still vote in person at the meeting.
Thank you for your continued support.
Robert J. Byrne

/s/ Robert J. Byrne

Chairman of the Board







TABLE OF CONTENTS
 
 
 
 
PROXY STATEMENT
 
 
RECORD DATE; PROXIES; VOTING
 
 
ELECTION OF DIRECTORS (PROPOSAL 1)
 
 
CORPORATE GOVERNANCE; BOARD AND COMMITTEE MATTERS
 
 
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
 
 
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
 
 
DIRECTOR COMPENSATION
 
 
COMPENSATION COMMITTEE REPORT
 
 
EXECUTIVE COMPENSATION
 
 
ADVISORY VOTE ON EXECUTIVE COMPENSATION (PROPOSAL 2)
 
 
AUDIT COMMITTEE REPORT
 
 
APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (PROPOSAL 3)
 
 
APPROVAL OF THE AMENDED AND RESTATED 2012 EQUITY INCENTIVE PLAN (PROPOSAL 4)
 
 
SHAREHOLDER PROPOSALS FOR 2016 ANNUAL MEETING
 
 
OTHER BUSINESS
 
 
ANNUAL REPORT
 
 
HOUSEHOLDING OF PROXY MATERIALS
 
 
WHERE TO FIND ADDITIONAL INFORMATION
 
 
APPENDIX "A"











NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDERS
NOTICE IS HEREBY GIVEN that an annual general meeting (the "Meeting") of the holders of common shares (the "Shareholders") of Masonite International Corporation, successor entity to Masonite Inc. and formerly known as Masonite Worldwide Holdings, Inc. (the "Company" or "Masonite") will be held at the University Club of Tampa, 201 N. Franklin Street, Suite 3800, Tampa, FL, 33602 on May 13, 2015 at the hour of 9:00 a.m. (Eastern Time) for the following purposes:
1.
TO ELECT Frederick J. Lynch, Jody L. Bilney, Robert J. Byrne, Peter R. Dachowski, Jonathan F. Foster, George A. Lorch, Rick J. Mills, Francis M. Scricco and John C. Wills to the Board of Directors;

2.
TO VOTE, on an advisory basis, on the compensation of our named executive officers as set forth in the Proxy Statement (as defined below);

3.
TO APPOINT Deloitte & Touche LLP, an independent registered public accounting firm, as the auditors of the Company through to the next annual general meeting of the Shareholders and authorize the Board of Directors of the Company to fix the remuneration of the auditors;

4.
TO APPROVE the Masonite International Corporation Amended and Restated 2012 Equity Incentive Plan, as more particularly described in the Proxy Statement; and

5.
TO RECEIVE the financial statements of the Company for the period ended December 28, 2014, together with the report of the auditors thereon; and

6.
TO TRANSACT such further or other business as may properly come before the Meeting or any postponement or adjournment thereof.

The Board of Directors recommends that you vote FOR each of the nominees listed in proposal 1 and FOR proposals 2 through 4. The Proxy Statement provides additional information relating to the matters to be dealt with at the Meeting and forms part of this notice.


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DATED at Tampa, Florida this 27th day of March, 2015.
BY ORDER OF THE BOARD OF DIRECTORS

/s/ Robert E. Lewis

Senior Vice President,
General Counsel and Secretary
Masonite International Corporation

PLEASE SUBMIT YOUR PROXY BY TELEPHONE OR THE INTERNET, OR BY MARKING, SIGNING, DATING AND RETURNING A PROXY CARD OR VOTING INSTRUCTION FORM.

Important Notice Regarding the Availability of Proxy Materials for the Shareholders Meeting to Be Held on May 13, 2015: This Proxy Statement and our Annual Report are available free of charge on
http://investor.masonite.com/investors/annual-meeting/default.aspx

 




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MASONITE INTERNATIONAL CORPORATION

PROXY STATEMENT

Unless otherwise indicated, or the context otherwise requires, "Company" or "Masonite" refers to Masonite International Corporation and its direct and indirect subsidiaries. Unless otherwise indicated, all dollar amounts are expressed in US dollars and references to "$" are to US dollars.
This proxy statement (the "Proxy Statement") is furnished in connection with the solicitation of proxies by Masonite’s Board of Directors {the “Board”) on behalf of Masonite, for use at the annual general meeting (the "Meeting") of holders ("Shareholders") of common shares ("Common Shares") of the Company to be held at the University Club of Tampa, 201 N. Franklin Street, Suite 3800, Tampa, FL, 33602 on May 13, 2015 at 9:00 a.m. (Eastern Time), and at all postponements or adjournments thereof, for the purposes set forth in the accompanying notice of the Meeting (the "Notice of Meeting").
In accordance with the rules of the Securities and Exchange Commission (the "SEC"), we sent a Notice of Internet Availability of Proxy Materials on or about March 27, 2015 to our Shareholders of record as of the close of business on March 18, 2015. We also provided access to our proxy materials over the Internet beginning on that date. If you received a Notice of Internet Availability of Proxy Materials by mail and did not receive, but would like to receive, a printed copy of our proxy materials, you should follow the instructions for requesting such materials included in the Notice of Internet Availability of Proxy Materials.
RECORD DATE; PROXIES; VOTING
Who Can Vote; Votes Per Share
The Board has set March 18, 2015 as the record date for the Meeting. At the Meeting, each Shareholder of record of Common Shares at the close of business on the record date will be entitled to vote on, all matters proposed to come before the Meeting, except to the extent such Shareholder has transferred any such Common Shares after the Record Date and the transferee of such Common Shares establishes ownership thereof and makes a written demand to the Secretary of the Company, not later than ten days before the date of the Meeting, to be included in the list of Shareholders entitled to vote at the Meeting, in which case the transferee will be entitled to vote such Common Shares. Each such Shareholder of record will be entitled to one vote per Common Share on each matter submitted to a vote of Shareholders, as long as those shares are represented at the Meeting, either in person or by proxy.
The Company is authorized to issue an unlimited number of Common Shares and an unlimited number of special shares (the "Special Shares"). As of March 6, 2015, there were 30,106,742 Common Shares and no Special Shares outstanding.
How to Vote; Submitting Your Proxy; Revoking Your Proxy
You may vote your shares either by voting in person at the Meeting or by submitting a completed form of proxy in the manner described in this Proxy Statement. By submitting your form of proxy, you are legally authorizing another person to vote your shares. The persons specified on the enclosed form of proxy are officers

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of the Company. A registered Shareholder who wishes to appoint any person other than those specified on the enclosed form of proxy to represent him, her or it at the Meeting may do so by crossing out the persons named in the enclosed form of proxy and inserting such other person’s name in the blank space provided in the form of proxy or by completing another proper form of proxy. Such other person need not be a Shareholder. Please note that if you appoint as proxy any person other than those specified on your form of proxy and neither you nor your proxy attends the Meeting in person, then your shares will not be voted.
If your shares are not registered in your name but in the "street name" of a bank, broker or other holder of record (a "nominee"), then your name will not appear in Masonite’s register of Shareholders, and you are considered a "Beneficial Holder". Those shares are held in your nominee’s name, on your behalf, and your nominee will be entitled to vote your shares. If your shares are held in street name, please refer to the information from your bank, broker or other nominee on how to submit voting instructions, which includes the deadlines for submission of voting instructions. Beneficial Holders may vote shares held in street name at the Meeting only if they obtain a signed proxy from the registered holder (bank, broker or other nominee) giving the Beneficial Holder the right to vote the shares.
To be valid, forms of proxy submitted by registered holders must be deposited at the offices of American Stock Transfer & Trust Company, LLC (the "Agent"), 6201 15th Avenue, Brooklyn, New York 11219, so as not to arrive later than 9:00 a.m. (Eastern Time) on May 12, 2015, or be provided, at the Meeting, to the chair of the Meeting (the "Chair of the Meeting"). If the Meeting is adjourned, forms of proxy must be deposited at the Agent 48 hours (excluding Saturdays, Sundays and holidays) before the time set for any reconvened meeting at which the forms of proxy are to be used, or be provided, at the Meeting, to the Chair of the Meeting or any reconvened meeting.
The document appointing a proxy must be in writing and completed and signed by a Shareholder or his or her attorney authorized in writing or, if the Shareholder is a corporation, under its corporate seal or by an officer or attorney thereof duly authorized. Instructions provided to the Agent by a Shareholder must be in writing and completed and signed by the Shareholder or his or her attorney authorized in writing or, if the Shareholder is a corporation, under its corporate seal or by an officer or attorney thereof duly authorized. Persons signing as officers, attorneys, executors, administrators, and trustees or similar appointment should so indicate and provide satisfactory evidence of such authority.
Your proxy is revocable. A Beneficial Holder that has given instructions to its nominee with respect to the voting of Common Shares may instruct the nominee to thereafter revoke the relevant proxy in accordance with the instructions provided to the Beneficial Holder by its bank, broker or other nominee. A registered Shareholder that has submitted a form of proxy may revoke the proxy: (i) by completing and signing a form of proxy bearing a later date and depositing it as aforesaid; or (ii) by depositing an instrument in writing executed by the Shareholder or by his or her attorney authorized in writing: (A) at the registered office of the Company at any time up to and including the last business day preceding the day of the applicable Meeting, or any adjournment thereof, at which the proxy is to be used, or (B) with the Chair of the Meeting at the Meeting or any adjournment thereof.
Even if you plan to attend the Meeting, we encourage you to vote in advance so that your vote will be counted if you later decide not to attend the Meeting. Voting your proxy by the Internet, telephone or mail will

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not limit your right to vote at the Meeting if you later decide to attend in person, subject to compliance with the foregoing requirements.
How Your Proxy Will be Voted; Discretionary Authority of Proxies
The persons named in the accompanying form of proxy will vote the Common Shares in respect of which they are appointed, on any ballot that may be called for, in accordance with the instructions of the Shareholder as indicated in the form of proxy. If a Shareholder signs and returns a proxy card, but does not give voting instructions, the shares represented by that proxy will be voted as recommended by the Board, as follows:
FOR the election of Frederick J. Lynch, Jody L. Bilney, Robert J. Byrne, Peter R. Dachowski, Jonathan F. Foster, George A. Lorch, Rick J. Mills, Francis M. Scricco and John C. Wills to the Board to fill these positions as described under the heading "Election of Directors."

FOR, the approval, on an advisory basis, of the executive compensation paid by Masonite to its Named Executive Officers included in this Proxy Statement as described under the heading "Advisory Vote on Executive compensation."

FOR the appointment of Deloitte & Touche LLP ("Deloitte"), an independent registered public accounting firm, as auditors of the Company and to authorize the Board to fix the auditor’s remuneration as described under the heading "Appointment of Independent Registered Accounting Firm."

FOR the approval of the Masonite International Corporation Amended and Restated 2012 Equity Incentive Plan as described under the heading "Approval of the Amended and Restated 2012 Equity Incentive Plan."

If any other matters are properly brought up at the Annual Meeting (other than the proposals contained in the Notice of Meeting and Proxy Statement), then the named proxies will have the authority to vote your shares on those matters in accordance with their discretion and judgment. The Board currently does not know of any matters to be raised at the Meeting other than the proposals contained in the Notice of Meeting and Proxy Statement. If a Shareholder votes via the Internet or by telephone, his, her or its electronic vote authorizes the named proxies in the same manner as if the Shareholder signed, dated and returned a proxy card by mail.
Quorum; Votes Necessary to Pass Resolutions
Pursuant to the Articles of the Company, a quorum for the transaction of business at the Meeting is at least 3 persons who are, or who represent by proxy, unrelated Shareholders, holding in the aggregate at least 15% of the Common Shares entitled to be voted at the Meeting. For purposes of determining a quorum, abstentions and broker "non-votes" present in person or by proxy are counted as represented. A broker "non-vote" occurs when a nominee (such as a broker) holding shares for a beneficial owner abstains from voting on a particular proposal because the nominee does not have discretionary voting power for that proposal and has not received instructions from the beneficial owner on how to vote those shares. Under current New York Stock Exchange ("NYSE") rules, your broker will not have discretion to vote your uninstructed shares with respect to all of the

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proposals described herein other than Proposal 3 (appointment of Deloitte & Touche LLP as the auditors of the Company and Board authorization to fix its remuneration). Your broker will have discretion to vote your uninstructed shares on Proposal 3.
The matters being considered and voted on at the Meeting are subject to differing standards for approval as follows:
Proposal no. 1 is the election of directors. Each Shareholder may, in respect of each Common Share held, cast one vote with respect to each vacancy on the Board. There is no cumulative voting for the appointment of Directors. Each Shareholder should indicate its decision in respect of each nominee by voting "FOR" the nominee or "WITHHOLD" voting for the nominee. Those nominees receiving the most votes will be elected as Directors until all vacancies are filled. If the number of nominees for election is equal to the number of vacancies to be filled, then all such nominees will be declared elected by acclamation;

Proposal no. 2 (vote on executive compensation) is an ordinary resolution of the Shareholders, and will be considered approved upon an affirmative vote of a majority (in excess of 50%) of the votes cast on the matter by Shareholders at the meeting represented in person or by proxy. Notwithstanding the approval or non-approval of this resolution, it is advisory in nature and is non-binding;

Proposal no. 3 (appointment of Deloitte & Touche LLP as the auditors of the Company and Board authorization to fix its remuneration) is an appointment. Each Shareholder may cast a vote "FOR" or "WITHHOLD" voting for Deloitte as auditor, and their appointment is dependent on no other independent registered public accounting firm being put forward at the meeting and receiving more "FOR" votes than them;

Proposal no. 4 (vote on Amended and Restated 2012 Equity Incentive Plan) is an ordinary resolution of the Shareholders, and will be considered approved upon an affirmative vote of a majority (in excess of 50%) of the votes cast on the matter by Shareholders at the Meeting represented in person or by proxy.

Abstentions and broker "non-votes" will not be counted as votes cast and will not affect the voting results for any of the above-noted matters.
Solicitation of Proxies; Tabulation of Votes
The Company will bear the cost of soliciting proxies its behalf. Our directors, officers and employees may solicit proxies in person or by telephone, electronic transmission and facsimile transmission. We will not be specially compensating our directors, officers and employees for those services, but they may be reimbursed for their out-of-pocket expenses incurred in connection with the solicitation. We will also reimburse brokers, fiduciaries and custodians for their costs in forwarding proxy materials to beneficial owners of our Common Shares. American Stock Transfer & Trust Company, LLC will act as our Scrutineer at the Meeting and assist us in tabulating the votes.

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ELECTION OF DIRECTORS (PROPOSAL 1)
At the Meeting, nine Directors are to be elected. Each of the nominees set forth below currently serves as a Director of Masonite. The nominees for Director receiving a plurality of the votes cast at the Meeting will be elected Directors. Each nominee elected as a Director will continue in office until the 2016 Annual Meeting and until his or her successor has been duly elected and qualified or until his or her earlier resignation or removal. If any nominee becomes unable to serve, proxies may be voted for the election of such other person as the Board may designate.
The following table sets forth the names of, and certain information for, the individuals proposed to be nominated for election as Directors. The nominees make up the current Board of the Company. Biographies for each nominee, which include a summary of each nominee’s present principal occupation and recent employment history, are set out below.
THE BOARD RECOMMENDS A VOTE "FOR" THE ELECTION OF EACH NOMINEE DESCRIBED BELOW AS DIRECTOR.

Name and Province of Residence
 
Principal Occupation
 
Date Appointed as a Director
FREDERICK J. LYNCH
Tampa, FL
 
President and Chief Executive Officer of Masonite
 
June 2009
 
 
JODY L. BILNEY(3)(4)
Louisville, KY
 
Senior Vice President, Chief Consumer Officer, Humana. Inc.
 
January 2014
 
 
ROBERT J. BYRNE(4)
Orlando, FL
 
President, Power Pro-Tech Services, Inc.
 
June 2009
 
 
PETER R. DACHOWSKI(2)(4)
Berwyn, PA
 
Senior Adviser, Graham Partners
Corporate Director
 
July 2013
 
 
JONATHAN F. FOSTER(1)(4)(5)
New York, NY
 
Managing Director of Current Capital LLC and Corporate Director
 
June 2009
 
 
GEORGE A. LORCH(2)(3)(4)
Naples, FL
 
Corporate Director
 
June 2009
 
 
RICK J. MILLS(1)(4)(5)
Nashville, TN
 
Corporate Director
 
September 2013
 
 
FRANCIS M. SCRICCO(2)(3)(4)
Boston, MA
 
Corporate Director
 
June 2009
 
 
JOHN C. WILLS(1)(4)
Aiken, SC
 
Corporate Director
 
June 2009
 
 
(1) Member of the Audit Committee.
(2) Member of the Human Resources and Compensation Committee.
(3) Member of the Corporate Governance and Nominating Committee.
(4) Independent member of the Board as defined under applicable NYSE listing standards.
(5) Audit Committee financial expert.


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Biographies
The present principal occupations and recent employment history of each of the Directors nominated for election at the Meeting above are as follows:
Frederick J. Lynch, (age 50) has served as President of Masonite since July 2006 and as President and Chief Executive Officer of Masonite since May 2007. Mr. Lynch has served as a Director of Masonite since June 2009. Mr. Lynch joined Masonite from Alpharma Inc., where he served as President of the human generics division and Senior Vice President of global supply chain from 2003 until 2006. Prior to joining Alpharma Inc. in 2003, Mr. Lynch spent nearly 18 years at Honeywell International Inc. (formerly AlliedSignal Inc.), most recently as vice president and general manager of the specialty chemical business.
Jody L. Bilney, (age 53) has served as a Director of Masonite since January 2014. Ms. Bilney has served as the Senior Vice President and Chief Consumer Officer of Humana Inc. since April 2013. Prior to that, she served in various senior executive marketing roles with Bloomin’ Brands Inc. from 2006 through March 2013, most recently serving as Executive Vice President and Chief Brand Officer. Prior to joining Bloomin’ Brands, she held senior executive marketing positions with Openwave Systems, Inc., Charles Schwab & Co., Inc., and Verizon Communications, Inc.
Robert J. Byrne, (age 53) has served as a Director of Masonite since June 2009 and has been Chairman of the Board of Masonite since July 2010. Mr. Byrne is the founder and has served as the President of Power Pro-Tech Services, Inc., which specializes in the installation, maintenance and repair of emergency power and solar photovoltaic power systems since 2002. Power Pro-Tech is Mr. Byrne’s fourth start-up. His other entrepreneurial ventures have been in telecommunications, private equity and educational software. From 1999 to 2001, Mr. Byrne was Executive Vice President and Chief Financial Officer of EPIK Communications, a start-up telecommunications company which merged with Progress Telecom in 2001 and was subsequently acquired by Level3 Communications. Having begun his career in investment banking, Mr. Byrne served as Partner at Advent International, a global private equity firm, from 1997 to 1999 and immediately prior to that, from 1993 to 1997, served as a Director of Orion Capital Partners. Mr. Byrne currently serves as a Director of NextEra Energy Partners, L.P.
Peter R. Dachowski, (age 66) has served as a Director of Masonite since July 2013. Mr. Dachowski spent 35 years with CertainTeed Corporation, a North American manufacturer of exterior and interior residential and commercial building envelope construction products, and its French parent company Saint-Gobain, most recently serving as CertainTeed’s Chairman and CEO from 2004 to 2011. Prior to rejoining CertainTeed, he served as President of Saint-Gobain’s worldwide insulation business. He was a member of Saint-Gobain’s Global Management Committee from 1994 to 2011. He was employed by The Boston Consulting Group as a Consultant and Engagement Manager from 1973 to 1976 after beginning his career as a Financial Analyst with the Treasury Department of Exxon Corporation in 1971. Mr. Dachowski is currently a Senior Advisor to Graham Partners, a middle-market private equity firm.
Jonathan F. Foster, (age 54) has served as a Director of Masonite since June 2009. Mr. Foster is the founder and Managing Director of Current Capital LLC, a private equity investing and management services firm. Previously, from 2007 until 2008, Mr. Foster served as a Managing Director and Co-Head of Diversified

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Industrials and Services at Wachovia Securities. From 2005 until 2007, he served as Executive Vice President Finance and Business Development of Revolution LLC. From 2002 until 2004, Mr. Foster was a Managing Director of The Cypress Group, a private equity investment firm and from 2001 until 2002 he served as a Senior Managing Director of Bear Stearns & Co. From 1999 until 2000, Mr. Foster served as the Executive Vice President, Chief Operating Officer and Chief Financial Officer of ToysRUs.com, Inc. Previously, Mr. Foster was with Lazard for over ten years in various positions, including as a Managing Director. Mr. Foster is a Director of Lear Corporation, Chemtura Corporation and Berry Plastics Group, Inc.
George A. Lorch, (age 73) has served as a Director of Masonite since June 2009. Mr. Lorch spent over 37 years with Armstrong World Industries, Inc., which designs and manufactures flooring and ceilings. From 1993 to 1994 Mr. Lorch served as the Chief Executive Officer and President of Armstrong World Industries, Inc. and from 1994 to 2000, he served as Chairman, Chief Executive Officer and President. In 2000, he became Chairman and Chief Executive Officer of Armstrong Holdings, Inc. and upon retirement at the end of 2000, he was named Chairman Emeritus. Currently, Mr. Lorch serves as Lead Director of the board of Pfizer, Inc. and has been a member of their board since 2000. He is also currently a Director on the boards of WPX Energy and Autoliv Inc.
Rick J. Mills, (age 67) has served as a Director of Masonite since September 2013. Prior to his retirement in 2008, Mr. Mills spent over 37 years with Cummins, Inc., most recently serving as the Corporate Vice President and President of the Components Group from 2005 to 2008. Prior to that he served Cummins in a number of financial and operational roles, including Vice President and Group President of Filtration and Corporate Controller. Mr. Mills also currently serves as a Director of Commercial Metals Company and Flowserve Corporation.
Francis M. Scricco, (age 65) has served as a Director of Masonite since June 2009. Prior to joining our Board, Mr. Scricco was with Avaya, Inc., a global business communications provider, where he served as senior vice president, global services from March 2004 to February 2007 and subsequently as senior vice president, manufacturing, logistics and procurement until his retirement in October 2008. Prior to joining Avaya, Inc., he was employed by Arrow Electronics as its COO from 1997 to 2000 and then as its president and CEO from 2000 to 2002. Mr. Scricco’s first operating role was as a general manager for General Electric. He began his career with The Boston Consulting Group in 1973. Mr. Scricco is currently a Director of Tembec, Inc., an integrated forest products company, and Chairman of the Board of Visteon Corporation, a global automotive supplier.
John C. Wills, (age 61) has served as a Director of Masonite since June 2009. Mr. Wills retired from Masco Corporation in 2007 where as Group President he was responsible for their worldwide plumbing business. He started his career with Procter & Gamble Corporation and entered the building product industry in 1985 when he joined Moen Incorporated in Canada. He also has retail big box experience participating in the start-up of The Home Depot in Canada in 1991, which at the time was called Aikenhead’s Home Improvement Warehouse. Mr. Wills is currently a member of the boards of ACPI (formerly Armstrong Cabinets), Phillips Service Industries, Inc. and Global Emission Systems, Inc.

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Director Qualifications
The Board seeks to ensure that the Board is composed of members whose particular experience, qualifications, attributes and skills, when taken together, will allow the Board to satisfy its oversight responsibilities effectively. Consistent with the Company’s Corporate Governance and Nominating Committee charter, in identifying candidates for membership on the Board, the Corporate Governance and Nominating Committee takes into account all factors it considers appropriate, which may include strength of character, mature judgment, career specialization, relevant technical skills, diversity and the extent to which the candidate would fill a present need on the Board. We believe that the backgrounds and qualifications of the Directors, considered as a group, should provide a composite mix of experience, knowledge and abilities that will allow our Board to fulfill its responsibilities.
When determining whether our current Directors have the experience, qualifications, attributes and skills, taken as a whole, to enable our Board to satisfy its oversight responsibilities effectively in light of our business and structure, our Board focused primarily on our longer-tenured Directors’ contributions to our success in recent years, the specific expertise that the more recently elected Directors have and are expected to continue to contribute, and on the information discussed in the biographies set forth under "Election of Directors-Biographies." With respect to Mr. Lynch, our Board considered in particular his current role as our Chief Executive Officer, his familiarity with our business operations, and his extensive management expertise. With respect to Mr. Foster, our Board considered in particular his experience as a Chief Financial Officer and member of the audit committee and board of directors of public companies, as well as his financial, investment banking and transactional experience. With respect to Mr. Byrne, our Board considered in particular his financial, investment banking and transactional experience and his proven entrepreneurial and operational skills in the industrial services industry. With respect to Mr. Dachowski, our Board considered in particular his extensive financial and building products industry experience. With respect to Mr. Lorch, our Board considered in particular his extensive management expertise and board experience at public companies, including serving as non-executive chairman of Pfizer and as a Director, Chairman and Chief Executive Officer of a public company in the building products industry. With respect to Mr. Mills, the Board considered his extensive management and financial experience in the manufacturing industry. With respect to Ms. Bilney, the Board considered her extensive marketing and branding experience with highly successful companies such as Humana Inc. With respect to Mr. Scricco, our Board considered in particular his extensive management experience, including as Chief Executive Officer of an electronics distribution business, his prior public-company board experience, his strategy consulting experience, and his familiarity with product marketing, distribution channels and branding. With respect to Mr. Wills, our Board considered in particular his sales and marketing experience in a large multiproduct public company in the building products industry and specifically his familiarity with big box retail customers such as The Home Depot.
Process for Shareholders to Recommend Director Nominees

Pursuant to its charter, the Corporate Governance and Nominating Committee will evaluate candidates for nomination to the Board, including those recommended by Shareholders on a substantially similar basis as it considers other nominees, as described above. Shareholders wishing to propose a candidate for consideration may do so by submitting the proposed candidate’s name, age, business address and residential address, principal occupation or employment, and certain other information required by our Articles, to the attention of our Corporate

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Secretary in accordance with our Articles and the Business Corporations Act (British Columbia) ("BCBCA"). Please note that our Articles require that timely notice be provided by any Shareholder who proposes director nominations for consideration at a Shareholders’ meeting, in addition to other requirements. See “Shareholder Proposals For 2016 Annual Meeting” below. All recommendations for nomination received by the Corporate Secretary that satisfy the requirements of our Articles and the BCBCA relating to such director nominations will be presented to the Corporate Governance and Nominating Committee for its consideration.

CORPORATE GOVERNANCE; BOARD AND COMMITTEE MATTERS
Board Structure and Director Independence
Our business, property and affairs are managed under the direction of our Board, which has nine Directors. Our Board has determined, after considering all the relevant facts and circumstances, that all of the Directors other than Mr. Lynch, our President and Chief Executive Officer, are independent, as "independence" is defined by the listing standards of the NYSE, because they have no direct or indirect material relationship with us (either directly or as a partner, Shareholder or officer of an organization that has a relationship with us) that would cause the independence requirements of the NYSE listing standards to not be satisfied, and otherwise meet the NYSE listing standards. Members of our Board are kept informed of our business through discussions with our Chief Executive Officer, Chief Financial Officer and other officers, by reviewing materials provided to them, by visiting our offices and facilities, and by participating in meetings of the Board and its committees. We currently separate the roles of Chief Executive Officer and Chairman of the Board. This structure properly reflects our belief that our Shareholders’ interests are best served by the day-to-day management direction of the Company under Mr. Lynch, as President and Chief Executive Officer, together with the leadership of our Chairman of the Board, Mr. Byrne.
Meetings of the Board
In 2014 there were six meetings of the entire Board and 25 committee meetings. All incumbent Directors attended at least seventy-five percent (75%) or more of the meetings of the Board and of the committees on which they served. Absent extraordinary circumstances, we expect all Directors and nominees to attend our annual meetings of Shareholders. All Directors attended the 2014 Annual General Meeting of Shareholders.
Executive Sessions
As required by the NYSE listing standards, non-employee Directors meet by themselves, without management or employee-Directors present, at regularly scheduled in-person Board meetings, meetings of the committees of the Board and telephonic meetings, as appropriate. The Chairman of the Board, Mr. Byrne, or the Chair of the committee, as applicable, presides at these meetings.
Board Committees; Membership
We currently have the following committees: Audit Committee, Human Resources and Compensation Committee, and Corporate Governance and Nominating Committee, each of which has the responsibilities and composition described below. The Board has adopted charters for each of these committees describing the authority and responsibilities delegated to each committee by the Board. All committee charters are available at

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our website, www.masonite.com, and available in print to any shareholder without charge, upon request to Masonite International Corporation, One Tampa City Center, 201 North Franklin Street, Suite 300, Tampa, FL 33602 Attention: Corporate Secretary, or by calling (800) 895-2723.
Audit Committee
The Audit Committee currently consists of Jonathan F. Foster (Chair), Rick J. Mills, and John C. Wills. The Audit Committee met ten times in 2014. Each member of our Audit Committee is independent under applicable NYSE listing standards and meets the standards for independence required by U.S. securities law requirements applicable to public companies, including Rule 10A-3 of the Securities Exchange Act of 1934 (the "Exchange Act"). Each member is financially literate under applicable NYSE listing standards and our Board has determined that each of Mr. Foster and Mr. Mills is qualified as an audit committee financial expert within the meaning of applicable SEC regulations. The Audit Committee oversees and evaluates and, where necessary or advisable, makes recommendations as to the quality and integrity of the financial statements of the Company, the internal control and financial reporting systems of the Company, the compliance by the Company with legal and regulatory requirements in respect of financial disclosure, the qualification, independence and performance of the Company’s independent auditors and the performance of the Company’s internal audit functions. In addition, the Audit Committee is directly responsible for the appointment, compensation, retention, termination and oversight of the work of the independent auditor (including oversight of the resolution of any disagreements between management and the independent auditor regarding financial reporting) for the purpose of preparing audit reports or performing other audit, review or attest services for the Company, subject to any applicable approvals required from our Board or our Shareholders.

Human Resources and Compensation Committee
The Human Resources and Compensation Committee currently consists of Francis M. Scricco (Chair), Peter R. Dachowski and George A. Lorch. The Human Resources and Compensation Committee met nine times in 2014. Each member of our Human Resources and Compensation Committee is independent under applicable NYSE listing standards and qualifies as a "non-employee director" for purposes of Rule 16b-3 under the Exchange Act. The Human Resources and Compensation Committee reviews and, as it deems appropriate, recommends to the Board policies, practices and procedures relating to the compensation and succession planning for the executive officers and other managerial employees and the establishment and administration of employee benefit plans. The Human Resources and Compensation Committee also exercises all authority under the Company’s employee equity incentive plans, subject to any applicable approvals required from our Board or our Shareholders. The Human Resources and Compensation Committee may delegate its authority as it deems appropriate to a subcommittee composed of one or more members. The Human Resources and Compensation Committee has utilized Frederic W. Cook & Co. ("Cook & Co.") as its independent consulting firm since 2010. For a discussion concerning the processes and procedures for considering and determining executive and director compensation and the role of executive officers and the compensation consultant in determining or recommending the amount or form of executive and director compensation, see "Compensation Discussion and Analysis" beginning on page 21 and "Director Compensation" beginning on page 17.


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Corporate Governance and Nominating Committee
The Corporate Governance and Nominating Committee currently consists of George A. Lorch (Chair), Francis M. Scricco and Jody L. Bilney. Mr. Dachowski was replaced on the Corporate Governance and Nominating Committee by Ms. Bilney when she joined the Board in January 2014. The Corporate Governance and Nominating Committee met six times in 2014. Each member of our Corporate Governance and Nominating Committee is independent under applicable NYSE listing standards. The Corporate Governance and Nominating Committee reviews and, as it deems appropriate, recommends to the Board policies and procedures relating to Director and Board committee nominations and corporate governance policies, oversees compliance with the Company’s ethics training and compliance programs, reviews policies with respect to risk assessment and risk management and provides oversight for risk management processes, and establishes and administers assessment of board, committee and individual Director performance.

Board Role in Risk Oversight
Management has responsibility for managing overall risk to the enterprise. A management risk committee meets quarterly to assess identified risks and steps being taken to appropriately mitigate risk. The Board has delegated to the Corporate Governance and Nominating Committee the primary responsibility for overseeing our risk management framework and methods for identifying and managing management’s adherence to the framework, including periodic review of the structure and effectiveness of our risk management committee. The Audit Committee reviews the guidelines and policies governing the process by which risk assessment and risk management are managed by management with the oversight of the Corporate Governance and Nominating Committee. The Audit Committee also reviews the Company’s major financial risk exposures and management’s actions to monitor and control such exposures. The Human Resources and Compensation Committee conducts a compensation plan risk assessment in order to ensure that our compensation plans focus on growth in shareholder value without incentivizing undue risk. Our Board receives reports from the committees and periodically assesses the enterprise-level risks that face the Company from a strategic point of view and reviews options for risk mitigation.
Corporate Governance Guidelines and Code of Ethics
Our Board has adopted corporate governance guidelines. Our Corporate Governance Guidelines reflect the principles by which we operate. From time to time, the Corporate Governance and Nominating Committee and the Board review and revise our Corporate Governance Guidelines in response to evolving best practices as appropriate. We have also adopted a Values Guide/Code of Conduct (the "Code of Conduct"), which applies to all of our Directors, officers and employees. We intend to post any amendments to or waivers from our Code of Conduct on our website to the extent applicable to our CEO, CFO, Corporate Controller, and any other officer who may function as a Chief Accounting Officer or a Director. Our Corporate Governance Guidelines, the Code of Conduct, and other information are available at our website, www.masonite.com, and such information is available in print to any Shareholder without charge, upon request to Masonite International Corporation, One Tampa City Center, 201 North Franklin Street, Suite 300, Tampa, FL 33602, Attention: Corporate Secretary, or by calling (800) 895-2723.

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Compensation Committee Interlocks and Insider Participation
During fiscal 2014, Messrs. Scricco, Lorch, and Dachowski served on the Human Resources and Compensation Committee. During fiscal 2014, no member of our Human Resources and Compensation Committee was an employee or officer or former officer of Masonite or had any relationships requiring disclosure under Item 404 of Regulation S-K. None of our executive officers has served on the board of directors or compensation committee of any other entity that has or has had one or more executive officers who served as a member of our Board or our Human Resources and Compensation Committee during fiscal 2014.
Certain Relationships and Related Party Transactions
The Company’s Related Person Transaction Policy defines a "Related Person Transaction" as any transaction that would be required to be disclosed pursuant to Item 404(a) of Regulation S-K in which the Company was or is to be a participant, the amount involved exceeds $120,000, and in which any Related Person had or will have a direct or indirect material interest, other than an employment relationship or transaction involving an executive officer and any related compensation. A "transaction" includes, but is not limited to, any financial transaction, arrangement or relationship (including any indebtedness or guarantee of indebtedness) or any series of similar transactions, arrangement or relationships. A "Related Person" is (i) any person who is, or at any time since the beginning of the last fiscal year, was an executive officer, a director or a director nominee of the Company; (ii) a security holder who is known to the Company to own of record or beneficially more than 5% of any class of the Company’s voting securities at the time of occurrence or existence of the Related Person Transaction; and (iii) a person who is an immediate family member of any of the foregoing persons (the term "immediate family" shall include any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law and any person (other than a tenant or employee) sharing the household of any of the foregoing persons).
Under the Related Person Transaction Policy, each Related Person Transaction must be approved or ratified in accordance with the guidelines set forth in the policy by the Corporate Governance and Nominating Committee or by the disinterested members of the Board. In considering whether to approve or ratify any Related Person Transaction, the Corporate Governance and Nominating Committee or the disinterested members of the Board, as the case may be, shall consider all factors that in their discretion are relevant to the Related Person Transaction. Additionally, any employment relationship or transaction involving an executive officer and any related compensation must be approved by the Human Resources and Compensation Committee of the Board or recommended by the Human Resources and Compensation Committee to the Board for its approval. In considering whether to approve or ratify any Related Person Transaction, the Corporate Governance and Nominating Committee or the disinterested members of the Board, as the case may be, shall consider all factors that in their discretion are relevant to the Related Person Transaction. There were no transactions, or currently proposed transactions, considered to be a Related Person Transaction since the beginning of our last fiscal year and through the date of this Proxy Statement.

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Communications with Directors
Interested parties, including Shareholders, may contact the Chairman of the Board or one or more members of the Board or its committees by writing to them at: Board of Masonite International Corporation, c/o Masonite International Corporation, One Tampa City Center, 201 North Franklin Street, Suite 300, Tampa, Florida 33602.
Certain Legal Proceedings
As a result of a liquidity shortfall triggered by the unprecedented downturn in the U.S. housing and construction market that commenced in 2006, on March 16, 2009, Masonite and several affiliated Canadian companies, voluntarily filed to reorganize under the Company’s Creditors Arrangement Act in Canada in the Ontario Superior Court of Justice. In addition, Masonite and its U.S. subsidiaries filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware. As such, our Director and Chief Executive Officer Mr. Frederick J. Lynch and our named executive officers, Lawrence W. Repar and Glenwood E. Coulter, Jr. served as executive officers of a company that filed a petition under the federal bankruptcy laws at or within two years prior to the time of the filing.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act, as amended, requires directors, executive officers and beneficial owners of more than ten percent (10%) of our Common Shares to file with the SEC initial reports of ownership and reports of changes in ownership of our Common Shares. Based solely on a review of the copies of these reports received by us and on written representations from certain reporting persons, we believe that all such reports were submitted on a timely basis during fiscal 2014 except for one Form 4 reporting one equity award grant transaction for each of Messrs. Lynch, Erceg, Repar, Coulter, and Lewis and Gail N. Auerbach which was filed late.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following tables show the amount of our Common Shares beneficially owned as of March 6, 2015, by those known to us to beneficially own more than 5% of our Common Shares, by our Directors and named executive officers individually and by our Directors and all of our executive officers as a group.
The percentage of Common Shares outstanding provided in the tables are based on 30,106,742 shares outstanding as of March 6, 2015. Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities.
5% Owners:
Except as otherwise indicated below, based solely on filings made under Sections 13(d) and 13(g) of the Exchange Act as of March 6, 2015, the only Shareholders known to us to beneficially own more than 5% of any class of our voting securities are:

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Amount and Nature of Beneficial Ownership
 
 
Name and Address of Beneficial Owner
 
Common Shares Directly or Indirectly Owned
 
Warrants Exercisable Within 60 days of March 6, 2015
 
Total Common Shares Beneficially Owned
 
Percentage of Common Shares Beneficially Owned
Oaktree Capital Management, L.P. and certain affiliates(1)
 
2,436,585
 
545,653
 
2,982,238
 
9.7%
Hotchkis and Wiley Capital Management, LLC(2)
 
2,878,842
 
 
2,878,842
 
9.5%
12 West Capital Management, LP(3)
 
2,221,635
 
598,385
 
2,820,020
 
9.2%
Gilder, Gagnon, Howe & Co. LLC(4)
 
1,651,562
 
 
1,651,562
 
5.5%
BlackRock, Inc.(5)
 
1,720,062
 
 
1,720,062
 
5.7%
The Vanguard Group(6)
 
1,575,039
 
 
1,575,039
 
5.2%
Baron Capital Group, Inc. (7)
 
2,109,234
 
 
2,109,234
 
7.0%
Archer Capital Management, L.P. (8)
 
1,538,646
 
 
1,538,646
 
5.1%
The Carlyle Group L.P. and certain affiliates(9)
 
1,773,781
 
 
1,773,781
 
5.9%

(1)
Based on the most recently available Schedule 13G/A filed with the SEC on February 6, 2015, as of December 31, 2014, the number of shares reported includes: (a) warrants exercisable for 119,352 Common Shares over which OCM Opportunities Fund V, L.P. has sole voting and dispositive power; (b) warrants exercisable for 266,934 Common Shares over which OCM Opportunities Fund VI, L.P. has sole voting and dispositive power; (c) 400,839 Common Shares and warrants exercisable for 145,672 Common Shares over which OCM Opportunities Fund VII Delaware, L.P. has sole voting and dispositive power; (d) 3,518 Common Shares and warrants exercisable for 12,227 Common Shares over which OCM Opportunities Fund VIIb, L.P. has sole voting and dispositive power; (e) 423 Common Shares and warrants exercisable for 1,468 Common Shares over which OCM Opportunities Fund VIIb (Parallel), L.P. has sole voting and dispositive power; and (f) 2,031,805 Common Shares over which OCM Opportunities Fund VIIb Delaware, L.P. has sole voting and dispositive power. The mailing address for the holders listed above is c/o Oaktree Capital Group Holdings GP, LLC, 333 S. Grand Avenue, 28th Floor, Los Angeles, CA 90071.
The general partner of OCM Opportunities Fund V, L.P. is OCM Opportunities Fund V GP, L.P. The general partner of OCM Opportunities Fund VI, L.P. is OCM Opportunities Fund VI GP, L.P. The general partner of OCM Opportunities Fund VII Delaware, L.P. is OCM Opportunities Fund VII Delaware GP Inc. The sole shareholder of OCM Opportunities Fund VII Delaware GP Inc. is OCM Opportunities Fund VII, L.P. The general partner of OCM Opportunities Fund VII is OCM Opportunities Fund VII GP, L.P. The general partner of OCM Opportunities Fund VII GP, L.P. is OCM Opportunities Fund VII GP Ltd. The general partner of OCM Opportunities Fund VIIb, L.P. and OCM Opportunities Fund VIIb (Parallel), L.P. is OCM Opportunities Fund VIIb GP, L.P. The general partner of OCM Opportunities Fund VIIb GP, L.P. is OCM Opportunities Fund VIIb GP Ltd. The general partner of OCM Opportunities Fund VIIb Delaware, L.P. is Oaktree Fund GP, LLC. The general partner of OCM Opportunities Fund V GP, L.P. and OCM Opportunities Fund VI GP, L.P., and the sole shareholder of each of OCM Opportunities Fund VII GP Ltd. and OCM Opportunities Fund VIIb GP Ltd., and the managing member of Oaktree Fund GP, LLC is Oaktree Fund GP I, L.P. The general partner of Oaktree Fund GP I, L.P. is Oaktree Capital I, L.P. The general partner of Oaktree Capital I, L.P. is OCM Holdings I, LLC. The managing member of OCM Holdings I, LLC is Oaktree Holdings, LLC. The sole director of OCM Opportunities Fund VII GP Ltd. and OCM Opportunities Fund VIIb GP Ltd. is Oaktree Capital Management, L.P. The general partner of Oaktree Capital Management, L.P. is Oaktree Holdings, Inc. The managing member of Oaktree Holdings, LLC and the sole shareholder of Oaktree Holdings, Inc. is Oaktree Capital Group, LLC. The duly elected Manager of Oaktree Capital Group, LLC is Oaktree Capital Group Holdings GP, LLC.
(2)
Based on the most recently available Schedule 13G filed with the SEC on February 13, 2015, as of December 31, 2014, the number of shares reported includes: (a) 2,,524,142 Common Shares over which Hotchkis and Wiley Capital Management, LLC ("HWCM") has sole voting power; and (b) 2,878,842 Common Shares over which HWCM has sole dispositive power. HWCN beneficially owns 354,700 Common Shares where certain clients have retained voting power over the Common Shares held. Accordingly, HWCM has the power to dispose of more Common Shares than it can vote. The mailing address for the holder listed above is 725 S. Figueroa Street, 39th Floor, Los Angeles, CA 90017.
(3)
Based on the most recently available Schedule 13G/A filed with the SEC on February 17, 2015, as of December 31, 2014, the number of shares reported includes: (a) 1,471,347 Common Shares and warrants exercisable for 396,292 Common Shares over which 12 West Capital Fund LP ("12 West Onshore Fund") has sole voting and dispositive power; and (b) 750,288 Common Shares and warrants exercisable for 202,093 Common Shares over which 12 West Capital Offshore Fund LP ("12 West Offshore Fund") has sole voting and dispositive power. 12 West Capital Management LP ("12 West Management"), which serves as the investment manager to 12 West Onshore Fund and 12 West Offshore Fund, and Joel Ramin, as the sole member of 12 West Capital Management, LLC, the general partner of 12 West Management,

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possess sole voting and dispositive power with respect to Common Shares held by 12 West Onshore Fund and 12 West Offshore Fund. The mailing address for the holder listed above is 90 Park Avenue, 41st Floor, New York New York 10016.
(4)
Based on the most recently available Schedule 13G/A filed with the SEC on February 10, 2015, as of December 31, 2014, the number of shares reported includes: (a) 1,495,012 Common Shares held in customer accounts over which partners and/or employees of the Gilder, Gagnon, Howe & Co. LLC ("GGH") have shared dispositive power; (b) 26,068 Common Shares held in the account of the profit sharing plan of GGH over which GGH has sole voting and dispositive power; and (c) 130,482 Common Shares held in accounts owned by the partners of GGH and their families over which GGH has shared dispositive power. The mailing address for the holder listed above is 3 Columbus Circle, 26th Floor, New York, NY 10019.
(5)
Based on the most recently available Schedule 13G filed with the SEC on February 2, 2015, as of December 31, 2014, the number of shares reported includes (a) 1,663,235 Common Shares over which Blackrock Inc. ("Blackrock") has sole voting power; and (b) 1,720,062 Common Shares over which Blackrock has sole dispositive power. The mailing address for the holder listed above is 55 East 52nd Street, New York, NY 10022.
(6)
Based on the most recently available Schedule 13G filed with the SEC on February 11, 2015, as of December 31, 2014, the number of shares reported includes (a) 32,879 Common Shares over which The Vanguard Group ("Vanguard") has sole voting power and shared dispositive power; and (b) 1,542,160 Common Shares over which Vanguard has sole dispositive power. The mailing address for the holder listed above is 100 Vanguard Blvd., Malvern, PA 19355.
(7)
Based on the most recently available Schedule 13G filed with the SEC on February 17, 2015, as of December 31, 2014, the number of shares reported includes (a) 1,986,869 Common Shares over which BAMCO, Inc. ("BAMCO") has shared voting and dispositive power and (b) 122,365 Common Shares over which Baron Capital Management, Inc. ("BCM") has shared voting and dispositive power. BAMCO and BCM are subsidiaries of Baron Capital Group, Inc. ("BCG"). Ronald Baron owns a controlling interest in BCG. The mailing address for the holder listed above is 767 Fifth Avenue, 49th Floor, New York, NY 10153.
(8)
Based on the most recently available Schedule 13G filed with the SEC on February 17, 2015, as of December 31, 2014, the number of shares reported includes 1,538,646 Common Shares held by certain private investment funds (the “Funds”) over which Archer Capital Management, L.P. (“Archer”) has shared voting and dispositive power as the investment manager to the Funds. Canton Holdings, L.L.C. (“Canton”) is the general partner of Archer. Joshua A. Lobel and Eric J. Edidin are principals of Canton. The mailing address for the holder listed above is 570 Lexington Avenue, 40th Floor, New York, New York 10022.
(9)
Based on the most recently available Schedule 13G filed with the SEC on June 9, 2014, as of December 31, 2013, the number of shares reported includes (a) 1,714,183 Common Shares held by Carlyle Strategic Partners II, L.P., over which it has shared voting and dispositive power, and (b) 59,598 Common Shares held by CSP II Coinvestment, L.P., over which it has shared voting and dispositive power. Carlyle Group Management L.L.C. is the general partner of The Carlyle Group L.P., which is a publicly traded entity listed on NASDAQ. The Carlyle Group L.P. is the sole shareholder of Carlyle Holdings I GP Inc., which is the managing member of Carlyle Holdings I GP Sub L.L.C., which is the general partner of Carlyle Holdings I L.P., which is the managing member of TC Group, L.L.C., which is the general partner of TC Group Sub L.P., which is the managing member of TC Group CSP II, L.L.C., which is the general partner of CSP II General Partner, L.P., which is the general partner of each of Carlyle Strategic Partners II, L.P. and CSP II Coinvestment, L.P. TC Group, L.L.C. is also the general partner of CSP General Partner, L.P., which is the general partner of Carlyle Strategic Partners, L.P. The mailing address for the holder listed above is c/o The Carlyle Group, 1001 Pennsylvania Avenue, N.W., Suite 220 South, Washington, D.C. 20004-2505.


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Directors and Executive Officers:
 
 
Number of Shares Beneficially Owned as of March 6, 2015
Name of Beneficial Owner(1)
 
Common Shares Directly or Indirectly Owned(2)
 
SARS Exercisable Within 60 Days of March 6, 2015(3)
 
Total Stock-Based Ownership(4)
Frederick J. Lynch
 
162,400
 
270,181
 
432,581
Robert J. Byrne
 
35,118
 
 
35,118
Jonathan F. Foster
 
8,678
 
 
8,678
George A. Lorch
 
30,761
 
 
30,761
Francis M. Scricco
 
19,761
 
 
19,761
John C. Wills
 
5,834
 
 
5,834
Jody L. Bilney
 
2,016
 
 
2,016
Rick J. Mills
 
2,564
 
 
2,564
Peter R. Dachowski
 
4,164
 
 
4,164
Mark J. Erceg
 
32,928
 
11,961
 
44,889
Lawrence P. Repar
 
6,495
 
39,339
 
45,834
Glenwood E. Coulter, Jr.
 
31,291
 
 
31,291
Robert E. Lewis
 
7,255
 
9,014
 
16,269
All directors and executive officers as a group (14 persons)
 
365,341
 
353,253
 
718,594

(1)
As of March 6, 2015 (i) no Director or executive officer beneficially owned more than 1% of the outstanding Common Shares of the Company other than Mr. Lynch who owned 1.42%, and (ii) the Directors and executive officers of the Company as a group beneficially owned approximately 2.36% of the Common Shares of the Company (including Common Shares they can acquire within 60 days). The address of each of our Directors and executive officers listed above is c/o Masonite International Corporation, One Tampa City Center, 201 North Franklin Street, Suite 300, Tampa, Florida 33602.
(2)
Includes the following number of Common Shares issuable upon the settlement of restricted stock units within 60 days of March 6, 2015: Mr. Lynch - 8,652; Mr. Erceg - 2,863; Mr. Repar - 3,607; Mr. Coulter - 2,290; and Mr. Lewis - 1,789. Also includes with respect to Mr. Byrne 35,118 Common Shares which are held in trust and, with respect to Mr. Wills, includes 5,834 Common Shares held by Jokaw Inc.
(3)
The number of Common Shares shown in this column are not currently outstanding but are deemed beneficially owned because of the right to acquire them pursuant to SARs exercisable within 60 days of March 6, 2015. Since the SARs are settled in Common Shares, the table assumes that the SARs were converted to Common Shares using a price of $62.29 per Common Share, the closing price of our Common Shares on the NYSE on March 6, 2015.
(4)
These amounts are the sum of the number of shares shown in the prior columns.


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DIRECTOR COMPENSATION
Mr. Lynch, our President and Chief Executive Officer, does not receive any additional compensation for serving on our Board. During, 2014, the annual Director compensation program was structured as follows:
Annual cash retainer: $100,000

Annual equity retainer: $40,000 ($105,000 for the Non-Executive Chairman of the Board)

No meeting fees (Board or Committee)

Additional Cash Retainer for Committee Chairs: $12,500

Additional Cash Retainer for the Non-Executive Chairman of the Board: $55,000

One-Time Equity Retainer for Newly Elected Directors: $100,000

All cash retainers are payable in equal installments at the beginning of each fiscal quarter. As indicated above, our non-employee Directors (other than the Non-Executive Chairman of the Board) also receive an annual equity retainer of restricted stock units (with the number of restricted stock units granted determined by dividing $40,000 by the fair market value of a Common Share on the grant date). The number of restricted stock units granted to the Non-Executive Chairman of the Board is determined by dividing $105,000 by the fair market value of a Common Share on the grant date. These grants are made annually immediately after a Director is re-elected to our Board and will vest on the first anniversary of the grant date, subject to the Director’s continued service on the Board through the vesting date. On December 2, 2014, after consulting with the Board’s compensation consultant, the Board determined to increase the annual equity retainer of restricted stock units made to our non-employee Directors (other than the Non-Executive Chairman of the Board) from $40,000 to $50,000 and to increase the annual equity retainer of restricted stock units made to the Non-Executive Chairman of the Board from $105,000 to $125,000, in each case effective with the award that is scheduled to be made after the Director is re-elected to our Board at the Meeting.

In addition, during 2014 newly elected members of the Board were entitled to receive a one-time grant of restricted stock units (with the number of restricted stock units granted determined by dividing $100,000 by the fair market value of a Common Share on the grant date) that vested on the first anniversary of the date on which the Director became a member of our Board, subject to the Director’s continued service on the Board through the vesting date. On December 2, 2014, after consulting with the Board’s compensation consultant, the Board determined to no longer make these one-time grants of restricted stock units to newly elected members of our Board.

All Directors are reimbursed for reasonable costs and expenses incurred in the attending meetings of our Board and its committees.


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We have stock ownership guidelines that require each of our non-employee Directors to own meaningful equity stakes in Masonite to further align their economic interests with those of our Shareholders. Our stock ownership guidelines require that our non-employee Directors own common shares in an amount not less than three times the amount of their annual cash retainer. Compliance with these guidelines will be measured once per fiscal year on the last day of the first fiscal quarter. Restricted stock units count as shares for purposes of the guidelines. There is no particular date by which the requisite share ownership level must be achieved. However, until the required level of ownership is achieved, each non-employee Director must retain at least fifty percent of the number of shares acquired by the Director upon the settlement of any restricted stock units. All of our non-employee Directors, other than Mr. Mills and Ms. Bilney, currently own the requisite number of shares.

Name
 
Fees Earned or Paid in Cash(1)
 
Stock Awards(2)
 
Total
Robert J. Byrne, Chairman
 
$155,000
 
$105,000
 
$260,000
Jody L. Bilney
 
$100,000
 
$154,904
 
$254,904
Peter R. Dachowski
 
$100,000
 
$40,000
 
$140,000
Jonathan F. Foster
 
$112,500
 
$40,000
 
$152,500
George A. Lorch
 
$112,500
 
$40,000
 
$152,500
Rick J. Mills
 
$100,000
 
$40,000
 
$140,000
Francis M. Scricco
 
$112,500
 
$40,000
 
$152,500
John C. Wills
 
$100,000
 
$40,000
 
$140,000
(1)
This column includes the annual cash retainers described above. Mr. Byrne received $55,000 for serving as non-executive Chairman of the Board. Mr. Foster received $12,500 for serving as chair of the Audit Committee. Mr. Lorch received $12,500 for serving as the chair of the Corporate Governance and Nominating Committee. Mr. Scricco received $12,500 for serving as the chair of the Human Resources and Compensation Committee.
(2)
On May 13, 2014, each non-employee Director then on the Board other than Mr. Byrne was awarded 771 restricted stock units and Mr. Byrne was awarded 2,024 restricted stock units under the Masonite International Corporation 2012 Equity Incentive Plan (the “2012 Plan”). On January 13, 2014 Ms. Bilney was awarded 2,016 restricted stock units under the 2012 Plan, representing her initial award upon joining the Board and a prorated amount of her annual equity retainer. The amounts reported in this column reflect the aggregate grant date fair value of the restricted stock units computed in accordance with Accounting Standards Codification Topic 718 "Stock Compensation," as issued by the Financial Accounting Standards Board. The assumptions made when calculating the amounts are found in Note 8 to our Consolidated Financial Statements in Part II, Item 8 of our Annual Report on Form 10-K for the fiscal year ended December 28, 2014. As of December 28, 2014, the non-executive Directors held the following outstanding restricted stock units: Mr. Byrne – 2,024; Mr. Foster - 771; Ms. Bilney – 2,787; Mr. Lorch - 771; Mr. Scricco - 771; Mr. Wills - 771; Mr. Dachowski - 771; and Mr. Mills - 771.

COMPENSATION COMMITTEE REPORT
The Human Resources and Compensation Committee of the Board has reviewed and discussed the following section of this Proxy Statement entitled "Compensation Discussion and Analysis" with management. Based on this review and discussion, the Human Resources and Compensation Committee has recommended to the Board that this Compensation Discussion and Analysis be included in this Proxy Statement and incorporated by reference into the Company’s Annual Report on Form 10-K for the year ended December 28, 2014.
Submitted by the Human Resources and Compensation Committee of the Company’s Board:
Francis M. Scricco (Chairman)
George A. Lorch
Peter R. Dachowski

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EXECUTIVE COMPENSATION
Executive Summary
Our Business
We are a leading global designer and manufacturer of interior and exterior doors for the residential new construction; the residential repair, renovation and remodeling; and the non-residential building construction markets. Since 1925, we have provided our customers with innovative products and superior service at compelling values. As of December 28, 2014, we served more than 7,000 customers in 80 countries and had approximately 10,300 employees worldwide.
Executive Compensation Program Attributes
Our executive compensation program is supported by an underlying philosophy that compensation should attract and retain high caliber talent, reward performance and align with the interests of our Shareholders. We execute this philosophy by providing our executives with base salaries, cash bonus awards under our annual cash bonus plan, grants of a combination of performance-based and time-based equity awards under our long-term incentive program, severance and change in control benefits, and other employee benefits. To focus our named executive officers ("NEOs") on delivering both short- and long-term results, a significant amount of their target total direct compensation mix is weighted towards at-risk compensation.
Adoption of Compensation Best Practices
As part of our compensation philosophy, we have taken a number of actions to ensure a fair, balanced, and transparent executive compensation structure, including:
Payouts under our executive annual cash bonus plan (“Management Incentive Plan” or “MIP”) are based solely on our achievement of certain financial and operational performance goals;

We deliver a majority of our long-term incentive awards in the form of performance-vesting equity awards that are tied to the achievement of challenging financial objectives;

We adopted stock ownership guidelines for our NEOs to ensure that they maintain a significant investment in our Common Shares, thereby aligning their economic interests with those of our Shareholders;

We implemented "claw back" policies, revised in 2015, that enable us to recover equity-based and cash-based incentive compensation from our employees, including our NEOs, following either certain detrimental misconduct or certain financial misconduct that contributes to the Company’s financial or operational results used to determine cash or equity awards under our plans being misstated and, for equity-based compensation only, following an employee’s material violation of any restrictive covenants to which that employee is a party;


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We have a policy that prohibits derivative transactions in our Common Shares, including: trading in puts, calls, covered calls, or other derivative products involving our securities; engaging in any hedging or monetization transaction with respect to our securities; or, holding company securities in a margin account or pledging our securities as collateral for a loan;

We do not have any plans or agreements that provide tax gross-ups under Section 280G of the Internal Revenue Code;

We no longer grant any equity awards that provide for "single trigger" vesting on or following a change of control. All awards now require a qualifying termination following a change of control ("a double trigger") in order to accelerate vesting; and

Our NEOs receive no perquisites or other personal benefits, unless such benefits serve a reasonable business purpose, such as providing newly hired executives with relocation benefits.

2014 Executive Compensation Highlights
Based on management’s recommendation, in fiscal year 2014 we approved base salary merit increases for certain of our NEOs after not granting merit increases in fiscal years 2012 and 2013.

Our 2014 MIP Adjusted EBITDA was $132.3 million which was less than the threshold level of $137.5 million, our MIP Net Revenue was $1,799.1 million which fell just short of the target level of $1,800.0 million and our Cash Conversion Cycle improved by 1.57 days which exceeded the threshold level of one day improvement. As a result, the MIP paid out at 30.3% of target.

In fiscal year 2014, we increased the portion of performance based awards expressed as a percentage of our total annual long-term incentive award program by 10%, such that 70% of Mr. Lynch’s restricted stock unit awards granted and 60% of each other NEO’s restricted stock unit awards granted were performance based. These equity awards require that we achieve certain pre-established performance levels based on 2016 performance of Adjusted EBITDA Margin and Return on Assets.

2014 Corporate Governance Highlights
Our Board is committed to maintaining sound governance practices and standards with respect to its oversight of our executive compensation program, including the following:
The Human Resources and Compensation Committee’s independent compensation consultant, Cook & Co., is retained directly by the Human Resources and Compensation Committee and performs no other services for us;

The Human Resources and Compensation Committee requested that Cook & Co. review our peer group for benchmarking executive compensation and we updated our compensation peer group following such review;

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The Human Resources and Compensation Committee reviews employee compensation annually to confirm that such compensation does not encourage unnecessary risk-taking; and

The Human Resources and Compensation Committee has approved an equity grant policy that sets forth the timing and approvals required for equity grants.

Introduction to Compensation Discussion & Analysis
Our Compensation Discussion and Analysis ("CD&A") explains the philosophy and objectives of our compensation program and our process for setting compensation for our NEOs for the fiscal year ended December 28, 2014.
Our executive compensation program is overseen by the Human Resources and Compensation Committee. As discussed in greater detail below, we offer our NEOs a balanced compensation structure, comprised of the following components:
Annual base salary

Annual cash bonuses

Long-term equity incentive awards

Severance and change of control benefits

Other employee benefits

In making its decisions on an executive’s compensation, the Human Resources and Compensation Committee considers the nature and scope of all elements of an executive’s total compensation package, the executive’s responsibilities and his or her effectiveness in supporting our key strategic, operational and financial goals (but does not assign any specific weighting to any of the items considered).
Compensation Discussion & Analysis
Our Named Executive Officers
For the fiscal year ended December 28, 2014, the following individuals were our NEOs:
Frederick J. Lynch, our President and Chief Executive Officer

Mark J. Erceg, our Executive Vice President and Chief Financial Officer

Lawrence P. Repar, our Executive Vice President, Global Sales and Marketing and Chief Operating Officer

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Glenwood E. Coulter, Jr., our Executive Vice President, Global Operations and Europe, and

Robert E. Lewis, our Senior Vice President, General Counsel and Corporate Secretary.

Executive Compensation Objectives
Our executive compensation programs are overseen by the Human Resources and Compensation Committee, which is comprised of Messrs. Francis M. Scricco (Committee chair), George A. Lorch and Peter Dachowski. The Human Resources and Compensation Committee consults with the Board of Directors in determining the compensation package of our Chief Executive Officer, and has ultimate responsibility for determining the compensation for all of the NEOs. In making its compensation decisions, the Human Resources and Compensation Committee considers, among other things, market data and trends, input from the Human Resources and Compensation Committee’s independent compensation consultant Cook & Co. (whose role is discussed below), and, with respect to the NEOs other than our Chief Executive Officer, the recommendations of our Chief Executive Officer (as discussed in more detail below).
The Human Resources and Compensation Committee is responsible for establishing and annually reviewing the overall compensation philosophy of the Company for its executive officers. The key principles guiding the Human Resources and Compensation Committee in making compensation determinations are:
We offer a total compensation program comprised of base salary and variable compensation (consisting of short-term cash and long-term equity components) linked to business goals, designed to attract, retain and motivate talented executives to deliver the Company’s financial and operating performance objectives and long-term vision.

To align the interests of management with those of our Shareholders, our pay mix is weighted in favor of at-risk compensation, both in the form of annual cash bonus and equity awards.

Pay for performance is an important concept of our compensation philosophy. Consistent with this focus, our compensation program includes annual cash incentives and long-term equity incentives.

Compensation Philosophy and Pay Mix
The Human Resources and Compensation Committee strives to provide pay opportunities that generally align within a competitive range to the market median (i.e., within 15% above or below the 50th percentile), as determined using both our peer group and national market survey data, and considers competitive compensation practices and other relevant factors such as experience, contribution, internal equity, and performance in setting each NEO’s target total direct compensation. Target total direct compensation represents the sum of target total cash compensation (base salary and target bonus) and target annual equity awards. Given our performance-based program, the actual amount of compensation realized will be contingent on our ability to perform against our pre-established performance goals and grow our stock price.

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Our compensation policy provides for a mix of performance-based and guaranteed compensation elements and our Human Resources and Compensation Committee strives to achieve an appropriate balance between these two types of compensation, as well as an appropriate mix of cash and equity-based compensation. The mix of compensation elements is primarily designed to reward individual performance and enterprise value growth and is weighted towards at-risk compensation, both in the form of performance-based annual cash bonuses and equity-based compensation, including performance-based and time-based awards.
The charts below illustrate the target total direct compensation for 2014 for Mr. Lynch and the average of the other four NEOs.
Prior Year’s Shareholder Advisory Vote
We believe that our stockholders recognize the positive attributes of our executive compensation program. We received strong support for our executive compensation from our stockholders at our 2014 annual general meeting of Shareholders, at which 99.8% of the votes cast on the “say on pay” proposal were in favor of the 2013 compensation for our NEOs.
Role of our Human Resources and Compensation Committee
The Human Resources and Compensation Committee makes compensation decisions for our NEOs after reviewing our performance for the preceding fiscal year, our short- and long-term strategies, and current economic and market conditions, and carefully evaluating each NEO’s performance during the preceding fiscal year against established organizational goals, leadership qualities, operational performance, business responsibilities, career with us, current compensation arrangements and long-term potential to enhance enterprise value. The Human Resources and Compensation Committee takes a holistic view in its assessment of executive compensation arrangements, taking into consideration the foregoing factors and shareholder considerations, not necessarily relying on any one factor exclusively in determining compensation for our NEOs. In making compensation

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decisions, the Human Resources and Compensation Committee receives advice from Cook & Co. and input from our Chief Executive Officer, as further discussed below.
Role of our Chief Executive Officer and Other Executive Officers
Our Chief Executive Officer reviews the base salaries of our NEOs (other than himself) on an annual basis and, if applicable, recommends base salary increases to the Human Resources and Compensation Committee, based on each NEO’s performance and responsibilities. Mr. Lynch confers with our Senior Vice President of Human Resources, Gail N. Auerbach, and together they consider applicable market data provided by Cook & Co. Mr. Lynch and Ms. Auerbach also provide the Human Resources and Compensation Committee with input regarding our annual cash incentive plan (as discussed below) and equity grants for executive officers, including but not limited to recommendations regarding eligibility for such grants and the size of the applicable grant (determined as a percentage of base salary). Additionally, Mr. Erceg provides input to Mr. Lynch and the Human Resources and Compensation Committee with respect to the financial performance aspects of our annual bonus plan and any performance-based equity awards. Although Mr. Lynch often attends meetings of the Human Resources and Compensation Committee, he recuses himself from those portions of the meetings related to his compensation. The Human Resources and Compensation Committee, in consultation with the Board of Directors, is exclusively responsible for determining any base salary increases and for making any other compensation decisions with respect to Mr. Lynch.
Role of Compensation Consultant
The Human Resources and Compensation Committee has utilized Cook & Co. as its independent consulting firm since 2010. Cook & Co. is engaged by, and reports directly to, the Human Resources and Compensation Committee. Cook & Co. provides our Human Resources and Compensation Committee with input and guidance on all components of our executive compensation program. Except for services provided to the Committee related to executive compensation and Board of Director pay, Cook & Co. did not provide any services to us during 2014. The Human Resources and Compensation Committee has evaluated whether any work performed by Cook & Co. raised any conflict of interest and determined that it did not.
Benchmarking
2013 Benchmarking Study
In 2013, the Human Resources and Compensation Committee engaged Cook & Co. to conduct a benchmarking study that the Human Resources and Compensation Committee considered as a factor in making executive compensation decisions in late 2013 and 2014. In conducting the benchmarking study, Cook & Co. utilized data from the same peer group of companies that had been used by the Human Resources and Compensation Committee to benchmark executive pay in 2011, as well as other market information from third-party surveys. The following companies were included in the 2011 peer group:

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American Woodmark Corp
Libbey Inc.
Apogee Enterprises Inc.
Louisiana-Pacific Corp.
Armstrong World Industries
Smith (AO) Corp.
Gibraltar Industries Inc.
Universal Forest Products Inc.
Grace (WR) & Co.
USG Corp.
Griffon Corp
Valspar Corp.
Lennox International Inc.
Vulcan Materials Co.

Following this benchmarking study, it was determined that target total cash compensation of our NEOs was at or above the market median, but equity award values were significantly below the market median, and therefore, target total direct compensation was below the market median.
For purposes of determining the size of long-term incentive awards that were granted to our NEOs in February 2014 (as described below in the “Long-Term Equity Incentive Awards” section), the Human Resources and Compensation Committee considered the results of the 2013 benchmarking study as a factor. The other factors considered in making these grants (none of which were individually weighted) included individual performance levels and responsibilities and providing an appropriate long-term retention incentive for the NEOs.
In addition, the Human Resources and Compensation Committee approved base salary merit adjustments in 2014 for certain of the NEOs (as described below in the "Base Salary” section) after taking into consideration the results of the 2013 benchmarking study and the competitiveness of base salaries, as well as the fact that merit adjustments to base salaries were not made in 2012 and 2013.
2014 Peer Group Review and Benchmarking Study
In May 2014, the Human Resources and Compensation Committee engaged Cook & Co. to review the peer group used in benchmarking executive compensation, as the Company had recently become publicly listed in late 2013. In conducting this review, Cook & Co. examined the following general criteria: (i) operational fit reflecting companies in a similar industry and subject to similar economic opportunities and pressures as well as similar business and performance characteristics; (ii) financial scope reflecting companies of similar size and scale (with size for purposes of peer group development generally defined as 1/3 to 3 times Masonite’s revenue and market cap), in addition to relevant secondary measures such as total assets and net income; and (iii) competitors for talent reflecting companies with whom Masonite competes for executive talent and that operate in similar economic markets. Based on Cook & Co.’s review, the Human Resources and Compensation Committee approved the following list of companies as an appropriate peer group for benchmarking executive compensation:
American Woodmark Corp
Louisiana Pacific Corp.
Apogee Enterprises Inc.
Ply Gem Holdings, Inc.
Armstrong World Industries
Quanex Building Products
Fortune Brands Home & SEC
Smith (A O) Corp.
Gibraltar Industries Inc.
Universal Forest Prods Inc.
Griffon Corp
USG Corp.
Lennox International Inc.
Vulcan Materials Co.


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In late 2014, the Human Resources and Compensation Committee engaged Cook & Co. to conduct a benchmarking study of our executive compensation based on the updated peer group as well as other market information from third-party surveys. The Human Resources and Compensation Committee plans to consider the results of the 2014 benchmarking study in making compensation decisions in 2015. The Human Resources and Compensation Committee intends to continue to strive to provide pay opportunities that generally align each NEO’s total direct compensation at the market median and expects that a significant portion of the NEO’s total compensation package will continue to be focused on rewarding long-term future performance through a combination of at-risk cash and equity incentive awards.

Elements of Our Executive Compensation Program
For 2014, our executive compensation program consisted of the following elements:
Base Salary
Base salary is designed to provide our NEOs with a fixed amount of income that is competitive in relation to the responsibilities of each NEO’s position. In 2014, the Human Resources Committee approved base salary merit adjustments for certain of the NEOs after taking into consideration the fact that base salary merit adjustments were not made in 2012 or 2013 and after considering prevailing market practices for executive merit adjustments and the results of the 2013 benchmarking study. Mr. Repar did not receive a merit adjustment in 2014 because the Human Resources and Compensation Committee determined that his base salary was already competitive in comparison to the market. The following table sets forth the 2014 base salary, 2013 base salary and percentage increase for each NEO:
Executive
 
2014 Base Salary
 
2013 Base Salary
 
% Increase
Frederick J. Lynch
 
$885,000
 
$850,000
 
4.1%
Mark J. Erceg
 
$465,000
 
$450,000
 
3.3%
Lawrence P. Repar
 
$630,000
 
$630,000
 
Glenwood E. Coulter, Jr.
 
$420,000
 
$400,000
 
5.0%
Robert E. Lewis
 
$390,000
 
$375,000
 
4.0%

Annual Cash Incentive Bonus
General
The compensation program for our NEOs includes our MIP. The MIP is a formulaic short-term incentive plan which provides executive officers with a cash bonus award based on the achievement of annual performance goals. The Human Resources and Compensation Committee approves the MIP each year, including the applicable performance goals, weighting, payout parameters and specific targets for each performance goal. Each fiscal year, Mr. Lynch, following discussions with Ms. Auerbach and Mr. Erceg, makes recommendations to the Human Resources and Compensation Committee for the MIP performance goals (and the applicable targets for achievement of each such performance goal at threshold, target and maximum levels of performance) applicable to all NEOs (including himself) as well as any proposed changes in the terms of the MIP for that fiscal year. The Human Resources and Compensation Committee considers these recommendations, as well as input from Cook &

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Co. regarding both current incentive plan design trends and specific feedback regarding Mr. Lynch’s recommendations, in approving the MIP for each fiscal year. Mr. Lynch has no involvement in the determination of his MIP payout.
2014 Management Incentive Plan
After considering management’s recommendation and input from Cook & Co., the Human Resources and Compensation Committee determined that the 2014 MIP would focus on our ability to grow the top line (MIP Net Revenue), profitability (MIP Adjusted EBITDA), and our ability to improve (i.e., shorten) the cash conversion cycle (Cash Conversion Cycle) (each as defined in the "MIP Definitions and Reconciliation" section below). For fiscal year 2014, the MIP performance goals and the individual weighting assigned to each performance goal as a percentage of the applicable target bonus were established as follows:

Performance Goal
 
Weighting
MIP Net Revenue
 
20%
MIP Adjusted EBITDA
 
60%
Cash Conversion Cycle
 
20%
Total
 
100%

The table below shows the threshold, target and maximum MIP performance goals for fiscal year 2014:
Performance Goal
 
Threshold
 
Target
 
Maximum
MIP Net Revenue
 
$1,728 million
 
$1,800 million
 
$1,872 million
MIP Adjusted EBITDA
 
$137.5 million
 
$160 million
 
$172.5 million
Cash Conversion Cycle
 
1 day improvement
 
3 days improvement
 
5 days improvement

For 2014, the MIP also required achievement of a minimum MIP Adjusted EBITDA of $110 million in order for any MIP bonuses to be payable (even if the MIP Net Revenue and Cash Conversion Cycle performance goals are achieved at or above the threshold level). For 2014 the payout percentages for each performance goal for performance at threshold, target and maximum were set as follows:
Performance Goal
 
Payout at Threshold Performance Level
 
Payout at Target Performance Level
 
Payout at Maximum Performance Level
MIP Net Revenue
 
50%
 
100%
 
150%
MIP Adjusted EBITDA
 
50%
 
100%
 
150%
Cash Conversion Cycle
 
33%
 
100%
 
167%

Following the completion of the fiscal year, the MIP payout pool is calculated using data derived from the audited financial results. For each performance goal, performance between the threshold and target levels and between the target and maximum levels is determined using straight-line interpolation.
Additionally, for 2014, the Human Resources and Compensation Committee approved a pricing adder that would have resulted in the payout percentages under the MIP based on the achievement of MIP Net Revenue, MIP Adjusted EBITDA and Cash Conversion Cycle (as described above) being increased by up to 25%. The pricing adder was based on the Company’s achievement of certain levels of increased revenue from price increases

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on products sold during 2014 and, in order for the pricing adder to apply, the Company was required to achieve a minimum MIP Adjusted EBITDA of $150 million. Because the Company did not meet this minimum level of MIP Adjusted EBITDA in 2014, the pricing adder did not apply to bonuses payable under the MIP.
Based on performance against the pre-established performance goals the 2014 MIP bonus was calculated as follows:
Performance Goals
 
Financial Weighting
 
Actual Results
 
Plan Payout
 
Weighted Payout
MIP Net Revenue (($) millions)
 
20.0%
 
$
1,799.1

 
99.4%
 
19.9%
MIP Adjusted EBITDA (($) millions)
 
60.0%
 
$
132.3

 
0.0%
 
0.0%
Cash Conversion Cycle (days)
 
20.0%
 
1.57

 
52.1%
 
10.4%
 
 
 
 
 
 
 
 
30.3%

The actual 2014 bonus payouts for each NEO were calculated by multiplying (1) his annual base salary, times (2) his target bonus percentage, times (3) the MIP payout percentage of 30.3%. Applying this formula, the bonuses paid to each NEO under the 2014 MIP were as follows:
Executive
 
Base Salary
 
Target Bonus as Percentage of Base Salary
 
2014 Overall Plan Payout Percentage
 
2014 Bonus
Frederick J. Lynch
 
$885,000
 
100%
 
30.3%
 
$268,155
Mark J. Erceg
 
$465,000
 
60%
 
30.3%
 
$84,537
Lawrence P. Repar
 
$630,000
 
60%
 
30.3%
 
$114,534
Glenwood E. Coulter, Jr.
 
$420,000
 
60%
 
30.3%
 
$76,356
Robert E. Lewis
 
$390,000
 
50%
 
30.3%
 
$59,085

The Human Resources and Compensation Committee approved an increase in Mr. Coulter’s MIP target bonus percentage from 50% to 60% for 2014 after considering the results of the 2013 benchmarking study which showed that Mr. Coulter was the only NEO with a short-term incentive target below the market median. Additionally, the Human Resources and Compensation Committee considered the scope and potential impact of Mr. Coulter’s duties and determined it was appropriate to raise his target bonus in order to align it with the bonus targets of Mr. Repar and Mr. Erceg under the MIP.
Bonuses earned under the 2014 MIP were paid in March 2015.
Long-Term Equity Incentive Awards
February 2014 Annual Long-Term Incentive Grant
The Human Resources and Compensation Committee believes that a significant portion of the equity awards granted to our executive officers should be earned based on the level of our performance pursuant to the financial and operating objectives described below. Tying a portion of the annual equity grants to our long-term performance serves to tie a greater portion of our NEOs’ compensation to the achievement of our financial and operating performance objectives and serves as a balance to the MIP, which measures our performance over a

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one-year period. For 2014, the Human Resources and Compensation Committee determined that 70% of the target equity value granted to Mr. Lynch (increased from 60% in 2013) and 60% of the target equity value granted to each of Messrs. Erceg, Repar, Coulter and Lewis, respectively (increased from 50% in 2013), would be in the form of restricted stock units subject to performance-based vesting conditions. The Human Resources and Compensation Committee believed a greater portion of each NEO’s annual equity award should be based on long-term performance and that an even greater portion of Mr. Lynch’s annual equity award should be earned based upon our long-term performance in light of his responsibilities for the Company as a whole.
After taking into consideration the results of the 2013 benchmarking study which showed that equity award values were significantly below the median, the Human Resources and Compensation Committee approved increased target values for long-term incentive grants in 2014 as follows:
Executive
 
2013 Target Equity Value as a Percentage of Base Salary
 
2014 Target Equity Value as a Percentage of Base Salary
Frederick J. Lynch
 
200%
 
300%
Mark J. Erceg
 
100%
 
150%
Lawrence P. Repar
 
90%
 
100%
Glenwood E. Coulter, Jr.
 
90%
 
100%
Robert E. Lewis
 
75%
 
100%

On February 24, 2014, the Human Resources and Compensation Committee granted to each of our NEOs an award consisting of the following number of restricted stock units: Mr. Lynch: 48,510; Mr. Erceg: 12,744, Mr. Repar: 11,511, Mr. Coulter: 7,674 and Mr. Lewis: 7,125. For Messrs. Erceg, Repar, Coulter and Lewis 40%, and for Mr. Lynch 30%, of the restricted stock units granted pursuant to each award are subject to time vesting requirements, and for Messrs. Erceg, Repar, Coulter and Lewis the remaining 60%, and for Mr. Lynch the remaining 70%, of the restricted stock units granted pursuant to each award are subject to performance vesting criteria.
December 2, 2014 Grant to Mr. Lewis
On December 2, 2014 the Human Resources and Compensation Committee approved an additional time-based award of 6,686 restricted stock units to Mr. Lewis in order to enhance the Company’s ability to ensure the retention of Mr. Lewis. These time-vesting restricted stock units vest over three years, with 25% vesting on the first anniversary of the date of grant, 25% on the second anniversary and 50% on the third anniversary.
Performance-Vesting Restricted Stock Units
One-half of the performance-vesting restricted stock units vest on the third anniversary of the date of grant subject to the level at which the 2016 Adjusted EBITDA Margin performance goal is achieved, with 100% of the units vesting upon achievement at the target level, 50% of the units vesting for performance at the threshold level, and 200% of the units vesting for performance at the maximum level. The remaining one-half of the performance-vesting restricted stock units vest on the third anniversary of the date of grant subject to the level at which the Return on Assets (“ROA”) performance goal is achieved, with 100% of the units vesting upon achievement at the target level, 50% of the units vesting for performance at the threshold level, and 200% of the units vesting for performance at the maximum level. In each case, straight-line interpolation will be used to

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determine the number of units that will vest if the level of achievement is between threshold and target or between target and maximum and any outstanding units that do not vest once the applicable level of performance has been determined will be automatically forfeited. For purposes of this grant, "Adjusted EBITDA Margin" means 2016 Adjusted EBITDA (as defined under the MIP except that acquisitions and divestitures are counted in the year of completion) divided by 2016 Net Revenue (as defined under the MIP except that acquisitions and divestitures are counted in the year of completion), and "ROA" means 2016 Adjusted EBITDA divided by total assets (as determined in accordance with generally accepted accounting principles). We believe that these performance targets will be challenging to achieve and will require substantial efforts from management in order to achieve them. Since only the target number of performance-vesting restricted stock units has been granted, additional shares will be issued upon vesting to the extent the level of performance achieved exceeds the target level.
Time-Vesting Restricted Stock Units
We grant a portion of the annual long-term incentive grant in the form of time-vesting restricted stock units to help build ownership as a newly public company and to aid in our ability to retain our management team over a longer time horizon. The time-vesting restricted stock units vest over three years, with 25% vesting on the first anniversary of the date of grant, 25% on the second anniversary and 50% on the third anniversary.
Each of the awards described above are subject to accelerated vesting under certain circumstances as described below in the "Potential Payments on Termination or Change in Control" section.
Timing of Equity Grants
As stated above, during 2014, the Human Resources and Compensation Committee approved an equity grant policy that sets forth the timing and approvals required for equity grants. Pursuant to this policy, the Human Resources and Compensation Committee typically makes annual awards of equity at its first scheduled meeting taking place after the release of earnings for the fourth fiscal quarter and the year (generally at the end of February), which meeting date is set in advance. The Board and the Human Resources and Compensation Committee have in the past made, and may in the future make, limited grants of equity on other dates in order to recognize or retain key employees, to compensate an employee in connection with a promotion, or to compensate newly hired executives for equity or other benefits lost upon termination of their previous employment or to otherwise induce them to join us. The Board and the Human Resources and Compensation Committee may make the foregoing “off-cycle” equity grants to employees who are below the executive zone on (i) the last business day prior to the 15th day of each month or (ii) the last business day of each month, whichever date first follows the applicable trigger date. Grants to newly hired or promoted executive zone employees are made at meetings of the Board or the Human Resources and Compensation Committee, as the case may be, at which such new hire or promotion is to be considered, and in accordance with applicable laws and regulations. Recognition or special retention grants to executive zone employees are made at meetings of the Board or the Human Resources and Compensation Committee, as the case may be, at which such recognition or special retention is to be considered, and in accordance with applicable laws and regulations.

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The Human Resources and Compensation Committee has delegated to the CEO the authority to make limited “off-cycle” grants to employees below the executive zone level of the types and on the pre-established grant dates described above.
We monitor and periodically review our equity grant policies to ensure compliance with plan rules and applicable law.
Stock Ownership Guidelines
Effective as of July 1, 2012, we implemented stock ownership guidelines that require each of our NEOs and all of our other senior officers to own meaningful equity stakes in Masonite to further align their long-term economic interests with those of our Shareholders. Our stock ownership guidelines require that (1) our Chief Executive Officer owns Common Shares in an amount not less than five times his base salary and (2) all other executive officers (including our NEOs) own Common Shares in an amount not less than three times their respective base salaries. Compliance with these guidelines will be measured once per fiscal year on the last day of the first fiscal quarter. Vested stock appreciation rights and restricted stock units count as shares for purposes of the guidelines, but unvested stock appreciation rights do not count. To the extent performance-vesting restricted stock units are granted, such restricted stock units will only count towards the guideline when and if earned. There is no particular date by which the requisite share ownership level must be achieved. However, until the required level of ownership is achieved, each executive must retain at least fifty percent of the number of shares acquired upon the exercise of stock appreciation rights or the settlement of any restricted stock units (net of shares forfeited to pay any applicable exercise price and to satisfy any applicable tax withholding). All of the NEOs have achieved the required level of stock ownership.
Severance and Change in Control Benefits
Each NEO is entitled to receive severance benefits under the terms of his employment agreement upon either termination by us without cause or a resignation by the NEO for good reason. We provide these severance benefits in order to provide an overall compensation package that is competitive with that offered by the companies with whom we compete for executive talent. Additionally, severance benefits allow our executives to focus on our objectives without concern for their employment security in the event of a termination.
The severance benefits provided upon a qualifying termination of an NEO’s employment in connection with a change in control are higher than severance benefits provided under other qualifying termination events, which is consistent with market practice. The Human Resources and Compensation Committee approved these enhanced change in control severance benefits because it considers maintaining a stable and effective management team to be important to protecting and enhancing the best interests of us and our Shareholders. To that end, the Human Resources and Compensation Committee recognizes that the possibility of a change in control may exist from time to time, and that this possibility, and the uncertainty and questions it may raise among management may result in the departure or distraction of management to the detriment of us and our Shareholders. Accordingly, the enhanced severance benefits have been put in place to encourage the attention, dedication and continuity of members of our management team to their assigned duties without the distraction that may arise from the possibility or occurrence of a change in control.

31



Other Compensation
We provide the following benefits to our NEOs on the same basis provided to all of our U.S. based employees:
medical, dental and vision insurance;

401(k) plan;

short- and long-term disability, life insurance, accidental death and dismemberment insurance;

health, limited purpose health and dependent care flexible spending accounts, healthcare saving account; and

various voluntary supplemental insurance products.

In addition, upon the hiring of a new executive, we may provide such executive with certain relocation benefits and each of our NEOs is eligible to participate in a non-qualified deferred compensation plan which permits him to defer base salary and/or bonuses.
We believe these benefits are consistent with those offered by companies with which we compete for employees.
Clawback Policies
Management Incentive Plan
We have implemented a clawback policy under the MIP, which provides that if an employee engages in (i) certain conduct during a plan year which is injurious to the Company or its reputation, (ii) illegal acts, theft, fraud, intentional misconduct or gross negligence related to the employee’s position with the Company or (iii) fraud, gross negligence, or intentional or willful misconduct that contributes to the Company’s financial or operational results that are used to determine the extent to which any MIP award is payable being misstated (regardless of whether we are required to prepare an accounting restatement) that is discovered during or within three years after the relevant plan year, the employee will forfeit his or her right to any MIP award for that plan year and will be required to return to us any amounts relating to previously paid MIP awards for such plan year. The plan administrator of the MIP is responsible for determining whether a recoverable event has occurred based on relevant facts and circumstances. The compensation recovery will be in addition to any other remedies available to the Company for any such behavior.
Equity Incentive Plans
The award agreements under the 2009 Plan and the 2012 Plan provide that if we determine that a participant has materially violated any of his or her covenants regarding confidentiality, non-disclosure of confidential information and, during the applicable period of time following such participant’s termination of

32



employment as specified in such award agreement, non-competition and non-solicitation of employees, then the following will result:
any outstanding awards, whether vested or unvested, will immediately be terminated and forfeited for no consideration;
if shares of stock have already been distributed to the participant but the participant no longer holds some or all of such shares, the participant must repay us, in cash, an amount equal to the sum of (i) the total amount of any cash previously paid to the participant in respect of the award and (ii) the total amount of any value received by the participant upon any sale of the shares; and
if shares of stock have been distributed to the participant and the participant continues to hold some or all of the shares, the participant will transfer such shares to the company for no consideration.

Additionally, equity awards granted under the 2012 Plan after December 31, 2014 are subject to a revised clawback policy with terms that are substantially similar to the clawback policy in effect for cash-based incentive compensation under the MIP as described above.

Accounting and Tax Implications
As a general matter, the Human Resources and Compensation Committee takes into account the various tax and accounting implications of the compensation vehicles employed by the Company.

We account for stock-based compensation in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 718 Compensation - Stock Compensation, which requires us to recognize compensation expense for share-based payments. The Human Resources and Compensation Committee takes into account FASB ASC Topic 718 in determining the amounts of long-term incentive grants to executives and employees, awarding both stock appreciation rights and restricted stock units.

Internal Revenue Code Section 162(m) (as interpreted by IRS Notice 2007-49) denies a federal income tax deduction for certain compensation in excess of $1 million per year paid to the chief executive officer and the three other most highly-paid executive officers (other than the company’s chief executive officer and chief financial officer) of a publicly-traded corporation. Certain types of compensation, including compensation based on performance criteria that are approved in advance by stockholders, are excluded from the deduction limit. In addition, "grandfather" provisions may apply to certain compensation arrangements that were entered into by a corporation before it was publicly held. The Human Resources and Compensation Committee’s policy is to qualify compensation paid to our executive officers for deductibility for federal income tax purposes to the extent feasible. However, to retain highly skilled executives and remain competitive with other employers, the Human Resources and Compensation Committee will have the right to authorize compensation that would not otherwise be deductible under Section 162(m) or otherwise and to pay bonuses in any amount, including discretionary bonuses or bonuses with performance goals that are different from those under the MIP.

The Company may rely on the exemption from Section 162(m) afforded to it by the grandfather provisions described above for compensation paid pursuant to the Company’s pre-existing plans (including the 2012 Plan). In addition, the Amended and Restated Plan has been designed to permit the Human Resources and Compensation

33



Committee to grant awards thereunder which are intended to qualify as “qualified performance-based compensation” under Section 162(m). See “Approval of the Amended and Restated 2012 Equity Incentive Plan.”

MIP Definitions and Reconciliation
The definitions for each of the financial performance goals for purposes of the 2014 MIP are as follows:
"Adjusted EBITDA" is defined as net income (loss) attributable to Masonite adjusted to exclude depreciation; amortization; share based compensation expense; loss (gain) on disposal of property, plant and equipment; asset impairment; registration and listing fees; restructuring costs; interest expense (income), net; other expense (income), net; income tax expense (benefit); loss (income) from discontinued operations, net of tax; and net income (loss) attributable to non-controlling interest. A reconciliation of Adjusted EBITDA to net income (loss) attributable to Masonite is included on page 102 of our Annual Report on form 10-K for the year ended December 28, 2014.
"MIP Net Revenue" is defined as net sales (as determined in accordance with generally accepted accounting principles), less net sales from any acquisitions or divestitures in the current year, plus or minus any changes to generally accepted accounting principles and other adjustments for unusual and nonrecurring events approved by the Human Resources and Compensation Committee or our Board of Directors, and plus or minus the impact of foreign exchange rate fluctuations versus prior year.
"MIP Adjusted EBITDA" is defined as Adjusted EBITDA, less Adjusted EBITDA from any acquisitions or divestitures in the current year, plus transaction costs (including fees and expenses) incurred related to acquisitions or divestitures, plus transaction costs (including fees and expenses) associated with debt or equity offerings, plus consulting fees related to non-budgeted Board initiatives undertaken in the current year, plus conversion costs for new retail business wins, plus or minus any changes to generally accepted accounting principles and other adjustments for unusual and nonrecurring events approved by the Human Resources and Compensation Committee or our Board of Directors, and plus or minus the impact of foreign exchange rate fluctuations versus prior year.
"Cash Conversion Cycle" is defined as year-ending Days on Hand (defined as ending inventory divided by trailing 12 months cost of goods sold times 365) plus year-ending Days Sales Outstanding (defined as ending accounts receivable divided by trailing 12 months net sales times 365), less year-ending Days Payable Outstanding (defined as accounts payable plus accrued expenses, divided by trailing 12 months cost of goods sold, times 365). Ending inventory, accounts receivable, accounts payable, net sales and cost of goods sold are determined in accordance with generally accepted accounting principles and adjusted for acquisitions or divestitures in the current year, plus or minus the impact of foreign exchange rate fluctuations, and plus or minus any changes to generally accepted accounting principles and other adjustments for unusual and nonrecurring events approved by the Human Resources and Compensation Committee or our Board of Directors. For purposes of the MIP, the performance goals for Cash Conversion Cycle are established as the number of days improvement from the prior year to the current year.

34



Summary Compensation Table
The following table summarizes the total compensation paid to or earned by each of our named executive officers for services provided to us during the fiscal years ended December 28, 2014, December 29, 2013 and December 30, 2012.
Name and Principal Position
 
Year
 
Salary ($)
 
Bonus ($)
 
Stock Awards ($)(1)
 
Option Awards ($)
 
Non-Equity Incentive
Plan Compensation
($)(2)
 
All Other Compensation
($)(3)
 
Total ($)
Frederick J. Lynch
 
2014
 
878,269
 
 
 
2,654,952
 
-
 
268,155
 
14,932
 
3,816,309
President and Chief Executive Officer
 
2013
 
850,000
 
-
 
1,700,000
 
606,163
 
878,050
 
13,856
 
4,048,069
 
 
2012
 
850,000
 
-
 
2,234,624
 
-
 
850,000
 
12,026
 
3,946,650
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mark J. Erceg
 
2014
 
462,115
 
 
 
697,479
 
-
 
84,537
 
14,158
 
1,258,290
Executive Vice President and Chief Financial Officer
 
2013
 
450,000
 
-
 
450,001
 
130,493
 
278,910
 
13,668
 
1,323,072
 
 
2012
 
450,000
 
50,000
 
467,377
 
-
 
315,090
 
13,000
 
1,295,467
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Lawrence P. Repar
 
2014
 
630,000
 
 
 
629,997
 
-
 
114,534
 
25,203
 
1,399,734
Executive Vice President, Global Sales and Marketing and Chief Operating Officer
 
2013
 
630,000
 
-
 
567,005
 
130,493
 
390,474
 
24,320
 
1,742,292
 
 
2012
 
625,000
 
75,000
 
597,248
 
-
 
437,625
 
43,456
 
1,778,329
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Glenwood E. Coulter, Jr.
 
2014
 
416,154
 
 
 
419,998
 
-
 
76,356
 
15,963
 
928,471
Executive Vice President, Global Operations and Europe
 
2013
 
400,000
 
-
 
359,996
 
90,083
 
206,600
 
15,069
 
1,071,747
 
 
2012
 
400,000
 
50,000
 
377,366
 
-
 
233,400
 
15,447
 
1,076,213
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Robert E. Lewis(4)
 
2014
 
387,115
 
 
 
779,946
 
-
 
59,085
 
14,465
 
1,240,611
Senior Vice President, General Counsel and Corporate Secretary
 
2013
 
375,000
 
-
 
281,239
 
73,245
 
193,688
 
14,166
 
937,337
(1)
Amounts in this column reflect the aggregate grant date fair value of restricted stock units granted during the applicable fiscal year in accordance with FASB ASC Topic 718. For a discussion of the assumptions made in the valuation of restricted stock units granted in 2014, please see note 8 "Share Based Compensation Plans" in the Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended December 28, 2014.
The amounts shown include the grant date fair value of performance-vesting restricted stock units granted in February 2014, based on the probable outcome of the related performance conditions at target levels, calculated in accordance with FASB ASC Topic 718. These restricted stock units are subject to achievement of the performance conditions as described in the heading above entitled "Compensation Discussion and Analysis-Elements of Our Executive Compensation Program-Long-Term Equity Incentive Awards-February 2014 Annual Long-Term Incentive Grant-Performance-Vesting Restricted Stock Units." The grant date fair value of the performance-vesting restricted stock units

35



based on the maximum level of performance is as follows: Mr. Lynch, $3,716,933; Mr. Erceg, $837,041; Mr. Repar, $756,040; Mr. Coulter, $504,063; and Mr. Lewis, $467,942.
(2)
Amounts shown in this column represent performance-based cash incentive awards that were earned during the specified year and paid in the following year. See "Compensation Discussion and Analysis-Elements of Our Executive Compensation Program-Annual Cash Incentive Bonus" for a description of the awards for fiscal year 2014.
(3)
Amounts shown in this column for 2014 include company contributions to our 401(k) plan of $13,000 respectively for each of the named executive officers; taxable fringe benefits paid by us for group term life insurance of $1,932 for Mr. Lynch, $1,158 for Mr. Erceg, $1,932 for Mr. Repar, $2,963 for Mr. Coulter and $1,465 for Mr. Lewis; and Canadian medical benefits paid by us of $10,271 for Mr. Repar. Such amount for Mr. Repar’s Canadian medical benefits has been converted to U.S. dollars using the Bloomberg exchange rate in effect on December 26, 2014 of 0.86 Canadian dollar per U.S. dollar.
(4)
Mr. Lewis was not a named executive officer prior to 2013.

Employment Agreements
Frederick J. Lynch
We entered into an "at will" employment agreement with Mr. Lynch, effective as of December 31, 2012 with a three-year term, pursuant to which he continues to serve as our President and Chief Executive Officer. Mr. Lynch’s base salary was increased from $850,000 to $885,000 in 2014 and he is eligible to earn an annual bonus targeted at 100% of his base salary, subject to the achievement of applicable performance goals.
Mark J. Erceg
We entered into an "at will" employment agreement with Mr. Erceg, effective as of December 31, 2012 with a three-year term, pursuant to which he continues to serve as our Executive Vice President and Chief Financial Officer. Mr. Erceg’s base salary was increased from $450,000 to $465,000 in 2014 and he is eligible to earn an annual bonus targeted at 60% of his base salary, subject to the achievement of applicable performance goals.
Lawrence P. Repar
We entered into an "at will" employment agreement with Mr. Repar, effective as of November 1, 2012 with a three-year term, pursuant to which he continues to serve as our Executive Vice President, Global Sales and Marketing, and Chief Operating Officer. Mr. Repar’s base salary is $630,000 and he is eligible to earn an annual bonus targeted at 60% of his base salary, subject to the achievement of applicable performance goals.
Glenwood E. Coulter, Jr.
We entered into an "at will" employment agreement with Mr. Coulter, effective as of November 1, 2012 with a three-year term, pursuant to which he continues to serve as our Executive Vice President, Global Operations and Europe. Mr. Coulter’s base salary was increased from $400,000 to $420,000 in 2014 and he is eligible to earn an annual bonus targeted at 60% of his base salary which was increased from 50% to 60% in 2014, subject to the achievement of applicable performance goals.

36



Robert E. Lewis
We entered into an "at will" employment agreement with Mr. Lewis, effective as of November 1, 2012 with a three-year term, pursuant to which he continues to serve as our Senior Vice President, General Counsel and Corporate Secretary. Mr. Lewis’ base salary was increased from $375,000 to $390,000 in 2014 and he is eligible to earn an annual bonus targeted at 50% of his base salary, subject to the achievement of applicable performance goals.
All of our NEOs are eligible to participate in our Deferred Compensation Plan (as discussed in greater detail below) and all of our employee benefit plans, including the 401(k) plan. Messrs. Lynch, Erceg, Coulter and Lewis are entitled to four weeks of vacation per year and Mr. Repar is entitled to five weeks of vacation per year. In addition, all of our NEOs are subject to covenants, during the term of their employment and for a period of 24 months thereafter, not to (i) engage in any business that competes with us, (ii) solicit customers, or (iii) solicit or hire our employees.

37



Grants of Plan Based Awards for 2014
 
 
 
 
ESTIMATED FUTURE PAYOUTS UNDER
NON-EQUITY INCENTIVE PLAN AWARDS (1)
 
ESTIMATED FUTURE PAYOUTS UNDER EQUITY INCENTIVE PLAN AWARDS (2)
NAMED EXECUTIVE OFFICER
 
 
 
 
 
GRANT DATE
 
THRESHOLD ($)
 
TARGET
($)
 
MAXIMUM ($)
 
THRESHOLD (#)
 
TARGET
(#)
 
MAXIMUM (#)
 
 
 
 
 
 
 
Frederick J. Lynch
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual Cash Bonus
 
-
 
412,410
 
885,000
 
1,357,590
 
-
 
-
 
-
Performance-Vesting Restricted Stock Units
 
02/24/14
 
-
 
-
 
-
 
16,979
 
33,957
 
67,914
Time-Vesting Restricted Stock Units
 
02/24/14
 
-
 
-
 
-
 
-
 
-
 
-
Mark J. Erceg
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual Cash Bonus
 
-
 
130,014
 
279,000
 
427,986
 
-
 
-
 
-
Performance-Vesting Restricted Stock Units
 
02/24/14
 
-
 
-
 
-
 
3,824
 
7,647
 
15,294
Time-Vesting Restricted Stock Units
 
02/24/14
 
-
 
-
 
-
 
-
 
-
 
-
Lawrence P. Repar
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual Cash Bonus
 
-
 
176,148
 
378,000
 
579,852
 
-
 
-
 
-
Performance-Vesting Restricted Stock Units
 
02/24/14
 
-
 
-
 
-
 
3,454
 
6,907
 
13,814
Time-Vesting Restricted Stock Units
 
02/24/14
 
-
 
-
 
-
 
-
 
-
 
-
Glenwood E.
Coulter, Jr.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual Cash Bonus
 
-
 
117,432
 
252,000
 
386,568
 
-
 
-
 
-
Performance-Vesting Restricted Stock Units
 
02/24/14
 
-
 
-
 
-
 
2,303
 
4,605
 
9,210
Time-Vesting Restricted Stock Units
 
02/24/14
 
-
 
-
 
-
 
-
 
-
 
-
Robert E. Lewis
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual Cash Bonus
 
-
 
90,870
 
195,000
 
299,130
 
-
 
-
 
-
Performance-Vesting Restricted Stock Units
 
02/24/14
 
-
 
-
 
-
 
2,138
 
4,275
 
8,550
Time-Vesting Restricted Stock Units
 
02/24/14
 
-
 
-
 
-
 
-
 
-
 
-
Time-Vesting Restricted Stock Units
 
12/02/14
 
-
 
-
 
-
 
-
 
-
 
-


38



Grants of Plan Based Awards for 2014 (continued)
NAMED EXECUTIVE OFFICER
 
ALL OTHER
STOCK
AWARDS
NUMBER OF
SHARES OR
UNITS
(#) (3)
 
ALL OTHER
OPTION
AWARDS
NUMBER OF
SECURITIES
UNDERLYING
OPTIONS
(#)
 
EXERCISE
PRICE
OF
OPTION
AWARDS
($/Sh)
 
GRANT
DATE
FAIR
VALUE
OF STOCK
AND OPTION
AWARDS ($)(4)
Frederick J. Lynch
 
 
 
 
 
 
 
 
Annual Cash Bonus
 
-
 
-
 
-
 
-
Performance-Vesting Restricted Stock Units
 
-
 
-
 
-
 
1,858,467
Time-Vesting Restricted Stock Units
 
14,553
 
-
 
-
 
796,486
Mark J. Erceg
 
 
 
 
 
 
 
 
Annual Cash Bonus
 
-
 
-
 
-
 
-
Performance-Vesting Restricted Stock Units
 
-
 
-
 
-
 
418,520
Time-Vesting Restricted Stock Units
 
5,097
 
-
 
-
 
278,959
Lawrence P. Repar
 
 
 
 
 
 
 
 
Annual Cash Bonus
 
-
 
-
 
-
 
-
Performance-Vesting Restricted Stock Units
 
-
 
-
 
-
 
378,020
Time-Vesting Restricted Stock Units
 
4,604
 
-
 
 
 
251,977
Glenwood E. Coulter, Jr.
 
 
 
 
 
 
 
 
Annual Cash Bonus
 
-
 
-
 
-
 
-
Performance-Vesting Restricted Stock Units
 
-
 
-
 
-
 
252,032
Time-Vesting Restricted Stock Units
 
3,069
 
-
 
 
 
167,966
Robert E. Lewis
 
 
 
 
 
 
 
 
Annual Cash Bonus
 
-
 
-
 
-
 
-
Performance-Vesting Restricted Stock Units
 
-
 
-
 
-
 
233,971
Time-Vesting Restricted Stock Units
 
2,850
 
-
 
-
 
155,981
Time-Vesting Restricted Stock Units
 
6,686
 
-
 
-
 
389,994
(1)
The amounts set forth in the "Threshold," "Target" and "Maximum" columns above indicate the threshold, target and maximum amounts for each of the NEOs under our 2014 MIP. The actual payouts were approved by the Human Resources and Compensation Committee on February 24, 2015 and are included in the "Non- Equity Incentive Plan Compensation column" on the Summary Compensation Table. Amount in these columns reflects a bonus target of 100% of base salary for Mr. Lynch, 60% of base salary for Messrs. Erceg, Repar and Coulter, and 50% of base salary for Mr. Lewis.
(2)
The amounts set forth in the "Threshold," "Target" and "Maximum" columns above correspond to the number of shares that would be earned by each of the NEOs upon achievement of the applicable 2016 Adjusted EBITDA Margin and Return on Assets performance measures at the specified threshold, target and maximum levels, respectively. Subject to achievement of the applicable performance measure, the performance-vesting restricted stock units are scheduled to vest on the third anniversary of the date of grant. See "Compensation Discussion and Analysis-Elements of Our Executive Compensation Program-Long-Term Equity Incentive Awards-February 2014 Annual Long-Term Incentive Grant-Performance-Vesting Restricted Stock Units" for a description of the performance-vesting restricted stock units and the applicable performance measures.
(3)
The time-vesting restricted stock units are scheduled to vest over 3 years, with 25% vesting on the first anniversary of the date of grant, 25% on the second anniversary and 50% on the third anniversary.
(4)
Amounts in this column reflect the grant date fair value of performance-vesting and time-vesting restricted stock units granted in February 2014 to each NEO and time-vesting restricted stock units granted in December 2014 to Mr. Lewis in accordance with FASB ASC Topic 718. For a discussion of the assumptions made in the valuation of such awards, please see note 8 "Share Based Compensation Plans" in the consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 28, 2014. The amounts shown include the grant date fair value of performance-vesting restricted stock units granted in February 2014, based on the probable outcome of the related performance conditions at target levels, calculated in accordance with FASB ASC Topic 718. These restricted stock units are subject to achievement of the performance conditions as described in the heading above entitled "Compensation Discussion and

39



Analysis-Elements of Our Executive Compensation Program-Long-Term Equity Incentive Awards-February 2014 Annual Long-Term Incentive Grant-Performance-Vesting Restricted Stock Units." The grant date fair value of the performance-vesting restricted stock units based on the maximum level of performance is as follows: Mr. Lynch, $3,716,933; Mr. Erceg, $837,041; Mr. Repar, $756,040; Mr. Coulter, $504,063; and Mr. Lewis, $467,942.

Outstanding Equity Awards at 2014 Fiscal Year-End
 
 
Options/SARs
Name
 
Number of Securities Underlying Unexercised Options (# Exercisable)
 
Number of Securities Underlying Unexercised Options (# Unexercisable)
 
Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)
 
Option Exercise Price ($)
 
Option Expiration Date
Frederick J. Lynch
 
212,785
 
-
 
-
 
13.64
 
07/09/19
 
 
64,426
 
-
 
-
 
19.06
 
12/12/19
 
 
65,781
 
21,927
(1) 
-
 
20.19
 
07/05/21
 
 
-
 
72,000
(2) 
-
 
32.68
 
08/06/23
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mark J. Erceg
 
8,849
 
8,849
(1) 
-
 
20.19
 
07/05/21
 
 
-
 
15,500
(2) 
-
 
32.68
 
08/06/23
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Lawrence P. Repar
 
15,009
 
-
 
-
 
13.64
 
07/09/19
 
 
13,414
 
-
 
-
 
19.06
 
12/12/19
 
 
21,766
 
7,255
(1) 
-
 
20.19
 
07/05/21
 
 
-
 
15,500
(2) 
-
 
32.68
 
08/06/23
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Glenwood E. Coulter, Jr.
 
15,159
 
-
 
-
 
19.06
 
12/12/19
 
 
13,931
 
4,643
(1) 
-
 
20.19
 
07/05/21
 
 
-
 
10,700
(2) 
-
 
32.68
 
08/06/23
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Robert E. Lewis
 
12,500
 
12,500
(8) 
-
 
17.37
 
04/15/22
 
 
-
 
8,700
(2) 
-
 
32.68
 
08/06/23
 
 
 
 
 
 
 
 
 
 
 


40



Outstanding Equity Awards at 2014 Fiscal Year-End (continued)
 
 
Stock Awards
Name
 
Number of Shares or Units of Stock That Have Not Vested (#)
 
Market Value of Shares or Units of Stock That Have Not Vested ($)
 
Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)
 
Equity Incentive Plan Awards: Market Value of Shares or Units of Stock That Have Not Vested ($)
Frederick J. Lynch
 
60,715
(3) 
3,693,901
 
77,214
(4) 
4,697,700
Mark J. Erceg
 
20,567
(5) 
1,251,296
 
17,189
(4) 
1,045,779
Lawrence P. Repar
 
24,800
(6) 
1,508,832
 
18,930
(4) 
1,151,701
Glenwood E. Coulter, Jr.
 
14,994
(7) 
912,235
 
12,239
(4) 
744,621
Robert E. Lewis
 
15,767
(9) 
959,264
 
10,239
(4) 
622,941
(1)
Represents the unvested portion of stock appreciation rights granted on July 5, 2011, the remaining twenty-five percent (25%) of which vested on December 31, 2014.
(2)
Stock appreciation rights granted on August 6, 2013 are scheduled to cliff vest on August 6, 2016.
(3)
Represents the unvested portion in the aggregate of: (i) 3,000 restricted stock units granted to Mr. Lynch on March 15, 2012, which vest as to fifty percent (50%) on July 1, 2013, twenty-five percent (25%) on July 1, 2014, and twenty-five percent (25%) on July 1, 2015; (ii) 20,000 restricted stock units granted to Mr. Lynch on May 30, 2012, which vest as to fifty percent (50%) on July 1, 2013, twenty-five percent (25%) on July 1, 2014, and twenty-five percent (25%) on July 1, 2015; (iii) 77,825 restricted stock units granted to Mr. Lynch on December 5, 2012, which vest as to thirty-three percent (33%) on December 5, 2013, thirty-three percent (33%) on December 5, 2014, and thirty-three percent (33%) on December 5, 2015; (iv) 28,838 restricted stock units granted to Mr. Lynch on February 25, 2013, which vest as to fifty percent (50%) on May 1, 2014, thirty percent (30%) on May 1, 2015, and twenty percent (20%) on May 1, 2016.; and (v) 14,553 restricted stock units granted to Mr. Lynch on February 24, 2014, which vest as to twenty-five percent (25%) on February 24, 2015, twenty-five percent (25%) on February 24, 2016, and fifty percent (50%) on February 24, 2017.
(4)
Represents the unvested portion in the aggregate of performance-vesting restricted stock units granted in February 2013 and February 2014 which are scheduled to vest on May 1, 2016 and February 24, 2017 respectively, subject to achievement of the applicable Adjusted EBITDA Margin and Return on Assets at the end of the 2015 fiscal year for the February 2013 awards and achievement of the applicable Adjusted EBITDA Margin and Return on Assets at the end of the 2016 fiscal year for the February 2014 awards. Amounts shown in this column represent the number of shares that would be earned by each of the NEOs upon achievement of the applicable 2015 and 2016 Adjusted EBITDA Margin and Return on Assets performance measures at the target levels, respectively. The maximum number of shares that may be earned by each NEO are as follows: Mr. Lynch, 154,428; Mr. Erceg, 34,378; Mr. Repar, 37,860; Mr. Coulter, 24,478; and Mr. Lewis, 20,478. See "Compensation Discussion and Analysis-Elements of Our Executive Compensation Program-Long-Term Equity Incentive Awards-February 2014 Annual Long-Term Incentive Grant-Performance-Vesting Restricted Stock Units" for a description of the performance-vesting restricted stock units and the applicable performance measures.
(5)
Represents the unvested portion in the aggregate of: (i) 1,000 restricted stock units granted to Mr. Erceg on March 15, 2012, which vest as to fifty percent (50%) on July 1, 2013, twenty-five percent (25%) on July 1, 2014, and twenty-five percent (25%) on July 1, 2015; (ii) 10,000 restricted stock units granted to Mr. Erceg on May 30, 2012, which vest as to fifty percent (50%) on July 1, 2013, twenty-five percent (25%) on July 1, 2014, and twenty-five percent (25%) on July 1, 2015; (iii) 15,898 restricted stock units granted to Mr. Erceg on November 1, 2012, which vest as to fifty percent (50%) on November 1, 2014, and fifty percent (50%) on November 1, 2015; (iv) 9,542 restricted stock units granted to Mr. Erceg on February 25, 2013, which vest as to fifty percent (50%) on May 1, 2014, thirty percent (30%) on May 1, 2015, and twenty percent (20%) on May 1, 2016.; and (v) 5,097 restricted stock units granted to Mr. Erceg on February 24, 2014, which vest as to twenty-five percent (25%) on February 24, 2015, twenty-five percent (25%) on February 24, 2016, and fifty percent (50%) on February 24, 2017.
(6)
Represents the unvested portion in the aggregate of: (i) 2,000 restricted stock units granted to Mr. Repar on March 15, 2012, which vest as to fifty percent (50%) on July 1, 2013, twenty-five percent (25%) on July 1, 2014, and twenty-five percent (25%) on July 1, 2015; (ii) 10,000 restricted stock units granted to Mr. Repar on May 30, 2012, which vest as to fifty percent (50%) on July 1, 2013, twenty-five percent (25%) on July 1, 2014, and twenty-five percent (25%) on July 1, 2015; (iii) 22,371 restricted stock units granted to Mr. Repar on November 1, 2012, which vest as to fifty percent (50%) on November 1, 2014, and fifty percent (50%) on November 1, 2015 (iv) 12,023 restricted stock units granted to Mr. Repar on February 25, 2013, which vest as to fifty percent (50%) on May 1, 2014, thirty percent (30%) on May 1, 2015, and twenty percent (20%) on May 1, 2016.; and (v) 4,604 restricted stock units granted to Mr. Repar on February 24, 2014, which vest as to twenty-five percent (25%) on February 24, 2015, twenty-five percent (25%) on February 24, 2016, and fifty percent (50%) on February 24, 2017.
(7)
Represents the unvested portion in the aggregate of (i) 1,000 restricted stock units granted to Mr. Coulter on March 15, 2012, which vest as to fifty percent (50%) on July 1, 2013, twenty-five percent (25%) on July 1, 2014, and twenty-five percent (25%) on July 1, 2015; (ii) 10,000 restricted stock units granted to Mr. Coulter on May 30, 2012, which vest as to fifty percent (50%) on July 1, 2013, twenty-five percent (25%) on July 1, 2014, and twenty-five percent (25%) on July 1, 2015; (iii) 10,719 restricted stock units granted to Mr. Coulter on November 1, 2012, which vest as to fifty percent (50%) on November 1, 2014, and fifty percent (50%) on November 1, 2015; (iv) 7,633 restricted stock units granted to Mr. Coulter on February 25, 2013, which vest as to fifty percent (50%) on May 1, 2014, thirty percent (30%)

41



on May 1, 2015, and twenty percent (20%) on May 1, 2016.; and (v) 3,069 restricted stock units granted to Mr. Coulter on February 24, 2014, which vest as to twenty-five percent (25%) on February 24, 2015, twenty-five percent (25%) on February 24, 2016, and fifty percent (50%) on February 24, 2017.
(8)
Represents the unvested portion of stock appreciation rights granted on April 12, 2012, which vest as follows: twenty-five percent (25%) on July 1, 2013; twenty-five percent (25%) on July 1, 2014; and fifty percent (25%) on July 1, 2015.
(9)
Represents the unvested portion in the aggregate of (i) 6,500 restricted stock units granted to Mr. Lewis on March 15, 2012, which vest as to twenty-five percent (25%) on July 1, 2013, twenty-five percent (25%) on July 1, 2014, and fifty (50%) on July 1, 2015 (ii) 5,963 restricted stock units granted to Mr. Lewis on February 25, 2013, which vest as to fifty percent (50%) on May 1, 2014, thirty percent (30%) on May 1, 2015, and twenty percent (20%) on May 1, 2016; (iii) 2,850 restricted stock units granted to Mr. Lewis on February 24, 2014, which vest as to twenty-five percent (25%) on February 24, 2015, twenty-five percent (25%) on February 24, 2016, and fifty percent (50%) on February 24, 2017; and (iv) 6,686 restricted stock units granted to Mr. Lewis on December 2, 2014, which vest as to twenty-five percent (25%) on December 2, 2015, twenty-five percent (25%) on December 2, 2016, and fifty percent (50%) on December 2, 2017.

Option Exercises and Stock Vested for 2014
The following table provides information regarding the amounts received by our named executive officers upon the vesting of restricted stock units and the exercise of stock appreciation rights during the year ended December 28, 2014.
 
 
OPTION AWARDS
 
STOCK AWARDS
NAMED EXECUTIVE OFFICER
 
NUMBER OF SHARES ACQUIRED ON EXERCISE (#)
 
VALUE REALIZED ON EXERCISE ($)(1)
 
NUMBER OF SHARES ACQUIRED ON VESTING (#)
 
VALUE REALIZED ON VESTING ($)(2)
Frederick J. Lynch
 
35,000
 
1,551,900
 
54,154
 
3,042,498
Mark J. Erceg
 
 
 
31,517
 
1,731,036
Lawrence P. Repar
 
204,727
 
8,813.240
 
22,868
 
1,229,867
Glenwood E. Coulter, Jr.
 
 
 
13,636
 
731,993
Robert E. Lewis
 
 
 
4,607
 
243,468
(1)
Value realized on exercise of stock appreciation rights is calculated based on the difference between the per share price of our stock at the time of exercise and the exercise price of such stock appreciation rights.
(2)
Value realized on vesting of restricted stock units is calculated by multiplying the number of restricted stock units that vested by the per share price of our stock on the applicable vesting date.
Nonqualified Deferred Compensation for 2014
The following table provides information regarding contributions, earnings and balances for our named executive officers under our nonqualified deferred compensation plan.
NAMED EXECUTIVE OFFICER
 
EXECUTIVE CONTRIBUTIONS IN 2014 ($)
 
AGGREGATE EARNINGS IN 2014 ($)
 
WITHDRAWALS/DISTRIBUTIONS IN 2014 ($)
 
AGGREGATE BALANCE AT DECEMBER 28, 2014 ($)
Frederick J. Lynch
 
219,567(1)
 
57,491(2)
 
 
781,244(3)
Mark J. Erceg
 
139,045(1)
 
16,848(2)
 
 
329,608(3)
Lawrence P. Repar
 
 
 
 
Glenwood E. Coulter, Jr.
 
104,038(1)
 
3,690(2)
 
 
107,728(3)
Robert E. Lewis
 
 
(16,220)(4)
 
317,476(5)
 

42



(1)
Represents the amounts that the NEO elected to defer in 2014 under the Deferred Compensation Plan. These represent compensation earned by the NEO in 2014, and are therefore also reported in the appropriate columns in the “Summary Compensation Table” for 2014 as described above.
(2)
Represents the net amounts credited to the account of the NEO under the Deferred Compensation Plan as a result of the performance of the securities in which the account was invested, as more fully described in the narrative disclosure below. These amounts do not represent above-market earnings, and thus are not reported in the “Summary Compensation Table” as described above.
(3)
Represents the amount of the NEO’s account balance under the Deferred Compensation Plan at the end of 2014. The amounts that were previously reported as compensation for each NEO in the Summary Compensation Table in previous years are as follows:
Name
Aggregate Amounts Previously Reported ($)
Frederick Lynch
504,186
Mark J. Erceg
173,715
Lawrence P. Repar
Glenwood E. Coulter, Jr.
Robert E. Lewis
333,696
(4)
Represents the loss of value of 5,632 shares of common stock underlying restricted stock units held that were settled on March 17, 2014, as determined from December 29, 2013 through March 17, 2014. This grant of restricted stock units, dated April 15, 2012, was reported as compensation for Mr. Lewis in the “Stock Awards” column of the Summary Compensation Table for 2012 based on the grant date fair value computed in accordance with FASB ASC Topic 718.
(5)
Represents the fair market value of 5,632 shares of common stock underlying restricted stock units that were settled on March 17, 2014 after having vested in full on February 27, 2013.

Deferred Compensation Plan
The Masonite International Corporation Deferred Compensation Plan (“Deferred Compensation Plan”) is an unfunded non-qualified deferred compensation plan that permits certain key employees to defer a portion of their compensation to a future time. Eligible employees may elect to defer a portion of their base salary, bonus and/or restricted stock units and eligible directors may defer a portion of their director fees or restricted stock units under the Deferred Compensation Plan. All contributions to the plan on behalf of the participant are fully vested (other than restricted stock unit deferrals which remain subject to the vesting terms of the applicable equity incentive plan) and are placed into a grantor trust, commonly referred to as a "rabbi trust." Although we are permitted to make matching contributions under the terms of the Deferred Compensation Plan, we have not elected to do so. The Deferred Compensation Plan invests the contributions in diversified securities from a selection of investments chosen by the participants who may periodically reallocate the assets in their respective accounts. Participants are entitled to receive the benefits in their accounts upon separation of service or upon a specified date, with benefits payable as a single lump sum or in annual installments. In the event of a change in control, each participant’s account will be distributed in the form of a single lump-sum payment on the second anniversary of the change in control, unless such participant elects, during the 12 month period beginning on the change in control, to receive a single lump-sum payment or installments commencing on either (i) any specified date that is at least 5 years after the second anniversary of the change in control or (ii) the seventh anniversary of the change in control.
Potential Payments on Termination or Change in Control
NEO Employment Agreements
The employment agreements entered into with each of our NEOs entitle them to receive the payments and benefits described below upon each termination and change in control event described below.

43



Frederick J. Lynch
Termination without cause or with good reason, other than in connection with a change in control
If Mr. Lynch’s employment is terminated by us other than for cause (as defined below) or disability (as defined below), or if he resigns for good reason (as defined below), and such termination is not in connection with a change in control, he will be entitled to receive:
a lump sum payment of an amount equal to a pro-rata portion of the annual bonus, based on actual performance, that he would have been paid if he had remained employed by us; and

continued payment of his base salary for 24 months; and

continued participation in our medical, dental and hospitalization coverage for 12 months on the same terms and conditions as immediately prior to his date of termination (i.e., at active employee rates).

Termination without cause or for good reason in connection with a change in control
In the event Mr. Lynch’s employment is terminated by us other than for cause or disability, or by Mr. Lynch for good reason, either during the two-year period following a change in control or if his employment is terminated at the request of a third party or otherwise arises in anticipation of a change in control, he will be entitled to receive:
a lump sum payment of an amount equal to a pro-rata portion of the annual bonus, based on actual performance, that he would have been paid if he had remained employed by us; and

a lump sum payment equal to two times the sum of his base salary and the average amount of his annual bonuses earned during the two calendar years immediately preceding the date of termination; and

continued participation in our medical, dental and hospitalization coverage for 24 months on the same terms and conditions as immediately prior to his date of termination (i.e., at active employee rates).

If any payments or benefits provided to Mr. Lynch in connection with a change in control occurring after January 1, 2014 are subject to excise taxes as a result of the application of Sections 280G and 4999 of the Internal Revenue Code, such payments and benefits will be reduced so that no excise tax is payable, but only if this reduction results in a more favorable after-tax position for Mr. Lynch.
Termination upon expiration of the term

If Mr. Lynch’s employment terminates as a result of the expiration of the term, Mr. Lynch will be entitled to receive:

44



continued payment of his base salary for 24 months; and

continued participation in our medical, dental and hospitalization coverage for 12 months on the same terms and conditions as immediately prior to his date of termination (i.e., at active employee rates).

All Other NEOs
Termination without cause or with good reason, other than in connection with a change in control

If the employment of Messrs. Erceg, Repar, Coulter or Lewis is terminated by us other than for cause or disability (as defined below), or if any such NEO resigns for good reason (as defined below), and such termination is not in connection with a change in control, he will be entitled to receive:
a lump sum payment of an amount equal to a pro-rata portion of the annual bonus, based on actual performance, that he or she would have been paid if he or she had remained employed by us; and

continued payment of base salary for 24 months; and

continued participation in our medical, dental and hospitalization coverage for 12 months on the same terms and conditions as immediately prior to such NEO’s date of termination (i.e., at active employee rates).

Termination without cause or for good reason in connection with a change in control

In the event the employment of Messrs. Erceg, Repar, Coulter or Lewis is terminated by us other than for cause or disability, or by such NEO for good reason, either during the two year period following a change in control (as defined above) or if such NEO’s employment is terminated at the request of a third party or otherwise arises in anticipation of a change in control, he or she will be entitled to receive:
a lump sum payment of an amount equal to a pro-rata portion of the annual bonus, based on actual performance, that he or she would have been paid if he or she had remained employed by us; and

a lump sum payment equal to two times the sum of base salary and the average amount of such NEO’s annual bonuses earned during the two calendar years immediately preceding the date of termination; and

continued participation in our medical, dental and hospitalization coverage for 24 months on the same terms and conditions as immediately prior to such NEO’s date of termination (i.e., at active employee rates).

If any payments or benefits provided to Messrs. Erceg, Repar, Coulter or Lewis in connection with a change in control are subject to excise taxes as a result of the application of Sections 280G and 4999 of the

45



Internal Revenue Code, such payments and benefits will be reduced so that no excise tax is payable, but only if this reduction results in a more favorable after-tax position for such executive.
Termination upon expiration of the term

If Messrs. Erceg, Repar, Coulter Lewis’ employment terminates as a result of the expiration of the term, each such NEO will be entitled to receive:
continued payment of base salary for 24 months; and

continued participation in our medical, dental and hospitalization coverage for 12 months on the same terms and conditions as immediately prior to his or her date of termination (i.e., at active employee rates).
Release

All severance payments to our NEOs are subject to the execution and non-revocation of an effective release in our favor.
Definitions
For purposes of all of the employment agreements:
"cause" is generally defined as:
conviction of, or plea of no contest to a felony (other than in connection with a traffic violation);

the NEO’s continued failure to substantially perform his or her material duties under the employment agreement;

an act of fraud or gross or willful material misconduct; or

a material breach by the NEO of the restrictive covenants of the employment agreement.

"change in control" means:
an acquisition of more than 50% of our voting securities (other than acquisitions from or by us);

an acquisition of more than 30% of our voting securities in one or a series of related transactions during any 12-month period (other than acquisition from or by us);

certain changes in a majority of the board of directors;


46



a merger or consolidation of the Company other than a merger or consolidation in which the Company is the surviving entity (other than a recapitalization in which no person or entity acquires more than 50% of our voting securities) ; or

a sale or disposition of at least 40% of the total gross fair market value of our assets, other than a sale or disposition of all or substantially all of our assets to a person or entity that owns more than 50% of our voting securities.

"disability" is generally defined as the NEO being unable to perform his material duties under the employment agreement due to illness, physical or mental disability or other similar incapacity that continues for 180 consecutive days or 240 days in any 24-month period.

"good reason" is generally defined as:
any material diminution or material adverse change to the applicable NEO’s title, duties or authorities;
a reduction in the NEO’s base salary or target bonus, except for a base salary reduction of up to 10% as part of across-the-board reductions in base salary for all senior executives;

a material adverse change in the applicable NEO’s reporting responsibilities or the assignment of duties substantially inconsistent with his or her position or status with the Company;

a relocation of the NEO’s primary place of employment to a location more than 25 miles further from his or her primary residence than the current location of the Company’s offices;

any material breach by the Company of the material provisions of the employment agreement or any other agreement with the Company or its affiliates;

the failure of any successor of the Company to assume in writing the obligations under the employment agreement; or

any material diminution in the aggregate value of employee benefits provided to the NEO on the effective date of the employment agreement; however, if such reduction occurs at any time other than within the 2 year period following a change in control, such NEO will not have good reason for across-the-board reductions in benefits applicable to all senior executives.

NEO Equity Award Agreements
The equity award agreements governing the outstanding restricted stock units and stock appreciation rights held by the NEOs provide for certain accelerated vesting of the underlying award, as summarized below:

47



Change in Control

For purposes of the 2012 Plan and the 2009 Plan and the applicable equity award agreements, a "change in control" generally has the same meaning as set forth in the employment agreements with the NEOs as described above.
Awards Granted Prior to July 2, 2013

All unvested restricted stock units and stock appreciation rights granted under the 2009 Plan and granted prior to July 2, 2013 under the 2012 Plan will become fully vested on the six month anniversary of a change in control if the participant is continuously employed by the Company through such date. However, if the participant’s employment is terminated without "cause" (as defined above for the NEOs) during such six-month period, any such unvested awards will become fully vested on the termination date. With respect to any performance-based restricted stock units, if such change in control occurs on or before the end of the applicable performance period, the number of units subject to such accelerated vesting will be counted at target, and if such change in control occurs after the end of the applicable performance period, the number of units subject to such accelerated vesting will be determined based on the Company’s actual performance against the applicable performance goal.
Awards Granted On or After July 2, 2013

With respect to all unvested restricted stock units and stock appreciation rights granted on or after July 2, 2013, if within 30 days prior or 24 months following the completion of a change in control or at any time prior to a change in control at the request of a prospective purchaser whose proposed purchase would constitute a change in control upon its completion, the participant’s employment is terminated either without "cause" or by the participant for "good reason" (each as defined above for the NEOs), any such awards will become fully vested on the date of such termination of employment.
Death or Disability

If a participant’s employment is terminated due to death or disability, all awards will become fully vested (except for certain stock appreciation rights granted on July 5, 2011 which are not subject to accelerated vesting upon death or disability and all of which were vested as of December 28, 2014). With respect to any performance-based restricted stock units, the number of units subject to such accelerated vesting will be counted at target.
For purposes of the 2012 Plan and the 2009 Plan and the applicable equity award agreements, a "disability" generally means the inability of a participant to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months.
The following table sets forth, for each of our NEOs the amount of the severance payments and benefits and the accelerated vesting of the restricted stock units and stock appreciation rights that the NEO would have been entitled to under the various termination and change in control events described above, assuming they had terminated employment on December 28, 2014.

48



Summary of Potential Payments upon Termination and/or Change of Control
The following sets forth, for each of our NEOs the amount of the severance payments and benefits and the accelerated vesting of the restricted stock units and stock appreciation rights that the NEO would have been entitled to under the various termination and change in control events described above, assuming they had terminated employment on December 28, 2014.
 
 
 
 
Cash Severance
 
Pro-Rata Bonus(1)
 
Health and Welfare Benefits(2)
 
Accelerated Vesting of RSUs(3)
 
Accelerated Vesting of SARs(4)
 
Total
 
 
 
 
($)
 
($)
 
($)
 
($)
 
($)
 
($)
Frederick J. Lynch
 
Without Cause/For Good Reason Without a CIC
 
1,770,000

(6) 
268,155

 
17,369

 

 

 
2,055,524

 
 
Without Cause/For Good Reason in connection With a CIC
 
3,498,050

(7) 

 
34,737

 
8,391,600

 
2,918,853

 
14,843,240

 
 
Termination upon Expiration of the Employment Agreement
 
1,770,000

(6) 

 
17,369

 

 

 
1,787,369

 
 
Death or Disability
 

 

 

 
8,391,600

 
2,918,853

 
11,310,453

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mark J. Erceg
 
Without Cause/For Good Reason Without a CIC
 
930,000

(6) 
84,537

 
16,508

 

 

 
1,031,045

 
 
Without Cause/For Good Reason in connection With a CIC
 
1,524,000

(7) 

 
33,016

 
2,297,075

 
796,192

 
4,650,283

 
 
Termination upon Expiration of the Employment Agreement
 
930,000

(6) 

 
16,508

 

 

 
946,508

 
 
Death or Disability
 

 

 

 
2,297,075

 
796,192

 
3,093,267

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Lawrence P. Repar
 
Without Cause/For Good Reason Without a CIC
 
1,260,000

(6) 
114,534

 
16,508

 

 

 
1,391,042

 
 
Without Cause/For Good Reason in connection With a CIC
 
2,088,099

(7) 

 
33,016

 
2,660,533

 
731,396

 
5,513,044

 
 
Termination upon Expiration of the Employment Agreement
 
1,260,000

(6) 

 
16,508

 

 

 
1,276,508

 
 
Death or Disability
 

 

 

 
2,660,533

 
731,396

 
3,391,929

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Glenwood E. Coulter, Jr.
 
Without Cause/For Good Reason Without a CIC
 
840,000

(6) 
76,356

 
12,201

 

 

 
928,557

 
 
Without Cause/For Good Reason in connection With a CIC
 
1,280,000

(7) 

 
24,402

 
1,656,856

 
490,050

 
3,451,308

 
 
Termination upon Expiration of the Employment Agreement
 
840,000

(6) 

 
12,201

 

 

 
852,201

 
 
Death or Disability
 

 

 

 
1,656,856

 
490,050

 
2,146,906

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Robert E. Lewis
 
Without Cause/For Good Reason Without a CIC
 
780,000

(6) 
59,085

 
16,246

 

 

 
855,331

 
 
Without Cause/For Good Reason in connection With a CIC
 
1,137,797

(7) 

 
32,492

 
1,582,205

 
788,367

 
3,540,861

 
 
Termination upon Expiration of the Employment Agreement
 
780,000

(6) 

 
16,246

 

 

 
796,246

 
 
Death or Disability
 

 

 

 
1,582,205

 
788,367

 
2,370,572

(1)
Represents the full annual cash performance bonus amount for 2014.
(2)
Represents the value of continued health and welfare benefits at active employee rates, based upon the NEO’s benefit election as of December 28, 2014, for a period of 12 months upon a termination without cause or for good reason without a change in control or due to expiration of the employment agreement, or 24 months upon a termination without cause or for good reason with a change in control, as applicable.
(3)
Amounts shown are calculated by aggregating the sums determined by multiplying, for each award, (x) the number of restricted stock units that receive accelerated vesting as a result of the applicable termination of employment, by (y) the closing stock price on December 26, 2014 of $60.84. The value of accelerated performance-vesting restricted stock units is calculated assuming that the applicable performance measures are achieved at the target levels.

49



(4)
Amounts shown are calculated by aggregating the sums determined by multiplying, for each award, (x) the number of shares subject to stock appreciation rights that receive accelerated vesting as a result of the applicable termination of employment, by (y) the difference between the closing price per share of our common stock on December 26, 2014 of $60.84, and the applicable exercise price of the stock appreciation right.
(5)
Represents a cash severance amount equal to 24 months of base salary.
(6)
Represents a cash severance amount equal two times (2x) the sum of base salary and the average amount of the NEO’s annual cash performance bonuses earned during the two calendar years immediately preceding the calendar year in which the date of termination occurred (i.e., 2013 and 2012).

ADVISORY VOTE ON EXECUTIVE COMPENSATION (PROPOSAL 2)

In accordance with the requirements of Section 14A of the Exchange Act and the related rules of the SEC, our Shareholders are being asked to approve, in an advisory, non-binding vote, the compensation of our NEOs as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion.
In considering their vote, we urge Shareholders to review the information on our compensation policies and decisions regarding the NEOs presented in the Compensation Discussion and Analysis on pages 21 to 50, as well as the discussion regarding the Human Resources and Compensation Committee on page 10.
This advisory resolution, commonly referred to as a "say-on-pay" resolution, is non-binding. Although this resolution is non-binding, the Board and the Human Resources and Compensation Committee value the opinions of our Shareholders and will review and consider the voting results when making future compensation decisions for our NEOs. We currently intend to hold this vote annually. The next such vote will be held at the Company’s 2016 annual general meeting.
We believe that our compensation components provide a reasonable balance of base compensation, cash incentive compensation and long-term equity-based incentive compensation that is closely aligned with the Company’s overall performance. The Company aims to provide executive officers with a reasonable level of security through base salary and benefits, while rewarding them through cash and equity-based incentive compensation to achieve business objectives and create shareholder value. We believe that each of our compensation components is integral to attracting, retaining and rewarding qualified NEOs.
The text of the resolution in respect of Proposal no. 2 is as follows:
RESOLVED, that, the compensation paid to the Company’s Named Executive Officers as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion, is hereby approved.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPROVAL, ON AN ADVISORY BASIS, OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS.


50



AUDIT COMMITTEE REPORT

The Audit Committee operates pursuant to a charter which is reviewed annually by the Audit Committee. Additionally, a brief description of the primary responsibilities of the Audit Committee is included in "Corporate Governance; Board and Committee Matters - Board Committees; Membership - Audit Committee" on page 10 of this Proxy Statement. Under the Audit Committee charter, management is responsible for the preparation, presentation and integrity of the Company’s financial statements, the application of accounting and financial reporting principles and internal controls and procedures designed to assure compliance with accounting standards and applicable laws and regulations. The independent registered public accounting firm is responsible for auditing the Company’s financial statements and expressing an opinion as to their conformity with U.S. generally accepted accounting principles. In addition, the independent registered public accounting firm is responsible for auditing and expressing an opinion on the Company’s internal controls over financial reporting.
In the performance of its oversight function, the Audit Committee reviewed and discussed the audited financial statements of the Company with management and with Deloitte & Touche LLP ("Deloitte"), the Company’s independent registered public accounting firm. The Audit Committee also discussed with Deloitte the matters required to be discussed by Public Company Accounting Oversight Board ("PCAOB") Auditing Standard No. 16 "Communications with Audit Committees." In addition, the Audit Committee received the written disclosures and the letter from Deloitte required by applicable requirements of the PCAOB regarding Deloitte’s communications with the Audit Committee concerning independence, and discussed with the independent registered public accounting firm their independence.
Based upon the review and discussions described in the preceding paragraph, the Audit Committee recommended to the Board that the audited financial statements of the Company be included in the Annual Report on Form 10-K for the year ended December 28, 2014 filed with the SEC.
Submitted by the Audit Committee of the Company’s Board:
Jonathan F. Foster (Chair)
Rick J. Mills
John C. Wills

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APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (PROPOSAL 3)

Our consolidated financial statements for the fiscal year ended December 28, 2014 have been audited by Deloitte & Touche LLP, independent auditors. On the recommendation of the Audit Committee, the Board recommends the appointment of Deloitte as the independent registered public accounting firm for the fiscal year ending January 3, 2016 and to authorize the Board to fix its remuneration for such term.
A representative of Deloitte is expected to be present at the Annual Meeting in order to respond to appropriate questions and to make any other statement deemed appropriate.
Service Fees Paid to the Independent Registered Public Accounting Firm
Deloitte & Touche LLP, based in the United States, began acting as our independent auditors with respect to the audit of our financial statements beginning with the 2012 fiscal year. Prior to that Deloitte LLP, based out of Canada, audited our financial statements, including for the 2011 fiscal year. The fees charged by Deloitte & Touche LLP and Deloitte LLP for professional services rendered in connection with all audit and non-audit related matters for the years ended December 28, 2014 and December 29, 2013 were as follows:
 
 
Deloitte & Touche LLP
 
Deloitte LLP
Type of Fees
 
2014 ($)
 
2013 ($)
 
2014 ($)
 
2013 ($)
Audit Fees
 
3,589,290
 
2,000,000
 
 
Audit-Related Fees
 
47,983
 
320,368
 
48,150
 
179,118
Tax Fees
 
186,493
 
 
 
All Other Fees
 
4,000
 
 
 
Totals
 
3,827,766
 
2,320,368
 
48,150
 
179,118

Independent Registered Public Accountants-Fee Information
Audit Fees
Fees for audit services in 2014 and in 2013 consisted of (a) audits of the Company’s annual consolidated financial statements (b) reviews of the Company’s quarterly condensed consolidated financial statements included in our Quarterly Reports on Form 10-Q and (c) annual stand-alone statutory audits.
Audit-Related Fees
Audit-related services principally include assurance and related services by the independent auditors that are reasonably related to the performance of the audit or review of our financial statements, or other filings that are not captured under "Audit Fees" above. In 2014 and 2013 these services included due diligence procedures and audits and accounting consultations related to acquisitions and our 2014 debt offering, procedures associated with required filings with the SEC made in connection with or as a result of our listing on the NYSE, and consultations as to the accounting or disclosure treatment of transactions or events and/or the actual or potential impact of final or proposed rules standards or interpretations by the SEC, FASB, and other regulatory or standard-setting bodies.

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Tax Fees
Tax services in 2014 included the preparation of original and amended income tax, Value Added Tax (VAT), and other tax returns in various non-U.S. jurisdictions, advice and planning related to transfer pricing, and international income and other tax, VAT, and customs matters.
All Other Fees
Other fees in 2014 included various educational information on comprehensive authoritative accounting regulatory literature including webcasts, podcasts, websites, database subscriptions, checklists, research reports and similar tools.
The Audit Committee considered whether Deloitte & Touche LLP’s and Deloitte LLP’s provision of the above non-audit services is compatible with maintaining such firm’s independence and satisfied itself as to Deloitte & Touche LLP’s and Deloitte LLP’s independence.
Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Auditors
The Audit Committee’s policy is to pre-approve all audit and permissible non-audit services provided by the independent auditors in order to ensure that the provision of such services does not impair the auditor’s independence. These services may include audit services, audit-related services, tax services and other services. Pre-approval is generally provided for up to one year and any pre-approval is detailed as to the particular service or category of services and is generally subject to a specific limit above which separate pre-approval is required. Management is required to periodically report to the Audit Committee regarding the extent of services provided by the independent auditors in accordance with this pre-approval, and the fees for the services performed to date. To ensure prompt handling of unexpected matters, the Audit Committee has delegated to the Chairman of the Audit Committee the authority to approve permissible non-audit services and fees. The Chairman of the Audit Committee will report any action taken in this regard to the Audit Committee at the next scheduled Audit Committee meeting.
During the fiscal year ended December 28, 2014, 100% of services were pre-approved by the Audit Committee in accordance with this policy.
The Board requests that Shareholders approve the appointment of Deloitte and authorize the Board to fix Deloitte’s remuneration for such term. This appointment will be dependent on no other independent registered public accounting firm being put forward at the meeting and receiving more "FOR" votes than Deloitte. If this proposal is not approved, the BCBCA provides that the current auditors, Deloitte, will continue to act for the Company until such time as the Shareholders approve alternate auditors.

THE BOARD RECOMMENDS A VOTE "FOR" THE APPOINTMENT OF DELOITTE AS AUDITORS TO SERVE UNTIL THE NEXT ANNUAL GENERAL MEETING OF THE COMPANY AND THE AUTHORIZATION OF THE BOARD OF DIRECTORS TO FIX THE AUDITOR’S REMUNERATION.


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APPROVAL OF THE AMENDED AND RESTATED 2012 EQUITY INCENTIVE PLAN (PROPOSAL 4)

We are seeking the approval by our Shareholders of the Masonite International Corporation Amended and Restated 2012 Equity Incentive Plan (the “Amended and Restated Plan”), which amends and restates in its entirety the Masonite International Corporation 2012 Equity Incentive Plan (the “2012 Plan”), in order to further enable the Human Resources and Compensation Committee to grant awards thereunder that are intended to qualify as “qualified performance-based compensation” under Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”). The Amended and Restated Plan makes certain changes to the performance criteria on which performance goals may be based and the adjustments to such performance criteria for such awards, as described below.
The 2012 Plan was initially adopted by the Company’s Board of Directors (the “Board”) effective as of July 12, 2012 and amended on June 21, 2013 to increase the aggregate number of Common Shares available for issuance thereunder from 1,500,000 to 2,000,000. Upon the recommendation of the Human Resources and Compensation Committee, the Board unanimously approved the Amended and Restated Plan on February 23, 2015, subject to Shareholder approval. Shareholder approval of the Amended and Restated Plan, including the performance criteria therein, will constitute approval of the material terms of the performance goals under Section 162(m) of the Code.
Section 162(m) generally denies a tax deduction to any publicly held corporation for certain compensation paid to the chief executive officer and the three most highly paid executive officers, other than the chief executive officer and the chief financial officer, of the corporation (collectively, the “covered employees”) in a taxable year to the extent that compensation to a covered employee exceeds $1.0 million. However, certain types of compensation, including “qualified performance-based compensation,” are exempt from this deduction limitation. In order to qualify for the exemption for qualified performance-based compensation, Section 162(m) of the Code generally requires, among other things, that (i) the compensation must be paid solely upon account of the attainment of one or more pre-established objective performance goals, (ii) the performance goals must be established by a compensation committee comprised of two or more “outside directors,” (iii) the material terms of the performance goals (including the maximum amount of compensation that could be paid to the employee) must be disclosed to and approved by the Shareholders, and (iv) the compensation committee of “outside directors” must certify that the performance goals have been met prior to payment.  
Section 162(m) of the Code contains a special rule for stock options and stock appreciation rights, which provides that stock options and SARs will satisfy the qualified performance-based compensation exception if the awards are made by a qualifying compensation committee, the plan sets forth the maximum number of shares that can be granted to any person within a specified period and the compensation is based solely on an increase in the stock price after the grant date.
Notwithstanding these general requirements for qualified performance-based compensation, Section 162(m) of the Code contains a transition rule for compensation plans of corporations which were privately held and which became publicly held without an initial public offering, which generally provides that compensation paid under a plan that existed prior to the date on which the corporation became publicly held will not be subject to Section 162(m) of the Code until the earliest to occur of:

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The first material modification of the plan;
The issuance of all of the shares of stock reserved for issuance under the plan;
The expiration of the plan; or
The first meeting of the corporation’s shareholders at which directors are to be elected that occurs after the close of the first calendar year following the calendar year in which the corporation becomes publicly held (the “Transition Date”).

Following the Transition Date, rights or awards granted under the plan, other than certain options and stock appreciation rights, will not qualify as qualified performance-based compensation for purposes of Section 162(m) of the Code, unless such rights or awards are granted or vest upon pre-established objective performance goals, the material terms of which are disclosed to and approved by the Shareholders of the corporation. Thereafter, the Shareholders of the corporation must generally re-approve the material terms of the performance goals every five years in order to continue to qualify for the exemption for qualified performance-based compensation under Section 162(m) of the Code.
Since the Company became publicly held on September 9, 2013, the Company has relied on the exemption from Section 162(m) of the Code afforded by the transition rule described in the paragraph above for performance awards granted under the 2012 Plan. This transition rule, as it relates to the Company, expires at the 2015 Annual General Meeting of Shareholders. Therefore, we are submitting the Amended and Restated Plan, including the material terms of the performance goals, for Shareholder approval to further enable the Human Resources and Compensation Committee to grant awards thereunder that are intended to qualify as qualified performance-based compensation under Section 162(m) of the Code.
The Board believes that it is in the best interests of the Company and its Shareholders for the Company to provide an incentive plan under which compensation awards made to covered employees can be deducted by the Company for federal income tax purposes. If Shareholders do not approve the Amended and Restated Plan, the Company may not be entitled to a tax deduction for some or all of the performance-based compensation paid to its covered employees under Section 162(m) of the Code.
We will continue to grant awards under the 2012 Plan using the shares available for issuance thereunder through the date of the Meeting. If the Amended and Restated Plan is not approved by our Shareholders, the Amended and Restated Plan will not become effective, the 2012 Plan will continue in effect, and we may continue to grant awards under the 2012 Plan, subject to its terms, conditions and limitations, using the shares available for issuance thereunder.
Summary of the Amended and Restated Plan
The following is a summary of the material terms of the Amended and Restated Plan and is not a complete description thereof. The description in this Proposal is qualified in its entirety by reference to the full text of the Amended and Restated Plan. A copy of the Amended and Restated Plan is attached to this Proxy Statement as Appendix ”A” and you are advised to review the actual terms of the Amended and Restated Plan.
Purpose. The purpose of the Amended and Restated Plan is to enhance the profitability and value of the Company for the benefit of its Shareholders by enabling the Company to offer eligible individuals cash and stock-based incentives in order to attract, retain and reward such individuals and strengthen the mutuality of interests between such individuals and the Company’s Shareholders.

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Eligibility.  Awards under the Amended and Restated Plan may be granted to employees, consultants or non-employee directors of the Company or any of its affiliates, as determined by the Human Resources and Compensation Committee. As of December 28, 2014, approximately 133 current employees, our eight non-employee directors, and no consultants were participating in the Amended and Restated Plan.
Types of Awards. The types of awards that will be available for grant under the Amended and Restated Plan are as follows:
incentive stock options;
nonqualified stock options;
stock appreciation rights;
restricted stock;
performance awards;
other stock-based awards; and
other cash-based awards.

Share Reserve.  The Amended and Restated Plan provides for an aggregate number of common shares without par value in the capital of the Company (“Common Shares”) available for awards granted thereunder equal to the sum of (i) 2,000,000 shares and (ii) the number of Common Shares subject to awards outstanding under the Company’s 2009 Equity Incentive Plan (the “2009 Plan”) as of the effective date of the 2012 Plan (the “Share Reserve”). The maximum number of Common Shares with respect to which incentive stock options may be granted is equal to the Share Reserve. The market price per share of our Common Shares as of March 12, 2015 was $65.11, the closing price on such date.
If any award under the Amended and Restated Plan expires, terminates, is forfeited or is cancelled, the associated shares will be available again for grant. Any awards settled in cash will not be counted against the foregoing maximum share limitations.
With respect to stock appreciation rights settled in Common Shares, upon settlement, only the number of Common Shares delivered to a participant will count against the aggregate and individual share limitations set forth above.
To the extent required by Section 162(m) of the Code for awards under the Amended and Restated Plan to qualify as “qualified performance-based compensation,” the following individual participant limitations shall apply: subject to certain adjustments as described below, (i) the maximum number of Common Shares subject to any award of stock options, stock appreciation rights, shares of restricted stock or other stock-based awards subject to the attainment of performance goals which may be granted during any fiscal year will be 300,000 shares per type of award and (ii) the maximum number of Common Shares for all types of awards granted during any fiscal year is 750,000 shares. The maximum value of a cash payment made under a performance-based award with respect to any fiscal year to any participant is $10,000,000. These limits did not apply during the transition period described above, but will apply commencing with the adoption of the Amended and Restated Plan.
Adjustments Upon Certain Events. In the event of a corporate transaction, such as a merger, consolidation, reorganization, recapitalization, stock split, reverse stock split, spinoff, stock dividend, subdivision, combination or reclassification of shares or similar change in capital structure, the Human Resources and Compensation Committee will make proportionate adjustments to the number and/or kind of shares that thereafter may be issued

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under the Amended and Restated Plan, the number and/or kind of shares or other property (including cash) to be issued upon exercise of an outstanding award granted under the plan, and/or the purchase price thereof. In the event of certain other corporate transactions, such as an extraordinary dividend, the Human Resources and Compensation Committee may adjust outstanding awards or make any other adjustments to the Amended and Restated Plan.
Administration of the Plan.  The Amended and Restated Plan is administered by the Human Resources and Compensation Committee, as authorized by the Board. The Human Resources and Compensation Committee has the authority to, among other things:
determine the type and number of awards to be granted and the terms and conditions of any award;
determine whether awards may be settled in cash, Common Shares or other awards; and
establish any rules, guidelines and practices as it may deem necessary or advisable to administer the Amended and Restated Plan.

Performance-Based Awards.  The Amended and Restated Plan permits the Human Resources and Compensation Committee to specify that an award or portion thereof is intended to satisfy the requirements for “qualified performance-based compensation” under Section 162(m) of the Code, provided that the performance criteria for such award or portion thereof will be a measure based on one or more of the performance criteria described below, as selected by the Human Resources and Compensation Committee and specified at the time the award is granted. However, nothing in the Amended and Restated Plan would require that awards granted thereunder be designated to satisfy the requirements under Section 162(m) of the Code for “qualified performance-based compensation” and the Human Resources and Compensation Committee may in its discretion grant or amend awards that may not be deductible by the Company.
The performance criteria to be utilized under the Amended and Restated Plan consist of one or more of the following which may be stated as a percentage of another performance criteria, or a percentage of a prior period’s performance criteria, or used on an absolute, relative or adjusted basis to measure the performance of the Company (or one or more affiliates, subsidiaries, divisions, other operational units and/or business units, administrative departments, business segments, brands or product categories of the Company, or any combination of the foregoing), or may be measured relative to the performance of a selected group of other companies, or a published or special index that the Human Resources and Compensation Committee, in its sole discretion, deems appropriate, or as compared to various stock market indices:
gross or net revenue;
earnings per share of Common Shares (basic or diluted and/or before or after taxes);
net income (before or after taxes) per share of Common Shares;
profit (before or after taxes);
net earnings (before or after taxes);
net income (before or after taxes);
operating income;
cash flow or cash conversion measures (including, without limitation, operating cash flow, free cash flow, discounted cash flow, cash flow in excess of cost of capital, days on hand, days sales outstanding or days payable outstanding), which may but are not required to be measured on a per-share basis;

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earnings before or after one or more of the following: interest, taxes, depreciation and/or amortization (including, without limitation, EBIT or EBITDA);
gross or net sales;
share price (including, without limitation, growth measures or total stockholder return, which may but are not required to be measured relative to assets or peers);
financial return measures (including, without limitation, return on assets, net assets, capital, employed capital, invested capital, equity, investment or sales);
measures of economic value added or other “value creation” metrics;
cost reduction targets;
objective measures of customer satisfaction or customer retention;
customer growth;
objective measures of employee satisfaction or employee retention;
gross or net margin (including, without limitation, EBITDA margin);
gross or net profit;
gross or net profit growth;
gross or net revenue growth;
asset growth;
market share or competitive market metrics;
cost of capital, debt leverage year-end cash position or book value, which may but are not required to be measured on a per-share basis;
dividend yield;
expenses, expense ratio management or general and administrative expense savings;
same-store sales or same-stores sales growth;
system-wide sales or system-wide sales growth;
traffic or customer counts;
productivity ratios;
new product sales or timely completion of new product rollouts;
strategic objectives, development of new product lines and related revenue, sales and margin targets, franchisee growth and retention, menu design and growth, co-branding or international operations;
asset quality;
inventory control;
enterprise value;
timely launch of new facilities;
operating efficiency;
gross or net operating margin;
working capital;
license revenues;
royalty income;
specified objectives with regard to limiting the level of increase in all or a portion of the Company’s bank debt or other long-term or short-term public or private debt or other similar financial obligations of the Company, which may be calculated net of cash balances and/or other objective offsets and adjustments as may be established by the Committee in accordance with this Exhibit A;

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reduction in operating expenses;
comparisons of continuing operations to other operations;
objective measures of personal targets, goals or completion of projects (including, without limitation, succession and hiring projects, completion of specific acquisitions, reorganizations or other corporate transactions, capital-raising transactions, or expansions of specific business operations or meeting divisional or project budgets); or
any combination of the foregoing.

Without giving effect to the Amended and Restated Plan, the performance criteria to be utilized under the 2012 Plan are the same as described above, except with respect to: (i) measures of economic value added or other “value creation” metrics; (ii) gross or net profit or profit growth; (iii) asset growth; (iv) cost of capital, debt leverage, year-end cash position or book value, which may but are not required to be measured on a per-share basis; (v) dividend yield; (vi) productivity ratios; (vii) timely completion of new product rollouts; (viii) strategic objectives, development of new product lines and related revenue, sales and margin targets, franchisee growth and retention, menu design and growth, co-branding or international operations; (ix) asset quality; (x) inventory control; (xi) enterprise value; (xii) timely launch of new facilities; (xiii) operating efficiency; (xiv) royalty income; (xv) comparisons of continuing operations to other operations; and (xvi) objective measures of personal targets, goals or completion of projects (including, without limitation, succession and hiring projects, completion of specific acquisitions, reorganizations or other corporate transactions, capital-raising transactions, or expansions of specific business operations or meeting divisional or project budgets), each of which were newly added pursuant to the Amended and Restated Plan.
Notwithstanding satisfaction of any performance goals, the number of shares issued under or the amount paid under an award that is intended to constitute “qualified performance-based compensation” under Section 162(m) of the Code may be reduced on the basis of such further considerations as determined by the Human Resources and Compensation Committee in its sole discretion.
In addition, pursuant to the Amended and Restated Plan, the Human Resources and Compensation Committee may determine to adjust any of the performance criteria intended to satisfy the requirements of “qualified performance-based compensation” under Section 162(m) to exclude, or adjust to reflect, the impact of an event or occurrence that the Human Resources and Compensation Committee determines should be appropriately excluded or adjusted, including:
reorganizations, restructurings, discontinued operations, extraordinary items or events, and other unusual or non-recurring charges as described in Accounting Standards Codification 225-20 (or any successor pronouncement thereto), “Extraordinary and Unusual Items,” and/or management’s discussion and analysis of financial condition and results of operations appearing or incorporated by reference in the Company’s Form 10-K for the applicable year;
acquisitions or divestitures (including, without limitation, items related to the business operations of any entity acquired by the Company during the Performance Period, the disposal of a business or segment of a business, or discontinued operations that do not qualify as a segment of a business under applicable accounting standards);
financing activities;