Exhibit 10
Compensation of Named Executive
Officers of Simpson Manufacturing Co., Inc.
Our executive officers are at-will
employees. We do not have a written employment contract with
any of them. We or the officer can terminate the employment
relationship at any time, for any reason, with or without
cause. For 2009, we have set the following officers’
annual salaries and expect to contribute to their defined
contribution profit sharing trust accounts, as follows:
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Estimated
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2009
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Profit Sharing
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Salary
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Trust Contribution(1)
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Thomas J Fitzmyers
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$
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336,036
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$
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24,500
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President and Chief Executive
Officer
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Barclay Simpson
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150,000
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15,000
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Chairman of the Board
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Phillip Terry Kingsfather
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275,000
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24,500
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President and Chief Executive
Officer of Simpson Strong-Tie Company Inc.
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Michael J. Herbert
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262,119
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24,500
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Vice President
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Karen W. Colonias
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262,119
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24,500
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Chief Financial Officer, Treasurer
and Secretary
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(1)
If we employ the officer on
December 31, 2009, we will (in 2010) contribute to his or her
profit sharing trust account 10% of his or her annual salary, with
a contribution limit of $24,500 for 2009, plus a pro rata share of
forfeitures by other participants.
Those officers participate in our Executive
Officer Cash Profit Sharing Plan, which is designed to reward them
with quarterly cash bonuses based on operating profit for their
respective profit centers less a return on assets, as established
by our Board of Directors. For this purpose, we generally
define operating profit as:
Income from operations of Simpson
Manufacturing Co., Inc. or relevant subsidiary
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Plus:
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Stock compensation charges
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Certain bonuses and commissions
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Salaried pension contributions
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Self-insured workers’ compensation
costs
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Equals:
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Operating profit
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Once we determine the operating profit, we
subtract qualifying levels based on a specified return on assets
(also as established by our Board of Directors) to determine the
pool of profit available to our participating employees. We
generally determine the return on assets as follows:
Average assets of Simpson Manufacturing
Co., Inc. or relevant subsidiary, net of specified
liabilities, for the 3 months ended on the last day of the month
prior to the end of the quarter
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Less:
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Cash
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Real estate
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Acquired assets (excluding cash,
real estate, goodwill and indefinite lived intangible assets) based
on tiered phase-in schedule
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Goodwill and indefinite lived intangible
assets
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Self-Insured workers’ compensation
reserves
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Multiplied by:
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Specified return percentage for Simpson
Manufacturing Co., Inc. or relevant subsidiary
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Equals:
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Qualifying level
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Based on our operating profit for each of the 4
quarters of 2009, our officers may receive a payout after our
quarterly earnings are announced to the public. Whether or not we
pay amounts in any quarter under the Executive Officer Cash Profit
Sharing Plan does not affect our officers’ ability to earn
amounts in any other quarter. If the operating profit is lower or
higher than the targeted operating profit, the payout will be
correspondingly lower or higher, but we generally do not make any
payment when the operating profit for the quarter is less than the
qualifying level for the quarter.
For the full year 2009, the annual operating
profit goals, qualifying levels and targeted payouts for each of
the following executive officers are as follows:
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Operating
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Qualifying
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Targeted
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Profit Goal
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Level(1)
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Payout(1)
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Thomas J Fitzmyers
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$
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66,205,000
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$
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66,069,000
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$
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271,000
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Barclay Simpson
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66,205,000
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66,069,000
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78,000
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Phillip Terry Kingsfather
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62,497,000
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60,819,000
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118,000
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Michael J. Herbert
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66,205,000
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66,069,000
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85,000
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Karen W. Colonias
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66,205,000
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66,069,000
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85,000
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