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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [X]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c)
or Section 240.14a-12
SIMPSON MANUFACTURING CO., INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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SIMPSON MANUFACTURING CO., INC.
4120 DUBLIN BLVD., SUITE 400
DUBLIN, CALIFORNIA 94568
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Our Stockholders:
The annual meeting of stockholders of Simpson Manufacturing Co., Inc. (the
"Company"), a Delaware corporation, will be held at 2:00 p.m., Pacific Daylight
Time, on May 18, 2001, at the Company's home office located at 4120 Dublin
Blvd., Suite 400, Dublin, California, for the following purposes:
1. To elect two directors to the Company's Board of Directors, each to
hold office for a three-year term and until his or her successor is elected and
qualifies or until his or her earlier resignation or removal.
2. To consider and act upon a proposal to ratify the selection of
PricewaterhouseCoopers LLP as the Company's independent auditors for the current
fiscal year.
3. To transact such other business as may properly come before the
meeting.
Only stockholders of record as of March 19, 2001, are entitled to notice
of and will be entitled to vote at this meeting or any adjournment thereof.
BY ORDER OF THE BOARD OF DIRECTORS
Michael J. Herbert
Secretary
Dublin, California
April 16, 2001
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TO ASSURE THAT YOUR SHARES ARE REPRESENTED AT THE MEETING, YOU ARE URGED TO
COMPLETE, DATE AND SIGN THE ENCLOSED PROXY AND MAIL IT PROMPTLY IN THE
POSTAGE-PAID ENVELOPE PROVIDED, WHETHER OR NOT YOU PLAN TO ATTEND THE
MEETING. YOUR PROXY CAN BE REVOKED BY YOU AT ANY TIME BEFORE IT IS VOTED.
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SIMPSON MANUFACTURING CO., INC.
4120 DUBLIN BLVD., SUITE 400
DUBLIN, CALIFORNIA 94568
APRIL 16, 2001
PROXY STATEMENT
SOLICITATION AND VOTING OF PROXIES
The accompanying proxy is solicited on behalf of the Board of Directors of
Simpson Manufacturing Co., Inc., a Delaware corporation (the "Company"), for use
at the Annual Meeting of Stockholders of the Company to be held at the Company's
home office located at 4120 Dublin Blvd., Suite 400, Dublin, California, on May
18, 2000, at 2:00 p.m., Pacific Daylight Time, or any adjournment (the
"Meeting"). Only holders of record of the Company's Common Stock at the close of
business on March 19, 2001, will be entitled to vote at the Meeting. At the
close of business on that date, the Company had 12,083,112 shares of Common
Stock outstanding and entitled to vote. A majority, or 6,041,557, of these
shares, present in person or by proxy at the Meeting, will constitute a quorum
for the transaction of business. This Proxy Statement and the Company's Annual
Report to Stockholders for the year ended December 31, 2000, are being mailed to
each stockholder on or about April 16, 2001.
REVOCABILITY OF PROXY
A stockholder who has given a proxy may revoke it at any time before it is
exercised at the Meeting, by (1) delivering to the Secretary of the Company (by
any means, including facsimile) a written notice stating that the proxy is
revoked, (2) signing and so delivering a proxy bearing a later date or (3)
attending the Meeting and voting in person (although attendance at the Meeting
will not, by itself, revoke a proxy). If, however, a stockholder's shares are
held of record by a broker, bank or other nominee and that stockholder wishes to
vote at the Meeting, the stockholder must bring to the Meeting a letter from the
broker, bank or other nominee confirming the stockholder's beneficial ownership
of the shares to be voted.
EXPENSES OF PROXY SOLICITATION
The expenses of this solicitation of proxies will be paid by the Company.
Following the original mailing of this Proxy Statement and other soliciting
materials, the Company or its agents may also solicit proxies by mail, telephone
or facsimile or in person.
VOTING RIGHTS
The holders of the Company's Common Stock are entitled to one vote per
share on any matter submitted to a vote of the stockholders, except that,
subject to certain conditions, stockholders may cumulate their votes in the
election of directors, and each stockholder may give one candidate a number of
votes equal to the number of directors to be elected multiplied by the number of
shares held by such stockholder or may distribute such stockholder's votes on
the same principle among as many candidates as such stockholder thinks fit. No
stockholder will be entitled, however, to cumulate votes (that is, cast for any
nominee a number of votes greater than the number of votes that the stockholder
normally is entitled to cast) unless the nominees' names have been placed in
nomination prior to the voting and the stockholder gives notice at the Meeting
prior to the voting of the stockholder's intention to cumulate the stockholder's
votes. If any one stockholder gives such notice, all stockholders may cumulate
their votes for nominees. In the election of directors, the nominees receiving
the highest number of affirmative votes of the shares entitled to be voted for
them up to the number of directors to be elected by such shares are elected.
Votes against a nominee and votes withheld have no legal effect.
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The Board of Directors expects all nominees named below to be available
for election. In case any nominee is not available, the proxy holders may vote
for a substitute. The Company knows of no specific matter to be brought before
the Meeting that is not identified in the notice of the Meeting or this Proxy
Statement. If, however, proposals of stockholders that are not included in this
Proxy Statement are presented at the Meeting, the proxies will be voted in the
discretion of the proxy holders. Regulations of the Securities and Exchange
Commission permit the proxies solicited by this Proxy Statement to confer
discretionary authority with respect to matters of which the Company is not
aware a reasonable time before the Meeting. Accordingly, the proxy holders may
use their discretionary authority to vote with respect to any such matter
pursuant to the proxies solicited hereby.
Directors will be elected at the Meeting by a plurality of the votes cast
at the Meeting by the holders of shares represented in person or by proxy.
Approval of Proposal No. 2 will require the affirmative vote of a majority of
the votes cast at the Meeting by the holders of shares represented in person or
by proxy. Abstentions and broker nonvotes are counted as shares present for
determination of a quorum but are not counted as affirmative or negative votes
on any item to be voted upon and are not counted in determining the number of
shares voted on any item.
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SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information, as of March 19, 2001,
unless otherwise indicated, with respect to the beneficial ownership of the
Company's Common Stock by (1) each stockholder known by the Company to be the
beneficial owner of more than 5% of the Company's Common Stock, (2) each
director and director nominee, (3) each person currently serving as an executive
officer of the Company named in the Summary Compensation Table (see "Executive
Compensation" below), and (4) all current executive officers and directors of
the Company as a group.
NAME AND, FOR EACH 5% AMOUNT AND NATURE OF PERCENT
BENEFICIAL OWNER, ADDRESS BENEFICIAL OWNERSHIP(1) OF CLASS
- ------------------------- ----------------------- --------
Barclay Simpson(2) 3,508,656 29.0%
4120 Dublin Blvd., Suite 400
Dublin, CA 94568
Royce & Associates, Inc. and
Royce Management Company(3) 737,700 6.1%
1414 Avenue of the Americas
New York, NY 10019
Neuberger Berman, LLC(4) 636,016 5.3%
605 Third Avenue
New York, NY 10158
Scudder Kemper Investments(5) 611,200 5.1%
345 Park Avenue
New York, NY 10154
Thomas J Fitzmyers(6) 338,093 2.8%
Stephen B. Lamson(7) 53,972 *
Donald M. Townsend(8) 48,403 *
Earl F. Cheit(9) 4,000 *
Peter N. Louras, Jr.(10) 2,500 *
Sunne Wright McPeak(11) 2,000 *
Barry Lawson Williams(12) 500 *
Michael J. Herbert - *
All current executive officers
and directors as a group(13) 3,958,033 32.7%
- ----------
* Less than 1%
(1) The information in this table is based upon information supplied by
officers and directors, and, with respect to principal stockholders,
statements on Schedule 13D or 13G filed with the Securities and Exchange
Commission. Unless otherwise indicated below, the persons named in the
table had sole voting and sole investment power with respect to all shares
beneficially owned, subject to community property laws where applicable.
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(2) Includes 1,250 shares subject to options granted under the 1994 Stock
Option Plan that are exercisable within 60 days.
(3) Royce & Associates, Inc. ("RAI") and Royce Management Company ("RMC")
beneficially owned an aggregate of 737,700 shares as of December 31, 2000,
of which RAI had sole power to vote or direct the vote and to dispose or
direct the disposition of 718,800 shares and RMC had sole power to vote or
direct the vote and to dispose or direct the disposition of 18,900 shares.
Charles M. Royce may be deemed to be a controlling person of RAI and RMC.
Mr. Royce disclaimed beneficial ownership of the shares beneficially owned
by RAI and RMC.
(4) Neuberger Berman, LLC ("Neuberger") is a registered investment advisor. In
its capacity as investment advisor, Neuberger may have discretionary
authority to dispose of or to vote shares that are under its management.
As a result, Neuberger may be deemed to have beneficial ownership of such
shares. Neuberger does not, however, have any economic interest in the
shares. The clients are the actual owners of the shares and have the sole
right to receive and the power to direct the receipt of dividends from or
proceeds from the sale of such shares. Neuberger Berman Inc. owns 100% of
Neuberger and Neuberger Berman Management, Inc. As of December 31, 2000,
Neuberger had shared dispositive power with respect to 636,016 shares,
sole voting power with respect to 273,816 shares and shared voting power
with respect to 357,200 shares. With regard to the shared voting power,
Neuberger Berman Management, Inc. and Neuberger Funds are deemed to be
beneficial owners for purpose of section 13(d) of the Securities and
Exchange Act of 1934, as amended, since they have shared power to make
decisions whether to retain or dispose of the securities. Neuberger is the
sub-advisor to the Neuberger Funds. The above-mentioned shares are also
included with the shared power to dispose calculation.
(5) Scudder Kemper Investments, Inc. ("Scudder") beneficially owned 611,200
shares as of December 31, 2000, and had investment power with respect to
all 611,200 shares, sole power to vote or to direct the vote of 437,200
shares and shared power to vote or direct the vote of 12,300 shares.
(6) Includes 11,250 shares subject to options granted under the 1994 Stock
Option Plan that are exercisable within 60 days.
(7) Includes 6,250 shares subject to options granted under the 1994 Stock
Option Plan that are exercisable within 60 days.
(8) Includes 5,625 shares subject to options granted under the 1994 Stock
Option Plan that are exercisable within 60 days.
(9) Includes 4,000 shares subject to options granted under the Company's 1995
Independent Director Stock Option Plan that are exercisable within 60
days.
(10) Includes 2,000 shares subject to options granted under the Company's 1995
Independent Director Stock Option Plan that are exercisable within 60
days.
(11) Includes 1,750 shares subject to options granted under the Company's 1995
Independent Director Stock Option Plan that are exercisable within 60
days.
(12) Includes 500 shares subject to options granted under the Company's 1995
Independent Director Stock Option Plan that are exercisable within 60
days.
(13) Includes 32,625 shares subject to options exercisable within 60 days,
including the options described in the above notes.
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PROPOSAL NO. 1
ELECTION OF DIRECTORS
NOMINEES
Stephen B. Lamson and Peter N. Louras, Jr., whose terms as directors
expire in 2001, have been nominated for re-election at the Meeting. The names of
the Company's directors, and certain information about them, are set forth
below. It is intended that shares represented by proxies in the accompanying
form will be voted for the election of Mr. Lamson and Mr. Louras. Although the
Board of Directors does not know whether any nominations will be made at the
Meeting other than the nomination of Mr. Lamson and Mr. Louras, if any
nomination is made at the Meeting, or if votes are cast for any candidates other
than those nominated by the Board of Directors, the persons authorized to vote
shares represented by executed proxies in the enclosed form (if authority to
vote for the election of directors or for any particular nominees is not
withheld) will have full discretion and authority to vote cumulatively and
allocate votes among either or both of the nominees of the Board of Directors in
such order as they may determine.
DIRECTOR
NAME AGE SINCE POSITION
---- --- -------- --------
Barclay Simpson(1)(4) 79 1956 Chairman of the Board and Director
(term expiring in 2003)
Thomas J Fitzmyers 60 1978 President and Chief Executive Officer
and Director (term expiring in 2002)
Stephen B. Lamson 48 1990 President and Chief Operating Officer,
Simpson Strong-Tie Company Inc.,
and Director (term expiring in 2001)
Earl F. Cheit(2)(4) 74 1994 Director (term expiring in 2002)
Peter N. Louras, Jr.(1)(3)(4) 51 1999 Director (term expiring in 2001)
Sunne Wright McPeak(2)(4) 52 1994 Director (term expiring in 2003)
Barry Lawson Williams(1)(2)(3)(4) 56 1994 Director (term expiring in 2002)
- ----------
(1) Member of the Compensation Committee
(2) Member of the Audit Committee
(3) Member of 1994 Stock Option Plan Committee
(4) Member of the Growth Committee
The Board of Directors has not established a nominating committee.
EXECUTIVE OFFICERS
Barclay Simpson, Thomas J Fitzmyers and Stephen B. Lamson are executive
officers of the Company (in Stephen B. Lamson's case, by virtue of his policy
making functions for the Company as President and Chief Operating Officer of
Simpson Strong-Tie Company Inc.) and are also directors and executive officers
of subsidiaries of the Company. Michael J. Herbert, age 42, is the Chief
Financial Officer, Treasurer and Secretary of the Company and of subsidiaries of
the Company and Donald M. Townsend, age 54, a director and the Chief Executive
Officer of the Company's subsidiary, Simpson Dura-Vent Company, Inc. ("Simpson
Dura-Vent" or "SDV"), are also regarded as executive officers of the Company,
because, by virtue of their roles in management, they perform policy-making
functions for the Company.
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BIOGRAPHICAL INFORMATION
Barclay Simpson has been the Chairman of the Board of Directors and a director
of the Company since 1956. Since 1982, Mr. Simpson and his wife have owned
Barclay Simpson Fine Arts Gallery, a commercial art gallery in Lafayette,
California. Mr. Simpson is also a member of the Boards of Directors of Civic
Bancorp, Calender Robinson Insurance, the University Art Museum of the
University of California at Berkeley, the California College of Arts and Crafts
and other charitable and educational institutions.
Thomas J Fitzmyers has served as President and a director of the Company since
1978, as the Chief Executive Officer and a director of Simpson Strong-Tie
Company Inc. ("Simpson Strong-Tie" or "SST") since 1983 and as a director of
Simpson Dura-Vent since 1982. He was appointed as the Company's Chief Executive
Officer in 1994. Mr. Fitzmyers was employed by Union Bank from 1971 to 1978. He
was a Regional Vice President when he left Union Bank to join the Company in
1978.
Stephen B. Lamson has served as the President and Chief Operating Officer of
Simpson Strong-Tie since 2000 and served as its Secretary from 1992 to 2000.
Prior to that, he served as the Company's, SST's and Simpson Dura-Vent's Chief
Financial Officer and Treasurer from 1989 to 2000 and as the Company's and SDV's
Secretary from 1989 to 2000. Mr. Lamson has served as a director of the Company
since 1990, as a director of SST since 1992 and as a director of SDV since 1989.
From 1980 to 1989, Mr. Lamson was with Coopers & Lybrand. He was an audit
manager when he left that firm to join the Company in 1989.
Earl F. Cheit has been a Senior Advisor to the Asia Foundation on Asia-Pacific
Economic Affairs since 1984 and became Dean Emeritus of the Haas School of
Business at the University of California, Berkeley, in 1992. He is currently a
director of The Shaklee Corporation and a Trustee of Mills College.
Peter N. Louras, Jr. is a retired executive of The Clorox Company. He joined
Clorox in 1980 and had been Group Vice President since May 1992. In this
position, he served on Clorox's Executive Committee with overall responsibility
for the company's international business activities and business development
function, which handles all acquisitions and divestitures. Before joining
Clorox, Mr. Louras, a certified public accountant, worked at Price Waterhouse in
San Francisco. Mr. Louras is a member of the American Institute of CPAs and the
Pennsylvania Institute of CPAs. He is currently a member of the Board of Regents
of JFK University and sits on the boards of various not-for-profit
organizations.
Sunne Wright McPeak has served since 1996 as the President and Chief Executive
Officer of the Bay Area Council, a business-sponsored organization founded in
1945 that promotes economic prosperity and environmental quality in the San
Francisco Bay Area. From 1993 to 1996, she was the President and Chief Executive
Officer of the Bay Area Economic Forum, a partnership of government, business,
academic and foundation sectors of the nine San Francisco Bay Area counties.
From 1979 through 1994, she served on the Board of Supervisors of Contra Costa
County, including several terms as Chair. Her most recent term as Chair
concluded in 1992. In addition, Ms. McPeak served as President of the California
State Association of Counties and has been a member of the advisory boards of
the Urban Land Institute and California State University, Hayward. She is
currently a director of the California Foundation for the Environment and the
Economy and the Bridge Housing Corporation.
Barry Lawson Williams has been President of Williams Pacific Ventures Inc., a
venture capital and real estate consulting firm, since 1987. He is a director of
PG&E Corporation, CH2M HILL Companies, Ltd., USA Education, Inc., Newhall Land
and Farming Co. Inc., Northwestern Mutual Life Insurance Co., R.H. Donnelly &
Co., Synavant and Kaiser Permanente. Mr. Williams is also a General Partner of
WDG Ventures Inc., a California limited partnership. He currently is interim
President and Chief Executive Officer of the American Management Association
International.
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Michael J. Herbert has served as the Company's and its subsidiaries Chief
Financial Officer, Treasurer and Secretary since 2000. From 1988 to 2000 he held
various financial management positions, most recently as Director of Finance,
with Sun Microsystems, Inc.
Donald M. Townsend has been employed by the Company since 1981 and has served as
a director of Simpson Dura-Vent since 1984 and as its President and Chief
Operating Officer since 1991. He has served as SDV's Chief Executive Officer
since 1994. From 1984 to 1991, he was the Vice President and General Manager of
SDV.
ATTENDANCE AT MEETINGS
The Board of Directors held five meetings and its committees held a
total of six meetings in 2000 (including four meetings of the Audit Committee
and one meeting of the Compensation Committee). Each director attended 100% of
the meetings of the Board of Directors and the committees on which he or she
served in 2000.
THE BOARD RECOMMENDS A VOTE "FOR" ELECTION OF BOTH STEPHEN B. LAMSON AND PETER
N. LOURAS, JR., THE TWO NOMINEES FOR DIRECTOR AT THIS MEETING.
PROPOSAL NO. 2
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The Board of Directors has selected PricewaterhouseCoopers LLP as its
principal independent auditors to audit the Company's financial statements for
2001, and the stockholders will be asked to ratify such selection.
PricewaterhouseCoopers LLP has audited the Company's financial statements since
prior to 1975. A representative from PricewaterhouseCoopers LLP will be present
at the Meeting, will be given an opportunity to make a statement at the Meeting
if he or she desires to do so, and will be available to respond to appropriate
questions.
THE BOARD RECOMMENDS A VOTE "FOR" RATIFICATION OF SELECTION OF
PRICEWATERHOUSECOOPERS LLP.
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EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The table below provides information relating to compensation for the
years ended December 31, 2000, 1999 and 1998, for the Chief Executive Officer
and the other four most highly compensated executive officers of the Company,
including the President and Chief Operating Officer of SST and the Chief
Executive Officer of SDV (determined as of the end of 2000) (collectively, the
"Named Executive Officers"). The amounts shown include compensation for services
in all capacities that were provided to the Company and its subsidiaries.
SUMMARY COMPENSATION TABLE
LONG-TERM COMPENSATION
-------------------------------
ANNUAL COMPENSATION AWARDS(1) PAYOUTS
---------------------------------- -------------------------------
OTHER SECURITIES
ANNUAL RESTRICTED UNDERLYING LTIP ALL OTHER
NAME AND COMPEN- STOCK OPTIONS/ PAY- COMPEN-
PRINCIPAL POSITION YEAR SALARY($) BONUS($) SATION($) AWARDS($) SARS(#)(1) OUTS($) SATION($)(2)
- ------------------ ---- --------- --------- --------- ---------- ----------- ------- ------------
Thomas J Fitzmyers, 2000 273,230 1,404,860 - - - - 24,000
President and Chief 1999 265,272 1,318,761 - - 4,500 - 24,000
Executive Officer of 1998 257,544 1,057,071 - - 4,500 - 24,000
the Company
Barclay Simpson, 2000 150,000 786,932 - - - - 22,500
Chairman of the Board 1999 150,000 738,706 - - 500 - 22,500
of the Company 1998 150,000 592,119 - - 500 - 22,500
Stephen B. Lamson, 2000 180,000 861,247 - - - - 24,000
President and Chief 1999 116,940 781,396 - - 2,500 - 17,541
Operating Officer 1998 113,532 626,339 - - 2,500 - 17,030
of SST(3)
Michael J. Herbert 2000 103,333 86,430 - - - - -
Chief Financial Officer
and Secretary of the
Company
Donald M. Townsend, 2000 182,607 410,091 13,412 - - - 24,000
President and Chief 1999 177,288 489,724 13,021 - 2,500 - 24,000
Executive Officer 1998 172,128 328,463 12,642 - - - 24,000
of SDV
- ----------
(1) Shares subject to outstanding stock options, which have exercise prices of
$37.44 to $48.13 per share.
(2) Represents contributions to the Company's profit sharing plan trusts for
the accounts of the Named Executive Officers.
(3) Mr. Lamson was promoted to President and Chief Operating Officer of
Simpson Strong-Tie in 2000. Prior to that, he was the Chief Financial
Officer and Secretary of the Company.
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EMPLOYEE STOCK OPTIONS
There were no options to purchase shares of Common Stock granted or to be
granted to the Named Executive Officers for the year ended December 31, 2000.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
DECEMBER 31, 2000, OPTION/SAR VALUES
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS OPTIONS/SARS
SHARES AT DECEMBER 31, AT DECEMBER 31,
ACQUIRED ON VALUE 2000, (#) EXERCISABLE/ 2000, ($) EXERCISABLE/
NAME EXERCISE(#) REALIZED($)(1) UNEXERCISABLE UNEXERCISABLE
- --------------------- -------------- -------------- ---------------------- ----------------------
Thomas J Fitzmyers 7,110 247,514 11,250/11,250 332,930/149,695
Barclay Simpson - - 750/1,250 14,454/11,921
Stephen B. Lamson - - 26,798/6,250 996,607/83,164
Donald M. Townsend - - 2,500/5,625 63,555/92,734
- ----------
(1) The value realized for option exercises is the aggregate fair market value
of the Company's Common Stock on the date of exercise less the exercise
price.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Boards of Directors of the Company
comprises Barclay Simpson, the Chairman of the Board of the Company, and Peter
N. Louras, Jr. and Barry Lawson Williams, both independent directors of the
Company. Mr. Louras and Mr. Williams have no relationships with the Company or
any of its subsidiaries other than as members of the Company's Board of
Directors and certain committees of the Company's Board of Directors. Certain
transactions to which Mr. Simpson, his affiliates and members of his family have
been parties are described below.
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Real Estate Transactions
The Company, directly and through its subsidiaries, leases certain of its
facilities from general partnerships (the "Partnerships") wholly or partly
comprising current or former directors, officers, employees and stockholders of
the Company and its subsidiaries. The Partnerships, their partners, the
percentage interests of such partners in the Partnerships and the properties
that the Partnerships lease, or previously leased and sold, to the Company or a
subsidiary, are as follows:
PARTNERSHIP PARTNERS (PERCENTAGE INTERESTS) PROPERTY LOCATION
- ------------------- ------------------------------------------------------------ -----------------
Simpson Investment Barclay Simpson (77%), John B. Simpson (5%), Anne Simpson San Leandro,
Company ("SIC") Gattis (5%), Jean D. Simpson (5%), Jeffrey P. Gainsborough California
(2%), Julie Marie Simpson (2%), Elizabeth Simpson Murray
(2%) and Amy Simpson (2%)
Doolittle Investors Barclay and Sharon Simpson (25.51%), SIC (25.51%), Everett San Leandro,
H. Johnston Family Trust (23.13%), Judy F. Oliphant, California
Successor Trustee of the Oliphant Family Revocable
Trust Agreement Dated January 27, 1993 (Survivors Trust)
("Oliphant Trust") (20.61%), and Thomas J Fitzmyers (5.24%),
Columbus-Westbelt
Investment Co. Barclay and Sharon Simpson (13.31%), Jeffrey P. Gainsborough Columbus, Ohio
(11.01%), Julie Marie Simpson (11.01%), Elizabeth Simpson
Murray (11.01%) and Amy Simpson (11.01%), Everett H.
Johnston Family Trust (5.54%), Oliphant Trust (5.54%),
Tyrell T. Gilb Trust (5.54%), Doyle E. Norman (5.54%),
Robert J. Phelan (5.54%), Richard C. Perkins Trust (5.48%),
Stephen P. Eberhard (5.05%), Stephen B. Lamson (3.32%) and
Thomas J Fitzmyers (1.10%),
Vacaville Investors Everett H. Johnston Family Trust (49.90%), SIC (27.50%), Vacaville,
Oliphant Trust (12.47%), Barclay and Sharon Simpson California
(4.57%), Richard C. Perkins Trust (4.43%) and Thomas
J Fitzmyers (1.13%),
Vicksburg Investors Everett H. Johnston Family Trust (41.17%), Barclay and Vicksburg,
Sharon Simpson (33.92%), Oliphant Trust (12.61%), Mississippi
Richard C. Perkins Trust (6.28%) and Thomas J
Fitzmyers (6.02%)
Barclay Simpson is the managing partner of SIC, a general partnership of
Mr. Simpson and his seven children. Everett H. Johnston, formerly a director and
executive officer of the Company (now retired), is the managing partner of each
Partnership other than SIC. Richard C. Perkins, Stephen P. Eberhard and Robert
J. Phelan are officers of SST and Doyle E. Norman and Tyrell T. Gilb (both now
retired) are former employees of the Company. Sharon Simpson is Barclay
Simpson's wife; and John B. Simpson, Anne Simpson Gattis, Jean D. Simpson,
Jeffrey P. Gainsborough, Julie Marie Simpson, Elizabeth Simpson Murray and Amy
Simpson are his children.
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Aggregate lease payments by the Company and its subsidiaries to the
Partnerships in 2000, 1999 and 1998 were, and the terms of the leases will
expire, as follows:
LEASE PAYMENTS LEASE
-------------------------------- EXPIRATION
PARTNERSHIP 2000 1999 1998 DATE
- ------------------ --------- --------- --------- ---------
SIC(1) $ 197,594 $ 185,100 $ 185,100 12/31/01
Doolittle Investors(2) 253,080 253,080 239,400 12/31/09
Columbus Westbelt Investment Co. 592,381 581,064 581,064 9/30/05
Vacaville Investors 437,640 437,640 437,640 11/30/07
Vicksburg Investors 367,013 354,868 353,411 11/30/03
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(1) In January 2001, the Company exercised its option to purchase the property
leased from SIC. The transaction is expected to close in May 2001.
(2) In January 2001, the Doolittle Investors lease was extended through
December 31, 2009.
The leases with the Partnerships are expected to continue until the
expiration of the respective terms of the leases, and they may hereafter be
renewed. The Company's future rent obligations under the continuing leases are
expected to be consistent with the rents paid in 2000, subject to adjustments as
provided in certain of the leases.
If and when any lease is proposed to be amended or renewed or any property
subject to any lease is proposed to be purchased by the Company, the Company
will enter into such transaction only with the approval of a majority of the
directors of the Company who are not employees or officers of the Company and
who are not partners of any of the Partnerships and only after such directors
satisfy themselves that such transaction will be fair, just and reasonable as to
the Company, beneficial to the Company and on terms reasonably consistent with
the terms available from unrelated parties in similar transactions negotiated at
arm's length.
The Company does not intend in the future to lease from any of the
Partnerships or any other entities controlled by any of its directors, officers
or employees any facilities that are not on or adjacent to the property subject
to the existing leases.
Cash Profit Sharing Bonus Plan
The Company maintains a cash profit sharing bonus plan for the benefit of
employees of the Company and its subsidiaries. The Company may change, amend or
terminate its bonus plan at any time. Under the bonus plan as currently in
effect, the Compensation Committee of the Board of Directors determines a
"qualifying level" for the coming fiscal year for the Company, SDV and each
branch of SST. The qualifying level is equal to the value of the net operating
assets (as defined) of the Company, SDV or the respective branch of SST,
multiplied by a rate of return on those assets. If profits exceed the qualifying
level in any fiscal quarter, a portion of such excess profits is distributed to
the eligible employees as cash bonuses. The percentage of excess profits
distributed and the rates used to calculate the amounts to be distributed to the
Named Executive Officers are determined by the Compensation Committee of the
Board of Directors, while the percentage of excess profits distributed and the
rates used to calculate the amounts to be distributed to all other participants
are determined by the executive officers. The failure to earn a cash bonus in
any given quarter does not affect the ability to earn a cash bonus in any other
quarter. Amounts paid under these programs aggregated $18.6 million, $17.8
million and $14.6 million in 2000, 1999 and 1998, respectively, the amounts of
which paid to Named Executive Officers in 2000, 1999 and 1998 are shown in the
Summary Compensation Table above.
11
15
1994 Stock Option Plan
By affording selected employees and directors of and consultants to the
Company and its subsidiaries the opportunity to buy shares of Common Stock of
the Company, the Simpson Manufacturing Co., Inc. 1994 Stock Option Plan (the
"Option Plan") is intended to enhance the ability of the Company and its
subsidiaries to retain the services of persons who are now employees, directors
or consultants, to secure and retain the services of new employees, directors
and consultants, and to provide incentives for such persons to exert maximum
efforts for the success of the Company and its subsidiaries. The Option Plan was
adopted by the Company's Board of Directors and approved by the Company's
stockholders prior to the Company's initial public offering in 1994. It was
amended in 1997 and again in 2000 with shareholder approval. No more than
2,000,000 shares of Common Stock may be sold (including shares already sold)
pursuant to all options granted under the Option Plan. Common Stock sold on
exercise of options granted under the Option Plan may be previously unissued
shares or reacquired shares, bought on the market or otherwise. Options to
purchase 139,750 and 117,250 shares of Common Stock were granted pursuant to
commitments made related to the preceding fiscal years under the Option Plan in
1999 and 1998, respectively, and options to purchase 7,000 shares of Common
Stock, out of a possible 178,500 shares, were committed to be granted in 2000.
No options were committed to be granted under the Option Plan to Named Executive
Officers in 2000. Options granted under the Option Plan to Named Executive
Officers in 1999 and 1998 are shown in the Summary Compensation Table above.
Profit Sharing Plans
The Company's subsidiaries maintain defined contribution profit sharing
plans for their U.S. based salaried employees (the "Salaried Plan") and for U.S.
based nonunion hourly employees (the "Hourly Plan"). An employee is eligible for
participation in a given year if he or she is an employee on the first and last
days of that calendar year and completes at least 1,000 hours of service during
that calendar year for the Salaried Plan or 750 hours of service during that
calendar year for the Hourly Plan. As of December 31, 2000, there were 349
employees participating in the Salaried Plan and 508 employees participating in
the Hourly Plan. Under the Salaried Plan and the Hourly Plan, the Board of
Directors may authorize contributions to the plan trusts in their exclusive
discretion. Contributions to the plan trusts by the Company's subsidiaries are
limited to the amount deductible for federal income tax purposes under section
404(a) of the Internal Revenue Code. Barclay Simpson and Michael J. Herbert, who
are Named Executive Officers of the Company, are trustees of the plan trusts.
Barclay Simpson is also a participant in the Salaried Plan. The amounts
contributed by the Company for his account in 2000, 1999 and 1998 is shown in
the Summary Compensation Table above. Certain of the Company's foreign
subsidiaries maintain similar plans for their employees.
Compensation of Directors
The Company's directors who do not receive compensation as officers or
employees of the Company are each paid an annual retainer of $10,000 and a fee
of $1,000 for attending in person each meeting of the Board of Directors and for
attending in person each meeting of any committee held on a day when the Board
of Directors does not meet. Each outside director is also paid $500 for each
committee meeting he or she attends in person on the same day as a Board of
Directors meeting and for each Board of Directors meeting attended by telephone
conference. Directors are also reimbursed for expenses incurred in connection
with their attendance at Board of Directors and committee meetings.
1995 Independent Director Stock Option Plan
The Simpson Manufacturing Co., Inc. 1995 Independent Director Stock Option
Plan (the "Independent Director Plan") was adopted by the Board of Directors and
approved by the stockholders in 1995 and was amended by the Board of Directors
in 1997. The purpose of the Independent Director Plan is to give independent
directors of the Company an opportunity to buy shares of Common Stock of the
Company, to encourage independent directors in their efforts on behalf of the
Company and to secure their continued service to the Company. No options to
purchase shares of Common Stock were committed to be granted under the
Independent Director Plan in 2000.
12
16
REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
The Audit Committee of the Board of Directors (the "Audit Committee") is
responsible for financial and accounting management. Its policies and practices
are described as follows:
COMPOSITION. The Audit Committee is composed of three independent
directors, as defined by the New York Stock Exchange rules, and operates under a
written charter adopted by the Board of Directors, a copy of which is attached
hereto as Exhibit A. The members of the Audit Committee are Barry Lawson
Williams, Chairman, Earl F. Cheit and Sunne Wright McPeak.
RESPONSIBILITIES. The responsibilities of the Audit Committee include
recommending to the Board of Directors an accounting firm to be engaged as the
Company's independent accountants. Management is responsible for the Company's
internal controls and financial reporting process. The independent accountants
are responsible for performing an independent audit of the Company's
consolidated financial statements in accordance with generally accepted auditing
standards and for issuing a report theron. The Audit Committee's responsibility
is to oversee these processes.
REVIEW WITH MANAGEMENT AND INDEPENDENT ACCOUNTANTS. The Audit Committee
has met and held discussions with management and the independent accountants.
Management represented to the Audit Committee that the Company's consolidated
financial statements were prepared in accordance with generally accepted
accounting principles, and the Audit Committee has reviewed and discussed the
consolidated financial statements with management and the independent
accountants. The Audit Committee has discussed with the independent accountants
matters required to be discussed by Statement on Auditing Standards No. 61,
"Communication with Audit Committees."
The Company's independent accountants also provided the Audit Committee
the written disclosures and the letter required by Independent Standards Board
Standard No. 1, "Independence Discussions with Audit Committees," and the Audit
Committee discussed with the independent accountants, PricewaterhouseCoopers
LLP, that firm's independence.
SUMMARY. Based upon the Audit Committee's discussions with management and
the independent accountants and the Audit Committee's review of the
representations of management, and the report of the independent accountants to
the Audit Committee, the Audit Committee recommended that the Board of Directors
include the audited consolidated financial statements in the Company's Annual
Report on Form 10-K for the year ended December 31, 2000, as filed with the
Securities and Exchange Commission. The Audit Committee believes that it has
satisfied its responsibilities under its charter.
AUDIT COMMITTEE
-------------------------------
Barry Lawson Williams, Chair
Earl F. Cheit
Sunne Wright McPeak
AUDIT AND RELATED FEES
AUDIT FEES. The aggregate fees billed by PricewaterhouseCoopers LLP for
professional services for the audit of Company's annual consolidated financial
statements for 2000 and the review of the consolidated financial statements
included in the Company's Forms 10-Q for 2000 were $186,000.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES. There were
no fees billed by PricewaterhouseCoopers LLP to the Company for financial
information systems design and implementation fees for 2000.
13
17
ALL OTHER FEES. The aggregate fees billed to the Company for all other
services rendered by PricewaterhouseCoopers LLP for 2000, including fees for
income tax preparation and consultation and for statutorily required reviews in
certain locations outside the U.S. where the Company has operations, were
$334,000.
The Audit Committee has determined that the fees for services rendered
were compatible with maintaining PricewaterhouseCoopers LLP's independence.
REPORT OF THE COMPENSATION COMMITTEE, 1994 STOCK OPTION PLAN COMMITTEE AND BOARD
OF DIRECTORS ON EXECUTIVE COMPENSATION
The Compensation Committee and the 1994 Stock Option Plan Committee of the
Board of Directors are responsible for the development and review of the
Company's compensation policy for all the salaried employees. The overall
philosophy of the Company's compensation program is to provide a high degree of
incentive to employees by creating programs that reward achievement of specific
profit goals. The Company believes that these incentive programs based on profit
targets are best suited to align the interests of employees and stockholders.
The Company does not have any special plans for the Chief Executive Officer or
other executive officers of the Company. The absence of special plans for the
executive officers is intended to create a sense of unity and cooperation among
the Company's employees. The four elements of the Company's compensation plan
for most salaried employees and all officers are base salary, a profit sharing
retirement plan, a cash profit sharing bonus plan and the Option Plan.
The Compensation Committee has not performed any recent salary surveys,
but based on surveys in prior years and recent raises, it believes the base
salaries for the Chief Executive Officer and other executive officers are
competitive when compared to similar companies. Stephen B. Lamson, who was
promoted to President and Chief Operating Officer of Simpson Strong-Tie in 2000,
received an increase in salary of 53.9%. Thomas J Fitzmyers, President and Chief
Executive Officer, and Donald M. Townsend, President and Chief Executive Officer
of SDV, each received an increase in salary of 3% in 2000. Barclay Simpson,
Chairman, did not receive an increase in salary in 2000.
All U.S. based salaried employees, including the Chief Executive Officer
and other executive officers, participate in the profit sharing plan in
proportion to their salaries. For 2000, 15% of all U.S. based salaried
employees' base pay will be contributed to the profit sharing plan subject to
the limitations of applicable law. In 2000, Thomas J Fitzmyers, President and
Chief Executive Officer, Stephen B. Lamson, President and Chief Operating
Officer of Simpson Strong-Tie and Donald M. Townsend, President and Chief
Executive Officer of SDV, were subject to a contribution limit under applicable
law; the Company's contribution to the profit sharing plan for their accounts
was $24,000 each.
All salaried employees, except those on commission programs, participate
in the Company's quarterly cash profit sharing bonus plan. Annually, the
Compensation Committee establishes an acceptable range of participation in the
profits in excess of the qualifying level to be distributed as cash bonuses for
each profit center. The Compensation Committee also approves the specific
percentages to be distributed to the Chief Executive Officer and other executive
officers. The executive officers determine the specific percentages for
distributions to all other participating employees. Historically, the percentage
of profits in excess of the qualifying level distributed under these plans has
not changed substantially from year to year. Employees with higher levels of
responsibility typically receive higher proportions of the cash profit sharing
for their profit center. In 2000, the Chief Executive Officer received 514% of
his base salary in cash profit sharing bonuses. Because the cash profit sharing
bonus plan is based upon a return on net operating assets, and not subjectively
determined, the Compensation Committee believes the plan provides substantial
incentive to all participating employees, not only the Company's officers.
14
18
The 1994 Stock Option Plan Committee believes an option plan is most
effective if options are granted to all participants on an objective rather than
subjective basis. Therefore, under the Option Plan, participants are granted
options if Company-wide and profit center operating goals are met. The
Compensation Committee establishes these goals at the beginning of the year. The
1994 Stock Option Plan Committee also believes that option plans with broad
based participation are most effective. The 1994 Stock Option Plan Committee
determines each year the employees who are eligible to participate in the Option
Plan, based on job responsibilities and contributions made to the Company. At
present, over one quarter of the Company's salaried employees participate in the
Option Plan. The 1994 Stock Option Plan Committee determines the number of
options to be granted under the Option Plan. In determining the potential
grants, the 1994 Stock Option Plan Committee considers previous stock and option
awards, current options owned, job responsibilities and contributions to the
Company. These same considerations apply to option grants to the Chief Executive
Officer and other executive officers. Because of the responsibilities of the
Chief Executive Officer and the other executive officers, their stock option
grants are generally higher than those of other participants who also achieve
their goals. Most of the operating goals were not met in 2000 and, accordingly,
options to purchase only 7,000 shares of Common Stock, out of a possible 178,500
shares, were committed to be granted in 2000.
In 1995, the Company adopted the Independent Director Plan to give the
outside members of the Board of Directors an opportunity to buy shares of Common
Stock of the Company. The Independent Director Plan is administered by the Board
of Directors (as its manager and not as its trustee) and determines which
persons are eligible to be granted options. The Board of Directors believes this
kind of option plan is most effective if options are granted to outside
directors on an objective basis. Therefore, the Board of Directors determines
the number of shares subject to options that they believe will be an appropriate
incentive to be granted when an outside director becomes a member of the Board
of Directors and if Company-wide operating goals, established by the
Compensation Committee at the beginning of the year, are met. These operating
goals were not met in 2000 and, accordingly, no stock options were committed to
be granted to any of the outside directors.
1994 STOCK
COMPENSATION COMMITTEE OPTION PLAN COMMITTEE
----------------------- ----------------------------
Barclay Simpson, Chair Barry Lawson Williams, Chair
Peter N. Louras, Jr. Peter N. Louras, Jr.
Barry Lawson Williams
15
19
COMPANY STOCK PRICE PERFORMANCE
The graph below compares the cumulative total stockholder return on the
Company's Common Stock from December 31, 1995, through December 31, 2000, with
the cumulative total return on the S & P 500 Index and the Dow Jones Building
Materials Index over the same period (assuming the investment of $100 in the
Company's Common Stock and in each of the indices on December 31, 1995, and
reinvestment of all dividends).
SIMPSON MANUFACTURING CO., INC.
COMPARISON OF CUMULATIVE TOTAL RETURN
DECEMBER 31, 1995, TO DECEMBER 31, 2000
EDGAR PRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
Dow Jones
Simpson Building
Manufacturing S & P 500 Materials
Co. Inc. Index Index
------------- --------- ---------
Dec-1995 $100 $100 $100
Dec-1996 170 123 118
Dec-1997 247 164 146
Dec-1998 277 211 168
Dec-1999 324 255 141
Dec-2000 378 232 140
Historical returns are not necessarily indicative of future performance.
16
20
OTHER BUSINESS
The Board of Directors does not presently intend to bring any other
business before the Meeting and, so far as is known to the Board of Directors,
no matters are to be brought before the Meeting except as specified in the
notice of the Meeting. As to any business that may properly come before the
Meeting, however, it is intended that proxies, in the form enclosed, will be
voted in respect thereof in accordance with the judgment of the persons voting
such proxies.
DISCLAIMER REGARDING INCORPORATION BY REFERENCE OF THE REPORT OF THE
COMPENSATION COMMITTEE AND THE STOCK PRICE PERFORMANCE GRAPH
THE INFORMATION SHOWN IN THE SECTIONS ENTITLED "REPORT OF THE COMPENSATION
COMMITTEE, THE 1994 STOCK OPTION PLAN COMMITTEE AND BOARD OF DIRECTORS ON
EXECUTIVE COMPENSATION" AND "COMPANY STOCK PRICE PERFORMANCE" SHALL NOT BE
DEEMED TO BE INCORPORATED BY REFERENCE BY ANY GENERAL STATEMENT INCORPORATING BY
REFERENCE THIS PROXY STATEMENT INTO ANY FILING BY THE COMPANY WITH THE
SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, EXCEPT TO THE EXTENT THAT
THE COMPANY INCORPORATES THIS INFORMATION BY SPECIFIC REFERENCE, AND SUCH
INFORMATION SHALL NOT OTHERWISE BE DEEMED FILED UNDER SUCH ACTS.
STOCKHOLDER PROPOSALS
Stockholder proposals for inclusion in the proxy statement and form of
proxy relating to the Company's 2002 Annual Meeting of Stockholders must be
received by the Company a reasonable time before the Company's solicitation is
made, and in any event not later than December 15, 2001.
BY ORDER OF THE BOARD
Michael J. Herbert
Secretary
TO ASSURE THAT YOUR SHARES ARE REPRESENTED AT THE MEETING, YOU ARE URGED TO
COMPLETE, DATE AND SIGN THE ENCLOSED PROXY AND MAIL IT PROMPTLY IN THE
POSTAGE-PAID ENVELOPE PROVIDED, WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING.
YOUR PROXY CAN BE REVOKED BY YOU AT ANY TIME BEFORE IT IS VOTED.
17
21
EXHIBIT A
SIMPSON MANUFACTURING CO., INC.
CHARTER OF THE AUDIT COMMITTEE
OF THE BOARD OF DIRECTORS
AUGUST 1, 2000
I. PURPOSE
The primary purpose of the Audit Committee (the "Committee") of the Board of
Directors (the "Board") of Simpson Manufacturing Co., Inc. (the "Company") is to
provide independent and objective oversight of the accounting functions and
internal controls of Simpson Manufacturing Co., Inc., and its subsidiaries and
to ensure the objectivity of the Company's financial statements. The Committee
and the Board shall have the ultimate authority and responsibility to select,
evaluate and, where appropriate, replace the independent accountants.
II. FUNCTIONS
The Audit Committee shall perform the following functions:
1. Independent Accountants. Recommend to the Board the firm to be
employed by the Company as its independent accountants, which firm
shall be ultimately accountable to the Board and the Committee as
representatives of shareholders.
2. Plan of Audit. Consult with the independent accountants regarding
the plan of audit. The Committee also shall review with the
independent accountants their report on the audit and review with
management the independent accountants suggested changes or
improvements in the Company's accounting practices or controls.
3. Accounting Principles and Disclosure. Review significant
developments in accounting rules. The Committee shall review with
management recommended changes in the Company's methods of
accounting or financial statements. The Committee also shall review
with the independent accountants any significant proposed changes in
accounting principles and financial statements.
4. Internal Accounting Controls. Consult with the independent
accountants regarding the adequacy of internal accounting controls.
Where appropriate, consultation with the independent accountants
regarding internal controls shall be conducted out of management's
presence.
A-1
22
5. Financial Disclosure Documents. Review with management and the
independent accountants the Company's financial disclosure
documents, including all interim and annual financial statements and
reports filed with the Securities and Exchange Commission or sent to
stockholders and following the satisfactory completion of each
year-end review recommend to the Board the inclusion of the audited
financial statements in the Company's filing on Form 10-K. The
review shall include any significant problems and material disputes
between management and the independent accountants and a discussion
with the independent accountants out of management's presence of the
quality of the Company's accounting principles as applied in its
financial reporting, the clarity of the Company's financial
disclosures and degree of aggressiveness or conservatism of the
Company's accounting principles and underlying estimates, and a
frank and open discussion of other significant decisions made by
management in preparing the financial disclosure and reviewed by the
independent accountants.
6. Internal Control Systems. Review with management the Company's
internal control systems intended to ensure the reliability of
financial reporting and compliance with applicable codes of conduct,
laws, and regulations. The review shall include any significant
problems and regulatory concerns.
7. Ethical Environment. Consult with management on the establishment
and maintenance of an environment that promotes ethical behavior,
including the establishment, communication, and enforcement of codes
of conduct to guard against dishonest, unethical, or illegal
activities.
8. Oversight of Independent Accountants. Evaluate the independent
accountants on an annual basis and where appropriate recommend a
replacement for the independent accountants. In such evaluation, the
Committee shall ensure that the independent accountants deliver to
the Committee a formal written statement delineating all
relationships between the accountants and the Company. The Committee
also shall engage in a dialogue with the accountants with respect to
any disclosed relationships or services that may impact the
objectivity and independence of the independent accountants and in
response to the independent accountant's report take, or recommend
that the Board take, appropriate action to satisfy itself of the
independent accountant's independence.
9. Charter Amendments. Review this Charter annually, assess its
adequacy and propose appropriate amendments to the Board.
The Committee's function is one of oversight and review, and it is not expected
to audit the Company, to define the scope of the audit, to control the Company's
accounting practices, or to define the standards to be used in preparation of
the Company's financial statements.
III. COMPOSITION & INDEPENDENCE
The Committee shall consist of not less than three independent members, who
shall be appointed by the Board of Directors. Members of the Committee shall be
financially literate or become financially literate within a reasonable period
of time after appointment to the Committee and at least one member of the
Committee shall have accounting, related financial management expertise, or any
other comparable experience or background that results in the individual's
financial sophistication. No member of the Committee shall be employed or
otherwise affiliated with the Company's independent accountants.
A-2
23
In the event that a Committee member faces a potential or actual conflict of
interest with respect to a matter before the Committee, that Committee member
shall be responsible for alerting the Committee Chairman, and in the case where
the Committee Chairman faces a potential or actual conflict of interest, the
Committee Chairman shall advise the Chairman of the Board of Directors. In the
event that the Committee Chairman, or the Chairman of the Board of Directors,
concurs that a potential or actual conflict of interest exists, an independent
substitute Director shall be appointed as a Committee member until the matter,
posing the potential or actual conflict of interest, is resolved.
IV. QUORUM AND MEETINGS
A quorum of the Committee shall be declared when a majority of the appointed
members of the Committee are in attendance. The Committee shall meet on a
regular basis. Meetings shall be scheduled at the discretion of the Chairman.
The Committee may ask members of management or others to attend the meeting and
provide pertinent information as necessary.
V. REPORTS
The Committee will report to the Board from time to time with respect to its
activities and its recommendations. When presenting any recommendation or advice
to the Board, the Committee will provide such background and supporting
information as may be necessary for the Board to make an informed decision. The
Committee will keep minutes of its meetings and will make such minutes available
to the full Board for its review.
The Committee shall report to shareholders in Company's proxy statement for its
annual meeting whether the Committee has satisfied its responsibilities under
this Charter.
VI. OTHER AUTHORITY
The Committee is authorized to confer with Company management and other
employees to the extent it may deem necessary or appropriate to fulfill its
duties. The Committee is authorized to conduct or authorize investigations into
any matters within the Committee's scope of responsibilities. The Committee also
is authorized to seek outside legal or other advice to the extent it deems
necessary or appropriate, provided it shall keep the Board advised as to the
nature and extent of such outside advice.
A-3
24
[MAP]
25
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PROXY
SIMPSON MANUFACTURING CO., INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF
The undersigned hereby appoints Barclay Simpson and Thomas J Fitzmyers, and each
of them, attorneys and proxies of the undersigned, with full power of
substitution and resubstitution, to vote on behalf of the undersigned all shares
of the common stock of Simpson Manufacturing Co., Inc. that the undersigned is
entitled to vote at the Annual Meeting of Shareholders to be held on May 18,
2001, at 4120 Dublin Blvd., Suite 400, Dublin, California, and at all
adjournments thereof, hereby revoking any proxy heretofore given with respect to
such common stock, and the undersigned authorizes and instructs said proxies to
vote as indicated on the reverse side hereof. The shares represented by this
proxy will be voted as directed, or if directions are not indicated, will be
voted for the election as directors of some or all of the persons listed on this
proxy, in the manner described in the proxy statement. This proxy confers on the
proxyholders the power of cumulative voting and the power to vote cumulatively
for less than all of the nominees as described in such proxy statement.
- ----------- -----------
SEE REVERSE (CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE) SEE REVERSE
SIDE SIDE
- ----------- -----------
26
- -----------------
VOTE BY TELEPHONE
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It's fast, convenient, and immediate!
Call Toll-Free on a Touch-Tone Phone
1-877-PRX-VOTE (1-877-779-8683)
- ----------------------------------------------
Follow these four easy steps:
1. Read the accompanying Proxy Statement
and Proxy Card.
2. Call the toll-free number
1-877-PRX-VOTE (1-877-779-8683)
3. Enter your 14-digit Voter Control Number
located on you Proxy Card above your
name.
4. Follow the recorded instructions.
- ----------------------------------------------
YOUR VOTE IS IMPORTANT!
Call 1-877-PRX-VOTE anytime!
- ----------------
VOTE BY INTERNET
- ----------------
It's fast, convenient, and your vote is
immediately confirmed and posted.
- ----------------------------------------------
Follow these four easy steps:
1. Read the accompanying Proxy Statement
and Proxy Card.
2. Go to the Website
http://www.eproxyvote.com/ssd
3. Enter your 14-digit Voter Control Number
located on you Proxy Card above your
name.
4. Follow the instructions provided.
- ----------------------------------------------
YOUR VOTE IS IMPORTANT!
Go to HTTP://WWW.EPROXYVOTE.COM/SSD anytime!
DO NOT RETURN YOU PROXY CARD IF YOU ARE VOTING BY TELEPHONE OR INTERNET
DETACH HERE
- --------------------------------------------------------------------------------
[X] PLEASE MARK VOTES AS IN THIS EXAMPLE
Unless otherwise specified, this proxy will be voted for both of the nominees
listed below as directors and for proposal 2, AND WILL BE VOTED IN THE
DISCRETION OF THE PROXIES ON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE
MEETING OR ANY ADJOURNMENT THEREOF. Such other matters are not related.
FOR AGAINST ABSTAIN
1. Election of Directors to serve for three-year terms 2. Ratification of appointment of
NOMINEES: (01) Stephen B. Lamson and Pricewaterhouse Coopers LLP [ ] [ ] [ ]
(02) Peter N. Louras, Jr. as independent auditors
FOR WITHHOLD
BOTH [ ] [ ] FROM BOTH
NOMINEES NOMINEES
[ ] -----------------------------------------------------
(INSTRUCTION: To withhold authority to vote for any individual
nominee, write that nominee's name in the space provided above.)
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [ ]
IF VOTING BY MAIL, PLEASE MARK, SIGN, DATE AND
RETURN THIS PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE
(Please sign exactly as name appears, at left,
indicating title or representative capacity,
where applicable)
Signature: Date: Signature: Date:
--------------------- ----------- --------------------- ------------