(Amended Effective December 6, 2017)
The purpose of the Compensation and Leadership Development Committee (the "Committee") of the Board of Directors (the "Board") of Simpson Manufacturing Co., Inc. (the "Company") shall be to discharge the Board's responsibilities relating to the development, attraction and retention of the Company's leadership and the Company's compensation and benefit programs. In furtherance of this role, the Committee's primary purposes are to: (a) oversee and monitor the compensation policies and strategy of the Company; (b) ensure that the compensation of the officers of the Company enables it to attract and retain high-quality leadership, incentivize positive and ethical behavior and is consistent with the compensation policies; (c) discharge the Boards' responsibilities relating to the compensation of the Company's executives; and (d) produce an annual report of the Committee for inclusion in the Company's proxy statements in accordance with applicable rules and regulations.
The Committee shall consist of three or more members, with the exact number to be determined by the Board. Each of the members of the Committee will be an "independent director" as defined under the rules of the New York Stock Exchange, as amended (the "NYSE Rules"), and any other applicable laws or regulations. At least two of the members of the Committee will be "Non-Employee Directors," as defined in Rule 16b-3 promulgated under Section 16 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and will qualify as "outside directors" as such term is defined under Section 162(m) of the Internal Revenue Code of 1986, as amended. The Board is responsible for the appointment and removal of Committee members.
The Committee shall meet at least four times annually or more frequently as circumstances require. The Board may designate one member of the Committee as its Chairperson and in the absence of any such designation by the Board, the Committee shall designate by majority vote of the full Committee one member of the Committee as its Chairperson. The Committee will meet periodically in executive session without management.
The Committee may request that any directors, officers or employees of the Company, or other persons whose advice and counsel are sought by the Committee, attend any meeting of the Committee to provide such pertinent information as the Committee requests. The Committee may also delegate matters to a subcommittee of the Committee.
Following each of its meetings, the Committee shall deliver a report on the meeting to the Board, including a summary description of actions taken by the Committee at the meeting. The Committee shall keep written minutes of its meetings, which minutes shall be maintained with the books and records of the Company.
The Committee shall have the following goals and responsibilities:
Compensation Strategy and Risk Management
- To review from time to time and approve the Company's compensation strategy to ensure that management is afforded the appropriate incentives and is rewarded appropriately for its contributions to the Company's growth and profitability, and positive and ethical behavior and that the compensation strategy aligns with and supports the Company's objectives and stockholder interests.
- Review the Company's significant compensation and benefits policies and practices for employees, including non-executive officers, as they relate to the Company's risk management practices and risk-taking incentives and proposed material changes in those policies and practices.
- To review and approve goals and objectives of the Chief Executive Officer (the "CEO"); to evaluate the performance of the CEO in light of these goals and objectives; and based upon this evaluation, to determine both the elements and amounts of the CEO's compensation.
- To conduct an annual review of the performance of the Company's executive officers, and recommend to the Board for approval the annual compensation, including salary, bonus, incentive and equity compensation, for the executive officers, including the CEO's direct reports and other officers subject to Section 16(a) of the Exchange Act. Consider any recommendations or proposals of the CEO in connection with executive compensation.
- To administer the Executive Officer Cash Profit Sharing ("EOCPS") Plan and review and approve on a quarterly and annual basis awards to eligible executives under the EOCPS Plan. The Committee will also periodically review and make recommendations to the Board with respect to adoption and approval of, and amendments to, all cash-based incentive plans for executive officers.
Equity-and Incentive-Based and Other Benefit Plans
- To review and make recommendations to the Board with respect to adoption and approval of, or amendments to, all equity-and incentive-based compensation plans and arrangements for employees, and the shares and amounts reserved thereunder after taking into consideration the Company's strategy of long-term and equity- and incentive-based compensation. The Committee shall have and shall exercise all the authority of the Board with respect to the administration of such plans.
- To review and make recommendations to the Board with respect to the approval of, reservation and issuance of shares thereunder, and material amendments to the Simpson Manufacturing Co., Inc. 401(k) Profit Sharing Plan and such other 401(k) or other employee benefit plans that the Company may adopt from time to time ("Benefit Plans"). The Committee shall have and shall exercise all the authority of the Board with respect to the administration of any such Benefit Plans.
- The Committee will: (i) administer the Company's equity- and incentive-based compensation plans (the "Stock Plans") (ii) approve grants of stock, stock options or stock rights to employees eligible for such grants (including grants in compliance with Rule 16b-3 promulgated under the Exchange Act to individuals who are subject to Section 16 of the Exchange Act pursuant to the Company Stock Plans (iii) interpret the Stock Plans and agreements thereunder; and (iv) determine acceptable forms of consideration for stock acquired pursuant to the Stock Plans.
- To review and discuss with management the Company's Compensation Discussion and Analysis; and prepare and approve the Committee's annual report to stockholders for inclusion in the Company's proxy statement.
- To review the results of the Company's "say on pay" vote as well as the results of other Company stockholder votes and stockholder engagement results/findings with respect to compensation-related matters, and will consider whether any changes should be made to the Company's compensation plans and programs as a result of any such stockholder vote or engagement.
- To oversee the Company's submission to a stockholder vote of matters relating to compensation, including advisory votes on executive compensation and the frequency of such votes, incentive and other compensation plans, and amendments to such plans.
Management Succession and Talent Management
- To oversee the management development and succession planning process (including succession planning for emergencies) for the CEO and the CEO's executive direct reports, and as appropriate, evaluate potential candidates.
- To review periodically the Company's key human resource policies and practices related to organizational engagement and effectiveness, corporate culture, talent sourcing strategies and employee development programs.
- To monitor the Company's policies, objectives and programs related to diversity and review periodically the Company's diversity performance in light of appropriate measures.
Corporate Governance Responsibilities
- The Committee shall on an annual basis assess the independence of advisors to the Committee.
- The Committee shall on an annual basis evaluate its performance, which evaluation should among other things, compare its performance with the requirements of this Charter. The evaluation should include a review and assessment of the adequacy of the Committee's Charter. The Committee shall address all matters that it considers relevant to its performance, including at least the following: the adequacy, appropriateness and quality of the information and recommendations presented by the Committee to the Board, the manner in which they were discussed or debated, and whether the number and length of meetings of the Committee were adequate for it to complete its work in a thorough and thoughtful manner.
- The Committee shall have the authority to appoint, remove and replace members of the Company's Retirement Plan Committee, which members may consist in whole or in part of management.
The Committee may conduct or authorize investigations into or studies of matters within the Committee's scope of responsibilities, and in its sole authority retain, at the Company's expense, compensation consultants, independent counsel or other advisors as it deems necessary, after taking into consideration the factors set forth in applicable New York Stock Exchange listing standards.
Simpson Manufacturing Co., Inc.