SIMPSON MANUFACTURING CO., INC.

5956 W. Las Positas Blvd.

Pleasanton, California 94588

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

To the Stockholders of Simpson Manufacturing Co., Inc.:

We will hold the annual meeting of our stockholders at 2:00 p.m., Pacific Daylight Time, on Tuesday, April 26, 2011, at our home office located at 5956 W. Las Positas Blvd., Pleasanton, California.  The matters that you will address at this meeting are:

1.               A proposal to elect as directors the 3 persons nominated by a committee of independent members of our Board of Directors, each to hold office for a 3-year term and until his successor is elected and qualifies or until his earlier resignation or removal.

2.               A proposal to approve the Simpson Manufacturing Co., Inc. 2011 Incentive Plan

3.               A proposal to ratify our Board of Directors’ selection of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the current fiscal year.

4.               An advisory (non-binding) vote on the compensation of our Named Executive Officers.

5.               An advisory (non-binding) vote on the frequency of future advisory votes on the compensation of our Named Executive Officers.

6.               Any other business that properly comes before the meeting.

Only stockholders of record as of March 1, 2011, are entitled to notice of and will be entitled to vote at this meeting or any adjournment of this meeting.

Pleasanton, California

March 10, 2011

TO ASSURE THAT YOUR SHARES ARE REPRESENTED AT THE MEETING, WE URGE YOU TO COMPLETE, DATE AND SIGN THE ENCLOSED PROXY AND MAIL IT PROMPTLY IN THE POSTAGE-PAID ENVELOPE PROVIDED, OR VOTE BY TELEPHONE OR THE INTERNET AS INSTRUCTED ON THE PROXY, WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING.  YOU CAN REVOKE YOUR PROXY AT ANY TIME BEFORE THE PROXIES YOU APPOINT CAST YOUR VOTES.

SIMPSON MANUFACTURING CO., INC.

5956 W. Las Positas Blvd.

Pleasanton, California 94588

March 10, 2011

PROXY STATEMENT

Solicitation and Voting of Proxies

On behalf of the Board of Directors of Simpson Manufacturing Co., Inc., a Delaware corporation, we are soliciting from you a proxy in the enclosed form for use at our 2011 Annual Meeting of Stockholders.  We will hold this meeting at our home office located at 5956 W. Las Positas Blvd., Pleasanton, California, on Wednesday, April 26, 2011, at 2:00 p.m., Pacific Daylight Time. Your proxy will be used at this meeting or at any adjournment of this meeting. Only holders of record of our common stock at the close of business on March 1, 2011, may vote at this meeting.  At the close of business on that date, we had 50,108,673 shares of our common stock outstanding and entitled to vote.  A majority, or 25,054,337, of these shares, present in person or represented by proxy at this meeting, will constitute a quorum for the transaction of business.  We are making this Proxy Statement and our Annual Report to Stockholders for the year ended December 31, 2010, available to each of our stockholders on or about March 10, 2011.

Revocability of Proxy

If you give a proxy, you may revoke it at any time before the proxy holders vote it at the meeting, in any of the 3 following ways:

·                  deliver a written notice to our Secretary by any means, including facsimile, stating that the proxy is revoked;

·                  sign a proxy bearing a later date and deliver it to our Secretary; or

·                  attend the meeting and vote in person, although your attendance at the meeting will not, by itself, revoke your proxy.

If, however, your shares are held of record by a broker, bank or other nominee and you desire to vote at the meeting, you must bring to the meeting a letter from the broker, bank or other nominee confirming your beneficial ownership of the shares you desire to vote.

Expenses of Proxy Solicitation

We are paying the expenses of this solicitation of proxies.  After we make this Proxy Statement and other soliciting materials available, we or our agents may also solicit proxies by mail, telephone, electronic mail or facsimile or in person.

Voting Rights

As a holder of our common stock, you are entitled to one vote per share on any matter submitted to a vote of the stockholders.  Our Bylaws permit stockholders to cumulate their votes in the election of directors at an annual meeting if, at least 65 days before the meeting, a stockholder notifies our Secretary in writing of the stockholder’s intention to cumulate votes.  Cumulative voting would entitle each stockholder to give one properly nominated candidate a number of votes equal to the number of directors to be elected multiplied by the number of shares the stockholder holds or to distribute those votes on the same principle among as many properly nominated candidates as the stockholder thinks fit.  Our Secretary has not, however, received a cumulative voting notice for this meeting, and as a result cumulative voting will not be available at this meeting.

Our Board of Directors expects all nominees named below to be available for election.  If any nominee is not available, the proxy holders may vote for a substitute whom the Governance and Nominating Committee of our Board of Directors may nominate.  We are not aware of any specific matter to be brought before the meeting that is not identified in the notice of the meeting and this Proxy Statement.  If, however, stockholders present proposals at the

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meeting that are not included in this Proxy Statement, the proxy holders will have discretion to vote on those proposals as they see fit.  The proxies solicited by this Proxy Statement will confer discretionary authority on matters of which we are not aware a reasonable time before the meeting.  Accordingly, the proxy holders may use their discretionary authority to vote on any such matter pursuant to the proxies in the enclosed form.

Our stockholders may cast votes personally at the meeting or the proxy holders may cast the votes of stockholders who provide proxies in the enclosed form.  Our stockholders will elect directors at the meeting by a plurality of the votes cast at the meeting.  In the election of directors, that is, the nominees receiving the highest numbers 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.  On each of Proposal Nos. 2, 3 and 4, approval will require the affirmative vote of a majority of the votes cast at the meeting on that Proposal.  On Proposal No. 5, the option (of the three available) receiving the most votes will be the option chosen by the stockholders.  Proposal Nos. 4 and 5 are advisory votes only and are not binding on us or our Board of Directors.  Abstentions and broker nonvotes count as shares present for determination of a quorum but do not count as affirmative or negative votes on any item to be voted on and do not count in determining the number of shares voted or votes cast on any matter.

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SECURITY OWNERSHIP OF CERTAIN

BENEFICIAL OWNERS AND MANAGEMENT

The following table provides information, as of March 1, 2011, unless otherwise indicated, about the beneficial ownership of our common stock by –

·                  each stockholder known by us to be the beneficial owner of more than 5% of our common stock,

·                  each director and director nominee,

·                  each person currently serving as one of our executive officers named in the Summary Compensation Table — see “Executive Compensation” below, and

·                  all of our current executive officers and directors as a group.

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*                 Less than 0.5%

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PROPOSAL NO. 1

ELECTION OF DIRECTORS

Nominees

We have nominated for re-election at the meeting Thomas J Fitzmyers, Earl F. Cheit and Barry Lawson Williams, whose terms as directors expire in 2011.  Below are the names of our directors and information about them.  The persons authorized to vote the shares represented by proxies in the enclosed form intend to vote for Mr. Fitzmyers, Mr. Cheit and Mr. Williams.  Under our Bylaws, the stockholders will not be permitted to nominate anyone at the meeting.  If stockholders cast any votes at the meeting for any candidates other than those that we have nominated, the persons authorized to vote shares represented by proxies in the enclosed form, except for proxies withholding authority to vote for the election of directors or for any particular nominees, will have full discretion and authority to vote for any or all of the nominees in such order as those persons may determine.

Executive Officers

Our executive officers include Barclay Simpson and Thomas J Fitzmyers.  They are also executive officers and directors of some of our subsidiaries.  Karen Colonias, age 53, is our Chief Financial Officer, Treasurer and Secretary. Michael J. Herbert, age 52, and Jeffrey E. Mackenzie, age 49, are our Vice Presidents.  Phillip T. Kingsfather, age 64, is a director and the President and Chief Executive Officer of our subsidiary, Simpson Strong-Tie Company Inc.  We regard Mr. Kingsfather as one of our executive officers, because he performs management policy-making functions for us.

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Director Qualifications and Biographical Information

Our directors are individuals of reputation, integrity and accomplishment. They bring to Board issues a range of talents, including a customer-oriented focus, useful education, and experience and insights.  A majority of our outside directors must be independent.  To be independent, an outside director must have no financial, family or close personal ties to us or our executives and must meet the NYSE regulatory standard of independence.  New directors are oriented to our business and governance through meetings with our officers and directors and visits to our facilities.  We also support, and pay for, participation in continuing education programs to assist directors in performing their Board responsibilities.

Barclay Simpson has been the Chairman of our Board of Directors since 1994.  He has been with our management since our inception in 1956.  Mr. Simpson also is a member of the Boards of Directors of the University Art Museum of the University of California, Berkeley, and the California College of the Arts.  He is also active in other charitable and educational institutions.  Mr. Simpson’s experience in our industry spans more than 50 years, and his ownership stake in our company closely aligns his interests with those of our other stockholders.

Thomas J Fitzmyers has served as our President and as a director since 1978.  He has served as our Chief Executive Officer since 1994.  He has served as a director of our subsidiary, Simpson Strong-Tie Company Inc., since 1983 and as its Chief Executive Officer from 1983 to February 2009.  He also served as a director of our subsidiary, Simpson Dura-Vent Company, Inc., from 1982 until its disposition in August 2010.  Mr. Fitzmyers was employed by Union Bank from 1971 to 1978.  He was a Regional Vice President when he left Union Bank to join us in 1978.  Mr. Fitzmyers’ experience as President and Chief Executive Officer of Simpson Manufacturing Co., Inc. gives him unique and invaluable insights into the challenges that may arise and our operations.

Jennifer A. Chatman is the Paul J. Cortese Distinguished Professor of Management, Haas School of Business, University of California, Berkeley.  Before joining the Berkeley faculty in 1993, she was a professor at the Kellogg Graduate School of Management, Northwestern University. She received her Ph.D. from University of California, Berkeley in 1988.  She is a member of the Board of Trustees of Prospect Sierra School.  In addition to her research and teaching at University of California, Berkeley, she consults with a wide range of organizations and teaches in executive development programs at a variety of universities.  Ms. Chatman brings to our Board a deep understanding of organizational structure, leadership and compensation that gives us an objective perspective in interpreting and leveraging our unique culture to achieve our strategic objectives.

Earl F. Cheit is Dean and Edgar F. Kaiser Professor Emeritus, Haas School of Business, University of California, Berkeley.  Until 2001, he was Chairman of the Board of YCI, a consumer products company, and Senior Advisor, Asia Pacific Economic Affairs, The Asia Foundation.  He is a member of the Audit Committee of the Evelyn and Walter Haas, Jr. Fund, a Trustee of Mills College, a Trustee Emeritus of the University of California, Berkeley, Foundation, and founding Chairman of Cal Performances, the performing arts presenter and commissioner at the University of California, Berkeley.  He is a member of the Bay Area Council’s Business Hall of Fame selection committee.  Mr. Cheit brings a wealth of academic and industry experience to our Board of Directors as well as an understanding of global economies, management and corporate governance.

Gary M. Cusumano has over 35 years of experience with The Newhall Land and Farming Company, most recently as its Chairman.  He retired from Newhall Land and Farming Company in January 2006.  He is a director of Granite Construction, Inc., Forest Lawn Memorial Park and the J.G. Boswell Company, was formerly a director of Sunkist Growers, Inc., Watkins-Johnson Company and Zero Corporation and has served on the boards of many not-for-profit and community service organizations.  Mr. Cusumano’s service as Chairman of the Newhall Land and Farming Company and his board service with Granite Construction provide our Board of Directors with the perspective and expertise of a publicly traded New York Stock Exchange company and real estate developer.

Peter N. Louras, Jr. is a retired corporate executive.  He joined The Clorox Company in 1980 and was Group Vice President from May 1992 until his retirement in July 2000.  In this position, he served on The Clorox Company’s Executive Committee with overall responsibility for its international business activities and business development function, including acquisitions and divestitures.  Before joining The Clorox Company, Mr. Louras, a certified public accountant, worked at Price Waterhouse in its offices in both San Francisco, California, and Philadelphia, Pennsylvania.  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 Directors of Dealer Fusion, a privately owned company.  Mr. Louras

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actively participates in civic projects and serves on the boards of various not-for-profit organizations. Mr. Louras’ business background provides the Board of Directors with a global perspective and hands-on experience in business development and strategic acquisitions. Mr. Louras also brings his financial accounting expertise to his role as Chair of the Audit Committee.

Robin G. MacGillivray became Senior Vice President — One AT&T Integration for AT&T in January 2010.  In this role, she is overseeing the implementation of several corporate initiatives designed to further integrate merged organizations and operations for optimal customer service and financial performance.  Prior to that she was Senior Vice President — Regional and Local Markets, responsible for service and sales to AT&T’s small business customers nationwide.  She previously served as Senior Vice President — Strategic Process Improvement, where she oversaw that company’s call center transformation, DSL improvement, and sales and marketing process standardization efforts.  Ms. MacGillivray joined AT&T in 1979, after receiving her bachelor’s degree in journalism from the School of Journalism and her master’s degree in telecommunications management from the Annenberg School of Communications, both at the University of Southern California.  She completed the Stanford Executive Program at Stanford University in 1997.  She has worked in numerous AT&T organizations and functions, including Engineering, Operations, Finance, Human Resources, Marketing, Customer Service and Sales.  She is the former President of the Board of Directors of the Girl Scouts of Northern California.  Ms. MacGillivray has extensive experience is managing complex businesses in highly competitive and rapidly changing environments and has cultivated this experience from a variety of functional areas.

Barry Lawson Williams is the retired General Partner of Williams Pacific Ventures Inc., a business and real estate investing and consulting firm.  He is a director of PG&E Corporation, SLM Corp., CH2M HILL Companies, Ltd., Ameron International Corporation, Northwestern Mutual Life Insurance Co. and, until January 2010, R.H. Donnelley & Company.  Mr. Williams is a director for several not-for-profit organizations, including African American Experience Fund, Resources Legacy Fund, Management Leadership for Tomorrow and the Oakland 100 Club.  Mr. Williams’ brings invaluable experience to our Board of Directors in several areas, including financial and acquisition analysis and real estate development, and in his extensive service on several high-profile boards.  He also brings legal and environmental experience and a broad understanding of relevant accounting and governance issues that we encounter.

Karen Colonias was appointed as our and our subsidiaries’ Chief Financial Officer, Treasurer and Secretary in May 2009.  From 2004 to May 2009, she held the position of Vice President and Branch Manager of Simpson Strong-Tie’s Stockton, California, manufacturing facility.  She joined Simpson Strong-Tie in 1984 as an engineer in the research and development department, where she was responsible for the design and testing of new products and code development.  In 1998, she was promoted to Vice President of Engineering of Simpson Strong-Tie, where she was responsible for Simpson Strong-Tie’s research and development efforts.  Prior to joining Simpson Strong-Tie, she worked as a civil engineer for the Bechtel Corporation.  Ms. Colonias has a BS in Engineering and an MBA and is also a licensed professional engineer.

Michael J. Herbert became Vice President in May 2009, responsible for our international operations outside of North America.  From 2000 to May 2009, he served as our and our subsidiaries’ Chief Financial Officer, Treasurer and Secretary.  From 1988 to 2000, he held various financial management positions, with his last position as Director of Finance, with Sun Microsystems, Inc.

Jeffrey E. Mackenzie was appointed Vice President in December 2008.  From November 2000 to December 2008, he served as our Financial Reporting Manager, overseeing our external reporting and managing various other accounting and finance functions.

Phillip T. Kingsfather has served as the President and Chief Executive Officer of Simpson Strong-Tie Company Inc. since February 2009.  From August 2006 to February 2009, he served as President and Chief Operating Officer of Simpson Strong-Tie Company Inc.  His career with us started in 1979 as an Outside Sales Representative in the Pacific Northwest for Simpson Strong-Tie Company Inc.  In 1985, he became Regional Sales Manager.  He joined our Anchor Systems sales team in 1997 and was instrumental in the launch of this product line.  In 2003, he was promoted to Vice President in charge of our Anchor Systems product line, where he served until August 2006.

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Independence

The New York Stock Exchange corporate governance rules require that the board of directors of a listed company consist of a majority of independent directors.  A majority of our directors are independent under those rules.

Our Board of Directors follows the independence standards required by the New York Stock Exchange corporate governance rules to determine director independence.  Those standards provide that a director will not be independent of a listed company if:

·                  the director is, or has been within the last 3 years, an employee of the listed company, or an immediate family member is, or has been within the last 3 years, an executive officer, of the listed company;

·                  the director has received, or has an immediate family member who has received, during any 12-month period within the last 3 years, more than $120,000 in direct compensation from the listed company, other than director and committee fees and pension or other forms of deferred compensation for prior service, provided such compensation is not contingent in any way on continued service;

·                  (a) the director is a current partner or employee of a firm that is the company’s internal or external auditor; (b) the director has an immediate family member who is a current partner of such a firm; (c) the director has an immediate family member who is a current employee of such a firm and personally works on the listed company’s audit; or (d) the director or an immediate family member was within the last 3 years a partner or employee of such a firm and personally worked on the listed company’s audit within that time;

·                  the director or an immediate family member is, or has been within the last 3 years, employed as an executive officer of another company where any of the listed company’s present executive officers at the same time serves or served on the other company’s compensation committee; or

·                  the director is a current employee, or an immediate family member is a current executive officer, of another company that has made payments to, or received payments from, the listed company for property or services in an amount that, in any of the last 3 fiscal years, exceeded the greater of $1,000,000 or 2% of the other company’s consolidated gross revenues.

For purposes of these standards, “immediate family member” includes a director’s spouse, parents, children, siblings, mothers- and fathers-in-law, sons- and daughters-in-law, brothers- and sisters-in-law, and anyone, other than any domestic employee, who shares the director’s home.

Applying these independence standards, our Board of Directors has affirmatively determined that Mr. Cheit, Mr. Louras, Mr. Williams, Ms. Chatman and Ms. MacGillivray are each independent under the New York Stock Exchange corporate governance rules, in that none of them has a material relationship with us, either directly or as a partner, shareholder, officer or employee of an organization that has a relationship with us.  Our Board of Directors has determined that our other directors, Mr. Simpson, Mr. Cusumano, and Mr. Fitzmyers, are not independent under those rules.  In making its determination, our Board of Directors considered all relevant facts and circumstances, including commercial, industrial, banking, consulting, legal, accounting, charitable and familial relationships, and considered the issue not merely from the standpoint of a director, but also from that of persons or organizations with which a director has an affiliation.

Criteria and Diversity

In considering whether to nominate any candidate to serve on our Board of Directors, the Governance and Nominating Committee of our Board of Directors considers the candidate’s education, business experience, financial expertise, industry experience, business acumen, interpersonal skills, vision, teamwork, integrity, strategic ability and customer focus.  Our Board of Directors does not assign specific weights to particular criteria and no particular criterion is necessarily applicable to all prospective nominees.  Our Board of Directors also believes that the backgrounds and qualifications of the directors, considered as a group, should provide a significant composite mix of experience, knowledge and abilities that will allow our Board of Directors to fulfill its responsibilities.  Nominees are not discriminated against on the basis of gender, race, religion, national origin, sexual orientation or disability.

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Attendance at Meetings

Our Board of Directors held 9 meetings in 2010.  Its committees held a total of 27 meetings in 2010, including 7 meetings of the Audit Committee, 11 meetings of the Compensation and Leadership Development Committee, 4 meetings of the Governance and Nominating Committee and 5 meetings of the Acquisition and Strategy Committee.  Each director attended at least 75% of the meetings of our Board of Directors and at least 75% of the meetings of the committees on which he or she served in 2010.  All of our directors attended the annual meeting of our stockholders in 2010, although we do not have a policy that requires our directors to attend the annual meeting of stockholders.

Leadership Structure and the Board of Directors Role in Risk Management

Our Board of Directors and its committees take an active role in overseeing management of our risks.  The Board regularly reviews information regarding our operational, financial, legal and strategic risks.  Our Compensation and Leadership Development Committee is responsible for overseeing the management of risks relating to our compensation plans; our Audit Committee oversees management of our financial risks; and our Governance and Nominating Committee manages risks associated with the independence of the Board of Directors and potential conflicts of interest.  In 2009, our Board of Directors created the Acquisition and Strategy Committee, whose role in risk management includes evaluating and managing our strategic risks.  While each committee is responsible for evaluating certain risks and overseeing the management of these risks, our entire Board of Directors is regularly informed about such risks through committee and executive officer reports.

For many years the roles of our Chairman and our Chief Executive Officer have been separated.  We believe that this is appropriate under current circumstances, because it allows management to make the operating decisions necessary to manage the business, while helping to keep a measure of independence between the oversight function of our Board of Directors and operating decisions.  We feel that this has provided an appropriate balance of operational focus, flexibility and oversight.

Our independent directors meet at regularly scheduled executive sessions without members of management.  In 2010, our Board of Directors created the role of Lead Independent Director and appointed Earl F. Cheit to that role.  The Lead Independent Director participates in setting the agenda of Board of Directors and Committee meetings, coordinates the distribution and presentation of meeting materials, maintains the focus and punctuality of Board of Directors and Committee meetings and presides over executive session meetings of the independent directors.

Communications with our Board of Directors

We encourage stockholders and interested parties to communicate any concerns or suggestions directly to the independent members of our Board of Directors, by writing to:

Board of Directors

Simpson Manufacturing Co., Inc.

P.O. Box 1394

Alamo, CA 94507-7394

OUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” THE ELECTION OF THOMAS J FITZMYERS, EARL F. CHEIT AND BARRY LAWSON WILLIAMS, THE THREE NOMINEES FOR DIRECTOR AT THIS MEETING.

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PROPOSAL NO. 2

APPROVAL OF THE SIMPSON MANUFACTURING CO., INC. 2011 INCENTIVE PLAN

At the annual meeting, we will ask our stockholders to consider a proposal to approve the Simpson Manufacturing Co., Inc. 2011 Incentive Plan.  The 2011 Incentive Plan is intended to incorporate and replace both the Simpson Manufacturing Co., Inc. 1994 Stock Option Plan and the Simpson Manufacturing Co., Inc. 1995 Independent Director Stock Option Plan, both of which will expire in May 2012.  In addition, both the 1994 Stock Option Plan and the 1995 Independent Director Stock Option Plan provide for granting only stock options.  The 2011 Incentive Plan, however, will provide for awards of restricted stock and restricted stock units, as well as stock options, affording us greater flexibility in formulating and implementing our compensation programs.  Nevertheless, we currently anticipate that awards under the 2011 Incentive Plan will, in the aggregate, be substantially consistent in economic substance with our existing policies and practices regarding granting employee stock options.

In adopting the 2011 Incentive Plan, our Board of Directors determined that it will become effective only when our stockholders approve it.  Our Board of Directors believes that approval of the 2011 Incentive Plan is in our and our stockholders’ best interests.

By affording our qualified employees, directors and consultants the opportunity to buy or own shares of our common stock, we intend the 2011 Incentive Plan to help us to attract and retain qualified individuals as employees, directors and consultants and to provide such individuals with incentives to continue in our service, devote their best efforts to our business and improve our economic performance, thus enhancing our value for the benefit of stockholders.

Coordination with 1994 Stock Option Plan and the 1995 Independent Director Stock Option Plan

Any stock option granted under the 1994 Stock Option Plan or the 1995 Independent Director Stock Option Plan that has not been exercised in full and that has not expired or terminated will continue in effect in accordance with its terms and conditions and will continue to be subject to and governed by the 1994 Stock Option Plan or the 1995 Independent Director Stock Option Plan, respectively, as in effect before the adoption of the 2011 Incentive Plan.

Common Stock Subject to the 2011 Incentive Plan

Our Board of Directors has determined that an aggregate of 16,320,000 shares of our common stock may be issued on exercise of stock options or pursuant to awards of restricted stock or restricted stock units under the 2011 Incentive Plan.  Those shares include all shares heretofore reserved for issuance pursuant to the 1994 Stock Option Plan or the 1995 Independent Director Stock Option Plan.  Of those 16,320,000 shares, 10,455,566 shares have been issued and 5,864,434 shares will remain available under the 2011 Incentive Plan.

Not more than an aggregate of 150,000 shares of our common stock may be subject to stock options granted in any calendar year to any one participant under the 2011 Incentive Plan.  Not more than an aggregate of 50,000 shares of our common stock may be subject to awards of restricted stock or restricted stock units in any one calendar year to any one participant under the 2011 Incentive Plan.

The above limitations are subject to proportionate adjustment in case of any stock split, stock dividend, recapitalization or other change in our capitalization generally.  In addition, shares of our common stock subject to awards under the 2011 Incentive Plan or stock options granted under the 1994 Stock Option Plan or the 1995 Independent Director Stock Option Plan that are forfeited, terminated, canceled or settled without the delivery of common stock, will again be available for awards under the 2011 Incentive Plan as if such awards or grants had not been made, except that the aggregate number of shares of common stock that may be issued under the 2011 Incentive Plan will not be increased by shares of common stock tendered in full or partial payment of the exercise price of any stock option, shares of common stock withheld to satisfy any tax withholding obligation or shares of common stock that we repurchase.

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Administration by the Compensation and Leadership Development Committee

Our Board of Directors has delegated the administration of the 2011 Incentive Plan to the Compensation and Leadership Development Committee.  If our stockholders approve the 2011 Incentive Plan, the Compensation and Leadership Development Committee will determine -

·                  who will be granted options, restricted stock or restricted stock units,

·                  the time, type, size and terms of awards,

·                  in the case of any grant of a stock option, whether it will be an incentive stock option or a non-qualified stock option (or “NQSO”), and

·                  the form, terms and conditions of the agreement relating to each award.

The Compensation and Leadership Development Committee has full authority, among other things, to interpret the 2011 Incentive Plan and grants under it, to establish, amend and rescind any rules and regulations relating to the 2011 Incentive Plan, and to make any other determinations that the Compensation and Leadership Development Committee believes necessary or advisable for the administration of the 2011 Incentive Plan.

The Compensation and Leadership Development Committee will select employees, directors and consultants to participate in the 2011 Incentive Plan on the basis of their past and anticipated future contributions.  Under the 2011 Incentive Plan, we may grant incentive stock options, non-qualified stock options, restricted stock or restricted stock units.

Vesting of Awards

The Compensation and Leadership Development Committee may base the date or dates on which a stock option becomes exercisable or an award of restricted stock or restricted stock units becomes unrestricted on performance or other criteria, although no stock option may be exercised more than 10 years from its grant.  The Compensation and Leadership Development Committee may divide the number of shares of our common stock subject to an award under the 2011 Incentive Plan into periodic installments, with the stock option becoming exercisable or the restricted stock or restricted stock units becoming unrestricted (“vesting”) during each installment period with respect to the portion allotted to that period.  Vesting provisions and restrictions may vary among awards.  The Compensation and Leadership Development Committee has discretion to waive any of the vesting provisions or restrictions that apply to outstanding awards.

Generally, the Compensation and Leadership Development Committee currently intends to grant options under the 2011 Incentive Plan that vest (become exercisable) in increments over 4 years and to grant restricted stock or restricted stock units under the 2011 Incentive Plan that vest (become unrestricted) over 3 years, except that awards of options, restricted stock or restricted stock units granted to an employee who has reached age 60 and ceases to be employed by us will fully vest on the employee’s termination date.

The Compensation and Leadership Development Committee may grant awards of restricted stock or restricted stock units to any participant in the 2011 Incentive Plan, but does not plan to grant any awards of restricted stock or restricted stock units until 2012.  At that time, the Compensation and Leadership Development Committee plans to consider the specific nature and extent of restrictions that will apply to those awards.  On receiving an award of restricted stock, a recipient will be entitled to the voting, dividend and other rights incident to ownership of our common stock with respect to the restricted stock, as set forth in the applicable agreement or as determined by the Compensation and Leadership Development Committee.

Awards Non-Transferable

Generally, stock options, restricted stock and restricted stock units awarded under the 2011 Incentive Plan will not be transferable, although shares of restricted stock will become transferable after the applicable restrictions terminate.  The Compensation and Leadership Development Committee may, however, determine that a recipient’s rights and interests in an award under the 2011 Incentive Plan may be made transferable by the recipient, subject to such conditions as the Compensation and Leadership Development Committee may specify.  A recipient of a stock option under the 2011 Incentive Plan will not have any rights of a stockholder under the stock option, unless and until the stock option is exercised and shares subject to it are issued to the recipient, and then only with respect to such shares.

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Change in Control

The 2011 Incentive Plan defines “change in control” as one of the following:

·                  a merger or consolidation in which we are not the surviving corporation, unless our stockholders immediately before the merger or consolidation continue to have substantially the same proportionate ownership in our successor entity immediately thereafter,

·                  a reverse merger in which we are the surviving corporation, but as part of the merger the outstanding shares of our common stock convert into other securities, cash or other property, unless our stockholders immediately before the reverse merger continue to have substantially the same proportionate ownership in our successor entity immediately thereafter, or

·                  the approval by our stockholders of a plan or proposal for our dissolution or liquidation.

The 2011 Incentive Plan provides generally that, on a change in control, except as otherwise provided in agreements applicable to particular awards:

·                  Our successor must assume all outstanding options or substitute similar options, or all outstanding options will continue in full force and effect, except as described in the next sentence.  If our successor refuses to assume or continue the options or to substitute similar options, and if the nature and terms of employment or engagement, including compensation and benefits, of the stock option holders will change significantly as a result of the change in control, each such stock option will become immediately vested (exercisable) in full, and will be terminated if not exercised before or at the time of such change in control.

·                  Our successor must substitute similar benefits for outstanding restricted stock and restricted stock units or all outstanding restricted stock and restricted stock units will continue in full force and effect, except as described in the next sentence.  If our successor refuses to substitute similar benefits for such restricted stock and restricted stock units and refuses to continue such restricted stock and restricted stock units in full force and effect, and if the nature and terms of employment or engagement, including compensation and benefits, of the holders of such restricted stock and restricted stock units will change significantly as a result of the change in control, such restricted stock and restricted stock units will vest (become unrestricted) at the time of such change in control.

In connection with a change in control, the Compensation and Leadership Development Committee may, however, require that any outstanding stock option, restricted stock or restricted stock award (or part of it) will be cancelled in exchange for payment in cash of the fair market value of the award.  The retirement and change in control provisions apply to all participants in our 2011 Incentive Plan, including our Principal Executive Officer, our Principal Financial Officer and our 3 other most highly compensated executive officers.

Forfeiture

Except as otherwise provided by the agreement applicable to an award under the 2011 Incentive Plan, the Compensation and Leadership Development Committee may require a recipient to forfeit all unexercised, unearned, unvested or unpaid awards under the 2011 Incentive Plan, if the Compensation and Leadership Development Committee determines that:  (a) the recipient, while employed by us, has prepared to engage or has engaged, directly or indirectly, without our written consent, in any manner or capacity, in any business or activity competitive with any business that we conduct; (b) the recipient has performed any act or engaged in any activity that is materially detrimental to our best interests; or (c) the recipient has materially breached any agreement with us or duty to us.

No Other Rights

Nothing in the 2011 Incentive Plan, or in any award granted under it, will confer on any person any right to continue in our employment or service or will limit, interfere with or otherwise affect in any way our right to terminate any recipient’s employment or service at any time.  Nothing in the 2011 Incentive Plan will prevent, limit or otherwise affect our authority with respect to any other or additional compensation arrangements.  No person has or will have any claim or right to be granted an award under the 2011 Incentive Plan.

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Prior Grants under 1994 Stock Option Plan and the 1995 Independent Director Stock Option Plan

The stock options that we have granted under the 1994 Stock Option Plan and the 1995 Independent Director Stock Option Plan will continue in effect according to their terms and will continue to be governed by those Plans.  We have granted the following stock options, all of which are non-qualified stock options, under the 1994 Stock Option Plan and the 1995 Independent Director Stock Option Plan to the following persons in the amounts and at the exercise prices indicated:

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The closing market price of a share of our common stock, as reported by the New York Stock Exchange on March 1, 2011, was $27.90.

Awards of Stock Options

Several conditions apply to incentive stock options generally, in accordance with the Internal Revenue Code.  Only employees are entitled to receive grants of incentive stock options.  If we grant an incentive stock option, the special federal income tax treatment accorded to incentive stock options (discussed below) is available only if, among other requirements, —

·                  the optionee does not sell the shares received on exercise of the stock option until at least 2 years after we grant the stock option and 1 year after its exercise, and

·                  we employ the optionee at all times from the date the stock option is granted to 3 months before the exercise of the option.

In addition, to the extent that incentive stock options granted under the 2011 Incentive Plan that vest in any year allow an optionee to acquire our common stock with a fair market value of more than $100,000, those incentive stock options are treated as non-qualified stock options.  We have not previously granted any incentive stock options and currently have no plans to do so.

In general, on exercising a stock option granted under the 2011 Incentive Plan, the optionee must pay us the exercise price in cash.  The Compensation and Leadership Development Committee has discretion to allow the optionee to pay the exercise price, either at the time the stock option is granted or when the optionee exercises it, by delivering shares of our common stock to us, or according to a deferred payment arrangement, or in some other manner.  If the Compensation and Leadership Development Committee allows the optionee to defer payment for the exercise of an option, we charge the optionee interest at least annually on the deferred amount at the minimum rate that avoids characterization of any of the exercise price as interest under the Internal Revenue Code or, if less, at the maximum rate permitted by law.

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The grant of a non-qualified stock option under the 2011 Incentive Plan should not have any federal income tax consequences.  On exercising a non-qualified stock option, the optionee generally recognizes taxable ordinary income equal to the excess of (a) the fair market value of the shares of our common stock purchased on such exercise, over (b) the stock option exercise price for those shares.  We generally must withhold tax from the optionee’s regular or supplemental wages based on the amount of ordinary income that the optionee recognizes and we are generally entitled to a business expense deduction in that amount.  To the extent provided in an option, the optionee may satisfy the withholding obligation by paying cash, by authorizing us to withhold shares from the shares the optionee would otherwise receive on exercising the option, or by delivering to us shares of our common stock that the optionee already owns.

When an optionee sells shares acquired by exercising a non-qualified stock option, the optionee recognizes capital gain or loss equal to the difference between the selling price for those shares and the fair market value of the shares when the optionee exercises the option.  If the optionee holds the shares for a year or more after exercising the non-qualified stock option (not including the time the optionee holds the stock option before exercising it), any gain on the sale of those shares is long-term capital gain.  An optionee’s sale of shares acquired on exercise of a non-qualified stock option has no tax consequences to us.

The grant of an incentive stock option under the 2011 Incentive Plan generally has no federal income tax consequences to the optionee.  Similarly, the optionee should not recognize any income on exercising an incentive stock option.  The optionee recognizes income with respect to an incentive stock option when the optionee sells the shares acquired on exercise of the option, and the optionee then generally recognizes capital gain or loss equal to the difference between the selling price and the stock option exercise price for those shares.  This federal income tax treatment is available, however, only if the optionee does not sell the shares acquired on exercise of an incentive stock option until at least 2 years after the stock option grant and at least 1 year after the stock option exercise.  If an optionee sells the shares before holding them for the required period (a disqualifying disposition), the shares are treated similarly to shares acquired through the exercise of a non-qualified stock option — the optionee generally recognizes as ordinary income in the year of the sale the excess of the fair market value of the shares when the optionee exercises the stock option over the stock option exercise price for those shares, and recognizes as capital gain the excess, if any, of the selling price over the fair market value of the shares when the optionee exercises the option.  If an optionee sells the shares before holding them for the required period at a price less than fair market value of the shares when the optionee exercises the option, the optionee recognizes ordinary income equal to the excess, if any, of the amount realized on the sale over the exercise price.  In case of a disqualifying disposition, we generally can take a business expense deduction in an amount equal to the amount the optionee recognizes as ordinary income.

Exercise of an incentive stock option may have implications with respect to alternative minimum tax.  After calculating regular tax liability, a taxpayer must determine whether he or she owes alternative minimum tax by recalculating his or her tax by disallowing certain deductions and adding certain items to income.  The alternative minimum tax calculation requires an optionee to include in income the excess of the fair market value of the shares at the time of exercise over the stock option exercise price, potentially resulting in federal tax of up to 28% on such amount.

Currently, the maximum marginal federal income tax rate on an individual’s net long-term capital gains is 15% and on an individual’s ordinary income is 35%.  Because an individual may deduct up to $3,000 of net capital losses in any year, it may be advantageous to characterize gain as long-term capital gain if the optionee has capital losses from other investments.

Except as otherwise provided in the applicable stock option agreement and with other exceptions provided in the 2011 Incentive Plan:

·                  If an optionee’s employment with us or engagement as our outside director or consultant ceases for a reason other than retirement after age 60, disability or death, each stock option held by the optionee will be exercisable, at any time or from time to time, before the earlier of the fixed termination date set forth in the stock option agreement and the ninetieth day after the cessation of the optionee’s employment or engagement, for the number of shares that the optionee could have acquired on exercise of the stock option immediately before the cessation of the optionee’s employment or engagement.

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·                  If our employee who holds a stock option dies while employed, during the period when the employee, if disabled, would be entitled to exercise the stock option, or after the employee’s retirement after age 60, the stock option will be exercisable until the fixed termination date set forth in the stock option agreement for the number of shares that the employee could have acquired on exercise of the stock option immediately before the employee’s death.

·                  If our employee who holds a stock option ceases to be employed with us because of disability, the stock option will be exercisable until the fixed termination date set forth in the stock option agreement for the number of shares that the employee could have acquired on exercise of the stock option immediately before the employee’s disability.

·                  If our employee who holds a stock option ceases to be employed with us because of retirement after age 60, the stock option will be exercisable until the fixed termination date set forth in the stock option agreement for the number of shares that the employee could have acquired on exercise of the stock option immediately before the employee’s retirement.

·                  If the service with us of an outside director or consultant who holds a stock option ceases by reason of retirement, disability or death, the stock option will be exercisable until the fixed termination date set forth in the stock option agreement for the number of shares that the outside director or consultant could have acquired on exercise of the stock option immediately before the outside director’s or consultant’s retirement, disability or death.

If the optionee does not exercise the stock option within that time, the stock option terminates.  Any stock option or portion of a stock option that is not vested when the optionee ceases to be our employee, outside director or consultant terminates on that date and cannot be exercised thereafter.

Notwithstanding the cessation of employment or service of an optionee, the Compensation and Leadership Development Committee may extend the expiration date of any stock option held by the optionee, but not beyond the expiration date of the stock option set forth in the applicable stock option agreement.

Awards of Restricted Stock and Restricted Stock Units

Restricted stock will constitute issued and outstanding shares of our common stock, except that a recipient will not be entitled to delivery of a certificate representing restricted stock until expiration of the restrictions applicable to it, and we will retain custody of all restricted stock issued as a dividend or otherwise with respect to restricted stock, which will be subject to the same restrictions, terms and conditions as are applicable to the awarded restricted stock.  No Restricted Stock will bear interest or be segregated in a separate account.  Restricted stock units constitute only our agreement to issue shares of our common stock or cash to the recipient after the applicable restricted period in consideration of the performance of services, and the recipient will not have any rights as a stockholder with respect to the shares of our common stock subject to the restricted stock units until such time, if any, as shares of our common stock are delivered to the recipient pursuant to the applicable agreement.  The Compensation and Leadership Development Committee currently expects that recipients of awards of restricted stock or restricted stock units may not be required to pay for the awards or, if required to pay, may be required to pay less than the fair market value of the restricted stock or restricted stock units.

The grant of a restricted stock or restricted stock unit award under the 2011 Incentive Plan should not have any federal income tax consequences, unless, in the case of a restricted stock award, the recipient makes an election under Internal Revenue Code section 83(b).  On the lapse of the restrictions of a restricted stock unit award, or a restricted stock award for which the recipient does not make an election under Internal Revenue Code section 83(b), the recipient generally recognizes taxable ordinary income equal to the fair market value of the shares of our common stock received at that time.  If a recipient of an award of restricted stock makes an election under Internal Revenue Code section 83(b) within 30 days of receiving the award, the recipient will recognize taxable ordinary income at that time equal to the then fair market value of the shares of common stock to which the award relates, but will not be subject to income tax when the restrictions lapse.  We generally must withhold tax from the recipient’s regular or supplemental wages based on the amount of ordinary income that the recipient recognizes and we are generally entitled to a business expense deduction in that amount.  To the extent provided in a restricted stock or restricted stock unit award, the recipient may satisfy the withholding obligation by paying cash or by authorizing us to withhold shares from the shares the recipient would otherwise receive on the lapse of the restrictions.

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When a recipient sells shares of restricted stock for which no election was made under Internal Revenue Code section 83(b), or sells shares acquired under a restricted stock unit award, the recipient recognizes capital gain or loss equal to the difference between the selling price for the shares and the fair market value of the shares when the restrictions lapse.  If a recipient of restricted stock has made an election under Internal Revenue Code section 83(b), on selling the shares of restricted stock the recipient recognizes capital gain or loss equal to the difference between the selling price for the shares and the fair market value of the shares when the award was granted.  If the recipient holds the shares for a year or more after reporting ordinary income on the award (either when an election was made under Internal Revenue Code section 83(b) or when the restrictions lapsed), any gain on the sale of those shares is long-term capital gain.  A recipient’s sale of shares acquired on the grant of a restricted stock or restricted stock unit award generally has no tax consequences to us.

Currently, the maximum marginal federal income tax rate on an individual’s net long-term capital gains is 15% and on an individual’s ordinary income is 35%.  Because an individual may deduct up to $3,000 of net capital losses in any year, it may be advantageous to characterize gain as long-term capital gain if the recipient has capital losses from other investments.

In general, if a recipient of an award of restricted stock or restricted stock units under the 2011 Incentive Plan ceases to be our employee, director or consultant, the recipient will be entitled to the shares of our common stock issued pursuant to the award, to the extent that the restrictions on the award have lapsed at that time.  Any restricted stock or restricted stock unit award terminates to the extent that the restrictions apply at that time.

Other Matters

Without the approval of our stockholders, except for adjustments for stock splits, stock dividends, recapitalizations and other changes in our capitalization generally and except for the change in control provisions, we will not:

·                  authorize the amendment of any outstanding stock option to reduce its exercise price;

·                  cancel and replace any outstanding stock option with another stock option having a lower exercise price, or for another award, or for cash; or

·                  pay a cash bonus or grant or sell another award at the time of exercise of a stock option.

The Compensation and Leadership Development Committee may suspend or terminate the 2011 Incentive Plan at any time.  We will not grant any awards under the 2011 Incentive Plan after it is terminated.  Termination of the 2011 Incentive Plan will not, however, affect any awards of stock options, restricted stock or restricted stock units made before the termination.  The Compensation and Leadership Development Committee may amend the 2011 Incentive Plan at any time, subject in some cases to the approval of our stockholders.

The 2011 Incentive Plan is not subject to any provisions of the Employee Retirement Income Security Act of 1974 and is not qualified under Internal Revenue Code section 401(a).

If our stockholders approve the 2011 Incentive Plan, we plan to register the shares of our common stock issuable under the 2011 Incentive Plan by filing a registration statement on Form S-8 with the Securities and Exchange Commission under the Securities Act of 1933.  At the same time, we plan to register for resale the shares of our common stock that are subject to the 2011 Incentive Plan by filing with that registration statement a reoffer prospectus on Form S-3.  When that registration is effective, recipients of shares of our common stock under the 2011 Incentive Plan generally will not be subject to restrictions on re-sale of those shares.

Internal Revenue Code section 409A generally provides that deferred compensation that does not satisfy the requirements of section 409A is taxable to the recipient when it vests and is subject to an additional penalty of 20% of the deferred compensation.  Treasury Regulations under section 409A provide that incentive stock options and non-qualified stock options that are issued to purchase stock generally are not treated as deferred compensation arrangements subject to section 409A, if the exercise price of the options may never be less than the fair market value of the underlying stock when the options are granted.  The 2011 Incentive Plan is intended to cause awards granted under it not to be subject to section 409A.

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A copy of the 2011 Incentive Plan is attached to this Proxy Statement as Exhibit A and is incorporated herein by this reference.  The description of the 2011 Incentive Plan in this Proxy Statement is qualified in its entirety by reference to Exhibit A attached hereto.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” APPROVAL OF THE SIMPSON MANUFACTURING CO., INC. 2011 INCENTIVE PLAN, IN THE FORM ATTACHED AS EXHIBIT A.

PROPOSAL NO. 3

RATIFICATION OF SELECTION OF INDEPENDENT

REGISTERED PUBLIC ACCOUNTING FIRM

Our Board of Directors has selected PricewaterhouseCoopers LLP as the principal independent registered public accounting firm to audit our internal controls over financial reporting and our financial statements for 2011.  You will be asked to ratify that selection.  PricewaterhouseCoopers LLP has audited our financial statements since before our initial public offering in 1994.  A PricewaterhouseCoopers LLP representative 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.

OUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” RATIFICATION OF THE SELECTION OF PRICEWATERHOUSECOOPERS LLP.

PROPOSAL NO. 4

ADVISORY VOTE ON THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS

The Dodd-Frank Wall Street Reform and Consumer Protection Act, enacted in July 2010, requires that we provide our stockholders with the opportunity to vote to approve, on a non-binding, advisory basis, the compensation of our named executives officers as disclosed in this proxy statement in accordance with the compensation disclosure rules of the Securities and Exchange Commission.  At this meeting, the stockholders will vote on the following resolution:

RESOLVED that the compensation paid to this corporation’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.

As described below under “Executive Compensation — Compensation Discussion and Analysis,” we seek to closely align the interests of our Principal Executive Officer, our Principal Financial Officer and our 3 other most highly compensated executive officers (our Named Executive Officers) with the interests of our stockholders.  Our compensation programs are designed to reward our Named Executive Officers for the achievement of short-term and long-term strategic and operational goals and the achievement of increased total shareholder value, while at the same time avoiding the encouragement of unnecessary or excessive risk-taking.

The vote on this resolution is not intended to address any specific element of compensation; rather, the vote relates to the compensation of our Named Executive Officers, as described in this proxy statement in accordance with the compensation disclosure rules of the Securities and Exchange Commission.  This vote is advisory, which means that it is not binding on us, our Board of Directors or the Compensation and Leadership Development Committee of our Board of Directors. The Compensation and Leadership Development Committee and our Board or Directors value the views of our stockholders and will take into account the outcome of the vote when considering future compensation decisions for our Named Executive Officers.

OUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” THE ABOVE RESOLUTION TO APPROVE THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS.

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PROPOSAL NO. 5

ADVISORY VOTE ON THE FREQUENCY OF AN

ADVISORY VOTE ON THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS

The Dodd-Frank Wall Street Reform and Consumer Protection Act also provides that stockholders must be given the opportunity to vote, on a non-binding, advisory basis, for their preference as to how frequently we should seek future advisory votes on the compensation of our Named Executive Officers as disclosed in accordance with the compensation disclosure rules of the Securities and Exchange Commission, which we refer to as an advisory vote on the compensation of our Named Executive Officers.  In voting on this Proposal, stockholders may indicate whether they would prefer that we conduct future advisory votes on the compensation of our Named Executive Officers once every one, two, or three years.  Stockholders also may, if they wish, abstain from casting a vote on this proposal.  At this meeting, the stockholders will vote on the following resolution:

RESOLVED that the stockholders recommend, in a non-binding advisory vote, whether a non-binding advisory vote to approve the compensation of this corporation’s named executive officers should occur every one, two or three years.

On this resolution, a stockholder may cast a vote on the preferred voting frequency by selecting the option of one year, two years or three years, or may abstain.  The option receiving the most votes, whether one year, two years or three years, will be the option chosen by the stockholders.

Our Board of Directors has determined that an annual advisory vote on the compensation of our Named Executive Officers will allow our stockholders to provide timely, direct input on our compensation philosophy, policies and practices as disclosed in our proxy statement each year.  Our Board believes that an annual vote is therefore consistent with our efforts to engage in an ongoing dialogue with our stockholders on the compensation of our Named Executive Officers and other corporate governance matters.

The Company recognizes that the stockholders may have different views as to the best approach, and therefore we look forward to hearing from our stockholders as to their preferences on the frequency of an advisory vote on the compensation of our Named Executive Officers.

This vote is advisory, which means that it is not binding on us, our Board of Directors or the Compensation and Leadership Development Committee of our Board of Directors.  Our Board of Directors and its Compensation and Leadership Development Committee will, however, take into account the outcome of the vote when considering the frequency of future advisory votes on the compensation of our Named Executive Officers.  Our Board of Directors may decide that it is in the best interests of our stockholders to hold an advisory vote on the compensation of our Named Executive Officers more or less frequently than the frequency receiving the most votes cast by our stockholders.

The proxy card provides stockholders with the opportunity to choose among four options (holding the vote every one, two or three years, or abstaining) and, therefore, stockholders will not be voting to approve or disapprove the recommendation of our Board of Directors.

OUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” THE OPTION OF “ONE YEAR” AS THE PREFERRED FREQUENCY FOR ADVISORY VOTES ON THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS.

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EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

Summary

Our philosophy on compensation is to closely align the interests of our Named Executive Officers with those of our stockholders.  Our compensation is also structured to give our employees, not just our Named Executive Officers, an opportunity to earn above-market compensation for outstanding performance, measured by our success.  Our Named Executive Officers include our Principal Executive Officer, our Principal Financial Officer and our 3 other most highly compensated executive officers.  We believe that we do this by providing a high degree of incentive to achieve both short-term and long-term goals, goals that when met, also increase our stockholders’ return.  Because payments to our employees depend on our first reaching financial goals, our stockholders participate in our returns before our employees.  To avoid unnecessary or excessive risk-taking in our compensation programs, our goals are focused on branch or company performance, not on individual performance.  Our Named Executive Officers’ total compensation comprises a mix of base salary and retirement plan contributions, a quarterly cash incentive program and long-term equity incentives.

Historically, our programs have rewarded our employees with above-market compensation during highly prosperous periods and have kept a cohesive team of our most valued employees during more challenging economic times, such as we have experienced recently.  Since we use a measure based on operating profit as the basis for both our non-equity incentive plan and our stock option plans, we believe that this is the most relevant measure to evaluate our financial performance for the purpose of making compensation decisions.

This table illustrates the close association of the compensation of our Named Executive Officers with our financial performance.  The other part of our incentive based compensation is stock options.  Stock options are also awarded to participating employees, including our Named Executive Officers, based on performance-based results. Generally, stock option awards are based on achieving the same operating profit goals as our cash profit sharing plans.  Once awarded, however, the value of stock option awards depends on our stock price performance over time.  Stock option awards for our Named Executive Officers vest over 4 years at a rate of 25% per year, so for our employees to realize their value, we must continually improve our operating results.

Because of the recent challenges in residential construction markets, particularly in the United States, the Compensation and Leadership Development Committee, did not make any changes to our Named Executive Officers’ base salaries in 2010, but has increased their salaries by between 3% and 8% for 2011.  In 2009, the contribution to our Named Executive Officers’ profit sharing trust account was reduced from 15% of base salary to 10% of base salary.  The contribution rate has continued at the reduced rate since then.

We encourage you to read this Compensation Discussion and Analysis in its entirety, as well as the information in the Summary Compensation Table and other related tables and disclosures, for an understanding of our compensation programs.

Analysis

The overall philosophy of our compensation program is to provide a high degree of incentive to employees by creating programs that reward achievement of specific profit goals.  We have followed the same philosophy for many years and that experience has continuously reinforced our belief that it successfully drives our financial performance.  We believe that our incentive programs, based on profit targets, align the interests of employees and stockholders, allow us to attract high-performing employees and help us retain the services of employees whose

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contributions are instrumental in achieving our goals.  Historically, as a means of creating a sense of unity and cooperation among our employees, we have not had any special compensation plans exclusively for executive officers.  Our Named Executive Officers are at-will employees.  We do not have a written employment agreement with any of them, and we generally do not offer any severance benefits.  We or the officer can terminate the employment relationship at any time, for any reason, with or without cause.

The primary objective of our overall compensation program is to motivate our Named Executive Officers and other officers and employees to increase stockholder value, and we aim to compensate them fairly relative to our achievement of that objective.  To retain their services, some portion of their compensation, in the form of salary and profit sharing trust contributions, should compensate them for their own investment of time, regardless of the performance of our businesses.  Each element of the compensation of our Named Executive Officers and other officers and employees possesses characteristics intended to motivate them in different ways.  We believe that coordinating the compensation elements helps us to retain the services of our Named Executive Officers, other officers and other key employees and to motivate them to achieve results that increase the value of our common stock.  The following is an analysis of the basic elements of our compensation program.

The Compensation and Leadership Development Committee of our Board of Directors believes that, to maintain a sense of unity and fairness, the forms of compensation for our Named Executive Officers generally should match those of all of our salaried employees.  Our compensation program comprises 4 basic elements:

·                  salary,

·                  payments to our defined contribution profit sharing plan,

·                  cash profit sharing, and

·                  stock options.

Role of Compensation Consultant

The Compensation and Leadership Development Committee may engage independent advisors to assist in carrying out its responsibilities.  In April 2010, the Compensation and Leadership Development Committee engaged Venture Pay Group as its compensation consultant, and in June 2010, Venture Pay Group issued its report.  The report included 3 major elements:

·                  a benchmark analysis of total direct compensation for our Named Executive Officers compared to industry peers,

·                  recommendations for potential changes to compensation programs, at several levels, to align our programs with our strategic objectives, and

·                  a review of current trends and issues in executive compensation.

The Compensation and Leadership Development Committee met with Venture Pay Group, reviewed their report with our management and has considered implementing its recommendations.  Although Venture Pay Group provided advice to the Compensation and Leadership Development Committee, the decisions made by the Compensation and Leadership Development Committee reflect factors and considerations in addition to the information and recommendations provided by Venture Pay Group.  As a result of the benchmarking information, the Compensation and Leadership Development Committee increased the base salary component of our Named Executive Officer’s Compensation for 2011 by 3% or 8% for each of our Named Executive Officers, except for Barclay Simpson whose base salary remained at the 2010 level.  See “Salary and Profit Sharing Trust Contributions” below.  As recommended by Venture Pay Group, the Compensation and Leadership Development Committee approved the Simpson Manufacturing Co., Inc. 2011 Incentive Plan, subject to stockholder approval, so that it may substitute restricted stock or restricted stock units for stock options to be granted in 2012, if we meet our 2011 operating profit goals.  The Compensation and Leadership Development Committee implemented a new long-term incentive program to give selected employees additional incentives if they help us achieve our strategic objectives. For 2011, this program includes a potential additional stock option grant to Michael J. Herbert.  See “Stock Options” below.

Comparative Market Information

Venture Pay Group compared our Named Executive Officer compensation to 2 peer groups including an Industry Match peer group compiled by Venture Pay Group and the peer group selected by ISS/Risk Metrics. 

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Venture Pay Group also used a set of proprietary proxy compensation survey databases to complete the benchmarking analysis.  Benchmarking was performed on total direct compensation from our most recently completed fiscal year, 2009, and on a 3-year average.  The 2 peer groups were composed of the following companies:

Venture Pay Group Industry Match Peer Group

ISS/Risk Metrics Peer Group

The Venture Pay Group Industry Match peer group was selected based on a broad range of publicly traded companies in related industries and with characteristics similar to ours, including industry specialization, revenues, market capitalization, net income and total assets.  Data gathered on the peer groups included base salary, bonus, total cash compensation, long-term incentives and total direct compensation.

Salary and Profit Sharing Trust Contributions

Base salary is a guaranteed minimum amount for performing the functions of the job, but salary alone provides no additional performance opportunity or motivation to increase value over the long term.  The Compensation and Leadership Development Committee determines the salaries for all of our Named Executive Officers using historical salary levels for their positions and adjustments for changes in cost of living and responsibilities.  We consider our salary levels sufficient to motivate our Named Executive Officers to perform the basic functions of their jobs.  We compensate our employees at a generally comparable level to other organizations of similar size in our industry.  Although our base salaries have historically been set at levels that the Compensation and Leadership Development Committee believes are below the market, a greater proportion of total compensation is based on a system that provides employees with incentives to attain our profitability goals.

The Compensation and Leadership Development Committee was concerned that we could lose key employees who might be enticed by higher salaries at comparable jobs.  Based on the salary levels identified in a report prepared by Semler Brossey Consulting Group, LLC in 2007, the Compensation and Leadership Development Committee decided that the salaries of some of our Named Executive Officers were substantially below the levels that those individuals would likely be paid by others for comparable services given the breadth of their responsibility and experience.  Therefore, in 2009, the Compensation and Leadership Development Committee increased the salary of our Chief Financial Officer by 25% and increased the salary of the President and Chief Executive Officer of Simpson Strong-Tie Company Inc. by 48%.  We offset those salary increases by reducing amounts, if any, that would otherwise be paid to the respective officers under our Executive Officer Cash Profit Sharing Plan, up to the amount of the respective officers’ salary increases.  Thus, the total cash compensation that we pay to each of those officers did not change, except that it increased to the extent, if any, that the amount paid to such officer under our Executive Officer Cash Profit Sharing Plan was less then the amount of such officer’s salary

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increase.  In April 2008, we made similar adjustments for most of our other U.S.-based salaried employees who participated in our Cash Profit Sharing Plan.  Beginning with the payment earned for the third quarter of 2010, we no longer offset the amounts of these salary increases against payments made under either our Cash Profit Sharing Plan or our Executive Officer Cash Profit Sharing Plan.  For 2011, Mr. Kingsfather, Mr. Herbert and Ms. Colonias each received a salary increase of 8%, Mr. Fitzmyers received a salary increase of 3% and Mr. Simpson did not receive a salary increase.  A comparison of our Chief Executive Officer’s 2009 salary with an average of the ISS/Risk Metrics peer group and the compensation survey benchmarks identified in the 2010 Venture Pay Group report is as follows:

The 2009 salaries for the other Named Executive Officers were also substantially below the 25th percentile of the benchmarks identified above, except that the salary of Michael Herbert, one of our Vice Presidents, was slightly above the 25th percentile.  As a result, the Compensation and Leadership Development Committee believes that our Chief Executive Officer’s and the other Named Executive Officers’ salaries are fair relative to salaries of their peers, given the other elements of our compensation program, even though these salaries are generally lower than those paid by companies in the general industry survey.  With the exception of Barclay Simpson’s salary, which has not increased since before our initial public offering in 1994, and except for the 2009 increases, our Named Executive Officers’ salaries have historically increased an average of about 3% per year.

We and our U.S. subsidiaries maintain defined contribution profit sharing plans for U.S.-based salaried employees, including our Named Executive Officers, and for U.S.-based non-union hourly employees.  An employee is eligible for participation in a given calendar year if he or she is an employee on the first and last days of that year and completes the minimum service requirement during that year.  The minimum service requirement for a salaried employee is at least 1,000 hours of service and for an hourly employee is at least 750 hours of service.  As of December 31, 2010, 684 employees participated in the salaried plan and 470 employees participated in the hourly plan.  Under both of these plans, our Board of Directors has exclusive discretion to authorize contributions to the plan trusts.  These plans limit contributions to the plan trusts to amounts deductible for federal income tax purposes under Internal Revenue Code section 404(a).  Michael Herbert and Karen Colonias, who are Named Executive Officers, are trustees of the plan trusts and also participate in the plan for salaried employees.  Some of our foreign subsidiaries maintain similar plans for their employees.

For all years through 2008, we made contributions to our profit sharing trust for our Named Executive Officers in amounts equal to 15% of their base salaries, up to the amounts that we were allowed to deduct from income under Internal Revenue Code section 404(a).  In addition, all employees are entitled to a proportionate share of forfeited contributions from employees who terminate their employment before fully vesting in the profit sharing plan.  The Compensation and Leadership Development Committee views these contributions and forfeitures as serving a similar objective as salaries.  In February 2009, in response to reduced profitability resulting from difficult economic conditions, the Compensation and Leadership Development Committee established a contribution amount equal to 10% of base salaries to our profit sharing trust beginning with the contribution that was made in 2010, up to the amounts that we are allowed to deduct from income under Internal Revenue Code section 404(a) for all of our and our subsidiaries’ U.S. based salaried employees.  This reduced contribution rate has continued for the contribution that is to be made in 2011 and we expect it to continue indefinitely, although the Compensation and Leadership Development Committee has discretion to consider changes to this contribution at any time.

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