Exhibit 10

Compensation of Named Executive Officers.

 

Our officers participate in our Executive Officer Cash Profit Sharing Plan,
which is designed to reward them with quarterly cash bonuses based on operating
profit for their respective profit centers less a return on assets, as
established by our Board of Directors.  For this purpose, we generally define
operating profit as:

 

Income from operations (of Simpson Manufacturing Co., Inc. or relevant
subsidiary)

 

 

Plus:

 

Stock compensation charges

 

Certain bonuses and commissions

 

Salaried pension contributions

 

Self-insured workers’ compensation costs

 

Equals:   operating profit

 

Once we determine the operating profit, we subtract qualifying levels based on a
specified return on assets (also as established by our Board of Directors) to
determine the pool of profit available to our participating employees.  We
generally determine the return on assets as follows:

 

Average assets, net of specified liabilities, for the 3 months ended on the last
day of the month prior to the end of the quarter

 

 

Less:

 

Cash

 

Real estate

 

Self-Insured workers’ compensation reserves

 

Multiplied by:       Specified return percentage for company or subsidiary

 

Equals:                   Qualifying level

 

Based on our operating profit for each of the 4 quarters of 2008, our officers
may receive a payout after our quarterly earnings are announced to the public. 
If the operating profit is lower or higher than the targeted operating profit,
the payout will be correspondingly lower or higher, but we generally do not make
any payment when the operating profit is less than the qualifying level.

 

In December 2007, we reported the 2008 operating profit goals, qualifying levels
and targeted payouts for each of the Named Executive Officers, as follows:

 

 

 

Operating

 

Qualifying

 

Targeted

 

 

 

Profit Goal

 

Level

 

Payout

 

Thomas J Fitzmyers

 

$

162,431,000

 

$

94,945,000

 

$

1,097,000

 

Barclay Simpson

 

162,431,000

 

94,945,000

 

315,000

 

Phillip Terry Kingsfather

 

161,774,000

 

87,751,000

 

617,000

 

Michael J. Herbert

 

162,431,000

 

94,945,000

 

494,000

 

Stephen P. Eberhard

 

657,000

 

7,194,000

 

—

 

 

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On February 13, 2008, the Compensation Committee revised the qualifying levels
and targeted payouts for the Named Executive Officers to adjust for
acquisitions, as follows:

 

 

 

Operating

 

Qualifying

 

Targeted

 

 

 

Profit Goal

 

Level

 

Payout

 

Thomas J Fitzmyers

 

$

162,509,000

 

$

95,586,000

 

$

1,213,000

 

Barclay Simpson

 

162,509,000

 

95,586,000

 

348,000

 

Phillip Terry Kingsfather

 

161,852,000

 

88,392,000

 

650,000

 

Michael J. Herbert

 

162,509,000

 

95,586,000

 

526,000

 

Stephen P. Eberhard

 

657,000

 

7,194,000

 

—

 

 

We use these parameters only to provide incentive to our officers and employees
who participate in our Executive Officer Cash Profit Sharing Plan and our Cash
Profit Sharing Plan.  You should not draw any inference whatsoever from these
parameters about our future financial performance.  You should not take these
parameters as projections or guidance of any kind.

 

Also affected by this change were the operating profit goals related to whether
we grant stock options under our 1994 Stock Option Plan to our Named Executive
Officers. In December 2007, we reported the 2008 operating profit goals and
anticipated stock options grants as follows:

 

 

 

Operating

 

Option

 

 

 

Profit Goal

 

Grant

 

Thomas J Fitzmyers

 

$

163,583,000

 

9,000 shares

 

Barclay Simpson

 

163,583,000

 

1,000 shares

 

Phillip Terry Kingsfather

 

162,442,000

 

28,000 shares

 

Michael J. Herbert

 

163,583,000

 

6,000 shares

 

Stephen P. Eberhard

 

1,141,000

 

16,000 shares

 

 

On February 13, 2008, the Compensation Committee revised operating profit goals
for the Named Executive Officers for consistency with the cash profit sharing
operating profit goals, as follows:

 

 

 

Operating

 

Option

 

 

 

Profit Goal

 

Grant

 

Thomas J Fitzmyers

 

$

162,509,000

 

9,000 shares

 

Barclay Simpson

 

162,509,000

 

1,000 shares

 

Phillip Terry Kingsfather

 

161,852,000

 

28,000 shares

 

Michael J. Herbert

 

162,509,000

 

6,000 shares

 

Stephen P. Eberhard

 

657,000

 

16,000 shares

 

 

We use these parameters only to provide incentive to our officers and employees
who participate in our 1994 Stock Option Plan.  You should not draw any
inference whatsoever from these parameters about our future financial
performance.  You should not take these parameters as projections or guidance of
any kind.

 

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