Exhibit 10.2


 


SIMPSON MANUFACTURING CO., INC.


1995
INDEPENDENT DIRECTOR STOCK OPTION PLAN


 


Adopted
March 6, 1995


and
Amended through November 18, 2004


 


1.             PURPOSES.


 


(a)           The
purpose of the Plan is to provide a means by which Independent Directors of the
Company may be given an opportunity to purchase stock of the Company.


 


(b)           The
Company, by means of the Plan, seeks to retain the services of persons who are
now Independent Directors of the Company, to secure and retain the services of
new Independent Directors, and to provide incentives for such persons to exert
maximum efforts for the success of the Company.


 


(c)           The
Company intends that the Options issued under the Plan shall be Nonstatutory
Stock Options.  The grant date and terms
of all Option Agreements shall be as provided in section 6, and a separate
certificate or certificates will be issued for shares purchased on exercise of
each Option.


 


2.             DEFINITIONS.


 


(a)           “Affiliate” means any parent corporation or
subsidiary corporation of the Company, whether now or hereafter existing, as
those terms are defined in sections 424(e) and (f), respectively, of the
Code.


 


(b)           “Board” means the Board of Directors of the
Company.


 


(c)           “Code” means the Internal Revenue Code of 1986, as amended.


 


(d)           “Committee” means a Committee appointed by the Board
in accordance with subsection 3(c) of the Plan.


 


(e)           “Common Stock” means the common stock of the Company.


 


(f)            “Company” means Simpson Manufacturing Co., Inc.,
a California corporation.


 


(g)           “Continuous Status as an Independent
Director” means
the relationship as an Independent Director is not interrupted or
terminated.  The Board, in its sole
discretion, may determine whether Continuous Status as an Independent Director
shall be considered interrupted in the case of: (i) any leave of absence
approved by the Board, including sick leave, military leave or any other
personal leave; or (ii) transfers between the Company, Affiliates or their
successors.


 


(h)           “Exchange Act” means the Securities Exchange Act of
1934, as amended.


 


(i)            “Independent Director” means a member of the Board who either (1) is
not currently employed by the Company or any Affiliate (service as a Director
and receipt of a director’s fee being deemed not to constitute “employment”),
is not a former employee of the Company or any Affiliate who is currently
receiving compensation for prior services (other than benefits under a tax
qualified pension plan), was not an officer of the Company or an Affiliate at
any time, and is not currently receiving compensation from the Company or any
Affiliate for personal services in any capacity other than as a Director; or (2) is
otherwise considered an Outside Director.


 


(j)            “Non-Employee Director” means a member of the Board who
satisfies the requirements established from time to time by the Securities and
Exchange Commission for non-employee directors under Rule 16b-3.


 


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(k)           “Nonstatutory Stock Option” means an option not intended to qualify
as an incentive stock option within the meaning of section 422 of the Code and
the regulations promulgated thereunder.


 


(l)            “Option” means a stock option granted pursuant to
the Plan.


 


(m)          “Option Agreement” means a written agreement between the
Company and an Optionee evidencing the terms and conditions of an Option.  Each Option Agreement shall be subject to the
terms and conditions of the Plan.


 


(n)           “Optionee” means an Independent Director who holds
an outstanding Option.


 


(o)           “Outside Director” means a member of the Board who
satisfies the requirements established from time to time for outside directors
under section 162(m) of the Code.


 


(p)           “Plan” means this Simpson Manufacturing Co., Inc. 1995
Independent Director Stock Option Plan.


 


(q)           “Rule 16b-3” means Rule 16b-3 under the Exchange
Act or any successor to Rule 16b-3, as in effect when discretion is being
exercised with respect to the Plan.


 


(r)           “Securities Act” means the Securities Act of
1933, as amended.


 


3.             ADMINISTRATION.


 


(a)           The
Plan shall be administered by the Board unless and until the Board delegates
administration to a Committee, as provided in subsection 3(c).


 


(b)           The
Board shall have the power, subject to, and within the limitations of, the
express provisions of the Plan:


 


(1)           To
determine from time to time which persons are eligible to be granted Options
under the Plan and the terms and conditions of each Option granted (which need
not be identical);


 


(2)           To
grant Options under the plan;


 


(3)           To
construe and interpret the Plan and Option Agreements and to establish, amend
and revoke rules and regulations for the Plan’s administration.  The Board, in the exercise of this power, may
correct any defect, omission or inconsistency in the Plan or in any Option
Agreement, in a manner and to the extent it shall deem necessary or expedient
to make the Plan fully effective;


 


(4)           To
amend the Plan as provided in section 11; and


 


(5)           To
determine the terms and conditions of each Option granted (which need not be
identical).


 


All decisions, determinations and interpretations of
the Board shall be final and binding on all Optionees and any other holders of
any Options granted under the Plan.


 


(c)           The
Board may delegate administration of the Plan to a Committee of the Board that
will satisfy the requirements of Rule 16b-3.  The Committee shall consist solely of two or
more Directors, each of whom is a Non-Employee Director and an Outside
Director, who shall be appointed by the Board. 
Subject to the foregoing, from time to time the Board may increase the
size of the Committee and appoint additional qualified members, remove members
(with or without cause) and appoint new members in substitution therefor, or
fill vacancies, however caused.  If
administration is delegated to a Committee, the Committee shall have, in
connection with the administration of the Plan, the powers theretofore
possessed 


 


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by the Board (and
references in this Plan to the Board shall thereafter be deemed to refer to the
Committee), subject, however, to such resolutions, not inconsistent with the
Plan, as may be adopted from time to time by the Board.  The Board may abolish the Committee at any
time and revest in the Board the administration of the Plan.


 


4.             SHARES SUBJECT TO THE PLAN.


 


(a)           Subject
to the provisions of section 10 relating to adjustments on changes in stock,
the stock that may be sold pursuant to Options shall not exceed in the
aggregate 320,000 shares of the Common Stock. 
If any Option shall for any reason expire or otherwise terminate, as a
whole or in part, without having been exercised in full, the stock not
purchased under such Option shall revert to and again become available for
issuance under the Plan.


 


(b)           The
stock subject to the Plan may be unissued shares or reacquired shares, bought
on the market or otherwise.


 


5.             ELIGIBILITY.


 


Options may be granted only to Independent
Directors.  No Independent Director shall
be eligible for the grant of an Option if, at the time of grant, such person
owns stock possessing more than ten percent of the total combined voting power
of all classes of stock of the Company or of any of its Affiliates.


 


6.             OPTION PROVISIONS.


 


Each Option Agreement shall be in a form and shall
contain terms and conditions as provided in this section 6.  The provisions of separate Option Agreements
need not be identical, but each Option Agreement shall include (through
incorporation of provisions hereof by reference in the Option Agreement or
otherwise), the substance of each of the following provisions:


 


(a)           Date of Grant and Shares Subject to
Option.  Each person who was an eligible Independent
Director on February 15, 1995, shall be granted an Option to purchase
2,000 shares of Common Stock, which Option shall be deemed to have been
effective as of that date.  Each person
who becomes an eligible Independent Director after February 15, 1995,
shall be granted an Option to purchase such number of shares of Common Stock as
the Board may determine on and as of the February 15 next following the
date that he or she becomes an eligible Independent Director, if he or she
maintains Continuous Status as an Independent Director through that February 15.  On each February 15 thereafter until the
Plan terminates, each eligible Independent Director shall be granted an
additional Option to purchase such number of shares of Common Stock as the
Board may determine.  Notwithstanding the
foregoing, no Options shall be granted in the year immediately following any
year in which the Company does not meet its budget and operating goals
established by or pursuant to the authority of the Board.


 


(b)           Term of Options. 
No Option shall be exercisable after the expiration of seven years from
the date it is granted.


 


(c)           Price.  The exercise
price of each Option shall be the price of the Common Stock on the New York
Stock Exchange at the close of trading on the date the Option is granted.


 


(d)           Consideration. 
The purchase price of stock acquired pursuant to an Option shall be paid
at the time that the Option is exercised. 
The consideration to be paid for the stock and the method of payment
shall be determined by the Board in the specific case, either at the time of
approval of the grant of an Option or thereafter, in the absolute discretion of
the Board (which discretion may be exercised in a particular case without regard
to any other case or cases), and may consist of cash, check or Common Stock,
any combination thereof, or any other form of legal consideration.


 


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(e)           Transferability. 
An Option shall not be sold, assigned, transferred, pledged,
hypothecated or otherwise disposed by the Optionee during his or her lifetime,
whether by operation of law or otherwise, other than by will or by the laws of
descent and distribution, or be made subject to execution, attachment or
similar process; provided that the Board may in its discretion at the time of
approval of the grant of an Option or thereafter permit an Option to be
transferred by an Optionee to a trust or other entity established by the
Optionee for estate planning purposes or may permit further transferability, on
a general or specific basis, or impose conditions or limitations on any
permitted transferability.  An Option
shall otherwise be exercisable during the lifetime of the person to whom the
Option is granted only by such person.


 


(f)            Vesting. 
Options shall be fully vested when granted.


 


(g)           Conditions On Exercise of Options and
Issuance of Shares.


 


(1)           Shares
shall not be issued on exercise of an Option unless the exercise of such Option
and the delivery of such Shares pursuant thereto shall comply with all
applicable laws and regulations, including, without limitation, the Securities
Act, the Exchange Act, the rules and regulations promulgated thereunder
and the requirements of any stock exchange on which the Common Stock may then
be listed, and shall be further subject to the approval of counsel to the
Company with respect to such compliance.


 


(2)           The
Company may require any Optionee, or any person to whom an Option is
transferred under subsection 6(e), as a condition of exercising an Option, (1) to
give written assurances satisfactory to the Company as to the Optionee’s
knowledge and experience in financial and business matters or to employ a
purchaser representative reasonably satisfactory to the Company who is
knowledgeable and experienced in financial and business matters, and that he or
she is capable of evaluating, alone or together with the purchaser
representative, the merits and risks of exercising the Option; and (2) to
give written assurances satisfactory to the Company stating that such person is
acquiring the stock subject to the Option for such person’s own account and not
with any present intention of selling or otherwise distributing the stock.  The foregoing requirements, and any
assurances given pursuant to such requirements, shall be inapplicable if (1) the
issuance of the shares on the exercise of the Option has been registered under
a then currently effective registration statement under the Securities Act, or (2) as
to any particular requirement, a determination is made by counsel for the
Company that such requirement need not be met in the circumstances under the
then applicable securities laws.  The
Company may, with advice of its counsel, place such legends on stock
certificates issued under the Plan as the Company deems necessary or
appropriate to comply with applicable securities laws, including, but not
limited to, legends restricting the transfer of the stock.


 


(h)           Termination of Relationship as an
Independent Director.  If an Optionee’s Continuous Status as an
Independent Director terminates, the Optionee or the Optionee’s estate or the
person who acquired the right to exercise the Option by bequest or inheritance
may exercise the Option (to the extent that the Optionee shall have been
entitled to exercise it at the date of termination) but only within the period
ending on the earlier of (1) the thirtieth day after the termination of
the Optionee’s Continuous Status as an Independent Director, or (2) the
expiration of the term of the Option as set forth in the Option Agreement.  If, at the date of termination, the Optionee
is not entitled to exercise his or her Option, the shares covered by the Option
shall revert to and again become available for issuance under the Plan.  If, after termination, the Optionee or the
Optionee’s estate or the person who acquired the right to exercise the Option
by bequest or inheritance does not exercise the Option within the time
specified in the Option Agreement, the Option shall terminate, and the shares covered
by such Option shall revert to and again become available for issuance under
the Plan.


 


(i)            Withholding. 
To the extent provided in an Option Agreement and approved by the Board
in the specific case, at the time of approval of the grant of the Option or
thereafter, the Optionee may satisfy any Federal, state or local tax
withholding obligation relating to the exercise of such Option by any of the
following means or by a combination of such means: (l) tendering a cash
payment; (2) authorizing the Company to withhold shares from the shares of
Common Stock otherwise issuable to the Optionee as a result of the exercise of
the Option; or (3) delivering to the Company owned and unencumbered shares
of 


 


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Common Stock.  The value of shares withheld or delivered
shall equal the fair market value of the Shares on the day the Option is
exercised.


 


7.             COVENANTS OF THE COMPANY.


 


(a)           During
the terms of the Options, the Company shall keep available at all times the number
of shares of Common Stock required to satisfy such Options.


 


(b)           The
Company shall seek to obtain from each regulatory commission or agency having
jurisdiction over the Plan such authority as may be required to issue and sell
shares of Common Stock on exercise of the Options; provided that this
undertaking shall not require the Company to register under the Securities Act
either the Plan, any Option or any stock issued or issuable pursuant to any
such Option.  If, after reasonable
efforts, the Company is unable to obtain from any such regulatory commission or
agency the authority that counsel for the Company deems necessary for the
lawful issuance and sale of Common Stock under the Plan, the Company shall be
relieved from any liability for failure to issue and sell Common Stock on
exercise of such Options unless and until such authority is obtained.


 


8.             USE OF PROCEEDS FROM STOCK.


 


Proceeds from the sale of Common Stock pursuant to
Options shall constitute general funds of the Company.


 


9.             MISCELLANEOUS.


 


(a)           Neither
an Optionee nor any person to whom an Option is transferred under subsection 6(e) shall
be deemed to be the holder of, or to have any of the rights of a holder with
respect to, any shares subject to such Option unless and until such person has
satisfied all requirements for exercise of the Option pursuant to its
terms.  No adjustment will be made for
dividends or other rights for which the record date is prior to the date of
satisfaction of all such requirements.


 


(b)           Nothing
in the Plan or any instrument executed or Option granted or other action taken
pursuant thereto shall confer on any Independent Director or Optionee any right
to continue acting as a Director or shall affect the right of the Company to
terminate the relationship as a Director of any Independent Director or
Optionee with or without cause.


 


10.          ADJUSTMENTS ON CHANGES IN STOCK.


 


(a)           If
any change is made in the stock subject to the Plan or subject to any Option
(through merger, consolidation, reclassification, reorganization,
recapitalization, stock dividend, dividend in property other than cash, stock
split or reverse stock split, liquidating dividend, combination of shares,
exchange of shares, change in corporate structure or otherwise), the Plan and
outstanding Options shall be appropriately adjusted by the Board in the
class(es) and maximum number of shares subject to the Plan and the class(es)
and number of shares and price per share of stock subject to outstanding
Options.


 


(b)           In
the event of: (1) a merger or consolidation in which the Company is not
the surviving corporation or (2) a reverse merger in which the Company is
the surviving corporation but the shares of the Common Stock outstanding
immediately preceding the merger are converted by virtue of the merger into other
property, whether in the form of securities, cash or otherwise, then to the
extent permitted by applicable law: (A) any surviving corporation shall
assume any Options outstanding under the Plan or shall substitute similar
options for those outstanding under the Plan, or (B) such Options shall
continue in full force and effect.  If
any surviving corporation refuses to assume or continue such Options, or to
substitute similar options for those outstanding under the Plan, then such
Options shall be terminated if not exercised prior to such event.  In the event of a dissolution or liquidation
of the Company, any Options outstanding under the Plan shall terminate if not
exercised prior to such event.


 


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11.          AMENDMENT OF THE PLAN.


 


(a)           The
Board at any time or from time to time shall have the right to amend, modify,
suspend or terminate the Plan for any reason; provided that the Company will
seek shareholder approval for any change to the extent such approval is
required by applicable law, regulation or rule; and provided further that,
except as required to accord with changes in the Code, the Employee Retirement
Income Security Act of 1974, as amended, or the rules and regulations
promulgated thereunder, the provisions in sections 5 and 6 relating to
eligibility, date of grant, number of shares subject to option, and exercise
price may not be amended more than once every six months.


 


(b)           Rights
and obligations under any Option granted before amendment of the Plan shall not
be altered or impaired by any amendment of the Plan, unless (1) the
Company requests the consent of the person to whom the Option shall have been
granted and (2) such person consents in writing.


 


12.          TERMINATION OR SUSPENSION OF THE PLAN.


 


(a)           The
Board may suspend or terminate the Plan at any time.  Unless sooner terminated, the Plan shall
terminate on May 28, 2012.  No
Options may be granted under the Plan while the Plan is suspended or after it
is terminated.


 


(b)           Rights
and obligations under any Option granted while the Plan is in effect shall not
be altered or impaired by suspension or termination of the Plan, except with
the consent of the person to whom the Option shall have been granted.


 


13.          EFFECTIVE DATE OF PLAN.


 


The Plan shall become effective as determined by the
Board, but no Options granted under the Plan shall be exercisable unless and
until the Plan shall have been approved by the shareholders of the Company,
which approval shall be solicited within twelve months before or after the date
the Plan is adopted by the Board, and, if required, an appropriate permit shall
have been issued by the Commissioner of Corporations of the State of
California.


 


14.          COMPLIANCE WITH SECTION 16 OF
THE EXCHANGE ACT.


 


It is the Company’s intent that the Plan comply in all
respects with Rule 16b-3.  If any
provision of this Plan is found not to be in compliance with Rule 16b-3,
that provision shall be deemed to have been amended or deleted as and to the
extent necessary to comply with Rule 16b-3, and the remaining provisions
of the Plan shall continue in full force and effect, without change.  All transactions under this Plan shall be
executed in accordance with the requirements of Section 16 of the Exchange
Act and the applicable regulations promulgated thereunder.


 


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