Related Party Transactions

12 Months Ended

Dec. 31, 2013

Related Party Transactions

Related Party Transactions

12. Related Party Transactions

The Company paid an airplane charter company standard hourly rates when an airplane was hired for use by its Chairman and former Chief Executive Officer for travel between his home and Company offices or by him and other Company employees in travel on business. For each of the years ended December 31, 2012 and 2011, the total cost to the Company for this and other airplanes that were used was $0.5 million. Included in these amounts for the years ended December 31, 2012 and 2011, was $20 thousand and $30 thousand, respectively, paid to the Company’s Chairman and former Chief Executive Officer for compensation. The independent members of the Board unanimously approved this arrangement. The Company computed the compensation cost of the use of airplanes using the Standard Industrial Fare Level (“SIFL”) tables prescribed under applicable Internal Revenue Service regulations. Beginning in 2013, the Company no longer hires an airplane for its Chairman, but will reimburse him for the cost of his travel based on commercial flight rates to and from its offices or when he travels on Company business.

In March 2013, the Company extended its lease on a property in Addison, Illinois, which is co-owned by Gerald Hagel, a vice president of Simpson Strong-Tie since March 2007. The extension is for an additional five years through 2018. The Company paid $0.3 million in 2013 to lease the property from Mr. Hagel and his wife, Susan Hagel, a former employee of Simpson Strong-Tie.

In December 2009 and January 2010, the Company made loans of $0.7 million and $1.7 million to two entities related to Keymark. Both of these loans bore interest at an annual rate of 5.5%. The $1.7 million loan was repaid in July 2012 and the $0.7 million loan was repaid in January 2013.

In 2011, the Company paid Keymark $2.5 million for fees owed to Keymark for software development, and the Company purchased the software assets of Keymark valued at $11.5 million for $6.2 million in net cash payments and its 46.1% interest in Keymark. The Company no longer has an equity interest in Keymark or any remaining receivables from Keymark. See Note 6.