SMITH & WESSON BRANDS, INC.
POLICY ON CORPORATE POLITICAL CONTRIBUTIONS AND EXPENDITURES
- Legal Compliance and Oversight
- Company Contributions, Expenditures, and Lobbying
- Political Action Committee
Smith & Wesson Brands, Inc. (the “Company”) believes that participation in the political process to promote and protect the interests of the Company is in the best interests of the Company and its stockholders. The Company seeks to be an effective participant in the political process by making prudent political contributions and expenditures consistent with the Company’s objectives and applicable law.
The Company is committed to compliance with all applicable laws and regulations in connection with the Company’s political contributions and expenditures. The Company’s Board of Directors (the “Board”) has adopted this Policy on Corporate Political Contributions and Expenditures (the “Policy”), which is designed to ensure that the Company’s political contributions and expenditures (a) reflect prevailing corporate governance practices consistent with the Company’s objectives and values; (b) comply with applicable laws and regulations of the relevant jurisdictions; and (c) promote and protect the best interests of the Company and its stockholders and not the personal agendas of individual directors, officers, or employees of the Company.
The Board, acting through the Nominations and Corporate Governance Committee, is responsible for overseeing the Company’s lobbying activities and political contributions, including monitoring the Company’s policy positions and trade association memberships and mandating that political spending activity is reported annually to and reviewed by the Board. The Company’s Chief Compliance Officer and Chief Financial Officer are responsible for managing and coordinating the Company’s political contributions and expenditures under the Policy and monitoring the operation and effectiveness of the Policy.
On an annual basis, management will report to the Nominations and Corporate Governance Committee and the Board on prior-year corporate-wide political contributions and expenditures to ensure alignment with the Policy and the Company’s objectives and values.
The Board must approve any amendment to the Policy.
Corporate Contributions and Expenditures
To the extent legally permitted and deemed appropriate and authorized by the Company’s Chief Compliance Officer and Chief Financial Officer, in consultation with senior management of the Company, the Company may consider corporate contributions consistent with the Policy to (a) candidates running for public office; (b) political parties and committees; (c) entities operating under section 527 of the Internal Revenue Code of 1986, as amended (the “Code”), and other tax-exempt organizations when such contributions are used for political purposes and are not deductible by the Company under Section 162(e) of the Code; and (d) support issue or ballot measure campaigns and committees. As provided below, the Company will disclose on an annual basis all of the foregoing contributions or expenditures made by the Company that are not deductible by the Company under Section 162(e) of the Code.
The Company belongs to various trade associations and trade groups. The Company believes that these organizations help advance a long-term public policy agenda helpful to the Company’s business interests and goals because the Company’s positions on public policy issues are often communicated through these organizations, which enables the Company to reach government officials more efficiently and in concert with industry partners. However, the Company’s positions do not always align with the positions taken by these organizations.
Some trade associations and trade groups may utilize a portion of membership dues for non-deductible state and federal lobbying and political expenditures. Under the requirements of Section 162(e) of the Code, the Company receives information from trade associations and other tax-exempt trade-industry organizations regarding the amount of funds received from the Company that are used for lobbying expenses and political expenditures and are not deductible by the Company for income tax purposes according to IRS statutes. As provided below, the Company will disclose on an annual basis, to the extent available to it, the portion of payments to trade associations and other tax-exempt trade-industry organizations reported to the Company as being used by such entities for political purposes and that are not deductible by the Company under Section 162(e).
Federal and state disclosures regarding lobbying activities by the Company and outside consultants that lobby on its behalf are publicly available. In accordance with the Lobbying Disclosure Act of 1995, as amended (the “LDA”), and comparable state laws, the Company and outside consultants that lobby on its behalf file required disclosure reports with the Clerk of the House and Secretary of the Senate regarding payments for all federal lobbying activities and with applicable state agencies regarding payments for state lobbying activities. As provided below, the Company will disclose on an annual basis the amounts paid by the Company, including to outside consultants that lobby on behalf of the Company, for lobbying activities.
The Company sponsors a political action committee, the Smith & Wesson Holding Corporation Political Action Committee (the “SWHCPAC”). The SWHCPAC is funded exclusively through voluntary contributions from the eligible restricted class of the Company, and the SWHCPAC has received, and may continue to receive, voluntary contributions from stockholders and the families of the foregoing groups. Those participating in the SWHCPAC are not reimbursed, directly or indirectly, for political contributions or expenses. All SWHCPAC contributions are fully disclosed in reports filed with the Federal Election Commission (the “FEC”) and can be accessed by going to the FEC’s website at www.fec.gov. The Policy does not apply to the actions of SWHCPAC.
The Company will post the Policy on its corporate website (https://www.smith-wesson.com/). In addition, for each fiscal year beginning with the Company’s 2015 fiscal year, in the event the Company makes political contributions or expenditures in the United States that are not deductible by the Company as “ordinary and necessary” business expenses under Section 162(e) of the Code in excess of $50,000 in the aggregate during such fiscal year, the Company will prepare and post on its corporate website an annual report on such political contributions and expenditures. The Company’s annual disclosure regarding such non-deductible amounts, if required, will include the following information:
- contributions to or expenditures in support of or opposition to political candidates, political parties, or political committees;
- dues, contributions, or other payments made to tax-exempt “social welfare” organizations and “political committees” operating under sections 501(c)(4) and 527 of the Code, respectively, and to tax-exempt entities that write model legislation and operate under Section 501(c)(3) of the Code to the extent that such amounts are non-deductible; and
- the portion of dues or other payments made to a tax-exempt entity, such as a trade association, that are used for an expenditure or contribution and that are reported to the Company as not deductible under Section 162(e) of the Code.
Prior to posting, the annual report will be presented to the Nominations and Corporate Governance Committee and the Board.
Effective Date: December 16, 2014; Revised June 1, 2020