Terri L. Herrington

About Terri L. Herrington

Terri L. Herrington, age 69, has served as an independent director of CompX International Inc. (CIX) since 2018. She is a private investor with senior finance and audit leadership roles at International Paper (nine years, retired end-2016) and BP/Amoco (25+ years, concluding as Global Director of Audit for Finance & Financial Control), and is designated an “audit committee financial expert.” She currently serves on CIX’s Audit Committee and its Management Development & Compensation Committee (MD&C). The board has determined she is independent under NYSE American standards.

Past Roles

External Roles

Board Governance

• Committee assignments: Member, Audit Committee; Member, Management Development & Compensation Committee (MD&C); designated as an “audit committee financial expert.” The Audit Committee had five meetings in 2024; the MD&C Committee had one meeting in 2024.
• Independence: The board determined Herrington (and others) are independent under NYSE American standards. CIX is a “controlled company” due to NL Industries’ ownership of 87.3% of CIX Class A shares; the company does not maintain an independent nominations committee and has chosen not to satisfy all NYSE American corporate governance standards for a compensation committee and not to have a charter for the MD&C committee.
• Attendance: The board held four meetings in 2024 and each incumbent director attended all board and relevant committee meetings held while in office.
• Presiding independent director: The Audit Committee chair presides at non-management/independent director meetings (Thomas E. Barry).
• Audit committee composition and load: Five members; two are “financial experts”; none serves on more than three public company audit committees.

Fixed Compensation

• 2024 Director Retainer and Fees (structure applies to eligible non-employee directors): | Retainer Type | Annual Amount | |---|---| | Each director | $50,000 (increased from $40,000 effective July 1, 2024) | | Chair of the board | $50,000 | | Audit chair or Audit Committee financial expert (only one such retainer if same person) | $45,000 | | Other Audit Committee members | $25,000 | | Members of other committees | $5,000 | | Meeting fee | $1,000 per day; hourly rate (not to exceed $1,000/day) for other board/committee services | | Death benefit (legacy directors elected prior to 2022) | Beneficiary/estate receives annual retainer upon death while serving |

• 2024 Director Compensation (Herrington): | Name | Fees Earned or Paid in Cash | Stock Awards | Total | |---|---:|---:|---:| | Terri L. Herrington | $97,500 | $20,216 (800 shares granted May 22, 2024, valued at $25.27) | $117,716 |

Performance Compensation

• Equity grant policy: On the day of the annual stockholder meeting, each eligible director receives a grant of CIX common shares equal to $20,000 in value (rounded to nearest 50 shares; cap 10,000 shares), fully vested and tradable at grant, subject to securities law restrictions. No performance metrics are tied to director equity; equity is time-based and fixed-value.

Other Directorships & Interlocks

• Herrington is a director of Valhi, Inc., serving on its Audit Committee (since prior to 2020) and its Management Development & Compensation Committee (since 2024).
• Compensation committee interlocks: During 2024, no MD&C Committee member (including Herrington) was an officer/employee of CIX, had related party relationships requiring SEC disclosure, or had interlock relationships under SEC rules.
• Controlled group context: CIX is part of a complex controlled structure involving Contran, Dixie Rice, Valhi, NL, and Kronos Worldwide; NL owns 87.3% of CIX Class A shares. Lisa K. Simmons and the Harold C. Simmons Family Trust may be deemed to control these entities; by virtue of these relationships, indirect beneficial ownership and control may be deemed across entities.

Expertise & Qualifications

• Audit committee financial expert designation; deep finance/audit leadership background from International Paper and BP/Amoco.
• Corporate governance, finance, and financial accounting oversight experience across public companies and complex organizational groups.

Equity Ownership

• Holdings in related companies (as disclosed): Valhi common stock—5,658 shares; NL common stock—none; all directors/executives disclaim beneficial ownership except to extent of pecuniary interest.
• Stock ownership guidelines (non-employee directors): May not sell annual stock grant shares unless, immediately after sale, holdings are valued at least three times the base annual cash retainer. Compliance status by director is not disclosed.
• Hedging/pledging: CIX has not adopted policies regarding hedging of equity securities by employees/directors; transactions must comply with the insider trading policy (filed as Exhibit 19.1 to the FY2024 10-K). Pledging restrictions are not disclosed.

Governance Assessment

• Strengths:

  • Independent director with audit committee financial expert designation; sits on key oversight committees (Audit; MD&C).
  • Full attendance in 2024 across board and committee meetings; board and committees met regularly (Board: 4; Audit: 5; MD&C: 1).
  • Transparent director compensation structure; modest equity grants fully vested at grant; clear stock ownership guideline of 3× retainer.

• Potential conflicts/related-party exposure:

  • Dual roles at CIX and Valhi (CIX’s controlling group) elevate conflict risk, especially where CIX engages in related-party arrangements—e.g., unsecured revolving loan to Valhi ($25.0M loans, $26.3M repaid; $9.3M outstanding at 12/31/2024; ~$1.0M interest earned in 2024). Audit Committee (of which Herrington is a member) determined terms were fair and reasonable and approved/ratified the loan.
  • MD&C Committee (including Herrington) recommends approval of charges under the Intercorporate Services Agreement (ISA) with Contran; independent directors approved the annual ISA charge effective January 1, 2024. This is a recurring related-party framework requiring robust oversight.

• Governance structure considerations:

  • Controlled company status; no independent nominations committee; company chose not to satisfy all NYSE American standards for a compensation committee and does not maintain an MD&C charter—reduces formal independence protections.
  • No adopted anti-hedging policy (beyond insider trading compliance) for directors/employees—can be viewed as a misalignment risk if hedging were to occur.

• Say-on-pay signal:

  • 2024 advisory vote on executive compensation received 90.3% support; no material practice changes made in response.

• Overall implication for investor confidence:

  • Herrington brings strong audit/finance credentials and is engaged on key committees with full attendance—positive for board effectiveness.
  • The controlled-company context, dual-board service at Valhi, and absence of a formal compensation committee charter require ongoing scrutiny of related-party decisions; current committee findings assert fairness (e.g., Valhi loan; ISA charge), but governance risk remains elevated versus a fully independent structure.