UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
NORTHWEST PIPE COMPANY
(Name of Registrant as Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed per Exchange Act Rules 14a-6(i)(4) and 0-11.
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
NORTHWEST PIPE COMPANY
12005 N. BURGARD
PORTLAND, OREGON 97203
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
-----------------------
To the Shareholders of Northwest Pipe Company:
NOTICE IS HEREBY GIVEN that the annual meeting of shareholders (the "Annual
Meeting") of Northwest Pipe Company (the "Company") will be held on Tuesday, May
2, 2000 at the Heathman Hotel, 1001 SW Broadway, Portland, OR 97205, at 9:00
a.m., local time. The purposes of the Annual Meeting will be:
1. ELECTION OF DIRECTORS. To elect two directors to hold
office for a term of three years or until their successors are elected
and qualified (Proposal No. 1);
2. AMENDMENT OF THE AMENDED 1995 STOCK INCENTIVE PLAN. To
approve and adopt an amendment to the Company's Amended 1995 Stock
Incentive Plan to increase the number of shares reserved for issuance
thereunder from 629,000 to 929,000 shares (Proposal No. 2);
3. RATIFICATION OF APPOINTMENT OF AUDITORS. To ratify the
appointment of PricewaterhouseCoopers LLP as the Company's independent
auditors for the year ending December 31, 2000 (Proposal No. 3); and
4. OTHER BUSINESS. To transact such other business as may
properly come before the meeting or any adjournments or postponements
thereof.
The Board of Directors has fixed the close of business on March 6, 2000 as the
record date for determining shareholders entitled to notice of and to vote at
the meeting or any adjournments thereof. Only shareholders of record at the
close of business on that date will be entitled to notice of and to vote at the
Annual Meeting or any adjournments or postponements thereof.
By Order of the Board of Directors,
Brian W. Dunham
President and Chief Operating Officer
Portland, Oregon
March 28, 2000
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE, WHETHER OR NOT YOU
PLAN TO BE PRESENT IN PERSON AT THE ANNUAL MEETING, PLEASE DATE, SIGN AND
COMPLETE THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE,
WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
1
NORTHWEST PIPE COMPANY
12005 N. BURGARD
PORTLAND, OREGON 97203
PROXY STATEMENT FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 2, 2000
---------------------
INTRODUCTION
GENERAL
This Proxy Statement and the accompanying 1999 Annual Report to Shareholders are
being furnished to the shareholders of Northwest Pipe Company, an Oregon
corporation (the "Company"), as part of the solicitation of proxies by the
Company's Board of Directors (the "Board of Directors") for use at the Company's
annual meeting of shareholders (the "Annual Meeting") to be held on Tuesday, May
2, 2000 at the Heathman Hotel, 1001 SW Broadway, Portland, OR 97205, at 9:00
a.m., local time. At the Annual Meeting, shareholders will be asked to elect two
members to the Board of Directors, to approve an amendment to the Company's
Amended 1995 Stock Incentive Plan, to ratify the appointment by the Board of
Directors of PricewaterhouseCoopers LLP as independent auditors of the Company
for the year ending December 31, 2000, and to transact such other business as
may properly come before the Annual Meeting or any adjournments or postponements
thereof. This Proxy Statement, together with the enclosed proxy card and the
1999 Annual Report to Shareholders, are first being mailed to shareholders of
the Company on or about March 28, 2000.
SOLICITATION, VOTING AND REVOCABILITY OF PROXIES
The Board of Directors has fixed the close of business on March 6, 2000 as the
record date for the determination of the shareholders entitled to notice of and
to vote at the Annual Meeting. Accordingly, only holders of record of shares of
Common Stock at the close of business on such date will be entitled to vote at
the Annual Meeting, with each such share entitling its owner to one vote on all
matters properly presented at the Annual Meeting. On the record date, there were
approximately 6,459,930 shares of Common Stock then outstanding. The presence,
in person or by proxy of a majority of the total number of outstanding shares of
Common Stock entitled to vote at the Annual Meeting is necessary to constitute a
quorum at the Annual Meeting.
If the enclosed form of proxy is properly executed and returned in time to be
voted at the Annual Meeting, the shares represented thereby will be voted in
accordance with the instructions marked thereon. EXECUTED BUT UNMARKED PROXIES
WILL BE VOTED FOR THE ELECTION OF THE TWO NOMINEES FOR ELECTION TO THE BOARD OF
DIRECTORS, FOR THE AMENDMENT TO THE COMPANY'S AMENDED 1995 STOCK INCENTIVE PLAN
AND FOR THE RATIFICATION OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS THE
COMPANY'S INDEPENDENT AUDITORS FOR THE YEAR ENDING DECEMBER 31, 2000. The Board
of Directors does not know of any matters other than those described in the
Notice of Annual Meeting that are to come before the Annual Meeting. If any
other matters are properly brought before the Annual Meeting, the persons named
in the proxy will vote the shares represented by such proxy upon such matters as
determined by a majority of the Board of Directors.
Shareholders who execute proxies retain the right to revoke them at any time
prior to the exercise of the powers conferred thereby by filing a written notice
of revocation with, or by delivering a duly executed proxy bearing a later date
to, Corporate Secretary, Northwest Pipe Company, 12005 N. Burgard, Portland,
Oregon 97203, or by attending the Annual Meeting and voting in person. All
valid, unrevoked proxies will be voted at the Annual Meeting.
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ELECTION OF DIRECTORS
(PROPOSAL NO. 1)
At the Annual Meeting, two directors will be elected, each for a three-year
term. Unless otherwise specified on the proxy, it is the intention of the
persons named in the proxy to vote the shares represented by each properly
executed proxy for the election of the nominees named below. The Board of
Directors believes that the nominees will stand for election and will serve if
elected as directors. However, if either of the persons nominated by the Board
of Directors fails to stand for election or is unable to accept election, the
proxies will be voted for the election of such other person as the Board of
Directors may recommend.
The Company's Articles of Incorporation and Bylaws provide that the Board of
Directors shall be composed of not less than six (6) and not more than nine (9)
directors. The Board of Directors has fixed the number of directors at six (6).
The Company's directors are divided into three classes composed of two directors
each. The term of office of only one class of directors expires each year, and
their successors are elected for terms of three years, and until their
successors are elected and qualified. There is no cumulative voting for election
of directors.
INFORMATION AS TO NOMINEES AND CONTINUING DIRECTORS
The following table sets forth the names of and certain information about the
Board of Directors' nominees for election as a director and those directors who
will continue to serve after the Annual Meeting.
DIRECTOR EXPIRATION
AGE SINCE OF TERM
--- ----- -------
NOMINEES:
Brian W. Dunham 42 1995 2000
Wayne B. Kingsley 57 1987 2000
CONTINUING DIRECTORS:
Warren K. Kearns 70 1986 2001
Vern B. Ryles, Jr. 62 1986 2001
William R. Tagmyer 62 1986 2002
Neil R. Thornton 69 1995 2002
NOMINEES FOR DIRECTOR
BRIAN W. DUNHAM has been a director of the Company since August 1995. Mr. Dunham
had served as the Company's Chief Financial Officer, Vice President, Treasurer
and Secretary since 1990 and became Executive Vice President in 1995. In
February 1997, Mr. Dunham was appointed the Company's Chief Operating Officer
and in January 1998 was elected President of the Company. From 1981 to 1990, he
was employed by Coopers & Lybrand LLP, independent accountants.
WAYNE B. KINGSLEY has been a director of the Company since 1987. Mr. Kingsley is
Chairman of the Board of Directors of American Waterways, Inc., a passenger
vessel operator, serves as a director of Coleman Natural Products, Inc., and
serves as Chairman of the Board of Directors of InterVen Partners, Inc.
CONTINUING DIRECTORS
WARREN K. KEARNS has been a director of the Company since 1986. Mr. Kearns is
currently the Principal in Warren Kearns Associates, providing consulting
services to clients in steel and steel-related industries. Mr. Kearns was
formerly President and director of L. B. Foster Company.
VERN B. RYLES has been a director of the Company since 1986. Mr. Ryles is
President and Chief Executive Officer of Poppers Supply, a manufacturer of
flavored popcorn snacks and distributor of snack foods and equipment. Mr. Ryles
is also a director of Electro Scientific Industries, a public company.
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WILLIAM R. TAGMYER has been the Chairman of the Board and Chief Executive
Officer since 1986. From 1986 to January 1998, Mr. Tagmyer also served as
President of the Company. From 1975 to 1986, he worked for L. B. Foster Company,
another steel pipe manufacturer. Prior to 1975, Mr. Tagmyer was employed by the
U.S. Steel Corporation and FMC Corporation in the areas of sales, marketing,
product management and contract administration.
NEIL R. THORNTON has been a director of the Company since 1995. He was
previously a director of the Company from 1986 to 1993. Mr. Thornton was
President and Chief Executive Officer of American Steel, L.L.C., a distributor
of carbon steel products, from 1985 until January 1998.
BOARD OF DIRECTORS COMMITTEES AND NOMINATIONS BY SHAREHOLDERS
Each year the members of the Board of Directors who are not employed by the
Company, and whose terms of office are not expiring at the next annual meeting,
serve as the Nominating Committee for selecting nominees for election as
directors. The Company's Bylaws also permit shareholders to make nominations for
the election of directors, if such nominations are made pursuant to timely
notice in writing to the Company's Secretary. To be timely, notice must be
delivered to, or mailed to and received at, the principal executive offices of
the Company not less than 60 days nor more than 90 days prior to the date of the
meeting, provided that at least 60 days notice or prior public disclosure of the
date of the meeting is given or made to shareholders. If less than 60 days'
notice or prior public disclosure of the date of the meeting is given or made to
shareholders, notice by the shareholder to be timely must be received by the
Company not later than the close of business on the tenth day following the date
on which such notice of the date of the meeting was mailed or such public
disclosure was made. A shareholder's notice of nomination must also set forth
certain information specified in the Company's Bylaws concerning each person the
shareholder proposes to nominate for election and nominating shareholder.
The Board of Directors met seven (7) times during 1999. Each director attended
more than 75 percent of the aggregate of (i) the total number of meetings of the
Board of Directors and (ii) the total number of meetings held by all committees
of the Board on which he served. The Board of Directors has an Executive
Committee, an Audit Committee, a Compensation Committee and a Nominating
Committee. The Executive Committee, comprised of Messrs. Kingsley, Ryles and
Tagmyer, exercises the authority of the Board of Directors between meetings of
the Board, subject to certain limitations. The Executive Committee did not meet
in 1999. The Audit Committee was comprised of Messrs. Kearns and Kingsley. The
Audit Committee oversees actions taken by the Company's independent auditors and
reviews the Company's internal audit controls. The Audit Committee met two (2)
times in 1999. The Compensation Committee was comprised of Messrs. Thornton and
Ryles. The Compensation Committee reviews the compensation levels of the
Company's employees, makes recommendations to the Board regarding changes in
compensation and administers the Company's stock option plans. The Compensation
Committee met seven (7) times in 1999. The Nominating Committee was comprised of
Mr. Kearns, Mr. Ryles and Mr. Thornton. The Nominating Committee met one (1)
time in 1999. There are no family relationships among any of the directors or
executive officers of the Company.
See "Management - Executive Compensation" for certain information regarding
compensation of directors.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE
ELECTION OF ITS NOMINEES FOR DIRECTOR. If a quorum is present, the Company's
Bylaws provide that directors are elected by a plurality of the votes cast by
the shares entitled to vote. Abstentions and broker non-votes are counted for
purposes of determining whether a quorum exists at the Annual Meeting, but are
not counted and have no effect on the determination of whether a plurality
exists with respect to a given nominee.
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MANAGEMENT
EXECUTIVE OFFICERS
Information with respect to the Company's current executive officers is set
forth below. Officers of the Company are elected by the Board of Directors and
hold office until their successors are elected and qualified.
NAME AGE CURRENT POSITION(S) WITH COMPANY
William R. Tagmyer 62 Chairman of the Board and Chief Executive Officer
Brian W. Dunham 42 Director, President and Chief Operating Officer
Charles L. Koenig 57 Vice President, Water Transmission
Robert L. Mahoney 38 Vice President, Corporate Development
Terrence R. Mitchell 44 Vice President, Tubular Products
John D. Murakami 46 Vice President, Chief Financial Officer
Gary A. Stokes 47 Vice President, Sales and Marketing
Information concerning the principal occupations of Messrs. Tagmyer and Dunham
is set forth under "Election of Directors".
CHARLES L. KOENIG was named Vice President, Water Transmission in February 1997
and had served as Vice President - California Operations since 1993.
Additionally, Mr. Koenig was named President of Thompson Pipe and Steel Company,
formerly a subsidiary of the Company, in May 1996. He has been with the Company
since 1992 and is a registered Professional Engineer. Previously, he was
Operations Manager with Thompson Pipe and Steel Company, where he was employed
for more than twenty years.
ROBERT L. MAHONEY was named Vice President, Corporate Development in July 1998,
had served as Director of Business Planning and Development since 1996 and has
been with the Company since 1992.
TERRENCE R. MITCHELL was named Vice President, Tubular Products in May 1996, and
had served as Vice President and General Manager - Kansas Division since 1993
and has been with the Company since 1985. Prior to joining the Company, he was
employed by Valmont Industries, another pipe manufacturer.
JOHN D. MURAKAMI was named Vice President, Chief Financial Officer in February
1997, and had served as Corporate Controller since September 1995. Prior to
joining the Company, he was employed by Babler Brothers, Inc., a manufacturer of
concrete pipe products.
GARY A. STOKES has been Vice President, Sales and Marketing since 1993. He has
been with the Company since 1987. Mr. Stokes was previously employed by L. B.
Foster Company for eleven years. He served as the Regional Manager responsible
for L.B. Foster Company's West Coast sales operations.
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EXECUTIVE COMPENSATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table provides certain summary information concerning compensation
awarded to, earned by or paid to the Company's Chief Executive Officer and each
of the four other most highly compensated executive officers of the Company
determined as of the end of the last fiscal year (hereafter referred to as the
"named executive officers") for the fiscal years ended December 31, 1999, 1998
and 1997.
SUMMARY COMPENSATION TABLE
LONG TERM
COMPENSATION
STOCK
ANNUAL COMPENSATION OPTIONS ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS(1) GRANTED COMPENSATION
William R. Tagmyer 1999 $335,000 $ -- 45,424 $18,569 (2)
Chairman of the Board and 1998 335,000 280,000 31,905 20,822 (2)
Chief Executive Officer 1997 280,008 180,985 48,000 18,358 (2)
Brian W. Dunham 1999 $300,000 $ -- 30,508 $5,000 (3)
Director, President and 1998 280,000 245,000 20,000 5,000 (3)
Chief Operating Officer 1997 203,603 140,000 25,000 4,750 (3)
Charles L. Koenig 1999 $170,400 $ -- 11,553 $50,660 (4)
Vice President, 1998 162,000 146,580 7,714 5,000 (3)
Water Transmission 1997 150,000 75,000 12,000 4,506 (3)
Terrence R. Mitchell 1999 $158,100 $ -- 10,719 $5,000 (3)
Vice President, 1998 150,000 81,891 7,143 5,000 (3)
Tubular Products 1997 125,000 104,329 9,000 4,750 (3)
Gary A. Stokes 1999 $172,600 $ -- 11,702 $5,000 (3)
Vice President, 1998 162,000 156,260 7,714 5,000 (3)
Sales and Marketing 1997 150,000 75,000 12,000 4,750 (3)
(1) As of the date of this Proxy Statement, the bonus amounts for 1999 have
not been determined or approved by the Board of Directors. Bonus amounts
reported for and earned in 1998 were approved and paid in 1999. Bonus
amounts reported for and earned in 1997 were approved and paid in 1998.
(2) Represents $13,569, $15,822 and $13,608 of Company-paid life insurance in
1999, 1998 and 1997, respectively, and $5,000, $5,000 and $4,750 of
matching amounts contributed to the Company's 401(k) plan in 1999, 1998
and 1997, respectively.
(3) Represents matching amounts contributed to the Company's 401(k) plan in
1999, 1998 and 1997.
(4) Represents $45,660 in relocation expenses and $5,000 of matching amounts
contributed to the Company's 401(k) plan in 1999.
5
STOCK OPTIONS
The following table contains information concerning the grant of stock options
to the named executive officers in 1999.
OPTION GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
----------------------------------------------------------
POTENTIAL REALIZABLE
PERCENT OF VALUE AT ASSUMED ANNUAL
TOTAL OPTIONS RATES OF STOCK PRICE
GRANTED TO EXERCISE APPRECIATION FOR
OPTIONS EMPLOYEES PRICE EXPIRATION OPTION TERM($) (2)
NAME GRANTED(1) IN 1999 ($/SH) DATE 5% 10%
---- ---------- ------- ------ ---- --- ---
William R. Tagmyer 45,424 27% $14.75 2/25/09 $421,362 $1,067,814
Brian W. Dunham 30,508 18 14.75 2/25/09 282,998 717,173
Charles L. Koenig 11,553 7 14.75 2/25/09 107,168 271,584
Terrence R. Mitchell 10,719 6 14.75 2/25/09 99,432 251,979
Gary A. Stokes 11,702 7 14.75 2/25/09 108,550 275,087
(1) Stock options are granted at an exercise price equal to the fair market
value of the Company's Common Stock on the date of grant. Options granted
vest ratably over a 60 month period, and have a ten year term.
(2) The potential realizable value is calculated based on the term of the
option at time of grant (10 years) and is calculated by assuming that the
stock price on the date of grant appreciates at the indicated annual rate
compounded annually for the entire term of the option and that the option
is exercised and sold on the last day of its term for the appreciated
price. Actual gains, if any, on stock option exercises are dependent on
the future performance of the Common Stock and overall stock market
conditions
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AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION
VALUES
The following table sets forth, for each of the named executive officers, the
number and value of unexercised options as of December 31, 1999. None of the
named executive officers exercised options to purchase the Company's Common
Stock during 1999.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS
DECEMBER 31, 1999 AT DECEMBER 31, 1999 (1)
--------------------- ---------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ------------- ----------- -------------
William R. Tagmyer 69,634 81,435 $213,591 $23,732
Brian W. Dunham 102,800 53,215 847,401 39,554
Charles L. Koenig 42,132 21,430 339,149 15,822
Terrence R. Mitchell 28,097 19,073 183,318 15,822
Gary A. Stokes 38,351 21,554 289,671 15,822
(1) The value of unexercised in-the-money options is calculated based on
the closing price of the Company's Common Stock on December 31, 1999,
$14.00 per share. Amounts reflected are based on the assumed value minus
the exercise price and do not necessarily indicate that the optionee sold
such stock.
CHANGE IN CONTROL AGREEMENTS
The Company has entered into change in control agreements (the "Agreements")
with its executive officers, including the named executive officers. Each of the
Agreements is for a term ending July 19, 2001, provided that on that date and
each anniversary thereafter, the term of the Agreements will be automatically
extended by one year unless either party gives 90 days prior written notice that
the term of an agreement shall not be so extended. If a "Change in Control" (as
defined in the Agreements and described below) occurs during the term of
Agreements, the Agreements will continue in effect until two years after the
Change in Control.
If an executive officer's employment with the Company is terminated within two
years after a Change in Control either by the Company without "Cause" (as
defined in the Agreements and described below) or by the executive officer for
"Good Reason" (as defined in the Agreements and described below), the executive
officer will be entitled to receive his full base salary through the date of
termination and any benefits or awards (both cash and stock) that have been
earned or are payable through the date of termination plus (i) a lump sum
payment equal to two year's base salary (three years in the case of Messrs.
Tagmyer and Dunham) and (ii) an amount equal to two times (three times in the
case of Messrs. Tagmyer and Dunham) the average cash bonuses paid to the
executive officer during the previous three years. In addition, the executive
officer would be entitled to the continuation of health and insurance benefits
for certain periods and all outstanding unvested stock options would immediately
become fully vested. In the event that the payments made to an executive officer
would be deemed to be a "parachute payment" under the Internal Revenue Code of
1986, an executive officer may choose to accept payment of a reduced amount that
would not be deemed to be a "parachute payment."
If an executive officer's employment with the Company is terminated within two
years after a Change in Control either by the Company for Cause or as a result
of the executive officer's disability or death, the executive officer will be
entitled to receive his full base salary through the date of termination plus
any benefits or awards (both cash and stock) that have been earned or are
payable through the date of termination.
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For purposes of the Agreements, a "Change in Control" includes (i) any merger or
consolidation transaction in which the Company is not the surviving corporation,
unless shareholders of the Company immediately before such transaction have the
same proportionate ownership of common stock of the surviving corporation in the
transaction, (ii) the acquisition by any person of 30 percent or more of the
Company's total combined voting power, (iii) the liquidation of the Company or
the sale or other transfer of substantially all of its assets, and (iv) a change
in the composition of the Board of Directors during any two-year period such
that the directors in office at the beginning of the period and/or their
successors who were elected by or on the recommendation of two-thirds of the
directors in office at the beginning of the period do not constitute at least a
majority of the Board. For purposes of the Agreements, "Good Reason" includes
(i) an adverse change in the executive officer's status, title, position(s) or
responsibilities or the assignment to the executive of duties or
responsibilities which are inconsistent with the executive officer's status,
title or position, (ii) a reduction in the executive officer's base salary or
the failure to pay compensation otherwise due to the executive officer, (iii) a
requirement that the executive officer be based anywhere other than within 10
miles of his job location before the Change in Control, (iv) the Company's
failure to continue in effect any compensation or employee benefit plan or
program in effect before the Change in Control or any act or omission that would
adversely effect the executive officer's continued participation in any such
plan or program or materially reduce the benefits under such plan or program,
(v) the failure by the Company to require any successor to the Company to assume
the Company's obligations under the Agreements within 30 days after a Change in
Control. For purposes of the Agreements, "Cause" means the willful and continued
failure to satisfactorily perform the duties assigned to the executive officer
within a certain period after notice of such failure is given and commission of
certain illegal conduct.
DIRECTOR COMPENSATION
The members of the Company's Board of Directors are reimbursed for their travel
expenses incurred in attending Board meetings. In addition, nonemployee members
of the Board of Directors receive a $12,000 annual retainer, $1,000 for each
Board meeting attended, $500 for each telephonic Board meeting attended and $500
for each meeting of a committee of the Board attended. The Company's 1995 Stock
Option Plan for Nonemployee Directors (the "1995 Nonemployee Director Plan")
provides that an option to purchase 5,000 shares of Common Stock is granted to
each new nonemployee director at the time such person is first elected or
appointed to the Board of Directors. In addition, each nonemployee director
receives an option to purchase 2,000 shares of Common Stock annually after each
annual meeting of shareholders. The number of options which may be granted under
the 1995 Nonemployee Director Plan in any fiscal year may not exceed 20,000,
subject to stock splits and similar events, and a total of 100,000 shares of
Common Stock have been reserved for issuance upon exercise of stock options
granted under the 1995 Nonemployee Director Plan. On May 11, 1999 options to
purchase 2,000 shares of Common Stock, at $14.563 each, were granted to each of
Messrs. Kingsley, Kearns, Ryles and Thornton.
8
COMPENSATION REPORT OF THE COMPENSATION COMMITTEE
Under rules established by the Securities and Exchange Commission (the "SEC"),
the Company is required to provide certain data and information with regard to
the compensation and benefits provided to the Company's Chief Executive Officer
and the four other most highly compensated executive officers. In fulfillment of
this requirement, the Compensation Committee has prepared the following report
for inclusion in this Proxy Statement.
EXECUTIVE COMPENSATION PHILOSOPHY
The Compensation Committee is composed entirely of nonemployee, outside
directors and is responsible for setting and monitoring policies governing
compensation of executive officers. The Compensation Committee reviews the
performance and compensation levels for executive officers, and sets salary and
bonus levels and option grants under the Company's stock option plans. The
objectives of the Committee are to correlate executive compensation with the
Company's business objectives and performance and to enable the Company to
attract, retain and reward executive officers who contribute to the long-term
success of the Company.
The Omnibus Budget Act of 1993 added Section 162(m) to the Internal Revenue Code
of 1986, which limits to $1,000,000 the deductibility of compensation (including
stock-based compensation) individually paid to a publicly-held Company's chief
executive officer and the four other most highly compensated executive officers.
The Board of Directors and the Compensation Committee intend to take the
necessary steps to structure executive compensation policies to comply with this
limit on deductibility of executive compensation.
SALARIES. The Compensation Committee annually assesses the performance and sets
the salary of the Company's executive officers. Salaries for executive officers
are based on a review of salaries for similar positions requiring similar
qualifications. In determining executive officer salaries, the Compensation
Committee reviews recommendations from management which include information from
salary surveys. Additionally, the Compensation Committee establishes both
financial and operational based objectives and goals. These goals and objectives
include sales and spending forecasts, along with published executive
compensation literature for comparable sized companies. The Compensation
Committee considers not only the performance evaluations of executive officers
but also reviews the financial condition of the Company in setting salaries.
BONUS AWARDS. The Compensation Committee administers a cash bonus plan to
provide additional incentives to executive officers and certain other management
employees. As of the date of this Proxy Statement, the Board of Directors has
not approved the executive bonus plan for 1999 and no bonus awards for 1999 have
been made.
STOCK OPTIONS. The Compensation Committee believes that employee equity
ownership provides significant motivation to executive officers to maximize
value for the Company's shareholders and, therefore, periodically grants stock
options under the Company's stock option plans. Stock options are granted at the
current market price and will only have value if the Company's stock price
increases over the exercise price. The Compensation Committee determines the
size and frequency of option grants for executive officers, after consideration
of recommendations from the Chief Executive Officer. Recommendations for option
grants are based upon the relative position and responsibilities of each
executive officer, expected contributions of each officer to the Company and
previous option grants to such executive officers.
9
CHIEF EXECUTIVE OFFICER COMPENSATION. Mr. Tagmyer's 1999 base salary was
determined in the same manner as the other executives as described in SALARIES
above. The Compensation Committee approved Mr. Tagmyer's 1999 annual base salary
of $335,000, based on the salary survey data referred to above and compensation
levels of Chief Executive Officers of comparable size companies in industries
similar to the Company's. As described in BONUS AWARDS above, the executive
bonus plan for 1999 has not been approved and no bonus awards for 1999 have been
made. Options to purchase 45,424 shares of the Company's Common Stock at $14.75
per share were granted to Mr. Tagmyer in 1999.
COMPENSATION COMMITTEE
Neil R. Thornton
Vern B. Ryles, Jr.
10
STOCK PERFORMANCE GRAPH
The SEC requires that registrants include in their proxy statement a line-graph
presentation comparing cumulative five-year shareholder returns on an indexed
basis, assuming a $100 initial investment and reinvestment of dividends, of (a)
the registrant, (b) a broad-based equity market index and (c) an
industry-specific index. The Company's Common Stock began trading on the Nasdaq
Stock Market on November 30, 1995. Accordingly, the following graph includes the
required information from November 30, 1995 through the end of the last fiscal
year, December 31, 1999. The broad-based market index used is the Nasdaq U.S.
Stock Market Total Return Index and the industry-specific index used is a peer
group of companies consisting of Ameron International, Inc., Lindsay
Manufacturing Co., Valmont Industries, Inc., L.B. Foster Company and Maverick
Tube Corporation.
The graph has been supplemented this year with comparative information relating
to the Russell 2000 Index. The Russell 2000 Index will replace the Nasdaq U.S.
Market Index, which is also shown, in proxy statements for future annual
meetings. This change reflects the fact that the Nasdaq U.S. Market Index has
become heavily weighted by technology issues and reflects trends in those stocks
to a greater degree than the broader market.
[GRAPHIC]
INDEXED RETURNS
------------------------------------------------------------------------
NORTHWEST PIPE NASDAQ U.S. RUSSELL 2000
COMPANY INDEX INDEX PEER GROUP
November 30, 1995 $100.00 $100.00 $100.00 $100.00
December 31, 1995 $122.05 $ 99.48 $102.39 $104.53
December 31, 1996 $180.30 $122.37 $117.51 $168.94
December 31, 1997 $266.29 $150.13 $141.62 $230.95
December 31, 1998 $178.91 $210.95 $136.74 $127.33
December 31, 1999 $155.34 $381.76 $163.57 $188.30
11
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended requires the
Company's directors and executive officers and persons who own more than ten
percent of a registered class of the Company's equity securities, to file
initial reports of ownership and reports of changes in ownership of shares with
the Securities and Exchange Commission. Such persons also are required to
furnish the Company with copies of all Section 16(a) reports they file.
Based solely on its review of the copies of such reports received by it with
respect to 1999, or written representations from certain reporting persons, the
Company believes that all filing requirements applicable to its directors,
officers and persons who own more than ten percent of a registered class of the
Company's equity securities have been complied with for 1999.
STOCK OWNED BY MANAGEMENT AND PRINCIPAL SHAREHOLDERS
The table below sets forth certain information, as of February 29, 2000,
regarding the beneficial ownership of the Common Stock by: (i) each person known
by the Company to be the beneficial owner of 5% or more of its outstanding
Common Stock, (ii) each of the named executive officers, (iii) each of the
Company's directors and (iv) all directors and executive officers as a group.
The address of each of the named executive officers and directors is c/o
Northwest Pipe Company, 12005 N. Burgard, Portland, Oregon 97203.
SHARES BENEFICIALLY
OWNED(1)
NAME OF BENEFICIAL OWNER SHARES PERCENT
5% SHAREHOLDERS
Fleet Boston Corporation (2) 540,360 8.4 %
One Federal Street
Boston, MA 02110
Frontier Capital Management LLC (3) 472,630 7.3
99 Summer Street
Boston, MA 02110
Becker Capital Management, Inc. (4) 459,417 7.1
1211 SW Fifth Avenue, Suite 2185
Portland, OR 97204
Dimensional Fund Advisors Inc. (5) 444,600 6.9
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
Benson Associates, LLC (6) 386,827 6.0
111 SW Fifth Avenue, Suite 2130
Portland, OR 97204
EXECUTIVE OFFICERS AND DIRECTORS
William R. Tagmyer 283,137 4.3
Brian W. Dunham 138,770 2.1
Gary A. Stokes 65,254 1.0
Charles L. Koenig 82,691 1.3
Terrence R. Mitchell 31,032 *
Warren K. Kearns 8,000 *
Wayne B. Kingsley (7) 25,929 *
Vern B. Ryles, Jr. 8,000 *
Neil R. Thornton 18,378 *
All directors and executive officers as a group,
(eleven persons) 682,212 10.0 %
12
(*) Represents beneficial ownership of less than one percent of the
outstanding Common Stock.
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission, and includes voting power and
investment power with respect to shares. Shares issuable upon the
exercise of outstanding stock options that are currently exercisable or
become exercisable within 60 days from February 29, 2000 are considered
outstanding for the purpose of calculating the percentage of Common
Stock owned by such person but not for the purpose of calculating the
percentage of Common Stock owned by any other person. The number of
stock options that are exercisable within 60 days of February 29, 2000
is as follows: Mr. Kingsley - 8,000; Mr. Kearns - 8,000 ; Mr. Ryles -
8,000; Mr. Thornton - 13,000; Mr. Tagmyer - 79,705; Mr. Dunham -
110,694; Mr. Stokes - 41,589; Mr. Koenig - 45,360; Mr. Mitchell -
31,032; and all directors and officers as a group - 365,628.
(2) The information as to beneficial ownership is based on a Schedule 13G
filed with the Securities and Exchange Commission by Fleet Boston
Corporation on February 14, 2000, reflecting its beneficial ownership
of Common Stock as of December 31, 1999. The Schedule 13G states that
Fleet Boston Corporation has sole voting power with respect to 379,060
shares of Common Stock and sole dispositve power with respect to
540,360 shares of Common Stock.
(3) The information as to beneficial ownership is based on a Schedule 13G
filed with the Securities and Exchange Commission by Frontier Capital
Management LLC on February 15, 2000, reflecting its beneficial
ownership of Common Stock as of December 31, 1999. The Schedule 13G
states that Frontier Capital Management LLC has sole voting and
dispositive power with respect to 472,630 shares of Common Stock.
(4) The information as to beneficial ownership is based on a Schedule 13G
filed with the Securities and Exchange Commission by Becker Capital
Management, Inc. on January 28, 2000, reflecting its beneficial
ownership of Common Stock as of December 31, 1999. The Schedule 13G
states that Becker Capital Management has sole voting power with
respect to 391,417 shares of Common Stock and sole dispositve power
with respect to 459,417 shares of Common Stock.
(5) The information as to beneficial ownership is based on a Schedule 13G
filed with the Securities and Exchange Commission by Dimensional Fund
Advisors Inc. on February 3, 2000, reflecting its beneficial ownership
of Common Stock as of December 31, 1999. The Schedule 13G states that
Dimensional Fund Advisors Inc. has sole voting and dispositive power
with respect to 444,600 shares of Common Stock.
(6) The information as to beneficial ownership is based on a Schedule 13G
filed with the Securities and Exchange Commission by Benson Associates,
LLC on February 16, 2000, reflecting its beneficial ownership of Common
Stock as of December 31, 1999. The Schedule 13G states that Benson
Associates, LLC has sole voting and dispositive power with respect to
386,827 shares of Common Stock.
(7) Shares held by Mr. Kingsley include 2,593 shares held in trust over
which Mr. Kingsley has sole voting and dispositive power.
13
APPROVAL OF AMENDMENT TO THE AMENDED 1995 STOCK INCENTIVE PLAN
(PROPOSAL NO. 2)
The Company maintains its Amended 1995 Stock Incentive Plan (the "1995 Plan") to
provide incentives to the Company's key employees and others who provide
services to the Company. The Board of Directors believes that the availability
of stock incentives is an important factor in the Company's ability to attract
and retain the best available personnel for positions of substantial
responsibility and to provide an incentive for them to exert their best efforts
on behalf of the Company. A total of 629,000 shares of Common Stock have been
reserved for issuance under the 1995 Plan. As of February 29, 2000 only 70,828
shares remained available for grant under the 1995 Plan. The Board of Directors
believes that additional shares will be needed under the 1995 Plan to provide
appropriate incentives to employees and others. Accordingly, the Board of
Directors has approved, and recommends shareholder adoption of, an amendment to
the 1995 Plan that would increase from 629,000 shares to 929,000 shares the
number of shares of Common Stock that are reserved for issuance under the 1995
Plan.
SUMMARY OF THE 1995 PLAN
As of February 29, 2000 there were twelve officers and directors and 1,264
employees of the Company eligible to participate in the 1995 Plan. Because the
directors, officers and employees of the Company who may participate in the 1995
Plan and the amount of their options will be determined by the Compensation
Committee in its discretion, it is not possible to state the names or positions
of, or the number of options that may be granted to, the Company's directors,
officers and employees.
The 1995 Plan, which was approved by the Company's shareholders on August 8,
1995, provides for grants of both "incentive stock options" within the meaning
of Section 422 of the Code and "non-qualified stock options" which are not
qualified for treatment under Section 422 of the Code, and for direct stock
grants and sales to employees or consultants of the Company, including
directors. No employee may receive options under the 1995 Plan for more than
100,000 shares of Common Stock in any one fiscal year, except that options for
up to an additional 100,000 shares of Common Stock may be granted in connection
with a person's initial employment with the Company.
The administration of the 1995 Plan has been delegated to the Compensation
Committee of the Board of Directors (the "Committee"). In addition to
determining who will be granted options, the Committee has the authority and
discretion to determine when options will be granted and the number of options
to be granted and whether the options will be incentive stock options or
non-qualified stock options. Only "employees" of the Company as that term is
defined in the Code will be entitled to receive Incentive Stock Options. See
"Federal Income Tax Consequences" below. The Committee also may determine the
time or times when each option becomes exercisable, the duration of the exercise
period for options and the form or forms of the instruments evidencing options
granted under the Plan. The Committee also may construe the Plan and the
provisions in the instruments evidencing options granted under the Plan to
participants and is empowered to make all other determinations deemed necessary
or advisable for the administration of the Plan.
The term of each option granted under the 1995 Plan will be ten years from the
date of grant, or such shorter period as may be established at the time of the
grant. An option granted under the 1995 Plan may be exercised at such times and
under such conditions as determined by the Compensation Committee. If a person
who has been granted an option ceases to be an employee or consultant of the
Company, such person may exercise that option only during the three month period
after the date of termination, and only to the extent that the option was
exercisable on the date of termination. If a person who has been granted an
option ceases to be an employee or consultant as a result of such person's total
and permanent disability, such person may exercise that option at any time
within twelve months after the date of termination, but only to the extent that
the option was exercisable on the date of termination. Except as otherwise
provided by the Compensation Committee at the time an option is granted, no
option granted under the 1995 Plan is transferable other than at death, and each
option is exercisable during the life of the optionee only by the optionee. In
the event of the death of a person who has received an option, the option
generally may be
14
exercised by a person who acquired the option by bequest or inheritance during
the twelve month period after the date of death to the extent that such option
was exercisable at the date of death.
The exercise price of incentive stock options granted under the 1995 Plan may
not be less than the fair market value of a share of Common Stock on the date of
grant of the option. For non-qualified stock options, the exercise price may be
less than, equal to, or greater than the fair market value of the Common Stock
on the date of grant, provided that the Compensation Committee must specifically
determine that any option grant at an exercise price less than fair market value
is in the best interests of the Company. The consideration to be paid upon
exercise of an option, including the method of payment, will be determined by
the Compensation Committee and may consist entirely of cash, check, shares of
Common Stock, such other consideration and method of payment permitted by
applicable law or any combination of such methods of payment as permitted by the
Compensation Committee. The Compensation Committee has the authority to reset
the price of any stock option after the original grant and before exercise. In
the event of stock dividends, splits, and similar capital changes, the 1995 Plan
provides for appropriate adjustments in the number of shares available for
option and the number and option prices of shares subject to outstanding
options.
In the event of a proposed sale of all or substantially all of the assets of the
Company, or a merger of the Company with and into another corporation,
outstanding options shall be assumed or equivalent options shall be substituted
by such successor corporation, unless the Committee provides all option holders
with the right to immediately exercise all of their options, whether vested or
unvested. In the event of a proposed dissolution or liquidation of the Company,
outstanding options will terminate immediately prior to the consummation of such
proposed action, unless otherwise provided by the Board. In such a situation,
the Board is authorized to give option holders the right to immediately exercise
all of their options, whether vested or unvested.
The 1995 Plan will continue in effect until June 2005, unless earlier terminated
by the Board of Directors, but such termination will not affect the terms of any
options outstanding at that time. The Board of Directors may amend, terminate or
suspend the 1995 Plan at any time. Amendments to the 1995 Plan must be approved
by shareholders if required by applicable tax, securities or other law or
regulation.
The issuance of shares of Common Stock upon the exercise of options is subject
to registration with the Securities and Exchange Commission of the shares
reserved by the Company under the 1995 Plan.
FEDERAL INCOME TAX CONSEQUENCES
The federal income tax discussion set forth below is included for general
information only. Optionees are urged to consult their tax advisors to determine
the particular tax consequences applicable to them, including the application
and effect of foreign, state and local income and other tax laws.
INCENTIVE STOCK OPTIONS. Certain options authorized to be granted under the 1995
Plan are intended to qualify as incentive stock options for federal income tax
purposes. Under federal income tax law currently in effect, the optionee will
recognize no income upon grant or upon a proper exercise of an incentive stock
option. If an employee exercises an incentive stock option and does not dispose
of any of the option shares within two years following the date of grant and
within one year following the date of exercise, then any gain realized upon
subsequent disposition of the shares will be treated as income from the sale or
exchange of a capital asset. If an employee disposes of shares acquired upon
exercise of an incentive stock option before the expiration of either the
one-year holding period or the two-year waiting period, any amount realized will
be taxable as ordinary compensation income in the year of such disqualifying
disposition to the extent that the lesser of the fair market value of the shares
on the exercise date or the proceeds of the sale of the shares exceeds the
exercise price.
NON-QUALIFIED STOCK OPTIONS. Certain options authorized to be granted under the
1995 Plan will be treated as non-qualified stock options for federal income tax
purposes. Under federal income tax law presently in
15
effect, no income is realized by the grantee of a non-qualified stock option
pursuant to the 1995 Plan until the option is exercised. At the time of exercise
of a non-qualified stock option, the optionee will realize ordinary compensation
income, and the Company will be entitled to a deduction, in the amount by which
the market value of the shares subject to the option at the time of exercise
exceeds the exercise price. Upon the sale of shares acquired upon exercise of a
non-qualified stock option, the excess of the amount realized from the sale over
the market value of the shares on the date of exercise will be taxable.
CONSEQUENCES TO THE COMPANY. The Company recognizes no deduction at the time of
grant or exercise of an incentive stock option. The Company will recognize a
deduction at the time of exercise of a non-qualified stock option on the
difference between the option price and the fair market value of the shares on
the date of grant. The Company also will recognize a deduction to the extent the
optionee recognizes income upon a disqualifying disposition of shares underlying
an incentive stock option.
Under Section 162(m) of the Code, publicly-held companies may be limited as to
income tax deductions to the extent total remuneration (including compensation
received through the exercise of stock options) for certain executive officers
exceeds $1 million in any one year. However, Section 162(m) provides an
exception for "performance-based" remuneration, including stock options. Section
162(m) requires that certain actions must be taken by a compensation committee
of two or more outside directors and that the material terms of such
remuneration must be approved by a majority vote of the shareholders in order
for stock options to qualify as "performance-based" remuneration. The
regulations adopted pursuant to Section 162(m) which establish the requirements
for options to be treated as "performance-based" remuneration require stock
option plans to set forth the maximum number of options that may be awarded to
any employee in any one year. Accordingly, the number of options that may be
awarded to any employee under the 1995 Plan in any calendar year is limited to
100,000, except that options for up to an additional 100,000 shares may be
granted in connection with a person's initial employment with the Company.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THIS PROPOSAL. For the
reasons discussed above, the Board recommends a vote FOR approval of the
amendment to the Company's Amended 1995 Stock Incentive Plan. If a quorum is
present, this proposal will be approved if a majority of the votes cast on the
proposal are voted in favor of approval. Abstentions and broker non-votes are
counted for purposes of determining whether a quorum exists at the Annual
Meeting but are not counted and have no effect on the determination of the
outcome of this proposal.
16
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
(PROPOSAL NO. 3)
The Board of Directors has appointed PricewaterhouseCoopers LLP, independent
accountants, as auditors of the Company for the year ending December 31, 2000,
subject to ratification by the shareholders.
Unless otherwise indicated, properly executed proxies will be voted in favor of
ratifying the appointment of PricewaterhouseCoopers LLP to audit the books and
accounts of the Company for the year ending December 31, 2000. No determination
has been made as to what action the Board of Directors would take if the
shareholders do not ratify the appointment.
A representative of PricewaterhouseCoopers LLP is expected to be present at the
Annual Meeting. The representative will be given the opportunity to make a
statement on behalf of his firm if such representative so desires, and will be
available to respond to any appropriate questions of any shareholder.
PricewaterhouseCoopers LLP were the Company's independent accountants for the
year ended December 31, 1999.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THIS PROPOSAL. If a
quorum is present, this proposal will be approved if the votes cast by the
shareholders entitled to vote favoring the ratification exceeds the votes cast
opposing the ratification. Abstentions and broker non-votes are counted for
purposes of determining whether a quorum exists at the Annual Meeting, but are
not counted and have no effect on the determination of the outcome of this
proposal.
DATE FOR SUBMISSION OF SHAREHOLDER PROPOSALS
Any shareholder proposal intended for inclusion in the proxy statement and form
of proxy relating to the Company's 2001 annual meeting of shareholders must be
received by the Company not later than November 30, 2000 pursuant to the proxy
soliciting regulations of the SEC. In addition, the Company's Bylaws require
that notice of shareholder proposals and nominations for director be delivered
to the Secretary of the Company not less than 60 days nor more than 90 days
prior to the date of an annual meeting, unless notice or public disclosure of
the date of the meeting occurs less than 60 days prior to the date of such
meeting, in which event, shareholders may deliver such notice not later than the
tenth day following the day on which notice of the date of the meeting was
mailed or public disclosure thereof was made. Nothing in this paragraph shall be
deemed to require the Company to include in its proxy statement and form of
proxy for such meeting any shareholder proposal which does not meet the
requirements of the SEC in effect at the time.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors does not know of
any other matters to be presented for action by the shareholders at the 2000
Annual Meeting. If, however, any other matters not now known are properly
brought before the meeting, the persons named in the accompanying proxy will
vote such proxy in accordance with the determination of a majority of the Board
of Directors.
17
COST OF SOLICITATION
The cost of soliciting proxies will be borne by the Company. In addition to use
of the mails, proxies may be solicited personally or by telephone by directors,
officers and employees of the Company, who will not be specially compensated for
such activities. Such solicitations may be made personally, or by mail,
facsimile, telephone, telegraph or messenger. The Company will also request
persons, firms and companies holding shares in their names or in the name of
their nominees, which are beneficially owned by others, to send proxy materials
to and obtain proxies from such beneficial owners. The Company will reimburse
such persons for their reasonable expenses incurred in that connection.
ADDITIONAL INFORMATION
A copy of the Company's Annual Report to Shareholders for the year ended
December 31, 1999 accompanies this Proxy Statement. The Company will provide,
without charge, on the written request of any beneficial owner of shares of the
Company's Common Stock entitled to vote at the Annual Meeting, a copy of the
Company's Annual Report on Form 10-K as filed with the SEC for the year ended
December 31, 1999. Written requests should be mailed to the Secretary, Northwest
Pipe Company, 12005 N. Burgard, Portland, OR 97203.
By Order of the Board of Directors,
Brian W. Dunham
President and Chief Operating Officer
Portland, Oregon
March 28, 2000
18
EXHIBIT A
NORTHWEST PIPE COMPANY
AMENDED 1995 STOCK INCENTIVE PLAN *
1. PURPOSES OF THE PLAN.
The purposes of this Stock Incentive Plan are to attract and retain the
best available personnel for positions of substantial responsibility, to provide
additional incentive to the Employees and Consultants of the Company and to
promote the success of the Company's business.
Options granted hereunder may be either "incentive stock options," as
defined in Section 422 of the Internal Revenue Code of 1986, as amended, or
"nonqualified stock options," at the discretion of the Board and as reflected in
the terms of the written option agreement. In addition, shares of the Company's
Common Stock may be Sold hereunder independent of any Option grant.
2. DEFINITIONS.
As used herein, the following definitions shall apply:
2.1 "ADMINISTRATOR" shall mean the Board or any of its Committees
as shall be administering the Plan, in accordance with Section 4.1 of the Plan.
2.2 "BOARD" shall mean the Board of Directors of the Company.
2.3 "CODE" shall mean the Internal Revenue Code of 1986, as
amended.
2.4 "COMMITTEE" shall mean a Committee appointed by the Board
in accordance with Section 4.1 of the Plan.
2.5 "COMMON STOCK" shall mean the Class B Common Stock of the
Company.
2.6 "COMPANY" shall mean Northwest Pipe Company, an Oregon
corporation.
2.7 "CONSULTANT" shall mean any person who is engaged by the
Company or any Parent or Subsidiary to render consulting services and is
compensated for such consulting services and any Director of the Company whether
compensated for such services or not.
2.8 "CONTINUOUS STATUS AS AN EMPLOYEE OR CONSULTANT" shall mean
the absence of any interruption or termination of service as an Employee or
Consultant. Continuous Status as an Employee or Consultant shall not be
considered interrupted in the case of: (i) any sick leave, military leave, or
any other leave of absence approved by the Company; provided, however, that for
purposes of Incentive Stock Options, any such leave is for a period of not more
than ninety days or reemployment upon the expiration of such leave is guaranteed
by contract or statute, provided further, that on the ninety-first day of such
leave (where reemployment is not guaranteed by contract or statute) the
Optionee's Incentive Stock Option shall automatically convert to a Nonqualified
Stock Option; or (ii) transfers between locations of the Company or between the
Company, its Parent, its Subsidiaries or its successor.
2.9 "DIRECTOR" shall mean a member of the Board.
2.10 "DISABILITY" shall mean total and permanent disability as
defined in Section 22(e)(3) of the Code.
- ---------
* Material in boldface (other than headings) is new, and material in [brackets]
has been deleted.
1
2.11 "EMPLOYEE" shall mean any person, including Officers and
Directors, employed by the Company or any Parent or Subsidiary of the Company.
Neither the payment of a director's fee by the Company nor service as a Director
shall be sufficient to constitute "employment" by the Company.
2.12 "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934,
as amended.
2.13 "INCENTIVE STOCK OPTION" shall mean an Option intended to
qualify as an incentive stock option within the meaning of Section 422 of the
Code.
2.14 "NONQUALIFIED STOCK OPTION" shall mean an Option not intended
to qualify as an incentive stock option within the meaning of Section 422 of the
Code.
2.15 "NOTICE OF GRANT" shall mean a written notice evidencing
certain terms and conditions of an individual Option grant. The Notice of Grant
is part of the Option Agreement.
2.16 "OFFICER" shall mean a person who is an officer of the Company
within the meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder.
2.17 "OPTION" shall mean a stock option granted pursuant to the
Plan.
2.18 "OPTION AGREEMENT" shall mean a written agreement between the
Company and an Optionee evidencing the terms and conditions of an individual
Option grant. The Option Agreement is subject to the terms and conditions of the
Plan.
2.19 "OPTIONED STOCK" shall mean the Common Stock subject to an
Option.
2.20 "OPTIONEE" shall mean an Employee or Consultant who receives
an Option.
2.21 "PARENT" shall mean a "parent corporation," whether now or
hereafter existing, as defined in Section 424(e) of the Code.
2.22 "PLAN" shall mean this 1995 Stock Incentive Plan.
2.23 "RULE 16b-3" shall mean Rule 16b-3 of the Exchange Act or any
successor to Rule 16b-3, as in effect when discretion is being exercised with
respect to the Plan.
2.24 "SALE" or "SOLD" shall include, with respect to the sale of
Shares under the Plan, the sale of Shares for consideration in the form of cash
or notes, as well as a grant of Shares for consideration in the form of past or
future services.
2.25 "SHARE" shall mean a share of the Common Stock, as adjusted
in accordance with Section 11 of the Plan.
2.26 "SUBSIDIARY" shall mean a "subsidiary corporation," whether
now or hereafter existing, as defined in Section 424(f) of the Code.
3. STOCK SUBJECT TO THE PLAN.
Subject to the provisions of Section 11 of the Plan, the maximum
aggregate number of Shares which may be optioned and/or Sold under the Plan is
929,000 [629,000] shares of Common Stock. The Shares may be authorized, but
unissued, or reacquired Common Stock.
If an Option should expire or become unexercisable for any reason
without having been exercised in full, the unpurchased Shares which were subject
thereto shall, unless the Plan shall have been terminated,
2
become available for future Option grants and/or Sales under the Plan; provided,
however, that Shares that have actually been issued under the Plan shall not be
returned to the Plan and shall not become available for future distribution
under the Plan.
4. ADMINISTRATION OF THE PLAN.
4.1 PROCEDURE.
4.1.1 MULTIPLE ADMINISTRATIVE BODIES. If permitted by Rule
16b-3, the Plan may be administered by different bodies with respect to
Directors, Officers who are not Directors, and Employees who are
neither Directors nor Officers.
4.1.2 ADMINISTRATION WITH RESPECT TO DIRECTORS AND OFFICERS
SUBJECT TO SECTION 16(b). With respect to Option grants made to
Employees who are also Officers or Directors subject to Section 16(b)
of the Exchange Act, the Plan shall be administered by (A) the Board,
if the Board may administer the Plan in compliance with the rules
governing a plan intended to qualify as a discretionary plan under Rule
16b-3, or (B) a Committee designated by the Board to administer the
Plan, which Committee shall be constituted to comply with the rules, if
any, governing a plan intended to qualify as a discretionary plan under
Rule 16b-3. Once appointed, such Committee shall continue to serve in
its designated capacity until otherwise directed by the Board. From
time to time the Board may increase the size of the Committee and
appoint additional members, remove members (with or without cause) and
substitute new members, fill vacancies (however caused), and remove all
members of the Committee and thereafter directly administer the Plan,
all to the extent permitted by the rules, if any, governing a plan
intended to qualify as a discretionary plan under Rule 16b-3. With
respect to persons subject to Section 16 of the Exchange Act,
transactions under the Plan are intended to comply with all applicable
conditions of Rule 16b-3. To the extent any provision of the Plan or
action by the Administrator fails to so comply, it shall be deemed null
and void, to the extent permitted by law and deemed advisable by the
Administrator.
4.1.3 ADMINISTRATION WITH RESPECT TO OTHER PERSONS. With
respect to Option grants made to Employees or Consultants who are
neither Directors nor Officers of the Company, the Plan shall be
administered by the Board or a Committee designated by the Board, which
Committee shall be constituted to satisfy the legal requirements
relating to the administration of stock option plans under state
corporate and securities laws and the Code. Once appointed, such
Committee shall serve in its designated capacity until otherwise
directed by the Board. The Board may increase the size of the Committee
and appoint additional members, remove members (with or without cause)
and substitute new members, fill vacancies (however caused), and remove
all members of the Committee and thereafter directly administer the
Plan, all to the extent permitted by the legal requirements relating to
the administration of stock option plans under state corporate and
securities laws and the Code.
4.2 POWERS OF THE ADMINISTRATOR. Subject to the provisions of the
Plan, and in the case of a Committee, subject to the specific duties delegated
by the Board to such Committee, the Administrator shall have the authority, in
its discretion:
4.2.1 to grant Incentive Stock Options in accordance with
Section 422 of the Code, or Nonqualified Stock Options;
4.2.2 to authorize Sales of Shares of Common Stock hereunder;
4.2.3 to determine, upon review of relevant information and in
accordance with Section 8.2 of the Plan, the fair market value of the
Common Stock;
3
4.2.4 to determine the exercise/purchase price per Share of
Options to be granted or Shares to be Sold, which exercise/purchase
price shall be determined in accordance with Section 8.1 of the Plan;
4.2.5 to determine the Employees or Consultants to whom, and
the time or times at which, Options shall be granted and the number of
Shares to be represented by each Option;
4.2.6 to determine the Employees or Consultants to whom, and
the time or times at which, Shares shall be Sold and the number of
Shares to be Sold;
4.2.7 to interpret the Plan;
4.2.8 to prescribe, amend and rescind rules and regulations
relating to the Plan;
4.2.9 to determine the terms and provisions of each Option
granted (which need not be identical) and, with the consent of the
holder thereof, modify or amend each Option;
4.2.10 to determine the terms and provisions of each Sale of
Shares (which need not be identical) and, with the consent of the
purchaser thereof, modify or amend each Sale;
4.2.11 to accelerate or defer (with the consent of the
Optionee) the exercise date of any Option;
4.2.12 to accelerate or defer (with the consent of the
Optionee or purchaser of Shares) the vesting restrictions applicable to
Shares Sold under the Plan or pursuant to Options granted under the
Plan;
4.2.13 to authorize any person to execute on behalf of the
Company any instrument required to effectuate the grant of an Option or
Sale of Shares previously granted or authorized by the Board;
4.2.14 to determine the restrictions on transfer, vesting
restrictions, repurchase rights, or other restrictions applicable to
Shares issued under the Plan;
4.2.15 to effect, at any time and from time to time, with the
consent of the affected Optionees, the cancellation of any or all
outstanding Options under the Plan and to grant in substitution
therefor new Options under the Plan covering the same or different
numbers of Shares, but having an Option price per Share consistent with
the provisions of Section 8 of this Plan as of the date of the new
Option grant;
4.2.16 to establish, on a case-by-case basis, different terms
and conditions pertaining to exercise or vesting rights upon
termination of employment, whether at the time of an Option grant or
Sale of Shares, or thereafter;
4.2.17 to approve forms of agreement for use under the Plan;
4.2.18 to reduce the exercise price of any Option to the then
current fair market value if the fair market value of the Common Stock
covered by such Option shall have declined since the date the Option
was granted;
4.2.19 to determine whether and under what circumstances an
Option may be settled in cash under subsection 9.5 instead of Common
Stock; and
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4.2.20 to make all other determinations deemed necessary or
advisable for the administration of the Plan.
4.3 EFFECT OF BOARD'S DECISION. All decisions, determinations and
interpretations of the Administrator shall be final and binding on all Optionees
and any other holders of any Options granted under the Plan or Shares Sold under
the Plan.
5. ELIGIBILITY.
5.1 PERSONS ELIGIBLE. Options may be granted and/or Shares Sold only to
Employees and Consultants. Incentive Stock Options may be granted only to
Employees. An Employee or Consultant who has been granted an Option or Sold
Shares may, if he or she is otherwise eligible, be granted an additional Option
or Options or Sold additional Shares.
5.2 ISO LIMITATION. To the extent that the aggregate fair market value:
(i) of shares subject to an Optionee's Incentive Stock Options granted by the
Company, any Parent or Subsidiary, which (ii) become exercisable for the first
time during any calendar year (under all plans of the Company or any Parent or
Subsidiary) exceeds $100,000, such excess Options shall be treated as
Nonqualified Stock Options. For purposes of this Section 5.2, Incentive Stock
Options shall be taken into account in the order in which they were granted, and
the fair market value of the Shares shall be determined as of the time of grant.
5.3 SECTION 5.2 LIMITATIONS. Section 5.2 of the Plan shall apply only
to an Incentive Stock Option evidenced by an Option Agreement which sets forth
the intention of the Company and the Optionee that such Option shall qualify as
an Incentive Stock Option. Section 5.2 of the Plan shall not apply to any Option
evidenced by a Option Agreement which sets forth the intention of the Company
and the Optionee that such Option shall be a Nonqualified Stock Option.
5.4 NO RIGHT TO CONTINUED EMPLOYMENT. The Plan shall not confer upon
any Optionee any right with respect to continuation of employment or consulting
relationship with the Company, nor shall it interfere in any way with his or her
right or the Company's right to terminate his employment or consulting
relationship at any time.
5.5 OTHER LIMITATIONS. The following limitations shall apply to
grants of Options to Employees:
5.5.1 No Employee shall be granted, in any fiscal year of
the Company, Options to purchase more than 100,000 Shares.
5.5.2 In connection with his or her initial employment, an
Employee may be granted Options to purchase up to an additional 100,000 Shares
which shall not count against the limit set forth in subsection 5.5.1 above.
5.5.3 The foregoing limitations shall be adjusted
proportionately in connection with any change in the Company's capitalization as
described in Section 11.
5.5.4 If an Option is canceled in the same fiscal year of the
Company in which it was granted (other than in connection with a transaction
described in Section 11, the canceled Option shall be counted against the limits
set forth in subsections 5.5.1 and 5.5.2) above. For this purpose, if the
exercise price of an Option is reduced, the transaction will be treated as a
cancellation of the Option and the grant of a new Option.
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6. TERM OF PLAN.
The Plan shall become effective upon the earlier to occur of its
adoption by the Board or its approval by the shareholders of the Company as
described in Section 17 of the Plan. It shall continue in effect for a term of
ten (10) years, unless sooner terminated under Section 13 of the Plan.
7. TERM OF OPTION.
The term of each Option shall be stated in the Notice of Grant;
provided, however, that in the case of an Incentive Stock Option, the term shall
be ten (10) years from the date of grant or such shorter term as may be provided
in the Notice of Grant. However, in the case of an Incentive Stock Option
granted to an Optionee who, at the time the Incentive Stock Option is granted,
owns stock representing more than ten percent (10%) of the voting power of all
classes of stock of the Company or any Parent or Subsidiary, the term of the
Incentive Stock Option shall be five (5) years from the date of grant thereof or
such shorter term as may be provided in the Notice of Grant.
8. EXERCISE/PURCHASE PRICE AND CONSIDERATION.
8.1 EXERCISE/PURCHASE PRICE. The per-Share exercise/purchase price for
the Shares to be issued pursuant to exercise of an Option or a Sale shall be
such price as is determined by the Administrator, but shall be subject to the
following:
8.1.1 In the case of an Incentive Stock Option
8.1.1.1 granted to an Employee who, at the time of
the grant of such Incentive Stock Option, owns stock
representing more than ten percent (10%) of the voting power
of all classes of stock of the Company or any Parent or
Subsidiary, the per Share exercise price shall be no less than
one hundred ten percent (110%) of the fair market value per
Share on the date of the grant.
8.1.1.2 granted to any other Employee, the per Share
exercise price shall be no less than one hundred percent
(100%) of the fair market value per Share on the date of
grant.
8.1.2 In the case of a Nonqualified Stock Option or Sale the
per Share exercise/purchase price determined by the Administrator.
Any determination to establish an Option exercise price or effect a
Sale of Common Stock at less than fair market value on the date of the Option
grant or authorization of Sale shall be accompanied by an express finding by the
Administrator specifying that the sale is in the best interest of the Company,
and specifying both the fair market value and the Option exercise or Sale price
of the Common Stock.
8.2 FAIR MARKET VALUE. The fair market value per Share shall be
determined by the Administrator in its discretion; provided, however, that where
there is a public market for the Common Stock, the fair market value per Share
shall be the closing price of the Common Stock (or the closing bid if no sales
were reported) for the date of grant of the Option or authorization of Sale or
other determination, as reported in THE WALL STREET JOURNAL (or, if not so
reported, as otherwise reported by the National Association of Securities
Dealers Automated Quotation (NASDAQ) System) or, in the event the Common Stock
is listed on a stock exchange, the fair market value per Share shall be the
closing price on such exchange for the date of grant of the Option or
authorization of Sale or other determination, as reported in THE WALL STREET
JOURNAL.
8.3 CONSIDERATION. The consideration to be paid for the Shares to be
issued upon exercise of an Option or pursuant to a Sale, including the method of
payment, shall be determined by the Administrator. In
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the case of an Incentive Stock Option, the Administrator shall determine the
acceptable form of consideration at the time of grant. Such consideration may
consist of:
8.3.1 cash;
8.3.2 check;
8.3.3 transfer to the Company of Shares which
8.3.3.1 in the case of Shares acquired upon exercise
of an Option, have been owned by the Optionee for more than
six months on the date of surrender, and
8.3.3.2 have a fair market value on the date of
surrender equal to the aggregate exercise price of the Shares
as to which said Option shall be exercised;
8.3.4 delivery of a properly executed exercise notice together
with irrevocable instructions to a broker to promptly deliver to the
Company the amount of Sale or loan proceeds required to pay the
exercise price;
8.3.5 such other consideration and method of payment for the
issuance of Shares to the extent permitted by legal requirements
relating to the administration of stock option plans under state
corporate and securities laws and the Code; or
8.3.6 any combination of the foregoing methods of payment.
If the fair market value of the number of whole Shares transferred or
the number of whole Shares surrendered is less than the total exercise price of
the Option, the shortfall must be made up in cash or by check. Notwithstanding
the foregoing provisions of this Section 8.3, the consideration for Shares to be
issued pursuant to a Sale may not include, in whole or in part, the
consideration set forth in subsections 8.3.3 and 8.3.4 above.
9. EXERCISE OF OPTION.
9.1 PROCEDURE FOR EXERCISE; RIGHTS AS A SHAREHOLDER. Any Option granted
hereunder shall be exercisable at such times and under such conditions as
determined by the Administrator, including performance criteria with respect to
the Company and/or the Optionee, and as shall be permissible under the terms of
the Plan.
An Option may not be exercised for a fraction of a Share.
An Option shall be deemed to be exercised when written notice of such
exercise has been given to the Company in accordance with the terms of the
Option by the person entitled to exercise the Option and full payment for the
Shares with respect to which the Option is exercised has been received by the
Company. Full payment may, as authorized by the Administrator, consist of any
consideration and method of payment allowable under the Option Agreement and
Section 8.3 of the Plan. Each Optionee who exercises an Option shall, upon
notification of the amount due (if any) and prior to or concurrent with delivery
of the certificate representing the Shares, pay to the Company amounts necessary
to satisfy applicable federal, state and local tax withholding requirements. An
Optionee must also provide a duly executed copy of any stock transfer agreement
then in effect and determined to be applicable by the Administrator. Until the
issuance (as evidenced by the appropriate entry on the books of the Company or
of a duly authorized transfer agent of the Company) of the stock certificate
evidencing such Shares, no right to vote or receive dividends or any other
rights as a shareholder shall exist with respect to the Optioned Stock,
notwithstanding the exercise of the Option. No adjustment will be made for a
dividend or other right for which the record date is prior to the date the stock
certificate is issued, except as provided in Section 11 of the Plan.
7
Exercise of an Option in any manner shall result in a decrease in the
number of Shares which thereafter may be available, both for purposes of the
Plan and for sale under the Option, by the number of Shares as to which the
Option is exercised.
9.2 TERMINATION OF EMPLOYMENT OR CONSULTING RELATIONSHIP. In the event
that an Optionee's Continuous Status as an Employee or Consultant terminates
(other than upon the Optionee's death or Disability) the Optionee may exercise
his or her Option, but only within such period of time as is determined by the
Administrator, and only to the extent that the Optionee was entitled to exercise
it at the date of termination (but in no event later than the expiration of the
term of such Option as set forth in the Notice of Grant). In the case of an
Incentive Stock Option, the Administrator shall determine such period of time
(in no event to exceed ninety (90) days from the date of termination) when the
Option is granted. If, at the date of termination, the Optionee is not entitled
to exercise his or her entire Option, the Shares covered by the unexercisable
portion of the Option shall revert to the Plan. If, after termination, the
Optionee does not exercise his or her Option with the time specified by the
Administrator, the Option shall terminate, and the Shares covered by such Option
shall revert to the Plan.
9.3 DISABILITY OF OPTIONEE. In the event that an Optionee's Continuous
Status as an Employee or Consultant terminates as a result of the Optionee's
Disability, the Optionee may exercise his or her Option at any time within
twelve (12) months from the date of such termination, but only to the extent
that the Optionee was entitled to exercise it at the date of such termination
(but in no event later than the expiration of the term of such Option as set
forth in the Notice of Grant). If, at the date of termination, the Optionee is
not entitled to exercise his or her entire Option, the Shares covered by the
unexercisable portion of the Option shall revert to the Plan. If, after
termination, the Optionee does not exercise his or her Option within the time
specified herein, the Option shall terminate, and the Shares covered by such
Option shall revert to the Plan.
9.4 DEATH OF OPTIONEE. In the event of the death of an Optionee, the
Option may be exercised at any time within twelve (12) months following the date
of death (but in the no event later than the expiration of the term of such
Option as set forth in the Notice of Grant), by the Optionee's estate or by a
person who acquired the right to exercise the Option by bequest or inheritance,
but only to the extent that the Optionee was entitled to exercise the Option at
the date of death. If, at the time of death, the Optionee was not entitled to
exercise his or her entire Option, the Shares covered by the unexercisable
portion of the Option shall revert to the Plan. If, after death, the Optionee's
estate or a person who acquired the right to exercise the Option by bequest or
inheritance does not exercise the Option within the time specified herein, the
Option shall terminate, and the Shares covered by such Option shall revert to
the Plan.
9.5 BUYOUT PROVISIONS. The Administrator may at any time offer to
buyout for a payment in cash or Shares, an Option previously granted, based on
such terms and conditions as the Administrator shall establish and communicate
to the Optionee at the time such offer is made.
10. NONTRANSFERABILITY OF OPTIONS.
Except as otherwise specifically provided in the Option Agreement, an
Option may not be sold, pledged, assigned, hypothecated, transferred or disposed
of in any manner other than by will, or by the laws of descent and distribution,
and may be exercised during the lifetime of the Optionee only by the Optionee
or, if incapacitated, by his or her legal guardian or legal representative.
8
11. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION OR MERGER.
11.1 CHANGES IN CAPITALIZATION: Subject to any required action by the
shareholders of the Company, the number of shares of Common Stock covered by
each outstanding Option and the number of shares of Common Stock which have been
authorized for issuance under the Plan but as to which no Options have yet been
granted or Sales made or which have been returned to the Plan upon cancellation
or expiration of an Option, as well as the price per share of Common Stock
covered by each such outstanding Option, shall be proportionately adjusted for
any increase or decrease in the number of issued shares of Common Stock
resulting from a stock split, reverse stock split, stock dividend, combination
or reclassification of the Common Stock, or any other increase or decrease in
the number of issued shares of Common Stock effected without receipt of
consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the
Administrator, whose determination in that respect shall be final, binding and
conclusive. Except as expressly provided herein, no issuance by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares of Common Stock subject to an Option.
11.2 DISSOLUTION OR LIQUIDATION. In the event of the proposed
dissolution or liquidation of the Company, each outstanding Option will
terminate immediately prior to the consummation of such proposed action, unless
otherwise provided by the Administrator. The Administrator may, in the exercise
of its sole discretion in such instances, declare that any Option shall
terminate as of a date fixed by the Board and give each Optionee the right to
exercise his or her Option as to all or any part of the Optioned Stock,
including Shares as to which the Option would not otherwise be exercisable.
11.3 MERGER OR ASSET SALE. In the event of a proposed sale of all or
substantially all of the assets of the Company, or the merger of the Company
with or into another corporation, each outstanding Option shall be assumed or an
equivalent option shall be substituted by such successor corporation or a Parent
or Subsidiary of such successor corporation, unless the Administrator
determines, in the exercise of its sole discretion and in lieu of such
assumption or substitution, that the Optionee shall have the right to exercise
the Option as to all of the Optioned Stock, including Shares as to which the
Option would not otherwise be exercisable. If the Administrator makes an Option
fully exercisable in lieu of assumption or substitution in the event of a merger
or sale of assets, the Administrator shall notify the Optionee that the Option
shall be fully exercisable for a period of thirty (30) days from the date of
such notice or such shorter period as the Administrator may specify in the
notice, and the Option will terminate upon the expiration of such period. For
the purposes of this paragraph, the Option shall be considered assumed if,
following the merger or sale of assets, the Option confers the right to
purchase, for each Share of Optioned Stock subject to the Option immediately
prior to the merger or sale of assets, the consideration (whether stock, cash,
or other securities or property) received in the merger or sale of assets by
holders of Common Stock for each Share held on the effective date of the
transaction (and if holders were offered a choice of consideration, the type of
consideration chosen by the holders of a majority of the outstanding Shares);
provided, however, that if such consideration received in the merger or sale of
assets was not solely common stock of the successor corporation or its Parent,
the Administrator may, with the consent of the successor corporation and the
Optionee, provide for the consideration to be received upon the exercise of the
Option, for each Share of Optioned Stock subject to the Option, to be solely
common stock of the successor corporation or its Parent equal in fair market
value to the per share consideration received by holders of Common Stock in the
merger or sale of assets.
12. TIME OF GRANTING OPTIONS.
The date of grant of an Option shall, for all purposes, be the date on
which the Administrator makes the determination granting such Option. Notice of
the determination shall be given to each Optionee within a reasonable time after
the date of such grant.
9
13. AMENDMENT AND TERMINATION OF THE PLAN.
13.1 AMENDMENT AND TERMINATION. The Board may amend or terminate the
Plan from time to time in such respects as the Board may deem advisable.
13.2 SHAREHOLDER APPROVAL. The Company shall obtain shareholder
approval of any Plan amendment to the extent necessary and desirable to comply
with Rule 16b-3 or with Section 422 of the Code (or any successor rule or
statute or other applicable law, rule or regulation, including the requirements
of any exchange or quotation system on which the Common Stock is listed or
quoted). Such shareholder approval, if required, shall be obtained in such a
manner and to such a degree as is required by the applicable law, rule or
regulation.
13.3 EFFECT OF AMENDMENT OR TERMINATION. Any such amendment or
termination of the Plan shall not affect Options already granted, and such
Options shall remain in full force and effect as if this Plan had not been
amended or terminated, unless mutually agreed otherwise between the Optionee and
the Administrator, which agreement must be in writing and signed by the Optionee
and the Company.
14. CONDITIONS UPON ISSUANCE OF SHARES.
Shares shall not be issued pursuant to the exercise of an Option or a
Sale unless the exercise of such Option or consummation of the Sale and the
issuance and delivery of such Shares pursuant thereto shall comply with all
relevant provisions of law, including, without limitation, the Securities Act of
1933, as amended, applicable state securities laws, the Exchange Act, the rules
and regulations promulgated thereunder, and the requirements of any stock
exchange (including NASDAQ) upon which the Shares may then be listed, and shall
be further subject to the approval of counsel for the Company with respect to
such compliance.
15. RESERVATION OF SHARES.
The Company, during the term of this Plan, will at all times reserve
and keep available such number of Shares as shall be sufficient to satisfy the
requirements of the Plan.
16. LIABILITY OF COMPANY.
16.1 INABILITY TO OBTAIN AUTHORITY. Inability of the Company to obtain
authority from any regulatory body having jurisdiction, which authority is
deemed by the Company's counsel to be necessary to the lawful issuance and sale
of any Shares hereunder, shall relieve the Company of any liability in respect
of the failure to issue or sell such Shares as to which such requisite authority
shall not have been obtained.
As a condition to the exercise of an Option or a Sale, the Company may
require the person exercising such Option or to whom Shares are being Sold to
represent and warrant at the time of any such exercise or Sale that the Shares
are being purchased only for investment and without any present intention to
sell or distribute such Shares if, in the opinion of counsel for the Company,
such a representation is required by any of the aforementioned relevant
provisions of law.
16.2 GRANTS EXCEEDING ALLOTTED SHARES. If the Optioned Stock covered by
an Option exceeds, as of the date of grant, the number of Shares which may be
issued under the Plan without additional shareholder approval, such Option shall
be void with respect to such excess Optioned Stock, unless shareholder approval
of an amendment sufficiently increasing the number of Shares subject to the Plan
is timely obtained in accordance with Section 13 of the Plan.
10
17. SHAREHOLDER APPROVAL.
Continuance of the Plan shall be subject to approval by the
shareholders of the Company within twelve months before or after the date the
Plan is adopted. Such shareholder approval shall be obtained in the manner and
to the degree required under applicable federal and state law.
11
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NORTHWEST PIPE COMPANY
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 2, 2000
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting of Shareholders and Proxy Statement, each dated
March 28, 2000 and hereby names, constitutes and appoints William R. Tagmyer and Brian W. Dunham, or each of them acting in
absence of the other, with full power of substitution, my true and lawful attorneys and Proxies for me and in my place and stead
to attend the Annual Meeting of the Shareholders of Northwest Pipe Company (the "Company") to be held at 9:00 a.m. local time in
Portland, Oregon on Tuesday, May 2, 2000 and at any adjournments or postponements thereof, and to vote all the shares of Common
Stock held of record in the name of the undersigned on March 6, 2000, with all the powers that the undersigned would possess if
he were personally present.
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Please mark
your votes as
indicated in /X/
this example
FOR ALL
NOMINEES
LISTED WITHHOLD
BELOW AUTHORITY
(EXCEPT (TO VOTE
AS MARKED FOR ALL
TO THE NOMINEES
CONTRARY LISTED FOR AGAINST ABSTAIN ON
BELOW) BELOW) PROPOSAL 2 PROPOSAL 2 PROPOSAL 2
1. PROPOSAL 1--Election of Directors / / / / 2. PROPOSAL 2--To approve and adopt / / / / / /
an amendment the Northwest Pipe
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY Company Amended 1995 Stock
INDIVIDUAL NOMINEE, STRIKE A LINE THROUGH THE NOMINEE'S Incentive Plan to increase the
NAME IN THE LIST BELOW.) number of shares reserved for
issuance thereunder from 629,000
BRIAN W. DUNHAM WAYNE B. KINGSLEY to 929,000 shares.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE
EACH OF THE NOMINEES NAMED ABOVE. APPROVAL OF PROPOSAL 2.
FOR AGAINST ABSTAIN ON
PROPOSAL 3 PROPOSAL 3 PROPOSAL 3
3. PROPOSAL 3--To ratify the / / / / / /
appointment of
PricewaterhouseCoopers LLP
as the Company's independent
auditors for the year ending
December 31, 2000.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE
APPROVAL OF PROPOSAL 3.
4. Upon such other matters as may properly come before, or incident
to the conduct of the Annual Meeting, the Proxy holders shall
vote in such manner as they determine to be in the best
interests of the Company. The Company is not presently aware of
any such matters to be presented for action at the meeting.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF
THE COMPANY. IF NO SPECIFIC DIRECTION IS GIVEN AS TO
ANY OF THE ABOVE ITEMS, THIS PROXY WILL BE VOTED FOR
THE TWO NOMINEES NAMED IN PROPOSAL 1 AND FOR PROPOSALS 2
AND 3. THE UNDERSIGNED SHAREHOLDER HEREBY ACKNOWLEDGES
RECEIPT OF THE COMPANY'S PROXY STATEMENT AND HEREBY REVOKES
ANY OTHER PROXY OR PROXIES PREVIOUSLY GIVEN.
I do ( ) do not ( ) plan to attend the meeting.
(Please check)
Shareholder (print name)_____________________________________ Shareholder (sign name)____________________________Dated_____________
Please sign exactly as your name appears on the Proxy Card. If shares are registered in more than one name, the signatures of all
such persons are required. A corporation should sign in its full corporate name by a duly authorized officer, stating his/her
title. Trustees, guardians, executors and administrators should sign in their official capacity, giving their full titles as such.
If a partnership is signing, please sign in the partnership name by authorized person(s). If you receive more than one Proxy Card,
please sign and return all such cards in the accompanying envelope.
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