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 Section 240.14a-11(c) or Section 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
11, 1999 at the Doubletree Hotel, 222 N. Vineyard Avenue, Ontario, CA, 91764, 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. APPROVAL OF EMPLOYEE STOCK PURCHASE PLAN. To approve the
Northwest Pipe Company 1999 Employee Stock Purchase Plan (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, 1999 (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 12, 1999 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
April 7, 1999
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.
NORTHWEST PIPE COMPANY
12005 N. BURGARD
PORTLAND, OREGON 97203
PROXY STATEMENT FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 11, 1999
---------------------
INTRODUCTION
GENERAL
This Proxy Statement and the accompanying 1998 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
11, 1999 at the Doubletree Hotel, 222 N. Vineyard Avenue, Ontario, CA, 91764, at
9:00 a.m., local time. At the Annual Meeting, shareholders will be asked to
elect two members of the Board of Directors, to approve the Northwest Pipe
Company 1999 Employee Stock Purchase 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, 1999, 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 1998 Annual Report to Shareholders, are first being mailed to
shareholders of the Company on or about April 7, 1999.
SOLICITATION, VOTING AND REVOCABILITY OF PROXIES
The Board of Directors has fixed the close of business on March 12, 1999 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 6,449,232 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 APPROVAL OF THE NORTHWEST PIPE COMPANY 1999 EMPLOYEE STOCK
PURCHASE PLAN AND FOR THE RATIFICATION OF THE APPOINTMENT OF
PRICEWATERHOUSECOOPERS LLP AS THE COMPANY'S INDEPENDENT AUDITORS FOR THE YEAR
ENDING DECEMBER 31, 1999. 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.
1
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:
William R. Tagmyer 61 1986 1999
Neil R. Thornton 68 1995 1999
CONTINUING DIRECTORS:
Brian W. Dunham 41 1995 2000
Wayne B. Kingsley 56 1987 2000
Warren K. Kearns 69 1986 2001
Vern B. Ryles, Jr. 61 1986 2001
NOMINEES FOR DIRECTOR
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.
CONTINUING DIRECTORS
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 L.L.P., independent accountants.
2
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. and serves as a
director of Coleman Natural Products, Inc.
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.
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 six (6) times during 1998. 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 1998. 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 1998. 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 eight (8) times in 1998. The Nominating Committee was comprised of
Mr. Kingsley and Mr. Thornton. The Nominating Committee met one (1) time in
1998. 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.
3
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 61 Chairman of the Board and Chief Executive Officer
Brian W. Dunham 41 Director, President and Chief Operating Officer
Charles L. Koenig 56 Vice President, Water Transmission
Robert L. Mahoney 37 Vice President, Corporate Development
Terrence R. Mitchell 43 Vice President, Tubular Products
John D. Murakami 45 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.
4
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, 1998, 1997
and 1996.
SUMMARY COMPENSATION TABLE
LONG TERM
COMPENSATION
------------
ANNUAL COMPENSATION STOCK
------------------- OPTIONS ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS(1) GRANTED COMPENSATION
- --------------------------- ---- ------ -------- ------- ------------
William R. Tagmyer 1998 $335,000 $ -- 31,905 $ 20,822(2)
Chairman of the Board and 1997 280,008 180,985 48,000 18,358(2)
Chief Executive Officer 1996 262,992 220,000 -- 12,539(2)
Brian W. Dunham 1998 $280,000 $ -- 20,000 $ 5,000(3)
Director, President and 1997 203,603 140,000 25,000 4,750(3)
Chief Operating Officer 1996 168,345 200,000 -- 4,375(3)
Gary A. Stokes 1998 $162,000 $ -- 7,714 $ 5,000(3)
Vice President, 1997 150,000 75,000 12,000 4,750(3)
Sales and Marketing 1996 130,400 120,000 -- 4,586(3)
Charles L. Koenig 1998 $162,000 $ -- 7,714 $ 5,000(3)
Vice President, Water 1997 150,000 75,000 12,000 4,506(3)
Transmission 1996 126,000 120,000 -- 4,489(3)
Terrence R. Mitchell 1998 $150,000 $ -- 7,143 $ 5,000(4)
Vice President, Tubular Products 1997 125,000 104,329 9,000 4,750(4)
1996 88,500 80,000 -- 39,512(4)
(1) Bonus amounts reported for and earned in 1997 were paid in 1998. As of
the date of this Proxy Statement, the bonus amounts for 1998 have not
been determined by the Board of Directors.
(2) Represents $15,822, $13,608 and $7,789 of Company-paid life insurance
in 1998, 1997 and 1996, respectively, and $5,000, $4,750 and $4,750 of
matching amounts contributed to the Company's 401(k) plan in 1998, 1997
and 1996, respectively.
(3) Represents matching amounts contributed to the Company's 401(k) plan in
1998, 1997 and 1996.
(4) Represents $35,559 of relocation expenses in 1996, and $5,000, $4,750
and $3,953 of matching amounts contributed to the Company's 401(k) plan
in 1998, 1997 and 1996, respectively.
5
STOCK OPTIONS
The following table contains information concerning the grant of stock options
to the named executive officers in 1998.
OPTION GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
----------------------------------------------------------
POTENTIAL REALIZABLE
PERCENT OF VALUE AT ASSUMED ANNUAL
TOTAL OPTIONS RATES OF STOCK PRICE
GRANTED TO EXERCISE APPRECIATION FOR
OPTIONS EMPLOYEES PRICE EXPIRATION OPTION TERM($)(2)
NAME GRANTED(1) IN 1998 ($/SH) DATE 5% 10%
---- ---------- ------- ----- ---- -- ---
William R. Tagmyer 31,905 31% $21.00 2/19/08 $421,363 $1,067,815
Brian W. Dunham 20,000 20 21.00 2/19/08 264,136 669,372
Charles L. Koenig 7,714 8 21.00 2/19/08 101,877 258,177
Terrence R. Mitchell 7,143 7 21.00 2/19/08 94,336 239,066
Gary A. Stokes 7,714 8 21.00 2/19/08 101,877 258,177
(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
6
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, 1998.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
SHARES OPTIONS AT IN-THE-MONEY OPTIONS
ACQUIRED VALUE DECEMBER 31, 1998 AT DECEMBER 31, 1998 (2)
ON REALIZED --------------------------- ---------------------------
NAME EXERCISE (1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ----------------- -------- --- -------------- -------------- ----------------------------
William R. Tagmyer - - 40,935 64,710 $204,414 $87,606
Brian W. Dunham - - 80,136 45,371 912,022 146,010
Charles L. Koenig - - 32,832 19,177 365,193 58,404
Terrence R. Mitchell - - 19,650 16,801 183,890 58,404
Gary A. Stokes 18,757 $415,092 29,026 19,177 307,627 58,404
(1) The value realized on options exercised was calculated based on the net
amount received per share from the sale of shares of stock minus the
exercise price of the options.
(2) The value of unexercised in-the-money options is calculated based on
the closing price of the Company's Common Stock on December 31, 1998,
$16.125 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.
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 19, 1998 options to
purchase 2,000 shares of Common Stock, at $22.875 each, were granted to each of
Messrs. Kingsley, Kearns, Ryles and Thornton.
7
COMPENSATION REPORT OF THE COMPENSATION COMMITTEE
COMPENSATION COMMITTEE REPORT
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 1998 and no bonus awards for 1998 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.
8
CHIEF EXECUTIVE OFFICER COMPENSATION. Mr. Tagmyer's 1998 base salary was
determined in the same manner as the other executives as described in SALARIES
above. The Compensation Committee approved Mr. Tagmyer's 1998 annual base salary
of approximately $335,000, based on the salary survey data referred to above and
compensation levels of President/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 1998 has not been approved and no bonus
awards for 1998 have been made. Options to purchase 31,905 shares of the
Company's Common Stock at $21.00 per share were granted to Mr. Tagmyer in 1998.
COMPENSATION COMMITTEE
Neil R. Thornton
Vern B. Ryles, Jr.
9
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, 1998). 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.
[GRAPH]
DATA
-----------------------------------------------------------------
NORTHWEST PIPE COMPANY NASDAQ U.S. PEER GROUP
---------------------- ----------- ----------
November 30, 1995 $100.00 $100.00 $100.00
December 31, 1995 $122.05 $ 99.48 $104.53
December 31, 1996 $180.30 $122.37 $168.93
December 31, 1997 $266.29 $150.13 $230.94
December 31, 1998 $178.91 $210.95 $127.33
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act") 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 1998, 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 1998.
10
STOCK OWNED BY MANAGEMENT AND PRINCIPAL SHAREHOLDERS
The table below sets forth certain information, as of February 28, 1999,
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:
SHARES BENEFICIALLY
OWNED(1)
--------
NAME OF BENEFICIAL OWNER SHARES PERCENT
------------------------ -------- ---------
Becker Capital Management, Inc. (2) 494,917 7.7 %
1211 SW Fifth Avenue, Suite 2185
Portland, OR 97204
Fleet Financial Group. Inc. (3) 485,000 7.5
One Federal Street
Boston, MA 02110
Harris Associates L.P. (4) 425,000 6.6
Harris Associates Investment Trust
2 North LaSalle Street
Chicago, IL 60602
The Prudential Insurance Company of America (5) 408,150 6.3
751 Broad Street
Newark, NJ 07102
Benson Associates, LLP (6) 324,927 5.0
111 SW Fifth Avenue, Suite 2130
Portland, OR 97204
William R. Tagmyer 250,424 3.9
Brian W. Dunham 117,747 1.8
Gary A. Stokes 60,539 1.0
Charles L. Koenig 70,971 1.1
Terrence R. Mitchell 22,227 *
Warren K. Kearns 6,000 *
Wayne B. Kingsley (7) 19,929 *
Vern B. Ryles, Jr. 6,000 *
Neil R. Thornton 16,378 *
All directors and executive officers as a group,
(eleven persons) 582,727 8.7 %
---------
(*) Represents beneficial ownership of less than one percent of the
outstanding Common Stock.
11
(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 28, 1999 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 28, 1999
is as follows: Mr. Kingsley - 6,000; Mr. Kearns - 6,000; Mr. Ryles
-6,000; Mr. Thornton - 11,000; Mr. Tagmyer - 49,492; Mr. Dunham -
87,012; Mr. Stokes - 31,874; Mr. Koenig - 35,675; Mr. Mitchell -
22,227; and all directors and officers as a group -267,292.
(2) The information as to beneficial ownership is based on a Schedule 13G/A
filed with the Securities and Exchange Commission by Becker Capital
Management, Inc. on February 11, 1999, reflecting its beneficial
ownership of Common Stock as of December 31, 1998. The Schedule 13G
states that Becker Capital Management has sole voting power and sole
dispositve power with respect to 494,917 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 Fleet Financial
Group, Inc. on February 12, 1999, reflecting its beneficial ownership
of Common Stock as of December 31, 1998. The Schedule 13G states that
Fleet Financial Group, Inc. has sole voting power with respect to
361,640 shares of Common Stock and sole dispositve power with respect
to 485,000 shares of Common Stock.
(4) The information as to beneficial ownership is based on Schedules 13G
filed with the Securities and Exchange Commission by Harris Associates
Investment Trust and Harris Associates L.P. on February 8, 1999,
reflecting their beneficial ownership of Common Stock as of December
31, 1998. The Schedules 13G state that Harris Associates Investment
Trust and Harris Associates L.P. have shared voting and dispositive
power with respect to 425,000 shares of Common Stock and Harris
Associates Investment Trust has sole dispositive power with respect to
25,000 shares of Common Stock. Included in the total of 425,000 shares
of Common Stock are 400,000 shares which are owned by the Harris
Associates Investment Trust, to which Harris Associates L.P. serves as
an investment advisor.
(5) The information as to beneficial ownership is based on a Schedule 13G
filed with the Securities and Exchange Commission by The Prudential
Insurance Company of America on February 1, 1999, reflecting its
beneficial ownership of Common Stock as of December 31, 1998. The
Schedule 13G states that The Prudential Insurance Company of America
has sole voting and dispositive power with respect to 148,050 shares of
Common Stock and shared voting and dispositive power with respect to
260,100 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, 1999, reflecting its beneficial ownership of Common
Stock as of December 31, 1998. The Schedule 13G states that Benson
Associates, LLC has sole voting and dispositive power with respect to
324,927 shares of Common Stock.
(7) Shares held by Mr. Kingsley include 593 shares held in trust over which
Mr. Kingsley has sole voting and dispositive power.
12
APPROVAL OF THE NORTHWEST PIPE COMPANY
1999 EMPLOYEE STOCK PURCHASE PLAN
(PROPOSAL NO. 2)
The Board of Directors of the Company has approved the implementation of an
Employee Stock Purchase Plan (the "ESPP"), subject to shareholder approval. The
Company has reserved a total of 300,000 shares of Common Stock for issuance
under the ESPP. The purpose of the ESPP is to provide a convenient and practical
means by which employees may participate in stock ownership of the Company. The
Board of Directors believes that the availability of an employee stock purchase
plan is an important factor in the Company's ability to attract and retain
highly qualified and motivated employees and to provide an incentive for them to
exert their best efforts on behalf of the Company.
The following discussion is intended only as a summary of the material
provisions of the ESPP. Shareholders are encouraged to review the complete copy
of the ESPP, which is included in this Proxy Statement as Exhibit A.
SUMMARY OF THE ESPP
ADMINISTRATION
The ESPP is intended to qualify as an "Employee Stock Purchase Plan" under
Section 423 of the Internal Revenue Code of 1986, as amended (the "Code"), and
will be administered by the Compensation Committee of the Board of Directors.
The Compensation Committee has the power to make and interpret all rules it
deems necessary or appropriate to administer the ESPP and has broad authority to
amend the ESPP, subject to certain amendments regarding shareholder approval.
ELIGIBILITY
Employees of the Company are eligible to participate in the ESPP after they have
been employed by the Company for at least six months, have completed at least
five months of continuous employment and work at least 20 hours per week.
Employees who control 5% or more of the total voting power of all classes of the
Company's stock or whose annual compensation exceeds $125,000 are not eligible
to participate in the ESPP.
CONTRIBUTIONS AND SHARE PURCHASES
Eligible employees may elect to contribute from 1% to 10% of their cash
compensation during each pay period. The ESPP provides for two annual six-month
offering periods, beginning on November 1 and May 1 of each year (the
"Enrollment Dates"). During the offering periods, participants accumulate funds
in an account via payroll deduction. At the end of each six-month offering
period, the purchase price is determined and the accumulated funds are used to
automatically purchase shares of Common Stock. The purchase price per share is
equal to 85% of the lower of (a) the fair market value of the Common Stock on
the Enrollment Date of the offering period or (b) the fair market value on the
date of purchase. Unless a participant files a withdrawal notice before the
beginning of the next offering period, such participant will automatically be
re-enrolled for the next offering period. Neither payroll deductions credited to
a participant's account nor any rights with regard to the purchase of shares
under the ESPP may be assigned, transferred, pledged or otherwise disposed of in
any way by the participant. Upon termination of a participant's employment for
any reason the payroll deductions credited to the participant's account will be
returned to the participant.
13
NEW PLAN BENEFITS
As of February 28, 1999 there were three officers, no directors and 1,024
employees of the Company eligible to participate in the ESPP. Participation in
the ESPP is voluntary and is dependent on each eligible employee's election to
participate and his or her determination as to the level of payroll deductions.
Accordingly, the names or positions of, or the future purchases under the ESPP
are not determinable. As of the date of this Proxy Statement, no options to
purchase shares of the Company's common stock have been granted under the ESPP.
TERM OF THE ESPP
The ESPP shall continue in effect for a term of ten years from the earlier of
its adoption by the Board of Directors or its approval by the shareholders of
the Company unless earlier terminated by the Board of Directors.
FEDERAL TAX EFFECTS
A participant acquiring stock pursuant to a qualified employee stock purchase
plan receives favorable tax treatment in that the participant does not recognize
any taxable income at the time of the grant of the option to purchase or upon
exercise of such option to purchase. The tax treatment of the disposition of the
stock depends upon whether the stock is disposed of within the holding period,
which is two years from the date of grant. If the participant disposes of the
stock after completion of the holding period, the lesser of (a) the sales price
less the purchase price, or (b) 15 percent of the market value of the shares on
the first day of the offering period, is taxable as ordinary income, and any
further profit is taxable as long-term capital gain. Any loss is treated as a
capital loss. If the participant disposes of the stock before the holding period
expires (disqualifying disposition), the difference between the price paid by
the employee and the market value of the shares at the date of purchase is
taxable as ordinary income, and the difference between the amount received by
the employee on the disposition of the shares and the market value of the shares
at the date of purchase is treated as a capital gain or loss. Upon a
disqualifying disposition of the stock, the Company may deduct from taxable
income in the year of the disqualifying disposition an amount equal to the
difference between the price paid by the employee and the market value of the
shares at the date of purchase. The federal income tax rules relating to
employee stock purchase plans qualifying under Section 423 of the Code are
complex. Therefore, the foregoing is intended to summarize only certain major
federal income tax rules concerning qualified employee stock purchase plans.
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
Company's 1999 Employee Stock Purchase 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.
14
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, 1999,
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, 1999. 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, 1998.
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 2000 annual meeting of shareholders must be
received by the Company not later than December 9, 1999, 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 1999
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.
15
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, 1998 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, 1998. 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
April 7, 1999
16
EXHIBIT A
NORTHWEST PIPE COMPANY
1999 EMPLOYEE STOCK PURCHASE PLAN
The following provisions constitute the Northwest Pipe Company 1999
Employee Stock Purchase Plan.
1. PURPOSE. The purpose of the Plan is to provide employees of the
Company and its Designated Subsidiaries with an opportunity to purchase Common
Stock of the Company through accumulated payroll deductions. It is the intention
of the Company to have the Plan qualify as an "Employee Stock Purchase Plan"
under Section 423 of the Internal Revenue Code of 1986, as amended. The
provisions of the Plan, accordingly, shall be construed so as to extend and
limit participation in a manner consistent with the requirements of that section
of the Code.
2. DEFINITIONS.
2.1. "ACCOUNT" shall mean each separate account maintained
for a Participant under the Plan, collectively or singly as the context
requires. Each Account shall be credited with a Participant's contributions,
and shall be charged for the purchase of Common Stock. A Participant shall be
fully vested in the cash contributions to his or her account at all times.
The Plan Administrator may create special types of accounts for
administrative reasons, even though the Accounts are not expressly authorized
by 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 the Compensation Committee of the
Board.
2.5. "COMMON STOCK" shall mean the Common Stock of the Company.
2.6. "COMPANY" shall mean Northwest Pipe Company, an Oregon
corporation.
2.7. "COMPENSATION" shall mean all base straight time gross
earnings plus payments for overtime, shift premiums and sales commissions, but
excluding incentive compensation, incentive payments, bonuses, awards, and other
compensation.
2.8. "DESIGNATED SUBSIDIARY" shall mean each Subsidiary
which has been designated by the Board from time to time in its sole
discretion as eligible to participate in the Plan.
2.9. "EMPLOYEE" shall mean an individual who renders
services to the Company or to a Designated Subsidiary pursuant to a
regular-status employment relationship with such employer. A person rendering
services to the Company or to a Designated Subsidiary purportedly as an
independent consultant or contractor shall not be an Employee for purposes of
the Plan.
2.10. "ENROLLMENT DATE" shall mean the first day of each
Offering Period.
2.11. "FAIR MARKET VALUE"
2.11.1. If the Common Stock is listed on any
established stock exchange or a national market system, including without
limitation the National Market System of the National Association of
Securities Dealers, Inc. Automated Quotation ("NASDAQ") System, its Fair
Market Value shall be the
1
closing sale price for the Common Stock (or the mean of the closing bid and
asked prices, if no sales were reported), as quoted on such exchange (or the
exchange with the greatest volume of trading in Common Stock) or system on
the last Trading Day prior to the day of such determination, as reported in
THE WALL STREET JOURNAL or such other source as the Board deems reliable, or;
2.11.2. If the Common Stock is quoted on the NASDAQ
system (but not on the National Market System thereof) or is regularly quoted
by a recognized securities dealer but selling prices are not reported, its
Fair Market Value shall be the mean of the closing bid and asked prices for
the Common Stock on the last Trading Day prior to the day of such
determination, as reported in THE WALL STREET JOURNAL or such other source as
the Board deems reliable, or;
2.11.3. In the absence of an established market for
the Common Stock, the Fair Market Value thereof shall be determined in good
faith by the Board.
2.12. "HIGHLY COMPENSATED EMPLOYEE" shall mean any Employee
whose compensation exceeds $125,000 (as adjusted each year by the percentage
change in the Consumer Price Index for Urban Wage Earners and Clerical
Workers prepared by the Bureau of Statistics, Department of Labor or the
comparable index that replaces it) provided that no Employee shall be a
Highly Compensated Employee as defined hereby if such Employee is not also a
"Highly Compensated Employee" within the meaning of Section 414(q) of the
Code.
2.13. "NASDAQ" shall mean the National Association of
Securities Dealers Automated Quotation System or such other quotation system
that supersedes it.
2.14. "OFFERING PERIOD" shall mean the period of approximately
six (6) months, commencing on the first Trading Day on or after a date
designated in advance by the Board and terminating on the last Trading Day in
the period ending six months later, during which an option granted pursuant
to the Plan may be exercised. The duration of Offering Periods may be changed
pursuant to Section 4 of this Plan.
2.15. "PARTICIPANT" shall mean any Employee who is
participating in this Plan by meeting the eligibility requirements of Section
3 and has completed a Payroll Participation Form.
2.16. "PAYROLL PARTICIPATION FORM" shall mean the form
attached hereto as Exhibit A (or such other form as may be provided by the
Company) on which a Participant shall elect to participate in the Plan and
designate the percentage of his or her Compensation to be contributed to his
or her Account through payroll deductions.
2.17. "PLAN" shall mean this Employee Stock Purchase Plan.
2.18. "PURCHASE DATE" shall mean the last day of each Offering
Period.
2.19. "PURCHASE PRICE" shall mean an amount equal to 85% of the
Fair Market Value of a share of Common Stock (i) on the Enrollment Date or (ii)
on the Purchase Date, whichever is lower.
2.20. "RESERVES" shall mean the number of shares of Common Stock
covered by each option under the Plan which have not yet been exercised and the
number of shares of Common Stock which have been authorized for issuance under
the Plan but not yet placed under option.
2.21. "SUBSIDIARY" shall mean a corporation, domestic or foreign,
of which not less than 50% of the voting shares are held by the Company or a
Subsidiary, whether or not such corporation now exists or is hereafter organized
or acquired by the Company of a Subsidiary.
2.22. "TRADING DAY" shall mean a day on which national stock
exchanges and NASDAQ are open for trading.
2
3. ELIGIBILITY.
3.1. A person shall become eligible to participate in the
Plan on the first Enrollment Date on or after which he or she first meets all
of the following requirements; provided, however, that no one shall become
eligible to participate in the Plan prior to the Enrollment Date of the first
Offering Period provided for in Section 2.13:
3.1.1. The person's customary period of employment is
for more than twenty (20) hours per week;
3.1.2. The person's customary period of employment is for
more than five (5) months in any calendar year.
3.1.3. The person has been employed by the Company or a
Designated Subsidiary for at six (6) months.
3.1.4. The person is not a Highly Compensated Employee.
3.2. Any provisions of the Plan to the contrary
notwithstanding, no Employee shall be granted an option under the Plan (i)
if, immediately after the grant, such Employee (or any other person whose
stock would be attributed to such Employee pursuant to Section 424(d) of the
Code) would own stock and/or hold outstanding options to purchase stock
possessing five percent (5%) or more of the total combined voting power or
value of all classes of stock of the Company or of any Subsidiary, or (ii)
which permits his or her rights to purchase stock under all employee stock
purchase plans (under Section 423 of the Code) of the Company and
Subsidiaries to accrue at a rate which exceeds Twenty-Five Thousand Dollars
($25,000) worth of stock (determined at the fair market value of the shares
at the time such option is granted) for each calendar year in which such
option is outstanding at any time.
3.3. For purposes of the Plan, eligibility shall be treated
as continuing intact while the individual is on sick leave or other leave of
absence approved by the Company. Where the period of leave exceeds 90 days
and the individual's right to reemployment is not guaranteed either by
statute or by contract, eligibility to participate in the Plan will be deemed
to have terminated on the 91st day of such leave.
4. OFFERING PERIODS. The Plan shall be implemented by consecutive
Offering Periods with the first Offering Period commencing on a date
designated in advance by the Board, and continuing for six month periods
thereafter until terminated in accordance with Section 19 hereof. The Board
shall have the power to change the duration of Offering Periods (including
the commencement dates thereof) with respect to future offerings without
shareholder approval if such change is announced at least fifteen (15) days
prior to the scheduled beginning of the first Offering Period to be affected
thereafter.
5. PARTICIPATION.
5.1. An eligible Employee may become a Participant in the
Plan by completing a Payroll Participation Form and filing it with the
Company's Administration Department (as set forth in Section 20 below) at
least fifteen (15) days prior to the applicable Enrollment Date, unless a
later time for filing the Payroll Participation Form is set by the Board for
all eligible Employees with respect to a given Offering Period.
5.2. Payroll deductions for a Participant shall commence on
the first payroll period following the Enrollment Date and shall end on the
last payroll period in the Offering Period, unless sooner terminated by the
Participant as provided in Section 10 hereof.
3
6. PAYROLL DEDUCTIONS.
6.1. At the time a Participant files his or her Payroll
Participation Form, he or she shall elect to have payroll deductions made on
each payday during the Offering Period in an amount not exceeding ten percent
(10%) of the Compensation which he or she receives on each payday during the
Offering Period, and the aggregate of such payroll deductions during the
Offering Period shall not exceed ten percent (10%) of the Participant's
Compensation during said Offering Period.
6.2. A Participant shall specify that he or she desires to
make contributions to the Plan in whole percentages not less than one percent
(1%) and not more than ten percent (10%) of the Participant's Compensation
during each pay period in the Offering Period, or such other minimum or
maximum percentage as the Board shall establish from time to time.
6.3. All payroll deductions made for a Participant shall be
credited to his or her Account under the Plan and will be withheld in whole
percentages only. A Participant may not make any additional payments into
such Account.
6.4. A Participant may discontinue his or her participation
in the Plan as provided in Section 10 hereof. A Participant's Payroll
Participation Form shall remain in effect for successive Offering Periods
unless terminated as provided in Section 10.
6.5. Notwithstanding the foregoing, to the extent necessary
to comply with Section 423(b)(8) of the Code and Section 3.2 hereof, a
Participant's payroll deductions shall be decreased to 0% at such time during
any Offering Period which is scheduled to end during the current calendar
year (the "Current Offering Period") that the aggregate of all payroll
deductions which were previously used to purchase stock under the Plan in a
prior Offering Period which ended during that calendar year plus all payroll
deductions accumulated with respect to the Current Offering Period equal
$21,250 (85% of $25,000). Payroll deductions shall recommence at the rate
provided in such Participant's Payroll Participation Form at the beginning of
the first Offering Period which is scheduled to end in the following calendar
year, unless terminated by the Participant as provided in Section 10.
6.6. At the time the option is exercised, or at the time
some or all of the Common Stock issued under the Plan is disposed of, the
Participant must make adequate provision for the Company's federal, state, or
other tax withholding obligations, if any, which arise upon the exercise of
the option or the disposition of the Common Stock. At any time, the Company
may, but will not be obligated to, withhold from the Participant's
compensation the amount necessary for the Company to meet applicable
withholding obligations, including any withholding required to make available
to the Company any tax deductions or benefit attributable to sale or early
disposition of Common Stock by the Employee.
7. OPTION TO PURCHASE COMMON STOCK. On the Enrollment Date of each
Offering Period, each eligible Employee participating in such Offering Period
shall be granted an option to purchase on the Purchase Date of such Offering
Period (at the applicable Purchase Price) up to a number of shares of the
Common Stock determined by dividing such Employee's payroll deductions
accumulated prior to such Purchase Date and retained in the Participant's
account as of the Purchase Date by the applicable Purchase Price; provided
that in no event shall an Employee be permitted to purchase during each
Offering Period more than a number of shares determined by dividing $12,500
by the Fair Market Value of a share of the Common Stock on the Enrollment
Date, and provided further that such purchase shall be subject to the
limitations set forth in Sections 3.2 and 12 hereof. Purchase of the Common
Stock shall occur as provided in Section 8, unless the Participant has
withdrawn pursuant to Section 10, and the option shall expire on the last day
of the Offering Period.
4
8. PURCHASE OF COMMON STOCK. Unless a Participant withdraws from
the Plan as provided in Section 10.1 below, his or her option for the
purchase of Common Stock will be exercised automatically on the Purchase
Date, and the maximum number of full shares subject to option shall be
purchased for such Participant at the applicable Purchase Price with the
accumulated payroll deductions in his or her account. No fractional shares of
Common Stock will be purchased; any payroll deductions accumulated in a
Participant's account which are not sufficient to purchase a full share shall
be retained in the Participant's account for the subsequent Offering Period,
subject to earlier withdrawal by the Participant as provided in Section 10
hereof. During a Participant's lifetime, a Participant's option to purchase
shares of Common Stock hereunder is exercisable only by him or her.
9. DELIVERY. As promptly as practicable after each Purchase Date,
the Company shall arrange for the electronic delivery to each Participant's
designated brokerage account of the shares of Common Stock purchased with his
or her payroll deductions.
10. WITHDRAWAL; TERMINATION OF EMPLOYMENT.
10.1. A Participant may withdraw all but not less than all the
payroll deductions credited to his or her account and not yet used to purchase
shares of Common Stock under the Plan by giving written notice in the form of
Exhibit B to this Plan (or such other form as may be provided by the Company) to
the Company (as set forth in Section 20 below) no less than 15 days immediately
preceding a Purchase Date. All of the Participant's payroll deductions credited
to his or her Account will be paid to such Participant as soon as practicable
after receipt of notice of withdrawal and such Participant's option for the
Offering Period will be automatically terminated, and no further payroll
deductions for the purchase of shares will be made during the Offering Period.
If a Participant withdraws from an Offering Period, payroll deductions will not
resume at the beginning of the succeeding Offering Period unless the Participant
delivers to the Company a new Payroll Participation Form.
10.2. Upon termination of a Participant's employment for any
reason, including death, disability or retirement, or a Participant failing to
remain an Employee of the Company for at least twenty (20) hours per week during
an Offering Period in which the Employee is a Participant, he or she will be
deemed to have elected to withdraw from the Plan and the payroll deductions
credited to such Participant's Account shall be returned to the Participant; or,
in the case of death, to the persons entitled thereto under Section 14, and such
Participant's option shall be automatically terminated.
11. INTEREST. No interest shall accrue on the payroll deductions of a
Participant in the Plan.
12. STOCK.
12.1. The maximum number of shares of the Company's Common Stock
which shall be made available for sale under the Plan shall be 300,000 shares,
subject to adjustment upon changes in capitalization of the Company as provided
in Section 18. If on a given Purchase Date the number of shares of Common Stock
eligible to be purchased exceeds the number of shares then available under the
Plan, the Company shall make a pro rata allocation of the shares remaining
available for purchase in as uniform a manner as shall be practicable and as it
shall determine to be equitable.
12.2. The Participant will have no interest or voting right in
shares covered by his or her option until such shares of Common Stock have been
purchased.
12.3. Common Stock to be delivered to a Participant under the
Plan will be registered in the name of the Participant or in the name of the
Participant and his or her spouse.
5
13. ADMINISTRATION.
13.1. ADMINISTRATIVE BODY. The Plan shall be administered by the
Committee. Subject to the terms of the Plan, the Committee shall have the power
to construe the provisions of the Plan, to determine all questions arising
thereunder, and to adopt and amend such rules and regulations for administering
the Plan as the Committee deems desirable.
13.2. RULE 16B-3 LIMITATIONS. Notwithstanding the provisions of
Subsection 13.1, in the event that Rule 16b-3 promulgated under the Securities
Exchange Act of 1934, as amended, or any successor provision ("Rule 16b-3")
provides specific requirements for the administrators of plans of this type, the
Plan shall be only administered by such a body and in such a manner as shall
comply with the applicable requirements of Rule 16b-3.
14. DESIGNATION OF BENEFICIARY.
14.1. A Participant may file a written designation of a
beneficiary who is to receive any shares and cash, if any, from the
Participant's account under the Plan in the event of such Participant's death
subsequent to a Purchase Date on which the option is exercised but prior to
delivery to such Participant of such shares and cash. In addition, a Participant
may file a written designation of a beneficiary who is to receive any cash from
the Participant's account under the Plan in the event of such Participant's
death prior to a Purchase Date.
14.2. Such designation of beneficiary may be changed by the
Participant at any time by written notice as provided in Section 20 below. In
the event of the death of a Participant and in the absence of a beneficiary
validly designated under the Plan who is living at the time of such
Participant's death, the Company shall deliver such shares and/or cash to the
executor or administrator of the estate of the Participant, or if no such
executor or administrator has been appointed (to the knowledge of the Company),
the Company, in its discretion, may deliver such shares and/or cash to the
spouse or to any one or more dependents or relatives of the Participant, or if
no spouse, dependent or relative is known to the Company, then to such other
person as the Company may designate.
15. TRANSFERABILITY. Neither payroll deductions credited to a
Participant's account nor any rights with regard to the exercise of an option or
to receive shares under the Plan may be assigned, transferred, pledged or
otherwise disposed of in any way (other than by will, the laws of descent and
distribution or as provided in Section 14 hereof) by the Participant. Any such
attempt at assignment, transfer, pledge or other disposition shall be without
effect, except that the Company may treat such act as an election to withdraw
funds from an Offering Period in accordance with Section 10.
16. USE OF FUNDS. All payroll deductions received or held by the
Company under the Plan may be used by the Company for any corporate purpose, and
the Company shall not be obligated to segregate such payroll deductions.
17. REPORTS. Individual accounts will be maintained for each
Participant in the Plan. Statements of account will be given to participating
Employees at least annually, which statements will set forth the amounts of
payroll deductions, the Purchase Price, the number of shares purchased and the
remaining cash balance, if any.
18. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, DISSOLUTION, MERGER OR
ASSET SALE.
18.1. CHANGES IN CAPITALIZATION. Subject to any required action by the
shareholders of the Company, the Reserves, as well as the price per share of
Common Stock covered by each option under the Plan which has not yet been
exercised, 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
6
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 Board, whose determination
in that respect shall be final, binding and conclusive. Except as expressly
provided herein, no issue 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. The Board may, if it so
determines in the exercise of its sole discretion, make provision for adjusting
the Reserves, as well as the price per share of Common Stock covered by each
outstanding option, in the event the Company effects one or more
reorganizations, recapitalizations, rights offerings or other increases or
reductions of shares of its outstanding Common Stock.
18.2. DISSOLUTION OR LIQUIDATION. In the event of the proposed
dissolution or liquidation of the Company, the Offering Period will terminate
immediately prior to the consummation of such proposed action, unless otherwise
provided by the Board.
18.3. 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 option under the Plan shall be
assumed or any equivalent option shall be substituted by such successor
corporation or a parent or subsidiary of such successor corporation, unless the
Board determines, in the exercise of its sole discretion and in lieu of such
assumption or substitution, to shorten the Offering Period then in progress by
setting a new Purchase Date (the "New Purchase Date") or to cancel each
outstanding right to purchase and refund all sums collected from Participants
during the Offering Period then in progress. If the Board shortens the Offering
Period then in progress in lieu of assumption or substitution in the event of a
merger or sale of assets, the Board shall notify each Participant in writing, at
least ten (10) business days prior to the New Purchase Date, that the Purchase
Date for his option has been changed to the New Purchase Date and that his
option will be exercised automatically on the New Purchase Date, unless prior to
such date he has withdrawn from the Offering Period as provided in Section 10
hereof. For purposes of this paragraph, an option granted under the Plan shall
be deemed to be assumed if, following the sale of assets or merger, the option
confers the right to purchase, for each share of option stock subject to the
option immediately prior to the sale of assets or merger, the consideration
(whether stock, cash or other securities or property) received in the sale of
assets or merger by holders of Common Stock for each share of Common Stock held
on the effective date of the transaction (and if such holders were offered a
choice of consideration, the type of consideration chosen by the holders of a
majority of the outstanding shares of Common Stock); provided, however, that if
such consideration received in the sale of assets or merger was not solely
common stock of the successor corporation or its parent (as defined in Section
424(e) of the Code), the Board may, with the consent of the successor
corporation and the Participant, provide for the consideration to be received
upon exercise of 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 sale of assets or
merger.
19. AMENDMENT OR TERMINATION.
19.1. The Board may at any time and for any reason terminate or
amend the Plan. Except as provided in Section 18, no such termination can affect
options previously granted, provided that an Offering Period may be terminated
by the Board on any Purchase Date if the Board determines that the termination
of the Plan is in the best interests of the Company and its shareholders. Except
as provided in Section 18, no amendment may make any change in any option
theretofore granted which adversely affects the rights of any Participant.
19.2. Without shareholder consent and without regard to whether
any Participant rights may be considered to have been "adversely affected," the
Committee shall be entitled to change the Offering Periods, limit the frequency
and/or number of changes in the amount withheld during an Offering Period,
establish the exchange ratio applicable to amounts withheld in a currency other
than U.S. dollars, permit payroll withholding in excess of the amount designated
by a Participant in order to adjust for delays or
7
mistakes in the Company's processing of properly completed withholding
elections, establish reasonable waiting and adjustment periods and/or
accounting and crediting procedures to ensure that amounts applied toward the
purchase of Common Stock for each Participant properly correspond with
amounts withheld from the Participant's Compensation, and establish such
other limitations or procedures as the Board (or its committee) determines in
its sole discretion advisable which are consistent with the Plan.
19.3. 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 423 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.
20. NOTICES. All notices or other communications by a Participant to
the Company under or in connection with the Plan shall be deemed to have been
duly given when received in the form specified by the Company by the Company's
Secretary at the Company's corporate headquarters.
21. CONDITIONS UPON ISSUANCE OF SHARES OF COMMON STOCK.
21.1. Common Stock shall not be issued with respect to an option
unless the exercise of such option and the issuance and delivery of such shares
pursuant thereto shall comply with all applicable provisions of law, domestic or
foreign, including, without limitation, the Securities Act of 1933, as amended,
the Securities Exchange Act of 1934, as amended, the rules and regulations
promulgated thereunder, and the requirements of any stock exchange 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.
21.2. As a condition to the purchase of Common Stock, the Company
may require the person purchasing such Common Stock to represent and warrant at
the time of any such purchase 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 applicable provisions of law.
22. TERM OF PLAN.
22.1. The Plan shall become effective upon the earlier to occur
of its adoption by the Board of Directors or its approval by the shareholders of
the Company. It shall continue in effect for a term of ten (10) years unless
sooner terminated pursuant to Section 19.
22.2. Notwithstanding the above, the Plan is expressly made
subject (i) to the approval of the shareholders of the Company within 12 months
after the date the Plan is adopted and (ii) at its election, to the receipt by
the Company from the Internal Revenue Service of a ruling in scope and content
satisfactory to counsel to the Company, affirming the qualification of the Plan
within the meaning of Section 423 of the Code. Such shareholder approval shall
be obtained in the manner and to the degree required under applicable federal
and state law. If the Plan is not so approved by the shareholders within 12
months after the date the Plan is adopted, and if, at the election of the
Company a ruling from the Internal Revenue Service is sought but is not received
on or before one year after the Plan's adoption by the Board, this Plan shall
not come into effect. In that case, the Account of each Participant shall
forthwith be paid to him or her.
23. ADDITIONAL RESTRICTIONS OF RULE 16B-3. The terms and
conditions of options granted hereunder to, and the purchase of shares by,
persons subject to Section 16 of the Exchange Act shall comply with the
applicable provisions of Rule 16b-3. This Plan shall be deemed to contain,
and such options shall contain, and the shares issued upon exercise thereof
shall be subject to, such additional conditions and restrictions as may be
required by Rule 16b-3 to qualify for the maximum exemption from Section 16
of the Exchange Act with respect to Plan transactions.
8
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NORTHWEST PIPE COMPANY
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 11, 1999
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting of
Shareholders and Proxy Statement, each dated April 7, 1999 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 Ontario, California on Tuesday, May 11, 1999
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 12, 1999,
with all the powers that the undersigned would possess if he were personally
present.
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TRIANGLE FOLD AND DETACH HERE TRIANGLE
Please mark
your votes as /X/
indicated in
this example
FOR all nominees listed WITHHOLD AUTHORITY
below (except as marked (to vote for all nominees
to the contrary below) listed below)
1. PROPOSAL 1 -- Election of Directors / / / /
(Instructions: To withhold authority to
vote for any individual nominee, strike
a line through the nominee's name in the list below.)
WILLIAM R. TAGMYER NEIL R. THORNTON
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
A VOTE FOR EACH OF THE NOMINEES NAMED ABOVE.
2. PROPOSAL 2 -- To approve the Northwest Pipe Company
1999 Employee Stock Purchase Plan.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
A VOTE FOR THE APPROVAL OF PROPOSAL 2.
FOR AGAINST ABSTAIN
PROPOSAL 2 PROPOSAL 2 PROPOSAL 2
/ / / / / /
3. PROPOSAL 3 -- To ratify the appointment of PricewaterhouseCoopers LLP as
the Company's independent auditors for the year ending December 31, 1999.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
A VOTE FOR THE APPROVAL OF PROPOSAL 3.
FOR AGAINST ABSTAIN
PROPOSAL 3 PROPOSAL 3 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.
I do do not
/ / / / plan to attend
the meeting.
(Please check)
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.
Dated
--------------------------------------
- --------------------------------------------
Shareholder (print name)
- --------------------------------------------
Shareholder (sign name)
The shareholder signed above reserves the right to revoke this Proxy at any
time prior to its exercise by written notice delivered to the Company's
Secretary at the Company's corporate offices, 12005 N. Burgard, Portland,
Oregon 97203, prior to the Annual Meeting. The power of the Proxy holders
shall also be suspended if the shareholder signed above appears at the Annual
Meeting and elects in writing to vote in person.
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TRIANGLE FOLD AND DETACH HERE TRIANGLE