UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
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| ¨ | Soliciting Material Pursuant to § 240.14a-12 |
NORTHWEST PIPE COMPANY
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
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April 3, 2009November 15, 2010
Dear Fellow Shareholder:
You are cordially invited to attend the 20092010 Annual Meeting of Shareholders to be held on Tuesday, June 2, 2009,Wednesday, December 22, 2010, at 9:00 a.m. (local time) at the Heathman Hotel in downtown Portland, Oregon. This year you will be asked to vote in favor of one proposal concerningon two matters: the election of two directors.four directors to the Board of Directors and the ratification of the appointment of the Company’s independent registered public accounting firm for the year ended December 31, 2010.
YOUR VOTE IS IMPORTANT. We encourage you to read the Proxy Statement and vote your shares as soon as possible. Shareholders may vote via the Internet, by telephone or by completing and returning a proxy card. Specific voting instructions are set forth in the Proxy Statement and proxy card.
Thank you for your support and continued interest in Northwest Pipe Company.
Sincerely,
Brian W. DunhamRichard A. Roman
President and Chief Executive Officer
5721 SE Columbia Way, Suite 200
Vancouver, Washington 98661
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To the Shareholders of Northwest Pipe Company:
The 20092010 Annual Meeting of Shareholders (the “Annual Meeting”) of Northwest Pipe Company will be held on Tuesday, June 2, 2009Wednesday, December 22, 2010 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:
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| 3. | 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 April 1, 2009November 12, 2010 as the record date for determining the 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.
It is important that your shares be represented and voted at the meeting. Please complete, sign and return your proxy card, or use the Internet or telephone voting systems.
We are enclosing a copy of the 20082009 Annual Report to Shareholders with this Notice and Proxy Statement.
IMPORTANT NOTICE REGARDING THE INTERNET AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON TUESDAY, JUNE 2, 2009:WEDNESDAY, DECEMBER 22, 2010: This proxy statement and the Company’s 20082009 Annual Report to Shareholders are also available atwww.nwpipe.com/proxy.
By Order of the Board of Directors,
Stephanie J. WeltyRichard A. Roman
SecretaryPresident and Chief Executive Officer
Portland, OregonVancouver, Washington
April 3, 2009November 15, 2010
PROXY STATEMENT FOR THE
20092010 ANNUAL MEETING OF SHAREHOLDERS OF
NORTHWEST PIPE COMPANY
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NORTHWEST PIPE COMPANY
5721 SE Columbia Way, Suite 200
Vancouver, Washington 98661
(360) 397-6250
PROXY STATEMENT FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 2, 2009DECEMBER 22, 2010
This Proxy Statement and the accompanying 20082009 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, June 2, 2009Wednesday, December 22, 2010 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 toto: (i) elect twofour members to the Board of Directors, two to serve for a three-year term, one to serve for a two-year term and one to serve for a one-year term; (ii) ratify the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2010; and (iii) 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 20082009 Annual Report to Shareholders, are first being mailed to shareholders of the Company on or about May 1, 2009.November 22, 2010.
Solicitation, Voting and Revocability of Proxies
The Board of Directors has fixed the close of business on April 1, 2009November 12, 2010 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 9,236,4939,291,541 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 nominees for election to the Board of Directors.Directors and FOR the ratification of the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2010. 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, 5721 SE Columbia Way, Suite 200, Vancouver, Washington, 98661, or by attending the Annual Meeting and voting in person. All valid, unrevoked proxies will be voted at the Annual Meeting.
Our Board of Directors and management have committed themselves to establishing a strong corporate governance environment, and to adopting best practices as they most meet the needs and goals of the Company. To that end, in January 2009 we have enhanced the former Nominating Committee to now be the Nominating and Governance Committee and we adopted Corporate Governance Principles, which cover such topics as qualifications and independence of Board members, the selection, orientation, and continuing education of Board members, as well as other topics designed to promote effective governance by the Board of Directors. A copyIn addition, the Board of Directors has adopted a Code of Business Conduct and Ethics, which applies to all employees, officers and directors of the Company. Copies of our Corporate Governance Principles isand Code of Business Conduct and Ethics are available on the Company’s website atwww.nwpipe.com under the heading “Corporate Governance”, or by writing to Northwest Pipe Company, attn. Corporate Secretary, 5721 SE Columbia Way, Suite 200, Vancouver, WA 98661.
The Board of Directors has determined that Michael C. Franson, Wayne B. Kingsley, Keith R. Larson and Richard A. RomanJames E. Declusin are independent. The Board has established director independence guidelines as part of the Corporate Governance Principles to assist in determining director independence in accordance with the standards of the Nasdaq Stock Market. The director independence guidelines provide that none of the following will be an “independent director”:
(A) a director who is, or at any time during the past three years was, employed by Northwest Pipe;
(B) a director who accepted or who has a family member who accepted any compensation from Northwest Pipe in excess of $120,000 during any period of twelve consecutive months within the three years preceding the determination of independence, other than the following:
(i) compensation for board or board committee service;
(ii) compensation paid to a family member who is an employee (other than an executive officer) of Northwest Pipe; or
(iii) benefits under a tax-qualified retirement plan, or non-discretionary compensation,
provided, however, that in addition to the requirements contained in this paragraph (B), Audit Committee members are also subject to additional, more stringent requirements under NASDAQ Rule 4350(d).
(C) a director who is a family member of an individual who is, or at any time during the past three years was, employed by Northwest Pipe as an executive officer;
(D) a director who is, or has a family member who is, a partner in, or a controlling shareholder or an executive officer of, any organization to which Northwest Pipe made, or from which Northwest Pipe received, payments for property or services in the current or any of the past three fiscal years that exceed 5% of the recipient’s consolidated gross revenues for that year, or $200,000, whichever is more, other than the following:
(i) payments arising solely from investments in Northwest Pipe’s securities; or
(ii) payments under non-discretionary charitable contribution matching programs.
(E) a director of Northwest Pipe who is, or has a family member who is, employed as an executive officer of another entity where at any time during the past three years any of the executive officers of Northwest Pipe serve on the compensation committee of such other entity; or
(F) a director who is, or has a family member who is, a current partner of Northwest Pipe’s outside auditor, or was a partner or employee of Northwest Pipe’s outside auditor who worked on Northwest Pipe’s audit at any time during any of the past three years.
Lead DirectorBoard Leadership Structure and Risk Oversight
To further strengthen our corporate governance environment,The Company’s Corporate Governance Principles provide that the independent directorsmembers of the Board of Directors will select a lead director from among the independent directors if the positions of Chairman of the Board and Chief Executive Officer are held by the same person or if the Chairman of the Board is not an independent director. The responsibilities of the lead director shall:include the following: coordinate the activities of the independent directors; make recommendations to the CEO in setting Board meeting agendas on matters concerning the independent directors; prepare the agenda for executive sessions of the independent directors, chair those sessions and be primarily responsible for communications between the independent directors and the CEO. William R. Tagmyer, the Chairman of our Board of Directors, is not “independent” within the meaning of the applicable rules of the Nasdaq Stock Market. Accordingly, at the time the Company’s Corporate Governance Principles were adopted, the Board selected one of the independent directors, Richard A. Roman, to serve as lead director. Mr. Roman resigned his position as lead director when he was selectedappointed as Lead Directorthe Company’s Chief Executive Officer in November 2008.March 2010. The remaining independent directors are in the process of identifying and appointing a new lead director.
The Board of Directors oversees management’s Company-wide risk management activities. Management’s risk management activities include assessing and taking actions necessary to manage risks incurred in connection with the long-term strategic direction of the Company and the operation of our business. The Board of Directors uses its committees to assist in its risk oversight function. The Compensation Committee is responsible for oversight of risk associated with our compensation plans. The Nominating and Governance Committee is responsible for oversight of board processes and corporate governance-related risk. The Audit Committee is responsible for oversight of our financial reporting process, financial internal controls and compliance activities, the qualification, independence and performance of our independent auditors, and compliance with applicable legal and regulatory compliance requirements. The Board of Directors maintains overall responsibility for oversight of the work of its various committees by having regular reports from the chairman of each Committee with respect to the work performed by his respective Committee. In addition, discussions about the Company’s strategic plan, financial results, capital structure, merger and acquisition related activity and other business discussed with the Board includes discussion of the risks associated with the matters under consideration.
The Board of Directors met fivefour times during 2008.2009. 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. Members of the Board of Directors are also encouraged to attend the Company’s annual meeting of shareholders each year. All of the members of the Board of Directors in office at that time attended the Company’s 20082009 Annual Meeting of Shareholders.
The Board of Directors has an Audit Committee, a Compensation Committee and a Nominating and Governance Committee. Each of the Committees consists of independent directors and each of the Committees has adopted a written charter which is available on the Company’s website atwww.nwpipe.com under the heading “Corporate Governance”, or by writing to Northwest Pipe Company, attn. Corporate Secretary, 5721 SE Columbia Way, Suite 200, Vancouver, WA 98661.
The table below lists the current membership of each Committee and the number of Committee meetings held in 2008.Committee.
| Audit Committee | Compensation Committee | Nominating and Governance Committee | ||||||||||
Name: | ||||||||||||
James E. Declusin | X | |||||||||||
Michael C. Franson | X | X | X | * | ||||||||
Wayne B. Kingsley | X | * | X | |||||||||
Keith R. Larson | ||||||||||||
| X | X | * | |||||||||
| * | Committee |
Audit Committee.Committee. The Audit Committee of the Board of Directors is responsible to assist the Board in fulfilling its oversight responsibilities. The Audit Committee’s primary duties and responsibilities arefor the oversight and monitoring of: the integrity of the Company’s financial reporting process, financial internal control systems, accounting and legal compliance and the integrity of theour financial reporting of the Company;reporting; the qualifications, independence and performance of the Company’sour independent auditors; theour compliance by the Company with applicable legal and regulatory requirements; and the maintenance of an open and private, if necessary, communication among the independent auditors, management, legal counsel and the Board. The Audit Committee met ninethirty times in 2008.2009. Each member of the Audit Committee is “independent” as defined by applicable U.S. Securities and Exchange Commission (“SEC”) and Nasdaq Stock Market rules. The Board of Directors has determined that Mr. RomanFranson qualifies as an “audit committee financial expert” as defined by the rules of the SEC.
Management is responsible for preparing the Company’s financial statements. The independent accountants areregistered public accounting firm is responsible for performing an independent audit of the Company’s financial statements in accordance with generally accepted auditing standards and to issueissuing a report thereon, and for performing an independent audit of the effectiveness of the Company’s internal controls over financial reporting. The Audit Committee’s responsibility is to monitor and oversee these processes. The Audit Committee serves a board-level oversight role in which it provides advice, counsel and direction to management and the independent accountants on the basis of the information it receives, discussions with the independent accountants and the experience of the Audit Committee’s members in business, financial and accounting matters.
In this context, the Audit Committee has reviewed and discussed the audited financial statements with management and the independent accountants. The Audit Committee also has discussed with the independent accountants the matters required to be discussed by Statement on Auditing Standards No. 61 (AICPA,Professional Standards, Vol. 1. AU section 380), as adopted by the Public Company Accounting Oversight Board in Rule 3200T.
The Company’s independent accountants also provided to the Audit Committee the written disclosures and letter required by Independence Standards Board Standard No. 1 (“Independence Discussions with Audit Committees”), as adopted by the Public Company Accounting Oversight Board in Rule 3600T, and the Audit Committee discussed with the independent accountants that firm’s independence.
Based on the above discussions and review with management and the independent accountants, the Audit Committee recommended to the Board of Directors that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 20082009 for filing with the U.S. Securities and Exchange Commission.
Respectfully submitted by the Audit Committee of the Board of Directors.
AUDIT COMMITTEE
Wayne B. Kingsley
Keith R. Larson
Richard A. RomanMichael C. Franson
Compensation Committee.Committee.The Compensation Committee of the Board of Directors is responsible to assistfor the Board of Directors in fulfilling its responsibilities with regard to oversight and determination of executive compensation by: reviewing, recommending and approving salaries and other compensation of the Company’s executive officers; administering the Company’s equity incentive and compensation plans, including reviewing, recommending and approving stock option and other equity incentive and compensation awards to executive officers; and reviewing, recommending and taking action upon any other compensation practices or policies of the Company as the Board may request or the Committee may determine to be appropriate. The Committee has sole authority to retain and terminate a compensation consultant to assist in the evaluation of executive compensation. In 2008, the Committee determined that, in line with emerging corporate governance best practices, it would retain Mercer, an outside compensation consultant, to provide services as compensation consultants. Mercer performed a director compensation review to assess the competitiveness of the Company’s Board of Directors compensation strategy for its non-employee directors and provided recommendations in terms of structure and magnitude of compensation. Additionally, Mercer performed a review of the long-term compensation of employees, and provided recommendations regarding the components and mix (short-term/long-term; fixed/variable; cash/equity) of the long-term compensation programs of the Company. The Committee also reviewed both general and peer survey data compiled by Mercer. While the Committee reviewed the information provided by Mercer, including the peer survey data, as a general indicator of relevant market
conditions, the Committee does not utilize specific benchmark levels as the principal factor in its compensation discussions. Mercer reported to the Committee Chair and had direct access to Committee members without management present, and attended Committee meetings either in person or by telephone. The Compensation Committee met seventhree times in 2008.2009.
Nominating and Governance Committee; Nominations by Shareholders.Shareholders. The Nominating and Governance Committee of the Board of Directors formed in January 2009, recommends to the Board of Directors corporate governance principles for the Company, identifies qualified candidates for membership on the Board of Directors, and proposes nominees for election as directors. Each of the members of the Nominating and Governance Committee is “independent” as defined by applicable Nasdaq Stock Market rules. The Nominating and Governance Committee met one time in 2009.
In identifying qualified candidates for the Board of Directors, the Nominating and Governance Committee will consider recommendations by shareholders. Shareholder recommendations as to candidates for election to the Board of Directors may be submitted to Corporate Secretary, Northwest Pipe Company, 5721 SE Columbia Way, Suite 200, Vancouver, Washington, 98661. The Nominating and Governance Committee will evaluate potential nominees, including candidates recommended by shareholders, by reviewing qualifications, considering references, conducting interviews and reviewing and considering such other information as the members of the Nominating and Governance Committee deem relevant. The Company’s Corporate Governance Principles specify that the criteria used by the Nominating and Governance Committee in the selection, review and evaluation of possible candidates for vacancies on the Board should include factors relating to whether the candidate would meet the definition of “independent” as well as skills, occupation and experience in the context of the needs of the Board. All candidates for election to the Board of Directors must be individuals of character, integrity and honesty. The Company does not have a formal policy with respect to the consideration of diversity in identifying director candidates, however the Board does consider diversity in reviewing director nominee candidates. The Nominating and Governance Committee has not employed any third parties to help identify or screen prospective directors in the past, but may do so at the discretion of the Nominating and Governance Committee.
The Company’s Bylaws 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 the nominating shareholder.
Shareholders and other parties interested in communicating directly with the members of the Board of Directors may do so by writing to: Board of Directors, Northwest Pipe Company, 5721 SE Columbia Way, Suite 200, Vancouver, Washington, 98661.
Certain Relationships and Related Transactions
We believe that there has not been any transaction or series of transactions to which we were or are to be a party in which the amount involved exceeds $120,000 and in which any director, executive officer or holder of more than 5% of our common stock, or members of any such person’s immediate family, had or will have a direct or indirect material interest, other than compensation described in “Executive Compensation Discussion and Analysis”. We intend that any such future transactions will be approved by the Board of Directors and will be on terms no less favorable to our Company than could be obtained from unaffiliated third parties.
At the Annual Meeting, twofour directors will be elected, eachtwo for a three-year term, one for a two-year term and one for a one-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 any 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 and not more than nine directors. The Board of Directors has fixed the number of directors at six. The Company’s directors are divided into three classes. The term of office of only one class of directors expires each year, and their successors are generally elected for terms of three years, and until their successors are elected and qualified. There is no cumulative voting for election of directors.
The Board of Directors unanimously recommends that shareholders vote FOR the election of its nominees for directors. 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.
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.
| Age | Director Since | Expiration of Current Term | Age | Director Since | Expiration of Current Term | Expiration of Term For Which Nominated | ||||||||||||||||
Nominees: | ||||||||||||||||||||||
Brian W. Dunham | 51 | 1995 | 2009 | |||||||||||||||||||
Richard A. Roman | 57 | 2003 | 2009 | |||||||||||||||||||
Continuing Directors: | ||||||||||||||||||||||
Michael C. Franson | 54 | 2007 | 2010 | |||||||||||||||||||
Wayne B. Kingsley | 66 | 1987 | 2010 | 68 | 1987 | 2010 | 2011 | |||||||||||||||
Keith R. Larson | 51 | 2007 | 2010 | 52 | 2007 | 2010 | 2012 | |||||||||||||||
James E. Declusin | 67 | 2010 | 2010 | 2013 | ||||||||||||||||||
Michael C. Franson | 55 | 2007 | 2010 | 2013 | ||||||||||||||||||
Continuing Directors: | ||||||||||||||||||||||
William R. Tagmyer | 71 | 1986 | 2011 | 72 | 1986 | 2011 | — | |||||||||||||||
Richard A. Roman | 59 | 2003 | 2012 | — | ||||||||||||||||||
Brian W. Dunham has been a director of the Company since August 1995. Mr. Dunham has been President of the Company since January 1998 and became Chief Executive Officer in January 2001. Prior to becoming President, 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 and Chief Operating Officer in February 1997. From 1981 to 1990, he was employed by Coopers & Lybrand LLP, an independent public accounting firm. Mr. Dunham also serves on the board of directors of Avista Corp., a provider of energy and energy-related services.
Richard A. Romanhas been a director of the Company since 2003. Mr. Roman is the President of Columbia Ventures Corporation, a private investment company which historically has focused principally on the international metals and telecommunications industries. Prior to joining Columbia Ventures Corporation in 1992,
Mr. Roman was a partner at Coopers & Lybrand, an independent public accounting firm. Mr. Roman also serves on the board of directors of three privately held companies.
Continuing Directors
Michael C. Fransonhas been a director of the Company since January 2007. He was previously a director from 2001 until 2005. Mr. Franson is a founder and is President of St. Charles Capital LLC, an investment banking firm formed in 2005. St. Charles Capital provides expertise in mergers and acquisitions, raising private capital, and financial advisory services for middle-market companies across the United States. Prior to founding St. Charles Capital, Mr. Franson was a managing director at The Wallach Company (“TWC”), which was subsequently sold to KeyCorp, the parent of KeyBanc Capital Markets. Prior to joining TWC, Mr. Franson was a partner at Boettcher and Company, a regional investment-banking firm located in Denver. Mr. Franson began his career as an equity analyst at Pacific Mutual Insurance Company, located in Newport Beach, California.
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 privately held passenger vessel operator.excursion company. From 1985 to 2002, Mr. Kingsley served as Chairman of the Board of Directors of InterVen Partners, Inc., a venture capital management company, and served as General Partner of the venture capital funds managed by InterVen Partners, Inc. Mr. Kingsley also serves on the boardBoard of directorsDirectors of twoone not-for-profit entities.entity. Currently, he is the Chairman of the Audit Committee, a member of the Executive Committee of the Board of Directors and a member of our Nominating and Governance Committee. Mr. Kingsley brings to the Board 23 years of experience as a member of the Board of Directors and investor in the Company, as well as his background as a manager and investor of venture capital funds and more recent experience as chairman of a privately held passenger vessel excursion company.
Keith R. Larson has been a director of the Company since May 2007. Mr. Larson is a Vice President of Intel Corporation and Managing Director of Intel Capital, Intel Corporation’s venture investment group. Mr. Larson was appointed Vice President in 2006 and has served as a Managing Director of Intel Capital since 2004, managing a team of investment professionals focused on identifying, making, and managing strategic investments in the manufacturing, memory, and digital health sectors.investments. For approximately three months in 2004, Mr. Larson managed the Western Europe and Israel investment team of Intel Capital. From 1999 to 2003, Mr. Larson was a Sector Director managing teams of investment professionals investing in communications, networking, and data storage sectors. Mr. Larson also serves on the boardBoard of directorsDirectors of two not-for-profit entities and one state government council. Currently, he is the Chairman of our Compensation Committee and a member of the Audit Committee. Mr. Larson brings to the Board his experience as a senior executive in corporate development in a large multinational public company.
James E. Declusinhas been a director of the Company since August 2010. Mr. Declusin served as President and CEO of Evraz Inc. NA until February 2010 and as President and CEO of Oregon Steel Mills, Inc. from August 2003 until Oregon Steel Mills was acquired by Evraz Group SA in January 2007. He has served as a director of Oregon Steel Mills and Evraz Inc. NA since 2000. Mr. Declusin spent sixteen years with California Steel Industries, most recently serving as Senior Executive Vice President and Chief Operating Officer, retiring on October 31, 2000. Prior to that time, he spent seventeen years in various management positions in the commercial area of Kaiser Steel Corporation. Currently, he is a member of the Compensation Committee. Mr. Declusin brings to the Board over 40 years of experience in the steel industry, including, most recently, as president and chief executive officer of a large publicly-held steel manufacturing company.
Michael C. Fransonhas been a director of the Company since January 2007. Mr. Franson is a founder and is President of St. Charles Capital LLC, an investment banking firm formed in 2005. St. Charles Capital provides expertise in mergers and acquisitions, raising private capital and financial advisory services for middle-market companies across the United States. Prior to founding St. Charles Capital, Mr. Franson was a Managing Director at The Wallach Company, which was subsequently sold to KeyCorp, the parent of KeyBanc Capital Markets. Prior to joining The Wallach Company, Mr. Franson was a partner at Boettcher and Company, a regional investment-banking firm located in Denver. Mr. Franson began his career as an equity analyst at Pacific Mutual Insurance Company, located in Newport Beach, California. Mr. Franson had previously served as a member of our Board of Directors from 2001 until 2005. Currently, he is the Chairman of the Nominating and Governance Committee and a member of our Compensation Committee and our Audit Committee. Mr. Franson brings to the Board his background and expertise in investment banking, including substantial experience in financial analysis and financial advisory services, merger and acquisition transactions and a wide variety of capital raising and financing transactions.
William R. Tagmyer has been the Chairman of the Board of Directors since 1986. From 1986 to January 1998, Mr. Tagmyer also served as our President of the Company and from 1986 to January 2001 as ChiefCEO. He is a member of our Executive Officer.Committee of the Board of Directors. He worked for L. B. Foster Company, another steel pipe manufacturer, from 1975 to 1986. 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. Mr. Tagmyer brings to the Board over fifty years of experience in steel and steel-related industries and twenty-five years of experience in leadership positions with the Company.
DIRECTOR COMPENSATIONRichard A. Roman
Membershas been a director of the Company since 2003. Mr. Roman has served as our CEO since March 29, 2010, and as President since October 5, 2010. In connection with his appointment as CEO, Mr. Roman resigned his positions as Lead Director and as a member of the Board’s Audit and Compensation Committees, and was elected to the Executive Committee of the Board of Directors who are alsoDirectors. He was a member of our employees do not receive additional compensation for serving as Directors. Each nonemployee Director receives a $24,000 annual retainer, $1,250 for each Board meeting attendedAudit and $500 for each meeting of a committee of the Board attended. The Audit Committee Chairman receives an additional annual retainer of $7,000,Compensation Committees since 2003 and 2005, respectively, and the Compensation Committee Chairman receivesBoard’s Lead Director since November 2008. Previously, Mr. Roman was also the President of Columbia Ventures Corporation, a private investment company which historically has focused principally on the international metals and telecommunications industries. Prior to joining Columbia Ventures Corporation in 1992, Mr. Roman was a partner at Coopers & Lybrand, an additional annual retainer of $5,000. In addition, in 2008 each nonemployee director received an award of $45,000 which was paid in cash, in an equivalent number of shares of Northwest Pipe Company Common Stock, or in a combination thereof, as specified by each director. The members of the Company’s Board of Directors are also reimbursed for travel expenses incurred in attending Board meetings.
The following table reflects compensation earned by the Directors for the year ended December 31, 2008, with the exception ofindependent public accounting firm. Mr. Dunham, whose compensation is included in theExecutive Compensationdisclosure.
Name(1) | Fees Earned or Paid in Cash ($) | Stock Awards ($)(2) | All Other Compensation ($)(3) | Total ($) | ||||||||
Michael C. Franson | $ | 51,533 | $ | 26,967 | $ | — | $ | 78,500 | ||||
Wayne B. Kingsley | 86,500 | — | — | 86,500 | ||||||||
Keith R. Larson | 58,019 | 22,481 | — | 80,500 | ||||||||
Richard A. Roman | 88,000 | — | — | 88,000 | ||||||||
William R. Tagmyer | — | — | 167,876 | 167,876 | ||||||||
The Company entered into an Amended and Restated Employment Agreement (the “Employment Agreement”) with Mr. Tagmyer effective December 31, 2008. The Employment Agreement is for a term ending on December 31, 2010, unless terminated earlier by the parties. The Employment Agreement provides that through 2010, Mr. Tagmyer will receive a base salary of $150,000 per year. If the Employment Agreement is terminated by Mr. Tagmyer or by the Company for “cause” (as defined), Mr. Tagmyer would be paid all compensationhis knowledge and expenses to which he is entitled through the date of termination of the Employment Agreement. If the Employment Agreement is terminated by the Company for any reason other than for “cause” orexperience as a result of Mr. Tagmyer’s death, Mr. Tagmyer would be entitled to receive all of the remaining payments that he would have been entitled to receive under the Employment Agreement if it had not been terminated. If the Employment Agreement is terminatedpartner at a large national independent public accounting firm as a result of Mr. Tagmyer’s death, Mr. Tagmyer’s beneficiary or estate would be entitled to receive fifty percent of the remaining payments under the Employment Agreement to which Mr. Tagmyer would have been entitled had he survived. The Employment Agreement contains certain
noncompetition provisions that apply to Mr. Tagmyer’s activities during the term of the Employment Agreement and for a period of one year after the later of the date of termination of the Agreement or the date the last payment is made under the Agreement.
Compensation Committee Interlocks and Insider Participation
Messrs. Franson, Larson and Roman, all of whom are independent directors, served on the Compensation Committee in 2008. No director orwell as his more recent management experience as an executive officer of a private investment company.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE “FOR” THE ELECTION OF ITS NOMINEES FOR DIRECTOR. PROXIES SOLICITED BY THE BOARD WILL BE VOTED “FOR” THE ELECTION OF THE BOARD’S NOMINEES UNLESS A VOTE WITHHOLDING AUTHORITY IS SPECIFICALLY INDICATED.If a quorum is present, the Company servesCompany’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 compensation committeedetermination of the board of directors of any company for which Messrs. Franson, Larson or Roman serve as executive officers or directors.whether a plurality exists with respect to a given nominee.
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 | ||||
| 59 | Director, Chief Executive Officer and President | ||||
Stephanie J. Welty | 54 | Senior Vice President, Chief Financial Officer and Corporate Secretary | ||||
Greg Carrier | 56 | Vice President, Purchasing | ||||
Winsor J.E. Jenkins | 62 | Vice President, Human Resources | ||||
Robert L. Mahoney | 48 | Senior Vice President; President, Tubular Products Group | ||||
Gary A. Stokes | 58 | Senior Vice President; President, Water Transmission Group | ||||
Gary R. Stone | 54 | Vice President, Quality Assurance | ||||
Information concerning the principal occupation of Mr. DunhamRoman is set forth under “Election of Directors.”
Stephanie J. Weltywas namedhas served as our Senior Vice President, Chief Financial Officer and Corporate Secretary insince November 2007. Prior to joining the Company,Previously, she was Chief Financial Officer at TriQuint Semiconductor, Inc., from 2005 to 2007. From 1994 to 2005 Ms. Welty served first as Accounting Manager, then Director of IT and Vice President of Finance at TriQuint.
Greg Carrier was namedhas served as our Vice President, Purchasing insince June 2007. He had served as our Corporate Director of Materials since 2001. Prior to 2001, Mr. Carrier served in a succession of positions in purchasing and materials management since joining the Company in 1996.
Winsor J.E. Jenkins was namedhas served as our Vice President, Human Resources insince June 2007. He had served as Corporate Director, Human Resources since March 1998 when he joined the Company.
Robert L. Mahoney was namedhas served as our Senior Vice President, responsible for the Tubular Products Group, insince June 2007. He had served as Vice President, Chief Strategic Officer since May 2005, as Vice President, Corporate Development since July 1998, and as Director of Business Planning and Development since 1996. Mr. Mahoney has been with the Company since 1992.
Gary A. Stokes was namedhas served as our Senior Vice President, responsible for the Water Transmission Group, effectivesince January 2008. He had served as Senior Vice President, Sales and Marketing since July 2001, and as Vice President, Sales and Marketing since 1993. Mr. Stokes has been with the Company since 1987.
Gary R. Stonewas namedhas served as our Vice President, Quality Assurance insince June 2007. He had served as Corporate Director, Quality Assurance since joining2001. Mr. Stone has been with the Company in 2001.since 1991.
COMPENSATION DISCUSSION AND ANALYSIS
Compensation Philosophy and Objectives
.The Board of Directors and executive management at Northwest Pipe Company believe that the performance and contribution of itsour executive officers are critical to theour overall success of the Company.success. To attract, retain, and motivate the executives to accomplish the Company’sour business strategy, the Compensation Committee of the Board of Directors (the “Compensation Committee”) establishes executive compensation policies and oversees executive compensation practices at Northwest Pipe Company.
The Compensation Committee believes that the most effective executive compensation program is one that is designed to reward the achievement of our specific annual and long-term goals, by the Company, and which aligns executives’ interests with those of the shareholders by rewarding performance that exceeds established goals, with the ultimate objective of improving shareholder value.
The Compensation Committee also evaluates compensation programs to ensure that the Company maintains itswe maintain our ability to attract and retain superior employees in key positions and that compensation provided to key employees remains competitive relative to the compensation paid to similarly situated executives of the Company’s peer companies.executives. The Compensation Committee believes our executive compensation packages provided by the Company should include both cash and share-based compensation that reward performance as measured against established goals.
In 2008, the Compensation Committee engaged an independent compensation consultant, Mercer, to conduct a review of our executive compensation program, and to advise the Compensation Committee on the design of a long-term equity incentive program. The Compensation Committee did not use a compensation consultant in 2009.
Process for Setting Executive Compensation. The Compensation Committee annually reviews and approves compensation levels and pay mix for our executives.
| • | The Compensation Committee does not utilize specific benchmark levels. Rather, the Compensation Committee considers broad, market based survey data, such assalary.com andWorldatWork.org, when assessing the competitiveness of compensation levels and pay mix for the CEO, CFO and other executives. |
The Compensation Committee evaluated and considered our annual performance within the context of our long-term strategic plan, identifying areas in which expectations were exceeded, achieved or fell below stated goals. The structure of all incentive compensation plans is reviewed periodically to assure their linkage to the current objectives, strategies and performance goals.
The Compensation Committee evaluated and considered a variety of growth, profitability, return and shareholder value measures relative to historical performance, and relative to internal budgets.
There is no pre-established policy or target for the allocation between either cash and non-cash or short-term and long-term incentive compensation. Rather, the Compensation Committee exercises business judgment in determining the appropriate level and mix of executive compensation.compensation in order to acknowledge the value of time spent on our business through cash and align director and shareholder interests through equity.
The Compensation Committee used subjective individual performance as a factor in making its decisions. The Compensation Committee and the Chief Executive OfficerCEO annually review the performance of each named executive officer (other than the Chief Executive OfficerCEO whose performance is reviewed by the Compensation Committee). Based on these reviews, the compensation committeeCompensation Committee makes compensation decisions, including salary adjustments and annual bonus awards, for the named executive officers.
In 2008, the
The Compensation Committee engaged an independentreviewed the total compensation consultant, Mercer, to conduct a review of the Company’seach named executive compensation program, and to advise the Committee on the design of a long-term equity incentive program, as discussed below.officer.
Elements of CompensationCompensation.
For the year ended December 31, 2008,2009, the principal components of compensation for executive officers were:
base salary;
performance-based incentive compensation;
long-term incentive compensation;
long-term equity incentive awards (restricted stock units and performance awards);
retirement benefits; and
perquisites and other personal benefits.
Base Salary.The Company providesWe provide executive officers and other employees with a base salary to compensate them for services rendered during the fiscal year. Base salaries are determined for each executive based on his or her position and responsibility, using market data. In addition, the Company considerswe consider the individual performance of the executive, and conductsconduct internal reviews of the executive’s compensation to ensure equity among executive officers. Salary levels are typically reviewed annually as part of the Company’sour performance review process as well as upon a promotion or other change in job responsibility. Merit based increases to salaries are based on the Compensation Committee’s assessment of the individual executive’s performance. Due to existing economic conditions, no pay increases were given to the named executive officers in 2009. In 2009, we furloughed employees, including executive officers, as part of our cost reduction activities. This furlough had the effect of reducing base salaries in 2009 as compared to 2008.
Performance-Based Incentive Compensation.CompensationThe Company provides.We provide executive officers and other employees with bonusincentive compensation to incentivize and reward them for high performance and achievement of corporate goals. The bonus program gives the Compensation Committee the latitude to award cash incentive compensation to executive officers and others as a reward for theour growth and profitability, of the Company, and places a significant percentage of each executive officer’s compensation at risk. Awards are based on the Company’sour achievement of certain financial performance measures for the year, including sales and net income measures.
Long-Term Incentive Compensation.The Long-Term Incentive Plan For 2009, there was phased out in 2008. This Plan encouraged participants to focus on long-term Company earnings and performance and provided an opportunityno performance-based incentive compensation for the executive officers and certain designated key employeesas a result of our failure to increase their compensation through cash-basedachieve applicable performance unit awardstargets.
Awards are generally based on our achievement of the following performance measures and are given a three-year performance cycle. Each annual award of performance units specifiedcertain weighting to determine a three-year cycle for determining the amount to be paid with respect to each award. For example, the performance units awarded in fiscal year 2007 were based upon the Company’s performance from 2004 through 2006. bonus amount.
Performance Measures | Weight | |
Current Year Earnings compared to Prior Year Earnings | 50% | |
Current Year Net Sales compared to Prior Year Net Sales | 30% | |
Current Year Earnings compared to the Business Plan | 20% |
The performance measurementCompensation Committee has established target awards for the satisfaction of these performance units awardedmeasures. The final amount of these awards is subject to adjustment at the Company’s average return on assets as compared to a hurdle rate determined bydiscretion of the Compensation Committee. Final payment for allEven if the performance units previously awarded was mademeasures are met, the Compensation Committee retains the right to adjust the actual bonus amounts of each individual. These adjustments are based on individual performance, as well as external factors affecting us or the occurrence of unusual or infrequent events. The following table expresses these awards as a percentage of base salary.
Performance Measures and Levels | Tier 1(1) | Tier 2(2) | Tier 3(3) | |||||||||
Earnings Growth over Prior Year | ||||||||||||
Maximum (150% of Target) | 80 | % | 75 | % | 70 | % | ||||||
Target | 25 | % | 20 | % | 15 | % | ||||||
Threshold (80% of Target) | 0 | % | 0 | % | 0 | % | ||||||
Sales Growth over Prior Year | ||||||||||||
Maximum (150% of Target) | 39 | % | 36 | % | 33 | % | ||||||
Target | 15 | % | 12 | % | 9 | % | ||||||
Threshold (80% of Target) | 0 | % | 0 | % | 0 | % | ||||||
Current Year Earnings over Business Plan | ||||||||||||
Maximum (150% of Target) | 30 | % | 28 | % | 26 | % | ||||||
Target | 10 | % | 8 | % | 6 | % | ||||||
Threshold (70% of Target) | 0 | % | 0 | % | 0 | % | ||||||
| (1) | Includes our CEO and President (As of December 31, 2009) |
| (2) | Includes our Senior Vice Presidents |
| (3) | Includes our Vice Presidents |
Award levels established by consideration of the 2008 actual results ($ in 2008, and no further performance unitsmillions):
| 2009 “Threshold” Performance Level ($) | 2009 “Target” Performance Level ($) | 2009 “Maximum” Performance Level ($) | ||||||||||
Net income | $ | 26 | $ | 32 | $ | 48 | ||||||
Water transmission operating profit(1)(2) | 34 | 43 | 64 | |||||||||
Tubular products operating profit(1)(2) | 29 | 36 | 55 | |||||||||
Revenue | 352 | 440 | 660 | |||||||||
Water transmission revenue(1)(2) | 218 | 272 | 408 | |||||||||
Tubular products revenue(1)(2) | 134 | 168 | 252 | |||||||||
Award levels established by consideration of this type will be awarded.the 2009 business plan ($ in millions):
| 2009 “Threshold” Performance Level ($) | 2009 “Target” Performance Level ($) | 2009 “Maximum” Performance Level ($) | ||||||||||
Net income | $ | 29 | $ | 42 | $ | 63 | ||||||
Water transmission operating profit(1)(2) | 50 | 72 | 107 | |||||||||
Tubular products operating profit(1)(2) | 17 | 24 | 36 | |||||||||
| (1) | Levels used to determine performance targets for our Group Executives. |
| (2) | Does not include corporate selling, general and administrative expenses. |
Long-Term Equity Incentive Awards. Beginning in 2008, the Companywe began providing long-term equity incentive awards to executive officers and certain designated key employees. The long-term equity incentive awards are designed to ensure that the Company’sour executive officers and key employees have a continuing stake in theour long-term success of the Company.success. In addition, the awards emphasize pay-for-performance. Terms and conditions of the awards are determined on an
annual basis by the Compensation Committee. The amount of the initial equity award was determined based on a percentage of the recipient’s salary, and ranged from twelve and one-half percent to eighty percent, depending on the grade level of the employee. Under the grant, twenty percent of the award was in the form of restricted stock units (“RSUs”), and eighty percent of the award was in the form of performance share awards (“PSAs”). RSUs are service based and entitle the holder to one share of Common Stock at the end of the vesting period (generally the vesting occurs annually over a three yearthree-year period), subject to continued employment. RSUs are designed to attract and retain executive officers and others by providing them with the benefits associated with the increase in the value of the Common Stock during the vesting period, while incentivizing them to remain with the Companyus long-term. PSAs are performanceperformance- and service based,service-based, and entitle the holder to receive one share of Common Stock, generally based on the achievement of a three-year earnings per share result compared to a pre-established target. The number of PSAs and, therefore, the number of shares awarded at the end of a performance period can range from zero to 225% of the target award. Vesting of the awarded PSAs generally occurs fifty percent atfollowing the end of the performance period, and fifty percent one year later, subject to continued employment. PSAs serve several purposes. They have value to the holder only if threshold earnings per share goals are achieved during their generally three-year performance measurement period (generally three-year) and they serve as a retention tool because awards made for the attainment of the targeted earnings per share goals vest equally over two years following the performance measurement period. Additionally, the holders benefit further if they are successful in increasing the value of theour Common Stock of the Company.Stock.
Concurrent with the implementation of the long-term equity incentive awards, the Companywe adopted a requirement that over the next five years executive officers must accumulate, and hold thereafter, one times their then-current annual salary in Common Stock.
Retirement Benefits. In order to provide competitive total compensation, the Company offers to itswe offer our executive officers and certain designated key employees a nonqualified retirement savings plan (the “Deferred Compensation Plan”), which provides executive officers and others with the opportunity to defer salary and bonus compensation for a period of years or until termination of employment. Executive officers who defer salary or bonus under this planthe Deferred Compensation Plan are credited with market-based returns. The CompanyWe may make a discretionary matching contribution based on deferrals made by each participant. In addition, the Companywe will make a contribution based on a target benefit projected for each participant. The target benefit projected is 1% of base salary in the year before attaining normal retirement age per year of employment (up to 35 years) with us. For 2009, deferred compensation match accounted for approximately 5% and 7% of the Company.total compensation for the President and the other executive officers, respectively.
The CompanyWe also offersoffer a qualified 401(k) defined contribution plan. The ability of executive officers to participate fully in this plan is limited under IRS and ERISA requirements. The 401(k) plan encourages employees to save for retirement by investing on a regular basis through payroll deductions.
Perquisites and Other Personal Benefits. The Company providesWe provide executive officers with perquisites and other personal benefits that the Companywe and the Compensation Committee believe are reasonable and consistent with itsour overall compensation program to better enable the Companyus to attract, retain and motivate employees for key positions. The Company isWe are selective in itsour use of perquisites, utilizing perquisites that are commonly provided, the value of which is generally modest. The Compensation Committee periodically reviews the levels of perquisites and other personal benefits provided to executive officers. The primary perquisites are car allowances, club membership dues, life insurance premiums and infrequent payments of spousal travel.
Executive Compensation and Risk. Although a substantial portion of the compensation paid to our executive officers is performance-based, we believe our executive compensation programs do not encourage excessive and unnecessary risk-taking by our executive officers because these programs are designed to encourage our executive officers to remain focused on both the short-term and long-term operational and financial goals of the Company. We achieve this balance through a combination of elements in our overall compensation plans, including: elements that reward different aspects of short-term and long-term performance;
incentive compensation that rewards performance on a variety of different measures; awards that are paid based on results averaged out over several years; and awards paid in cash and awards paid in shares of the Company’s stock, to encourage alignment with the interests of shareholders.
Summary of Cash and Certain Other Compensation
The following table reflects compensation earned by the Company’s Chief Executive Officer, the Company’s Chief Financial Officer,our CEO, our CFO, and each of the three of our other most highly compensated individuals of the Company,executive officers, for the years ended December 31, 2009, 2008 2007 and 20062007 (the “named executive officers”).
Name and Principal Position | Year | Salary ($)(1) | Bonus ($)(2) | Stock Awards ($)(3) | Option Awards ($)(4) | Non-Equity Incentive Plan Compensation ($) | All Other Compensation ($) | Total ($) | Year | Salary(1) | Bonus(2) | Stock Awards(3) | Option Awards(4) | Non-Equity Incentive Plan Compensation | All Other Compensation | Total ($) | ||||||||||||||||||||||||||||||||||||||||
Brian W. Dunham | 2008 | $ | 570,000 | $ | 720,069 | $ | 273,272 | — | $ | 242,028 | $ | 75,728 | (5) | $ | 1,881,097 | 2009 | $ | 559,000 | $ | — | $ | 96,805 | $ | — | $ | — | $ | 74,420 | (7) | $ | 730,225 | |||||||||||||||||||||||||
Director, Chief Executive | 2007 | 545,000 | 560,000 | — | $ | 9,681 | 53,948 | 71,606 | (5) | 1,240,235 | ||||||||||||||||||||||||||||||||||||||||||||||
Officer and President | 2006 | 520,000 | 400,000 | — | 18,602 | 18,601 | 70,923 | (5) | 1,028,126 | |||||||||||||||||||||||||||||||||||||||||||||||
Director, Chief Executive Officer and President | 2008 | 570,000 | 720,069 | 525,183 | — | 242,028 | 75,728 | (7) | 2,133,008 | |||||||||||||||||||||||||||||||||||||||||||||||
| 2007 | 545,000 | 560,000 | — | — | 53,948 | 71,606 | (7) | 1,230,554 | ||||||||||||||||||||||||||||||||||||||||||||||||
Stephanie J. Welty(10) | 2008 | 245,000 | 283,534 | 60,586 | — | 12,250 | 16,059 | (6) | 617,429 | |||||||||||||||||||||||||||||||||||||||||||||||
Gary A. Stokes | 2009 | 282,500 | — | 36,669 | — | — | 61,806 | (8) | 380,975 | |||||||||||||||||||||||||||||||||||||||||||||||
Senior Vice President | 2008 | 288,000 | 150,080 | 199,009 | — | 89,410 | 66,693 | (8) | 793,192 | |||||||||||||||||||||||||||||||||||||||||||||||
| 2007 | 262,500 | 232,000 | — | — | 19,653 | 58,854 | (8) | 573,007 | ||||||||||||||||||||||||||||||||||||||||||||||||
Robert L. Mahoney | 2009 | 243,250 | — | 31,582 | — | — | 44,722 | (9) | 319,554 | |||||||||||||||||||||||||||||||||||||||||||||||
Senior Vice President | 2008 | 248,000 | 324,261 | 171,377 | — | 75,536 | 47,324 | (9) | 866,498 | |||||||||||||||||||||||||||||||||||||||||||||||
| 2007 | 231,000 | 192,000 | — | — | 15,342 | 45,122 | (9) | 483,464 | ||||||||||||||||||||||||||||||||||||||||||||||||
Stephanie J. Welty(6) | 2009 | 240,250 | — | 31,188 | — | — | 25,810 | (10) | 297,248 | |||||||||||||||||||||||||||||||||||||||||||||||
Senior Vice President, Chief Financial Officer and Corporate Secretary | 2008 | 245,000 | 283,534 | 104,314 | — | 12,250 | 16,059 | (10) | 661,157 | |||||||||||||||||||||||||||||||||||||||||||||||
| 2007 | 40,000 | 50,000 | — | — | — | 2,815 | (6) | 92,815 | 2007 | 40,000 | 50,000 | — | — | — | 2,815 | (10) | 92,815 | |||||||||||||||||||||||||||||||||||||||
Winsor J.E. Jenkins | 2008 | 167,200 | 185,723 | 35,071 | — | 27,964 | 51,571 | (7) | 467,529 | 2009 | 164,000 | — | 12,415 | — | — | 53,283 | (11) | 229,698 | ||||||||||||||||||||||||||||||||||||||
Vice President | 2007 | 160,000 | 60,000 | — | 920 | 5,245 | 13,200 | (7) | 239,365 | 2008 | 167,200 | 185,723 | 67,435 | — | 27,964 | 51,571 | (11) | 499,893 | ||||||||||||||||||||||||||||||||||||||
| 2006 | 133,000 | 17,660 | — | 4,243 | 1,883 | 3,959 | (7) | 160,745 | 2007 | 160,000 | 60,000 | — | — | 5,245 | 13,200 | (11) | 238,445 | |||||||||||||||||||||||||||||||||||||||
Robert L. Mahoney Senior Vice President | 2008 | 248,000 | 324,261 | 89,174 | — | 75,536 | 47,324 | (8) | 784,295 | |||||||||||||||||||||||||||||||||||||||||||||||
| 2007 | 231,000 | 192,000 | — | 2,259 | 15,342 | 45,122 | (8) | 485,723 | ||||||||||||||||||||||||||||||||||||||||||||||||
| 2006 | 205,000 | 86,500 | — | 10,244 | 5,212 | 39,755 | (8) | 346,711 | ||||||||||||||||||||||||||||||||||||||||||||||||
Gary A. Stokes Senior Vice President | 2008 | 288,000 | 150,080 | 103,555 | — | 89,410 | 66,693 | (9) | 697,738 | |||||||||||||||||||||||||||||||||||||||||||||||
| 2007 | 262,500 | 232,000 | — | 3,308 | 19,653 | 58,854 | (9) | 576,315 | ||||||||||||||||||||||||||||||||||||||||||||||||
| 2006 | 250,000 | 135,000 | — | 15,095 | 7,026 | 60,610 | (9) | 467,731 | ||||||||||||||||||||||||||||||||||||||||||||||||
| (1) | Includes amounts earned in each of the respective years, even if deferred. |
| (2) | Annual bonus represents amount earned for the year. Actual payments may be made over subsequent years. |
| (3) |
| (4) | There were no stock option awards to named executive officers in 2009, 2008 |
|
| (5) | Mr. Dunham resigned from his position as the CEO effective as of March 29, 2010, and resigned as our President and as a member of our Board of Directors effective as of October 5, 2010. |
| (6) | Ms. Welty joined us as CFO in November 2007. |
| (7) | Amount includes $42,701, $43,706 and $41,608 in 2009, 2008 and |
| Amount includes |
| Amount includes $19,545, $19,825 and $17,976 in 2009, 2008 and |
| Amount includes |
The following table reflects grants of long-term equity incentive awards granted to each of the eligible named executive officers for the year ended December 31, 2008.2009. The conditions that must be met before these awards are issued are discussed under “Long-Term Equity Incentive Awards” above.
Name | Grant Date | Estimated Future Payouts Under Equity Incentive Plan Awards | Grant Date Fair Value of Stock Awards(3) ($) | Grant Date | Estimated Future Payouts Under Equity Incentive Plan Awards | Grant Date Fair Value of Stock Awards(3) | |||||||||||||||||||||||||
| Threshold (#) | Target (#) | Maximum (#) | Threshold (#) | Target (#) | Maximum (#) | ||||||||||||||||||||||||||
Brian W. Dunham | 08/18/2008 | (1) | 4,785 | 4,785 | 4,785 | 254,275 | 4/15/2009 | (1) | — | 3,197 | 3,197 | $ | 96,805 | ||||||||||||||||||
| 08/18/2008 | (2) | — | 18,610 | 35,500 | 988,935 | 4/15/2009 | (2) | — | 12,787 | 28,771 | 387,190 | ||||||||||||||||||||
Stephanie J. Welty | 08/18/2008 | (1) | 862 | 862 | 862 | 45,807 | |||||||||||||||||||||||||
| 08/18/2008 | (2) | — | 5,457 | 10,901 | 289,985 | ||||||||||||||||||||||||||
Winsor J.E. Jenkins | 08/18/2008 | (1) | 614 | 614 | 614 | 32,628 | |||||||||||||||||||||||||
Gary A. Stokes | 4/15/2009 | (1) | — | 1,211 | 1,211 | 36,669 | |||||||||||||||||||||||||
| 08/18/2008 | (2) | — | 2,388 | 4,556 | 126,898 | 4/15/2009 | (2) | — | 4,845 | 10,901 | 146,707 | ||||||||||||||||||||
Robert L. Mahoney | 08/18/2008 | (1) | 1,561 | 1,561 | 1,561 | 82,952 | 4/15/2009 | (1) | — | 1,043 | 1,043 | 31,582 | |||||||||||||||||||
| 08/18/2008 | (2) | — | 6,072 | 11,584 | 322,666 | 4/15/2009 | (2) | — | 4,172 | 9,387 | 126,328 | ||||||||||||||||||||
Gary A. Stokes | 08/18/2008 | (1) | 1,813 | 1,813 | 1,813 | 96,343 | |||||||||||||||||||||||||
Stephanie J. Welty(6) | 4/15/2009 | (1) | — | 1,030 | 1,030 | 31,188 | |||||||||||||||||||||||||
| 08/18/2008 | (2) | — | 7,052 | 13,452 | 374,743 | 4/15/2009 | (2) | — | 4,122 | 9,275 | 124,814 | ||||||||||||||||||||
Winsor J.E. Jenkins | 4/15/2009 | (1) | — | 410 | 410 | 12,415 | |||||||||||||||||||||||||
| 4/15/2009 | (2) | — | 1,641 | 3,692 | 49,689 | ||||||||||||||||||||||||||
| (1) | Awards represent the |
| (2) | Awards represent the |
| (3) | The grant date fair value of the awards is based on the closing price of |
Outstanding Equity Awards at 20082009 Fiscal Year End
The following table sets forth, for each of the named executive officers, the equity awards made to each such named executive officer that were outstanding at December 31, 2008.2009.
| Option Awards | Stock Awards | ||||||||||||||||||||||||||||||||||||||
Name | Option Awards | Stock Awards | Number of Securities Underlying Unexercised Options (#) | Option Exercise Price ($) | Option Expiration Date | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | ||||||||||||||||||||||||||||||||
| Number of Securities Underlying Unexercised Options (#) | Number of Securities Underlying Unexercised Options (#) | Option Exercise Price ($) | Option Expiration Date | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards Market or Payout Value of Unearned Shares, Units or Other Rights that Have Not Vested ($) | Exercisable | Unexercisable | ||||||||||||||||||||||||||||||||
| Exercisable | Unexercisable | ||||||||||||||||||||||||||||||||||||||
Brian W. Dunham. | 30,508 | (1) | — | $ | 14.750 | 02/25/2009 | 4,785 | (5) | 203,889 | ||||||||||||||||||||||||||||||
| 35,945 | (2) | — | 13.563 | 05/02/2010 | 18,610 | (6) | 792,972 | ||||||||||||||||||||||||||||||||
| 38,571 | (3) | — | 14.000 | 05/15/2011 | |||||||||||||||||||||||||||||||||||
| 12,798 | (4) | — | 17.900 | 05/23/2012 | |||||||||||||||||||||||||||||||||||
Brian W. Dunham | 35,945 | (1) | — | $ | 13.563 | 05/02/2010 | — | — | |||||||||||||||||||||||||||||||
| 38,571 | (2) | — | 14.000 | 05/15/2011 | — | — | |||||||||||||||||||||||||||||||||
| 12,798 | (3) | — | 17.900 | 05/23/2012 | — | — | |||||||||||||||||||||||||||||||||
| — | — | — | 1,267 | (4) | $ | 34,032 | |||||||||||||||||||||||||||||||||
| — | — | — | 3,197 | (5) | 85,871 | ||||||||||||||||||||||||||||||||||
| — | — | — | 16,061 | (6) | 431,398 | ||||||||||||||||||||||||||||||||||
| — | — | — | 12,787 | (7) | 343,459 | ||||||||||||||||||||||||||||||||||
Gary A. Stokes | 13,405 | (1) | — | 13.563 | 05/02/2010 | — | — | ||||||||||||||||||||||||||||||||
| 13,791 | (2) | — | 14.000 | 05/15/2011 | — | — | |||||||||||||||||||||||||||||||||
| 4,373 | (3) | — | 17.900 | 05/23/2012 | — | — | |||||||||||||||||||||||||||||||||
| — | — | — | 480 | (4) | 12,893 | ||||||||||||||||||||||||||||||||||
| — | — | — | 1,211 | (5) | 32,527 | ||||||||||||||||||||||||||||||||||
| — | — | — | 6,086 | (6) | 163,470 | ||||||||||||||||||||||||||||||||||
| — | — | — | 4,845 | (7) | 130,137 | ||||||||||||||||||||||||||||||||||
Robert L. Mahoney | 8,582 | (1) | — | 13.563 | 05/02/2010 | — | — | ||||||||||||||||||||||||||||||||
| 9,286 | (2) | — | 14.000 | 05/15/2011 | — | — | |||||||||||||||||||||||||||||||||
| 2,986 | (3) | — | 17.900 | 5/23/2012 | — | — | |||||||||||||||||||||||||||||||||
| — | — | — | 413 | (4) | 11,093 | ||||||||||||||||||||||||||||||||||
| — | — | — | 1,043 | (5) | 28,015 | ||||||||||||||||||||||||||||||||||
| — | — | — | 5,240 | (6) | 140,746 | ||||||||||||||||||||||||||||||||||
| — | — | — | 4,172 | (7) | 112,060 | ||||||||||||||||||||||||||||||||||
Stephanie J. Welty | — | — | — | — | 862 | (7) | 36,730 | — | — | — | 408 | (4) | 10,959 | ||||||||||||||||||||||||||
| 5,457 | (8) | 232,523 | |||||||||||||||||||||||||||||||||||||
| — | — | — | 1,030 | (5) | 27,666 | ||||||||||||||||||||||||||||||||||
| — | — | — | 4,907 | (6) | 131,802 | ||||||||||||||||||||||||||||||||||
| — | — | — | 4,122 | (7) | 110,717 | ||||||||||||||||||||||||||||||||||
Winsor J.E. Jenkins | — | — | — | — | 614 | (5) | 26,163 | — | — | — | 164 | (4) | 4,405 | ||||||||||||||||||||||||||
| 2,388 | (6) | 101,753 | |||||||||||||||||||||||||||||||||||||
| — | — | — | 410 | (5) | 11,013 | ||||||||||||||||||||||||||||||||||
Robert L. Mahoney | 7,281 | (1) | — | 14.750 | 02/25/2009 | 1,561 | (5) | 66,514 | |||||||||||||||||||||||||||||||
| 8,582 | (2) | — | 13.563 | 05/02/2010 | 6,072 | (6) | 258,728 | ||||||||||||||||||||||||||||||||
| 9,286 | (3) | — | 14.000 | 05/15/2011 | |||||||||||||||||||||||||||||||||||
| 2,986 | (4) | — | 17.900 | 05/23/2012 | |||||||||||||||||||||||||||||||||||
| — | — | — | 2,061 | (6) | 55,358 | ||||||||||||||||||||||||||||||||||
Gary A. Stokes | 13,405 | (2) | — | 13.563 | 05/02/2010 | 1,813 | (5) | 77,252 | |||||||||||||||||||||||||||||||
| 13,791 | (3) | — | 14.000 | 05/15/2011 | 7,052 | (6) | 300,486 | ||||||||||||||||||||||||||||||||
| 4,373 | (4) | — | 17.900 | 05/23/2012 | |||||||||||||||||||||||||||||||||||
| — | — | — | 1,641 | (7) | 44,077 | ||||||||||||||||||||||||||||||||||
| (1) |
| These options were granted on May 2, 2000 and vested in sixty equal monthly installments beginning on June 2, 2000, and were fully vested on May 2, 2005. |
| These options were granted on May 15, 2001 and vested in sixty equal monthly installments beginning on June 15, 2001, and were fully vested on May 15, 2006. |
| These options were granted on May 23, 2002 and |
| These |
| (5) | These RSUs were granted on April 15, 2009 and vest as follows: 34% in March 2010; 33% in March 2011; and 33% in March 2012. |
| (6) | These performance stock awards were granted on August 18, 2008 and vest as follows, |
| These performance stock awards were granted on |
20082009 Option Exercises and Stock Vesting
The following table sets forth, for each named executive officer, the number of shares acquired upon option exercises and vesting of stock awards during 20082009 and the related value realized upon such exercises.
| Option Awards | Stock Awards | ||||||||||||||||||||
Name | Option Awards | Number of Shares Acquired on Exercise (#)(1) | Value Realized on Exercise ($)(2) | Number of Shares Acquired on Vesting (#)(3) | Value Realized on Vesting ($)(4) | ||||||||||||||||
| Number of Shares Acquired on Exercise (#)(1) | Value Realized on Exercise ($)(2) | ||||||||||||||||||||
Brian W. Dunham | 20,000 | $ | 327,600 | 30,508 | $ | 553,720 | 6,067 | $ | 187,842 | ||||||||||||
Gary A. Stokes | — | — | 2,299 | 71,179 | |||||||||||||||||
Robert L. Mahoney | 7,281 | 132,150 | 1,980 | 61,305 | |||||||||||||||||
Stephanie J. Welty | — | — | — | — | 1,004 | 29,989 | |||||||||||||||
Winsor J.E. Jenkins | 142 | 5,351 | — | — | 778 | 24,087 | |||||||||||||||
Robert L. Mahoney | 1,857 | 30,418 | |||||||||||||||||||
Gary A. Stokes | 19,416 | 358,052 | |||||||||||||||||||
| (1) | This column shows the number of shares underlying the options exercised in |
| (2) | The value realized is based on the difference between the market price at the time of exercise of the options and the applicable exercise price. |
| (3) | This column shows the number of shares acquired on vesting in 2009 by the named executive officers. The actual number of shares received by these individuals from shares vested in 2009 (net of shares used to cover the applicable income taxes, if so elected) was as follows: Mr. Dunham – 3,941; Mr. Stokes – 2,006; Mr. Mahoney – 1,320; Ms. Welty – 753; Mr. Jenkins – 584. |
| (4) | The value realized on vesting is based on the closing market price multiplied by the number of shares of stock vested on the applicable vesting date. |
20082009 Nonqualified Deferred Compensation
The following table sets forth, for each named executive officer under the Company’sour Deferred Compensation Plan, the amounts of the contributions made by each executive, the contributions made by the Company,us, the earnings generated by the investments within the Plan, and the balance of each named executive officer’s account under the Deferred Compensation Plan at December 31, 2008.2009.
Name | Executive Contributions in Last Fiscal Year ($)(1) | Company Contributions in Last Fiscal Year ($)(2) | Aggregate Earnings (Loss) in Last Fiscal Year ($) | Aggregate Balance at Last Fiscal Year-End ($)(3) | Executive Contributions in Last Fiscal Year(1) | Company Contributions in Last Fiscal Year(1) | Aggregate Earnings in Last Fiscal Year | Aggregate Balance at Last Fiscal Year-End | |||||||||||||||||||||
Brian W. Dunham | $ | 10,417 | $ | 43,706 | $ | (93,421 | ) | $ | 378,232 | $ | 10,417 | $ | 42,701 | $ | 98,652 | $ | 530,002 | ||||||||||||
Gary A. Stokes | 16,948 | 32,811 | 92,508 | 496,979 | |||||||||||||||||||||||||
Robert L. Mahoney | 105,072 | 19,545 | 113,940 | 586,451 | |||||||||||||||||||||||||
Stephanie J. Welty | — | — | — | — | 5,889 | 2,945 | 347 | 9,181 | |||||||||||||||||||||
Winsor J.E. Jenkins | — | 30,311 | (8,185 | ) | 51,351 | — | 30,122 | 15,483 | 96,955 | ||||||||||||||||||||
Robert L. Mahoney | 72,800 | 19,825 | (86,568 | ) | 347,894 | ||||||||||||||||||||||||
Gary A. Stokes | 17,280 | 34,426 | (87,928 | ) | 354,713 | ||||||||||||||||||||||||
| (1) |
| These contributions are also reported in the All Other Compensation Column of theSummary Compensation |
| A portion of the amounts in the Aggregate Balance at Last Fiscal Year-End column were reported in the Summary Compensation Table of previous years in the Salary column (in the case of executive contributions) or in the All Other Compensation column (in the case of registrant contributions). |
The Company hasWe have entered into change in control agreements (the “Agreements”) with itsour executive officers. Each of the Agreements is for a term ending July 19, 2009,2011, 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 Companyus 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 or her 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 years’ base salary (one year in the case of Mr. Jenkins and three years in the case of Mr. Dunham)Jenkins) and (ii) an amount equal to two times (one times in the case of Mr. Jenkins and three times in the case of Mr. Dunham)Jenkins) 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 Companyus for Cause or as a result of the executive officer’s disability or death, the executive officer will be entitled to receive his or her 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.
For purposes of the Agreements, a “Change in Control” includes (i) any merger or consolidation transaction in which the Company iswe are not the surviving corporation, unless our 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’sour total combined voting power, (iii) the liquidation of the Company or the sale or other transfer of substantially all of itsour 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 of Directors. 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 or her job location before the Change in Control, (iv) the Company’sour 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 effectaffect the executive officer’s continued participation in any such plan or program or materially reduce the benefits under such plan or program, and (v) theour failure by the Company to require any of our successor to the Company to assume the Company’sour 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.
The amount of compensation payable to each named executive officer in each situation under a change in control is listed in the tables below. The amounts shown assume that a change in control occurred and that the employment of each executive was terminated effective as of December 31, 2008.
Mr. Dunham2009.
Executive Benefits and Payments Upon Termination | Termination Without Cause or Voluntary Termination For Good Reason | Termination For Cause, Disability or Death | ||||
Base Salary | $ | 1,710,000 | $ | 0 | ||
Bonus | 1,574,577 | 0 | ||||
Health and Insurance Benefits | 62,771 | 0 | ||||
Earned Vacation | 54,808 | 54,808 | ||||
Ms. Welty
Executive Benefits and Payments Upon Termination | Termination Without Cause or Voluntary Termination For Good Reason | Termination For Cause, Disability or Death | Termination Without Cause or Voluntary Termination for Good Reason | Termination For Cause, Disability or Death | |||||||||||
Mr. Dunham(1) | |||||||||||||||
Base Salary | $ | 490,000 | $ | 0 | $ | 1,677,000 | $ | — | |||||||
Bonus | 124,500 | (1) | 0 | 1,255,976 | — | ||||||||||
Health and Insurance Benefits | 23,267 | 0 | 62,771 | — | |||||||||||
Earned Vacation | 23,558 | 23,558 | 53,750 | 53,750 | |||||||||||
Mr. Stokes | |||||||||||||||
Base Salary | $ | 565,000 | $ | — | |||||||||||
Bonus | 317,375 | — | |||||||||||||
Health and Insurance Benefits | 25,185 | — | |||||||||||||
Earned Vacation | 26,077 | 26,077 | |||||||||||||
Mr. Mahoney | |||||||||||||||
Base Salary | $ | 486,500 | $ | — | |||||||||||
Bonus | 246,252 | — | |||||||||||||
Health and Insurance Benefits | 32,372 | — | |||||||||||||
Earned Vacation | 23,389 | 23,389 | |||||||||||||
Ms. Welty | |||||||||||||||
Base Salary | $ | 480,500 | $ | — | |||||||||||
Bonus | 62,250 | (2) | — | ||||||||||||
Health and Insurance Benefits | 23,267 | — | |||||||||||||
Earned Vacation | 23,101 | 23,101 | |||||||||||||
Mr. Jenkins | |||||||||||||||
Base Salary | $ | 246,000 | $ | — | |||||||||||
Bonus | 76,604 | — | |||||||||||||
Health and Insurance Benefits | 12,364 | — | |||||||||||||
Earned Vacation | 6,308 | 6,308 | |||||||||||||
| (1) | Mr. Dunham resigned as President and a member of our Board of Directors effective October 5, 2010. |
| (2) | Because Ms. Welty joined |
Members of the Board of Directors who are also our employees do not receive additional compensation for serving as directors. Each nonemployee director receives a $24,000 annual retainer, $1,250 for each Board meeting attended and $500 for each meeting of a committee of the Board attended. The Audit Committee Chairperson receives an additional annual retainer of $7,500, and the Compensation Committee Chairperson and Nominating and Governance Committee Chairperson receive an additional annual retainer of $5,000 and $5,000, respectively. In addition, in 2009 each nonemployee director received an award of $45,000 which was paid in cash, in an equivalent number of shares of Northwest Pipe Company Common Stock, or in a combination thereof, as specified by each director. Our members of the Board of Directors are also reimbursed for travel expenses incurred in attending board meetings.
Director Compensation Table.The following table reflects compensation earned by the directors for the year ended December 31, 2009, with the exception of Mr. JenkinsDunham, whose compensation is included in the Summary of Cash and Certain Other Compensation table above.
Executive Benefits and Payments Upon Termination | Termination Without Cause or Voluntary Termination For Good Reason | Termination For Cause, Disability or Death | ||||
Base Salary | $ | 167,200 | $ | 0 | ||
Bonus | 57,584 | 0 | ||||
Health and Insurance Benefits | 8,243 | 0 | ||||
Earned Vacation | 6,431 | 6,431 | ||||
Mr. Mahoney
Name(1) | Fees Earned or Paid in Cash | Stock Awards(2) | All Other Compensation(3) | Total | ||||||||||||
William R. Tagmyer | $ | — | $ | — | $ | 169,784 | $ | 169,784 | ||||||||
Richard A. Roman(4) | 95,000 | — | — | 95,000 | ||||||||||||
Michael C. Franson | 76,000 | — | — | 76,000 | ||||||||||||
Wayne B. Kingsley | 97,000 | — | — | 97,000 | ||||||||||||
Keith R Larson | 63,002 | 26,998 | — | 90,000 | ||||||||||||
Executive Benefits and Payments Upon Termination | Termination Without Cause or Voluntary Termination For Good Reason | Termination For Cause, Disability or Death | ||||
Base Salary | $ | 496,000 | $ | 0 | ||
Bonus | 316,394 | 0 | ||||
Health and Insurance Benefits | 32,372 | 0 | ||||
Earned Vacation | 23,846 | 23,846 | ||||
Mr. Stokes
| (1) | As of December 31, 2009, each director had the following number of options outstanding: Mr. Franson – 2,000; Mr. Kingsley – 12,000; Mr. Larson – 0; Mr. Roman – 15,000; Mr. Tagmyer – 0. |
Executive Benefits and Payments Upon Termination | Termination Without Cause or Voluntary Termination For Good Reason | Termination For Cause, Disability or Death | ||||
Base Salary | $ | 576,000 | $ | 0 | ||
Bonus | 490,059 | 0 | ||||
Health and Insurance Benefits | 25,185 | 0 | ||||
Earned Vacation | 26,585 | 26,585 | ||||
| (2) | On September 21, 2009, shares of common stock were granted to Mr. Larson, pursuant to our 2007 Stock Incentive Plan. The amount included in this column represent the amount recognized by us in 2009 for financial statement reporting purposes for the fair value of common stock awarded to Mr. Larson. These amounts do not correspond to the actual value that will be recognized by Mr. Larson. For information on the valuation assumptions with respect to grants made in 2009, refer to the note on Share-Based Compensation Plans included in consolidated financial statements. |
| (3) | Amount includes $150,000 base salary, amounts contributed to Mr. Tagmyer’s qualified 401(k) defined contribution plan and amounts paid by us for his automobile allowance. |
| (4) | Mr. Roman is serving as our CEO, effective as of March 29, 2010, and President since October 5, 2010. Mr. Roman has been a member of our Board of Directors and Audit Committee since 2003, our Compensation Committee since 2005 and the Board’s Lead Director since November 2008. In connection with his appointment as CEO, Mr. Roman resigned his positions as Lead Director and as a member of the Board’s Audit and Compensation Committees. |
COMPENSATION COMMITTEE REPORTEmployment Agreements
Employment Agreement with Richard A. Roman. We entered into an Employment Agreement (the “Roman Employment Agreement”) with Mr. Roman effective March 29, 2010. The Roman Employment Agreement provides for an annual base salary of $450,000 and eligibility to participate in our cash and stock incentive plans and all other employee benefit plans available to our employees. The Roman Employment Agreement has a two-year term. Mr. Roman has been granted an option to purchase 24,000 shares of common stock at an exercise price equal to $24.15, the fair market value of the common stock on the date of grant. The stock option was fully vested on the date of grant. If Mr. Roman’s employment is terminated for Cause (as defined in the Roman Employment Agreement), or if Mr. Roman terminates his employment without Good Reason (as defined in the Roman Employment Agreement), or in the event of Mr. Roman’s death or disability, we will pay Mr. Roman’s base salary through the date of termination. If Mr. Roman’s employment is terminated without Cause or if Mr. Roman terminates his employment with us for Good Reason, we will continue to pay Mr. Roman’s base salary for the remaining term of the Roman Employment Agreement. The Roman Employment Agreement contains certain noncompetition provisions that apply to Mr. Roman’s activities during the term of the Roman Employment Agreement and for a period of one year after the later of the date of termination of the Roman Employment Agreement or the date the last payment is made under the Roman Employment Agreement.
Employment Agreement with William R. Tagmyer. We entered into an Amended and Restated Employment Agreement (the “Tagmyer Employment Agreement”) with Mr. Tagmyer effective December 31, 2008. The Tagmyer Employment Agreement is for a term ending on December 31, 2010, unless terminated earlier by the parties. The Tagmyer Employment Agreement provides that through 2010, Mr. Tagmyer will
receive a base salary of $150,000 per year. If the Tagmyer Employment Agreement is terminated by Mr. Tagmyer or by us for Cause (as defined in the Tagmyer Employment Agreement), Mr. Tagmyer would be paid all compensation and expenses to which he is entitled through the date of termination of the Tagmyer Employment Agreement. If the Tagmyer Employment Agreement is terminated by us for any reason other than for Cause or as a result of Mr. Tagmyer’s death, Mr. Tagmyer would be entitled to receive all of the remaining payments that he would have been entitled to receive under the Tagmyer Employment Agreement if it had not been terminated. If the Tagmyer Employment Agreement is terminated as a result of Mr. Tagmyer’s death, Mr. Tagmyer’s beneficiary or estate would be entitled to receive fifty percent of the remaining payments under the Tagmyer Employment Agreement to which Mr. Tagmyer would have been entitled had he survived. The Tagmyer Employment Agreement contains certain noncompetition provisions that apply to Mr. Tagmyer’s activities during the term of the Tagmyer Employment Agreement and for a period of one year after the later of the date of termination of the Tagmyer Employment Agreement or the date the last payment is made under the Tagmyer Employment Agreement.
We entered into a Separation Agreement and Release (the “Separation Agreement”) with Brian W. Dunham on October 5, 2010. Pursuant to the terms of the Separation Agreement, the Company will pay Mr. Dunham an amount equal to his base salary of $570,000 over the twelve months ending October 5, 2011, and Mr. Dunham will be available to consult with the Company during that period. The Company will also pay the premiums for continuation of Mr. Dunham’s health insurance coverage during that period. The Separation Agreement also includes provisions relating to, among other things, a release of claims against the Company, confidentiality and cooperation.
Compensation Committee Interlocks and Insider Participation
Messrs. Franson, Larson and Roman, all of whom were independent directors, served on the Compensation Committee in 2009. Mr. Roman resigned his position as Lead Director and as a member of the Board’s Audit and Compensation Committees effective March 29, 2010, upon his appointment as the Company’s Chief Executive Officer.
Equity Compensation Plan Information
The following table provides information as of December 31, 2009, with respect to the shares of the Company’s Common Stock that may be issued under the Company’s existing equity compensation plans.
Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) | Weighted-average exercise price of outstanding options, warrants and rights (b)(3) | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c) | |||||||||
Equity compensation plans approved by security holders(1) | 340,590 | $ | 15.26 | 439,049 | ||||||||
Equity compensation plans not approved by security holders(2) | — | — | — | |||||||||
Total | 340,590 | $ | 15.26 | 439,049 | ||||||||
| (1) | Consists of the Company’s 2007 Stock Incentive Plan, 1995 Stock Incentive Plan and the 1995 Stock Option Plan for Nonemployee Directors. |
| (2) | The Company does not have any equity compensation plans or arrangements that have not been approved by shareholders. |
| (3) | The weighted-average exercise price set forth in this column is calculated excluding outstanding RSUs and performance stock awards, since recipients are not required to pay an exercise price to receive the shares subject to these awards. |
The Compensation Committee has reviewed and discussed the foregoing Compensation Discussion and Analysis with management. Based on this review and discussion, the Compensation Committee has recommended to the full Board of Directors that the Compensation Discussion and Analysis be included in the proxy statement for filing with the U.S. Securities and Exchange Commission.
COMPENSATION COMMITTEE
Michael C. Franson
Keith R. Larson
Richard A. Roman
(until March 29, 2010)James E. Declusin (since August 26, 2010)
EQUITY COMPENSATION PLAN INFORMATIONCERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Since January 1, 2009, there has not been any transaction or series of transactions to which we were or are to be a party in which the amount involved exceeds $120,000 and in which any director, executive officer or holder of more than 5% of our common stock, or members of any such person’s immediate family, had or will have a direct or indirect material interest, other than the Separation Agreement and Release entered into by the Company and Brian W. Dunham on October 5, 2010, and compensation arrangements with the Company’s executive officers and directors, all on terms described under “Executive Compensation” above. The following table provides information asAudit Committee is responsible for the review and approval of December 31, 2008,all related party transactions. Although the Audit Committee does not have written policies and procedures with respect to the sharesreview of related party transactions, we intend that any such transactions will be reviewed by the Company’s Common Stock that mayAudit Committee and will be issued under the Company’s existing equity compensation plans.on terms no less favorable to us than could be obtained from unaffiliated third parties.
Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) | Weighted-average exercise price of outstanding options, warrants and rights (b) | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c) | ||||
Equity compensation plans approved by security holders(1) | 348,104 | $ | 15.17 | 504,331 | |||
Equity compensation plans not approved by security holders(2) | — | — | — | ||||
Total | 348,104 | $ | 15.17 | 504,331 | |||
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 SEC. 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 itus with respect to 2008,2009, or written representations from certain reporting persons, the Company believeswe believe that all filing requirements applicable to itsour 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 20082009 except that Mr. Dunham, Ms. Welty, Mr. Carrier, Mr. Jenkins, Mr. Mahoney, Mr. Stokes and Mr. Stone eachLarson failed to report one grant of restricted stock units on a timely basis on a Form 4 that was subsequently filed.
STOCK OWNED BY MANAGEMENT AND PRINCIPAL SHAREHOLDERS
The table below sets forth certain information, as of April 1, 2009,November 12, 2010, 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 director nominees, and (iv) all directors, director nominees and executive officers as a group. The address of each of the named executive officers and directors is c/o Northwest Pipe Company, 5721 SE Columbia Way, Suite 200, Vancouver, Washington, 98661.
| Shares Beneficially Owned(1) | Shares Beneficially Owned(1) | ||||||||||||
Name of Beneficial Owner | Shares | Percent | Shares | Percent | |||||||||
Invesco Ltd.(2) | 1,080,940 | 11.7 | % | ||||||||||
Invesco Ltd(2) | 1,060,877 | 11.4 | % | ||||||||||
1555 Peachtree Street NE | |||||||||||||
Atlanta, GA 30309 | |||||||||||||
Eagle Asset Management, Inc.(3) | 774,906 | 8.47 | % | 1,038,419 | 11.2 | % | |||||||
880 Carillon Parkway | |||||||||||||
St. Petersburg, FL 33716 | |||||||||||||
Dimensional Fund Advisors LP(4) | 731,822 | 7.9 | % | 691,024 | 7.4 | % | |||||||
1299 Ocean Avenue | |||||||||||||
Santa Monica, CA 90401 | |||||||||||||
UniCredit S.p.A.(5) | 543,133 | 5.9 | % | ||||||||||
Piazza Cordusio 2 | |||||||||||||
20123 Milan, Italy | |||||||||||||
Wentworth, Hauser & Violich, Inc.(6) | 521,150 | 5.6 | % | ||||||||||
Palisades West, Building One | |||||||||||||
6300 Bee Cave Road | |||||||||||||
Austin, TX 78746 | |||||||||||||
Wentworth, Hauser & Violich, Inc.(5) | 503,233 | 5.4 | % | ||||||||||
301 Battery Street, Suite 400 | |||||||||||||
San Francisco, CA 94111 | |||||||||||||
Brian W. Dunham | 215,811 | 2.3 | % | 201,101 | 2.2 | % | |||||||
William R. Tagmyer | 29,250 | * | |||||||||||
Richard A. Roman | 39,000 | * | |||||||||||
James E. Declusin | — | * | |||||||||||
Gary A. Stokes | 35,993 | * | |||||||||||
Robert L. Mahoney | 23,794 | * | |||||||||||
Stephanie J. Welty | 1,663 | * | |||||||||||
Michael C. Franson | 11,565 | * | 11,565 | * | |||||||||
Winsor J.E. Jenkins | 285 | * | 1,044 | * | |||||||||
Wayne B. Kingsley | 31,858 | * | 31,858 | * | |||||||||
Keith R. Larson | 471 | * | 1,275 | * | |||||||||
Robert L. Mahoney | 27,279 | * | |||||||||||
Richard A. Roman | 15,000 | * | |||||||||||
Gary A. Stokes | 41,343 | * | |||||||||||
William R. Tagmyer | 58,499 | * | |||||||||||
Stephanie J. Welty | 514 | * | |||||||||||
All directors and executive officers as a group (twelve persons) | 403,223 | 4.3 | % | ||||||||||
All directors and executive officers as a group (13 persons) | 378,443 | 4.0 | % | ||||||||||
| (*) | 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 |
| (2) | The information as to beneficial ownership is based on a Schedule |
| (3) | The information as to beneficial ownership is based on a Schedule 13G filed with the |
| (4) | The information as to beneficial ownership is based on a Schedule 13G filed with the |
| (5) | The information as to beneficial ownership is based on a Schedule 13G/A filed with the |
RATIFICATION OF APPOINTMENT OF
INDEPENDENT AUDITORSREGISTERED PUBLIC ACCOUNTING FIRM
Deloitte and& Touche LLP has been selected by the Audit Committee to serve as the Company’s independent registered public accounting firm for 2010. Deloitte & Touche LLP served as the Company’s independent registered public accountants for the year ended December 31, 2008.2009. Although the Company is not required to seek shareholder approval of this appointment, the Board of Directors believes it to be sound corporate governance to do so. If the appointment is not ratified, the Audit Committee will investigate the reasons for shareholder rejection and will reconsider the appointment for future periods. Representatives of Deloitte and& Touche LLP are expected to be present at the Annual Meeting and will be given an opportunity to make a statement if they desire to do so and will be available to respond to appropriate questions.
Fees for services billed or expected to be billed by the Company’s principal accountant, Deloitte and& Touche LLP, for the years ended December 31, 20082009 and 20072008 were as follows:
| 2008 | 2007 | 2009 | 2008 | |||||||||||
Audit fees(1) | $ | 468,750 | $ | 562,500 | $ | 2,069,296 | $ | 468,750 | ||||||
Audit-related fees(2) | 25,000 | 25,000 | 30,000 | 25,000 | ||||||||||
Tax and All Other Fees | — | — | — | — | ||||||||||
Total fees | $ | 493,750 | $ | 587,500 | $ | 2,099,296 | $ | 493,750 | ||||||
| (1) | Audit fees include fees for audits of the annual financial statements, including required quarterly reviews, and the audit of the Company’s internal control over financial |
| (2) | Audit-related fees include fees billed for audits of the Company’s employee benefit plans’ |
To help assure independence of the independent auditors, the Audit Committee has established a policy whereby all services of the principal accountant or other firms must be approved in advance by the Audit Committee; provided, however, that de minimis services may instead be approved by the Chief Executive Officer or the Chief Financial Officer. One hundred percent of the fees shown in the principal accountant fees schedule for 20082009 and 20072008 were approved by the Audit Committee.
On July 13, 2007, the Company dismissed PricewaterhouseCoopersTHE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS VOTING “FOR” THE RATIFICATION OF THE AUDIT COMMITTEE’S APPOINTMENT OF DELOITTE & TOUCHE LLP as its independent registered public accounting firm. The Company’s Audit Committee participated in and made the decision to change the Company’s independent registered public accounting firm. The reports of PricewaterhouseCoopers on the financial statements of the Company for the fiscal years ended DecemberAS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE YEAR ENDING DECEMBER 31, 2005 and 2006 contained no adverse opinion or disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principle. During the fiscal years ended December 31, 2005 and 2006 and through July 13, 2007: (i) there were no disagreements with PricewaterhouseCoopers on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements if not resolved to the satisfaction of PricewaterhouseCoopers would have caused them to make reference thereto in their reports on the financial statements for such years; and (ii) there were no reportable events within the meaning of Item 304(a)(1)(v) of Regulation S-K, except for the material weakness in internal control over financial reporting described in the following paragraph.
In its Annual Report on Form 10-K for the year ended December 31, 2006, the Company reported it had a material weakness in the Company’s internal control over financial reporting as a result of a lack, as of December 31, 2006, of effective controls over the accumulation of certain internal costs that were initially capitalized in the Company’s property, plant and equipment account during the combination of the Company’s Riverside and Adelanto facilities. This control deficiency resulted in an audit adjustment to the Company’s annual 2006 consolidated financial statements. The Audit Committee and management discussed this material weakness with PricewaterhouseCoopers and authorized PricewaterhouseCoopers to respond fully to any inquiries about the Company’s material weaknesses over financial reporting as may be made by the Company’s successor independent registered public accounting firm. The Company requested that PricewaterhouseCoopers furnish the Company with a letter addressed to the SEC stating whether or not PricewaterhouseCoopers agreed with the statements in the foregoing.2010. PROXIES SOLICITED BY THE BOARD WILL BE VOTED FOR RATIFICATION OF SUCH APPOINTMENT UNLESS A copy of such letter was filed with the SEC on July 18, 2007 as an exhibit to the Company’s Current Report on Form 8-K filed on that date.VOTE AGAINST THE PROPOSAL OR ABSTENTION IS SPECIFICALLY INDICATED.
DATE FOR SUBMISSION OF SHAREHOLDER PROPOSALS
The Company expects that its 2011 annual meeting of shareholders will be held in June 2011, consistent with prior annual meetings but more than 30 days from the anniversary date of the 2010 Annual Meeting. Pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, some shareholder proposals may be eligible for inclusion in the Company’s 20102011 proxy statement. Any such proposal must be received by the Company not later than December 4, 2009.March 1, 2011, which the Company believes is a reasonable time before it will begin to print and send its proxy
materials. Shareholders interested in submitting such a proposal are advised to contact knowledgeable counsel with regard to the detailed requirements of the applicable securities law. The submission of a shareholder proposal does not guarantee that it will be included in the Company’s proxy statement. Alternatively, under the Company’s bylaws, a proposal or nomination that a shareholder does not seek to include in the Company’s proxy statement pursuant to Rule 14a-8 may 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 10th day following the day on which notice of the date of the meeting was mailed or public disclosure thereof was made. A shareholder’s submission must include certain specified information concerning the proposal or nominee, as the case may be, and information as to the shareholder’s ownership of common stock of the Company. Proposals or nominations not meeting these requirements will not be entertained at the annual meeting. If the shareholder does not also comply with the requirements of Rule 14a-4(c)(2) under the Securities Exchange Act of 1934, the Company may exercise discretionary voting authority under proxies it solicits to vote in accordance with its best judgment on any such proposal or nomination submitted by a shareholder.
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 20092010 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.
The cost of soliciting proxies will be borne by the Company. In addition to use of the mail, 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.
A copy of the Company’s Annual Report to Shareholders (including Form 10-K) for the year ended December 31, 20082009 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, additional copies of the Company’s Annual Report. Written requests should be mailed to the Corporate Secretary, Northwest Pipe Company, 5721 SE Columbia Way, Suite 200, Vancouver, Washington, 98661.
By Order of the Board of Directors,
Brian W. DunhamRichard A. Roman
President and Chief Executive Officer and President
Portland, OregonVancouver, Washington
April 3, 2009November 15, 2010
YOUR VOTE IS IMPORTANT. PLEASE VOTE TODAY.
We encourage you to take advantage of Internet or telephone voting.
Both are available 24 hours a day, 7 days a week.
Internet and telephone voting is available through 11:59 PM Eastern Time the day prior to the annual meeting day.
NORTHWEST PIPE COMPANY
Proxy for Annual Meeting of Shareholders to be Held on June 2, 2009INTERNET
The undersigned hereby names, constitutes and appoints William R. Tagmyer and Brian W. Dunham, or each of them acting in absence ofhttp://www.proxyvoting.com/nwpx
Use 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, June 2, 2009 at the Heathman Hotel, 1001 SW Broadway, Portland, OR 97205 and at any adjournments or postponements thereof, andInternet to vote allyour proxy.
Have your proxy card in hand when you access the shares of Common Stock held of recordweb site.
OR
TELEPHONE
1-866-540-5760
Use any touch-tone telephone to vote your proxy. Have your proxy card in hand when you call.
If you vote your proxy by Internet or by telephone, you do NOT need to mail back your proxy card.
To vote by mail, mark, sign and date your proxy card and return it in the name ofenclosed postage-paid envelope.
Your Internet or telephone vote authorizes the undersigned on April 1, 2009, with allnamed proxies to vote your shares in the powers that the undersigned would possesssame manner as if he or she were personally present.you marked, signed and returned your proxy card.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE COMPANY. IF NO SPECIFIC DIRECTION IS GIVEN AS TO ANY OF THE ITEMS ON THE REVERSE SIDE, THIS PROXY WILL BE VOTED FOR THE NOMINEES NAMED IN PROPOSAL 1. THE UNDERSIGNED SHAREHOLDER HEREBY ACKNOWLEDGES RECEIPT OF THE COMPANY’S PROXY STATEMENT AND HEREBY REVOKES ANY OTHER PROXY OR PROXIES PREVIOUSLY GIVEN.
Address Change/Comments
(Mark the corresponding box on the reverse side)
BNY MELLON SHAREOWNER SERVICES P.O . BOX 3550 SOUTH HACKENSACK, NJ 07606-9250
(Continued and to be marked, dated and signed, on the other side)84482
FOLD AND DETACH HERE
You can now access your Northwest Pipe Company account online.
Access your North west Pipe Company shareholder account online via Investor ServiceDirect® (ISD).
The transfer agent for Northwest Pipe Company now makes it easy and convenient to get current information on your shareholder account.
o View account status o View payment history for dividends
o View certificate history o Make address changes
o View book-entry information o Obtain a duplicate 1099 tax form
o Establish/change your PIN
Visit us on the web at http:/ www.bnymellon.com/shareowner/isd For Technical Assistance Call 1-877-978-7778 between 9am-7pm Monday-Friday Eastern Time
www.bnymellon.com/shareowner/isd Investor ServiceDirect®
Available 24 hours per day, 7 days per week TOLL FREE NUMBER: 1-800-370-1163
Choose MLinkSM for fast, easy and secure 24/7 online access to your future proxy materials, investment plan statements , tax documents and more. Simply log on to Investor ServiceDirect® at www.bnymellon.com/shareowner/isd where step-by-step instructions will prompt you through enrollment.
45473
THIS PROXY WILL BE VOTED AS DIRECTED, OR IF NO DIRECTIONS IDIRECTION IS INDICATED, WILL BE VOTED “FOR” THE NOMINEES NAMED IN PROPOSAL 1.1 AND FOR THE RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP UNDER PROPOSAL 2.
Please marksmark your votes as indicated in this example X
FOR WITHHOLD * EXCEPTIONS ALL 1. ELECTION OF DIRECTORS
FOR ALL
1. Election of DirectorsWITHHOLD FOR ALL
*EXCEPTIONS
Nominees:
01 Brian RichardWayne B. Kingsley for a one year term, expiring in 2011
02 Keith R. Larson for a two year term, expiring in 2012
03 James E. Declusin for a three year term, expiring in 20122013
02 Richard A. Roman04 Michael C. Franson for a three year term, expiring in 20122013
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A
A VOTE FOR THE NOMINEES NAME ABOVENAMED ABOVE.
(INSTRUCTIONS: To withhold authority to vote for any individual nominee, mark the “Exceptions”
“Exceptions” box above and write that nominee’s name in the space provided below.)
*Exceptions
FOR AGAINST ABSTAIN
2. Ratification of appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2010.
3. 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.
Will Attend Meeting YES
Mark Here for Address Change or Comments SEE REVERSE
Will Attend Meeting
YES
Signature Signature
Date
NOTE: Please sign as name appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such.
FOLD AND DETACH HERESignature
WE ENCOURAGE BOTH YOU ARE TO AVAILABLE TAKE ADVANTAGE 24 HOURS OF A IN DAY, INTERNET 7 DAYS OR A TELEPHONE WEEK. VOTING.Signature
InternetDate
You can now access your Northwest Pipe Company account online.
Access your Northwest Pipe Company account online via Investor ServiceDirect® (ISD).
BNY Mellon Shareowner Services, the transfer agent for Northwest Pipe Company, now makes it easy and telephone voting are available through 11:59 PMconvenient to get current information on your shareholder account.
View account status
View payment history for dividends
View certificate history
Make address changes
View book-entry information
Obtain a duplicate 1099 tax form
Visit us on the web at http://www.bnymellon.com/shareowner/equityaccess
For Technical Assistance Call 1-877-978-7778 between 9am-7pm
Monday-Friday Eastern Time the
Investor ServiceDirect®
Available 24 hours per day, prior7 days per week
TOLL FREE NUMBER: 1-800-370-1163
Choose MLinkSM for fast, easy and secure 24/7 online access to the annual meeting day.
NORTHWEST PIPE COMPANY
INTERNET http://www.proxyvoting.com/nwpx
Use the Internetyour future proxy materials, investment plan statements, tax documents and more. Simply log on to vote your proxy. Have your proxy card in hand whenInvestor ServiceDirect® at www.bnymellon.com/shareowner/equityaccess where step-by-step instructions will prompt you access the web site.
OR
TELEPHONE 1-866-540-5760
Use any touch-to ne telephone to vote your proxy. Have your proxy card in hand when you call.
If you vote your proxy by Internet or by telephone, you do NOT need to mail back your proxy card.
To vote by mail, mark, sign and date your proxy card and return it in the enclosed postage-paid envelope.
Your Internet or telephone vote authorizes the named proxies to vote your shares in the same manner as if you marked, signed and returned your proxy card.through enrollment.
Important notice regarding the Internet availability of proxy materials for the Annual Meeting of Shareholders:
ShareShareholders. The holders Proxy Statement shareholders are available and at: the 20082009 Annual Report to Shareholders are available at: www.nwpipe.com/proxy
45473FOLD AND DETACH HERE
NORTHWEST PIPE COMPANY
Proxy for Annual Meeting of Shareholders to be Held on December 22, 2010
The undersigned hereby names, constitutes and appoints William R. Tagmyer and Richard A. Roman, 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 Wednesday, December 22, 2010 at the Heathman Hotel, 1001 SW Broadway, Portland, OR 97205 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 November 12, 2010, with all the powers that the undersigned would possess if he or she were personally present.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE COMPANY. IF NO SPECIFIC DIRECTION IS GIVEN AS TO ANY OF THE ITEMS ON THE REVERSE SIDE, THIS PROXY WILL BE VOTED FOR THE NOMINEES NAMED IN PROPOSAL 1, FOR THE RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE YEAR ENDING DECEMBER 31, 2010, AND IN ACCORDANCE WITH THE RECOMMENDATION OF A MAJORITY OF THE BOARD OF DIRECTORS AS TO OTHER MATTERS. THE UNDERSIGNED SHAREHOLDER HEREBY ACKNOWLEDGES RECEIPT OF THE COMPANY’S PROXY STATEMENT AND HEREBY REVOKES ANY OTHER PROXY OR PROXIES PREVIOUSLY GIVEN.
Address Change/Comments
(Mark the corresponding box on the reverse side)
BNY MELLON SHAREOWNER SERVICES
P.O. BOX 3550
SOUTH HACKENSACK, NJ 07606-9250
(Continued and to be marked, dated and signed, on the other side)
84482