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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.    )

Filed by the Registrant☒                            Registrant ☒

Filed by a Partyparty other than the Registrant☐Registrant ☐

Check the appropriate box:

NORTHWEST PIPE COMPANY

(Name of Registrant as Specified in Its Charter) 

Payment of Filing Fee (Check the appropriate box):

 

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April 18, 201616, 2020

 

Dear Fellow Shareholder:

 

You are cordially invited to attend the 20162020 Annual Meeting of Shareholders. We will hold our meetingShareholders (“Annual Meeting”) on Thursday, June 2, 2016,4, 2020, at 8:9:00 a.m. Pacific TimeTime. In light of ongoing developments related to the global outbreak of coronavirus disease 2019, the Board of Directors has determined that this year’s Annual Meeting will be conducted virtually via webcast instead of in-person. You will be able to attend the meeting, vote your shares, and submit questions by logging in at the Hilton Vancouver Hotel, located at 301 West 6^th Street, Vancouver, Washington.www.virtualshareholdermeeting.com/NWPX2020.

 

YOUR VOTE IS IMPORTANT. As a shareholder of Northwest Pipe Company, you can play an important role in our Company by considering and taking action on the matters set forth in the attached Proxy Statement. We appreciate the time and attention you invest in making thoughtful decisions.

 

Thank you for your support and continued interest in Northwest Pipe Company.

 

		Sincerely,
	Scott Montross
		President and Chief Executive Officer

 

 

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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

To the Shareholders of Northwest Pipe Company:

The 20162020 Annual Meeting of Shareholders (the “Annual Meeting”) of Northwest Pipe Company (the “Company”) will be held via webcast on Thursday, June 2, 2016,4, 2020, at 8:9:00 a.m. Pacific TimeTime. While there will be no physical location, shareholders may attend and participate in the Annual Meeting virtually by logging in at www.virtualshareholdermeeting.com/NWPX2020. To participate in the Hilton Vancouver Hotel, located at 301 West 6^th Street, Vancouver, Washington. Annual Meeting, you will need your unique 16-digit control number printed in the box and marked by the arrow on your proxy card or on the voting instructions from your stockbroker, bank, or other nominee that accompanied your proxy materials.

The purposes of the Annual Meeting will be:

Only shareholders of record at the close of business on April 15, 20169, 2020 are entitled to receive notice of, and to vote at, the Annual Meeting and any adjournments or postponements of the Meeting.meeting.

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 20152019 Annual Report to Shareholders with this Notice and Proxy Statement.

		By Order of the Board of Directors,
	Scott Montross
		President and Chief Executive Officer
Vancouver, Washington
April 18, 2016

Vancouver, Washington

April 16, 2020

PROXY STATEMENT FOR THE

20162020 ANNUAL MEETING OF SHAREHOLDERS OF

NORTHWEST PIPE COMPANY

TABLE OF CONTENTS

NORTHWEST PIPE COMPANY

5721 SE Columbia Way,201NE Park Plaza Drive, Suite 200 100

Vancouver, Washington 9866198684

(360) 360-397-6250

PROXY STATEMENT FOR

ANNUAL MEETING OF SHAREHOLDERS

TO BE HELD ON JUNE 2, 20164, 2020

INTRODUCTION

This Proxy Statement and the accompanying 2015Annual Report on Form 10-K for the year ended December 31, 2019 (“2019 Annual Report to ShareholdersShareholders”), as filed with the U.S. Securities and Exchange Commission (the “SEC”) 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 Thursday, June 2, 20164, 2020 at 8:9:00 a.m. Pacific TimeTime. While there will be no physical location, shareholders may attend and participate in the Annual Meeting virtually by logging in at www.virtualshareholdermeeting.com/NWPX2020. To participate in the Hilton Vancouver Hotel, locatedAnnual Meeting, you will need your unique 16-digit control number printed in the box and marked by the arrow on your proxy card or on the voting instructions from your stockbroker, bank, or other nominee that accompanied your proxy materials. Access to the webcast will open approximately fifteen minutes prior to the start of the Annual Meeting to allow time for you to log in and test your computer audio system. We encourage you to access the meeting prior to the start time. For additional information about participating in this year’s virtual Annual Meeting, please see “Questions and Answers About the Proxy Materials and the Annual Meeting” starting at 301 West 6^th Street, Vancouver, Washington.page 29.

At the Annual Meeting, shareholders will be asked to vote on the following matters:

This Proxy Statement, together with the enclosed proxy card and the 20152019 Annual Report to Shareholders, are first being mailed to shareholders of the Company on or about April 29, 2016.24, 2020.

The Board of Directors has fixed the close of business on April 15, 20169, 2020 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 9,573,3719,787,995 shares of Common Stock then outstanding, with each share of Common Stock being entitled to one vote.

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 in accordance with the recommendations 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 the Company’s Corporate Secretary, Northwest Pipe Company, 5721 SE Columbia Way,201 NE Park Plaza Drive, Suite 200,100, Vancouver, Washington 98661,98684, or by attending the Annual Meeting and voting in person.electronically during the virtual meeting. All valid, unrevoked proxies will be voted at the Annual Meeting.

CORPORATE GOVERNANCE

Our Board of Directors and management have committed themselves to establishing a strong corporate governance environment and to adopting the best practices to meet the needs and goals of the Company. As part of that commitment, we have 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. We have also adopted a Code of Business Conduct and Ethics, which applies to all employees, officers, and directors of the Company and sets forth guidance to help in recognizing and dealing with ethical issues, to provide mechanisms for reporting unethical conduct, and to promote a culture of honesty and accountability, and a Code of Ethics for Senior Financial Officers, which applies to our senior financial officers and sets forth guidance to deter wrongdoing, and promote honest and ethical conduct, and to promote a culture of integrity and fairness. Copies of our Corporate Governance Principles, Code of Business Conduct and Ethics, and Code of Ethics for Senior Financial Officers are available on the Company’s website atwww.nwpipe.com under “Investor Relations” -— “Corporate Governance”, or by writing to the Company’s Corporate Secretary, Northwest Pipe Company, 5721 SE Columbia Way,201 NE Park Plaza Drive, Suite 200,100, Vancouver, Washington 98661.98684.

We have also adopted a Policy for Reporting Financial Irregularities (“Whistleblower Policy”), which is intended to create a workplace environment that encourages the highest standards of ethical, moral, and legal business conduct. The Whistleblower Policy establishes procedures for any person to confidentially and anonymously report violations by us or any of our personnel of our Code of Business Conduct and Ethics or any laws, rules, or regulations without fear of retaliation. The Whistleblower Policy also contains procedures for submission of complaints involving our accounting practices and internal accounting controls.

In June 1999, the Board of Directors adopted a Shareholder Rights Plan (“Rights Plan”) designed to enhance the ability of the Board of Directors to negotiate more effectively with a prospective acquirer. In June 2019, the Rights Plan, as amended, expired in accordance with its terms and is of no further force or effect.

Director Elections

While directors are elected by a plurality of votes cast, our Corporate Governance Principles include a director resignation policy, requiring a director who receives more votes “withheld” than in favor of election in an uncontested election to tender an offer of his or her resignation to the Board of Directors for consideration. The Nominating and Governance Committee shall recommend to the Board of Directors the action to be taken with respect to such offer of resignation, and the Board of Directors shall promptly determine whether to accept such resignation, and shall publicly disclose its decision and rationale.

Director Independence

The current Board of Directors consists of sixseven directors, twoone of whom areis currently employed by the Company (Messrs. Montross and Roman)(Mr. Montross). Mr. Roman, Chairperson of the Board, was employed by the Company until September 30, 2018. The Board of Directors has affirmatively determined that all of the non-employeeother directors (Ms. Applebaum and Messrs. Declusin, Demorest,Franson, Larson, Paschal, and Larson)Yearsley) are “independent” in accordance with the standards of the Nasdaq Stock Market, including standards related to independence for service on the committees on which they serve, and as defined by the director independence guidelines included in our Corporate Governance Principles.

Board Leadership Structure and Risk Oversight

The Company’s Corporate Governance Principles provide that the independent members of the Board of Directors will select a lead director from among the independent directors if the positions of ChairmanChairperson of the Board and Chief Executive Officer (“CEO”) are held by the same person or if the ChairmanChairperson of the Board is not an independent director. The responsibilities of the ChairmanChairperson of the Board include the following: set Board meeting agendas in collaboration with the CEO; preside at Board meetings and the annual shareholders’ meeting; assign tasks to the appropriate committees;committees in accordance with their respective charters; and ensure that information flows openly between management and the Board.Board of Directors. The responsibilities of the lead director 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. Richard Roman, the ChairmanChairperson of our Board of Directors, is not “independent” within the meaning of the applicable rules of the Nasdaq Stock Market. Accordingly, in December 2010, the remaining directors appointed James DeclusinMichael Franson remains as the Board’s Lead Director.Director since his appointment in August 2016.

The Board of Directors oversees management’s Company-wide risk management activities. Management’s risk management activities which 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 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 Board of Directors maintains overall responsibility for oversight of the work of its various committees by having regular reports from the chairmanchairperson of each Committee with respect to the work performed by histheir respective Committee. In addition, discussions withby the Board of Directors about the Company’s strategic plan, financial results, capital structure, merger and acquisition related activity, and other business generally include discussion of the risks associated with the matters under consideration.

Board of Directors Meetings

Regular attendance at the Company’s Board meetings and the Annual Meeting is required of each director. The Board of Directors held fiveseven meetings during 2015.2019. Each of the directors attended more than 75% of the total number of Board and applicable Committee meetings during his or her tenure in 2015.2019. In addition, all of the directors serving at that time attended the Company’s 20152019 Annual Meeting of Shareholders.

Board of Directors Committees

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.comunder “Investor Relations” -— “Corporate Governance”,Governance,” or by writing to the Company’s Corporate Secretary, Northwest Pipe Company, 5721 SE Columbia Way,201 NE Park Plaza Drive, Suite 200,100, Vancouver, Washington 98661.98684.

The table below lists the current membership of each Committee.

____________

*     Committee Chairperson

(1)     Ms. Applebaum is retiring at the expiration of her term in June 2020.

Audit Committee.The Audit Committee of the Board of Directors is responsible for the oversight and monitoring of: the integrity of the Company’s financial reporting process, financial internal control systems, accounting, legal, and legalregulatory compliance, and financial reporting; the qualifications, independence, and performance of our independent auditors; our compliance with applicable legal and regulatory requirements; and the maintenance of open and private, if necessary, communication among the independent auditors, management, legal counsel, and the Board.Board of Directors. The Audit Committee met 11eight times in 2015.2019. Each member of the Audit Committee is “independent” as defined by applicable U.S. Securities and Exchange Commission (“SEC”)SEC and Nasdaq Stock Market rules. The Board of Directors has determined that Ms. Applebaum and Messrs. DemorestFranson and Larson, and Ms. Applebaum each qualifiesqualify as an “audit committee financial expert” as defined by the rules of the SEC. Mr. Yearsley is a new member to the Board of Directors and therefore his qualifications as an “audit committee financial expert” have not yet been reviewed by the Board of Directors.

Compensation Committee.The Compensation Committee of the Board of Directors is responsible for the oversight and determination of executive compensation by reviewing and approving salaries and other compensation of the Company’s executive officers, and administering the Company’s equity incentive and compensation plans, including reviewing and approving stock option and other equity incentive and compensation awards to executive officers. In addition, the Compensation Committee is responsible for recommending to the Board of Directors the level and form of compensation and benefits for directors, and reviewing, recommending, and taking action upon any other compensation practices or policies of the Company as the Board of Directors 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. The Compensation Committee met sixfour times in 2015.2019. Each member of the Compensation Committee is “independent” as defined by applicable Nasdaq Stock Market rules.

Nominating and Governance Committee. The Nominating and Governance Committee of the Board of Directors recommends to the Board of Directors corporate governance principles for the Company, identifies qualified candidates for membership on the Board of Directors, and proposes to the Board of Directors for its approval nominees for election as directors. The Nominating and Governance Committee met four times in 2015.2019. Each member of the Nominating and Governance Committee is “independent” as defined by applicable Nasdaq Stock Market rules.

Communications with Directors

Any shareholder who wants to communicate with members of the Board of Directors, individually or as a group, may do so by writing to the intended member or members of the Board of Directors, c/o Chairman of the Board, Northwest Pipe Company, 5721 SE Columbia Way, Suite 200, Vancouver Washington 98661. Communications should be sent by overnight or certified mail, return receipt requested. All communications will be submitted to the Board of Directors in a timely manner.Director Qualifications and Diversity

Nominations by Shareholders 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 the Company’s 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, 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 of Directors 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.Board of Directors. 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 Nominating and Governance Committee Charter includes diversity as one of several criteria in recommending and reviewing a director nominee candidate. From time to time, the Nominating and Governance Committee has employed a third party to help identify or screen prospective directors, and may continue to do so at their discretion.

Communications with Directors

Any shareholder who wants to communicate with members of the Board of Directors, individually or as a group, may do so by writing to the intended member or members of the Board of Directors, c/o Chairperson of the Board, Northwest Pipe Company, 201 NE Park Plaza Drive, Suite 100, Vancouver, Washington 98684. Communications should be sent by overnight or certified mail, return receipt requested. All communications will be submitted to the intended member(s) of the Board of Directors in a timely manner.

Nominations by Shareholders. 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 the Company’s Corporate Secretary, Northwest Pipe Company, 201 NE Park Plaza Drive, Suite 100, Vancouver, Washington 98684. The Nominating and Governance Committee will evaluate potential nominees, including candidates recommended by shareholders, by reviewing qualifications, considering references, and reviewing and considering such other information as the members of the Nominating and Governance Committee deem relevant.

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.

ELECTION OF DIRECTORS

(Proposal No.1)

At the Annual Meeting, twothree directors will be elected, two to serve for three-year terms.terms and one to serve for a two-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.a director. However, if any of the personsperson nominated by the Board of Directors failfails 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 provide that the Board of Directors shall be composed of not less than six and not more than nine directors. The size of the Board of Directors is currently fixed at seven directors, but will be reduced to six directors. Theeffective upon the election of directors at the Annual Meeting. Under the Company’s Articles of Incorporation and Bylaws, the Company’s directors are divided into three classes.classes, with each class to be as nearly equal in number as possible. 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. Mr. Yearsley is being elected to a two-year term to balance the directors among the classes as required by the Company’s Articles of Incorporation and Bylaws. Ms. Applebaum will retire at the expiration of her term in June 2020. There is no cumulative voting for election of directors.

Information as to NomineesNominees, Continuing Directors, and Continuing DirectorsRetiring Director

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.Meeting, and a retiring director.

NomineesNominees for Director

James DeclusinScott Montross has been a director of the Company since January 2013. Mr. Montross has served as our President and CEO since January 1, 2013, and as our Chief Operating Officer from May 2011 until December 2012. Previously Mr. Montross served as Executive Vice President, Flat Products Group of EVRAZ North America from March 2010 through April 2011. Mr. Montross served as Vice President, General Manager, EVRAZ North America from February 2007 through February 2010. Prior to his General Manager role, Mr. Montross served as Vice President of Marketing and Sales at Oregon Steel Mills, Inc. from June 2003 through February 2007. From 2002 to 2003, Mr. Montross was a Vice President of Marketing and Sales for National Steel Corporation. Mr. Montross has a BA from Colgate University. Mr. Montross brings to the Board his in-depth knowledge of the Company and its industry through his years of service as CEO, as well as his extensive commercial and operational experience in the steel industry.

John Paschal has been a director of the Company since August 2010.2019. 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 served as a director of Oregon Steel Mills and, subsequently, Evraz Inc. NA from 2000 until 2010. Mr. Declusin spent 16 years with California Steel Industries, most recently serving as Senior Executive Vice President and Chief Operating Officer, retiring in October 2000. Prior to that time, he spent 17 years in various management positions in the commercial area of Kaiser Steel Corporation. Currently, hePaschal is the Board’s Lead Director, ChairmanPresident of the Temtco Steel Division of Kloeckner Metals Corporation. Mr. Paschal and his late uncle, Bill Taylor of Taylor Machine Works, co-founded Temtco Steel in 1979 with an emphasis on high-strength steel and value added services. Temtco Steel was sold to Kloeckner Metals in 2008. Mr. Paschal graduated from Mississippi State University with a BS in Business Administration in 1981. Currently, Mr. Paschal is a member of our Nominating and GovernanceCompensation Committee and a member of our CompensationNominating and Governance Committee. Mr. DeclusinPaschal brings to the Board over 40 years ofhis extensive experience in the steel industry including, most recently, as presidentwell as his executive leadership and chief executive officer of a large publicly-held steel manufacturing company.business management skills.

Harry DemorestWilliam Yearsleyhas been a director of the Company since February 2013.March 2020. Mr. DemorestYearsley has been a director of Sioux Creek Silica LLC since November 2014 and its interim CEO since March 2017, is an investor and lead outside director at Tri-Arc, LLC, and is the primary advisor to Terra CO2 Technologies Ltd., an early stage Canadian company developing new technologies to reduce carbon dioxide emissions from the production of cement. Mr. Yearsley has also been a limited partner of Lariat Partners Fund One since 2013 and served as its operating partner from 2013 to 2019. From 2011 to 2012, Mr. Yearsley was the CEO of Columbia Forest Products fromReal Goods Solar, Inc., a publicly traded engineering, procurement, and construction solar company. From 2007 to 2011, Mr. Yearsley was an endowed professor at the University of Colorado Boulder Department of Civil, Architectural, and Environmental Engineering, and was honored as the top teaching faculty member in 2011. In 1996, Mr. Yearsley co-founded American Civil Constructors and led the company as chairman and CEO until 2007,2007. From 1984 to 1997, Mr. Yearsley was employed by Redland PLC, a FTSE 100 firm traded on the London Stock Exchange, and later in his tenure served as President from 1994 until 1996,chairman and as Executive Vice President from 1992 until 1994. Prior to Columbia Forest Products,CEO of the construction materials and non-metallic mining groups. Mr. Demorest was the Office Managing Partner for Arthur Anderson and Co., an independent public accounting firm, from 1981 to 1991 in Portland, Oregon. Mr. Demorest is a former board member at Columbia Forest Products, serving on its compensation and audit committees, and a former board member and audit committee chairman of Oregon Steel Mills, Inc. Mr. DemorestYearsley has also served on theseveral boards of several civicprivately-owned construction related businesses. Mr. Yearsley holds a BS in Engineering from Southern Illinois University and charitable organizations.a MS in Industrial Science and a PhD in Construction Engineering from Colorado State University. Currently, heMr. Yearsley is the Chairmana member of our Audit Committee and a member of our Nominating and Governance Committee. Mr. DemorestYearsley brings to the Board his extensive financialexperience with merger and managerial experience.acquisition transactions, capital raising, management of public and private companies, as well as his substantial knowledge of the construction industry.

Continuing Directors

Michael Franson has been a director of the Company since August 2016. Mr. Franson previously served on the Board of Directors from 2001 until 2005 and again from 2007 until 2014. In July 2016, Mr. Franson retired from KPMG Corporate Finance LLC as Managing Director and Global Head of Technology M&A after serving in that role from 2014 to 2016. From 2005 to 2014, Mr. Franson was a co-founder and President of St. Charles Capital LLC, an investment banking firm focused on mergers and acquisitions, raising private capital and providing financial advisory services for middle-market companies across the United States. From 2000 to 2005, Mr. Franson was a Managing Director at The Wallach Company, which was subsequently sold to KeyCorp, the parent of KeyBanc Capital Markets. Mr. Franson holds a BS in Marketing from California State University at Chico and a MBA in Finance from the University of Oregon, Charles H. Lundquist College of Business. Currently, he is the Chairperson of our Compensation Committee and a member of 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.

Keith Larson has been a director of the Company since May 2007. Mr. Larson is on the board of directors of one privately-held company which supplies subsystems to semiconductor equipment manufacturers, and is an advisor to other privately-held companies. Mr. Larson was a Vice President of Intel Corporation and Senior Managing Director of Intel Capital, Intel Corporation’s strategic investment group, until his retirement in April 2019, where he was a voting member of the investment committee and managed the Financial Investments Portfolio, along with other duties. Mr. Larson was appointed Vice President in 2006 and served as a Managing Director of Intel Capital from 2004 to 2018, managing a team of investment professionals focused on identifying, making, and managing strategic investments in the manufacturing, memory and programmable solutions, and the Sports and Bioinformatics vertical sectors. Mr. Larson has previously managed Latin America, Taiwan, Korea, and Japan regions for Intel Capital, and 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 formerly served on the board of regents of a university, and on a state government council, which oversaw approximately $80 billion in investments of various Oregon State agencies and funds including the Oregon Public Employees Retirement Fund. Mr. Larson attended the UCLA School of Economics and holds a BS in Business Administration, Accounting (Cum Laude) from the University of Southern California. Currently, he is the Chairperson of our Audit Committee and a member of our Compensation Committee. Mr. Larson brings to the Board his experience as a senior executive in corporate development in a large multinational public company as well as his experience in corporate governance.

Richard Roman has been a director of the Company since January 2003 and the Chairperson of the Board of Directors since January 2013. Mr. Roman has also served as our CEO from March 2010 until December 2012, and as President from October 2010 until December 2012. Previously, Mr. Roman was 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 received a BA from Grinnell College and a MBA from University of Chicago. Mr. Roman brings to the Company his knowledge and experience as a partner at a large national independent public accounting firm as well as his more recent management experience as an executive officer of a private investment company.

Retiring Director

Michelle Applebaum has been a director of the Company since September 2014. Ms. Applebaum has been a NACD Leadership and Governance Fellow. From 2003 to 2014, Ms. Applebaum built one of the first and most successful “independent” equity research advisory boutiques working on a retainer basis with over 30 years100 of experience in capital markets. She joinedthe country’s largest institutional money managers. From 1981 to 2003, Ms. Applebaum was an equity analyst with Salomon Brothers in 1981,(later Citigroup) and became ranked number one in steel equity analysis in 1988 and was promoted totop-ranked for most of the remainder of her tenure at the firm. She was made a Managing Director in 1994.1994, one of 400 at the firm at that time. While at Salomon Brothers, Ms. Applebaum was part of a team that built and ran the firm’s steel investment banking practice, which was a top advisor to the sector for nearly a decade. After leaving the firm in 2003, Ms. Applebaum built onehas a BA in Economics from Northwestern University and a MBA from Northwestern University Kellogg School of the first and most successful “independent” equity research advisory boutiques. Ms. Applebaum recently retired, and is currently a trustee at Lake Forest College in Chicago and on the advisory board of a financial analytics company.Management. Currently, she is the Chairperson of our Nominating and Governance Committee and a member of our Audit Committee and Compensation Committee. Ms. Applebaum brings to the Board her experience advising corporate clients in more than $10 billion of equity and debt raises as well as dozens of mergers and acquisitions. She also brings insight into the Company’s investor base from her nearly four decades of working with value-oriented institutional investors and portfolio managers. She also brings relevant industry experience and insight, as well as her extensive expertise in financial expertise.

Keith Larson has been a director of the Company since May 2007. Mr. Larson is a Vice President of Intel Corporationanalysis and Managing Director of Intel Capital, Intel Corporation’s strategic 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, wearables, programmable solutions, and Intel Labs sectors, as well as the Japan region. Mr. Larson has previously managed Latin America, Taiwan and Korea regions for Intel Capital, and 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 currently serves on the board of regents of a university, and formerly served on one state government council, which oversaw approximately $80 billion in investments of various Oregon State agencies and funds such as the Oregon Public Employees Retirement Fund. Currently, he is the Chairman of our Compensation Committee and a member of our Audit Committee. Mr. Larson brings to the Board his experience as a senior executive in corporate development in a large multinational public company as well as his experience in corporate governance.

Scott Montross has been a director of the Company since January 2013. Mr. Montross has served as our President and CEO since January 2013, and as our Chief Operating Officer from May 2011 until December 2012. Previously he served as Executive Vice President, Flat Products Group of Evraz, Inc. NA from March 2010 through April 2011. Mr. Montross served as Vice President, General Manager, Evraz Oregon Steel from February 2007 through February 2010. Prior to his General Manager role, Mr. Montross served as Vice President of Sales at Oregon Steel Mills, Inc. from June 2003 through February 2007. From 2002 to 2003, Mr. Montross was a Vice President of Sales for National Steel Corporation. Mr. Montross brings to the Board his extensive commercial and operational experience in the steel industry.

Richard Romanhas been a director of the Company since 2003. Effective January 1, 2013, Mr. Roman became the Chairman of the Board of Directors. Mr. Roman has also served as our CEO from March 2010 until December 2012, and as President from October 2010 until December 2012. Previously, Mr. Roman was 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 one privately held manufacturing company. Mr. Roman brings to the Company his knowledge and experience as a partner at a large national independent public accounting firm as well as his more recent management experience as an executive officer of a private investment company.finance.

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

This compensation discussion and analysis provides information about our compensation program for our 2015 CEO, our Chief Financial Officer (“CFO”), and each of the three other most highly compensated executive officers (“Named Executive Officers:Officers”):

* On April 1, 2020, Mr. Wilkins was appointed CFO upon Ms. Gantt’s retirement as CFO.

** In February 2020, Mr. Brittain was promoted to Senior Vice President of Operations.

Further information about each of our executive officers is available in Part III – Item 1010. “Directors, Executive Officers and Corporate Governance” of our 20152019 Annual Report on Form 10-K.to Shareholders.

Compensation Philosophy and Objectives.The Board of Directors and executive management at the Company believe that the performance and contribution of our executive officers are critical to our overall success. To attract, retain, and motivate the executives to accomplish our business strategy, the Compensation Committee establishes executive compensation policies and oversees executive compensation practices at the 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, 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 we maintain our ability to attract, retain, and motivate superior employees in key positions and that compensation provided to key employees remains competitive when compared with other employment opportunities. The Compensation Committee believes our executive compensation packages should include both cash and share-based compensation that reward performance as measured against established goals and market performance.

goals.

In 2011, the Compensation Committee engaged Mercer LLC (“Mercer”) to conduct an overall review of our executive compensation program, and to advise the Compensation Committee on the levels of base salary as well as on the design of the Company’s performance-based cash incentive program and long-term equity incentive program. To that end, Mercer developed a competitive peer group and performed benchmarking analysis of the levels and mix of compensation. The Compensation Committee used the results from this peer group and benchmarking analysis as reference data in making judgments regarding executive compensation without the implementation of a formal policy. The following peer companies were included in the analysis:

Process for Setting Executive Compensation. The Compensation Committee reviews and approves the salaries and other discretionary compensation of the Company’s executive officers, and administers the Company’s equity incentive and compensation plans, including reviewing and approving equity incentive and discretionary compensation awards to executives. The Compensation Committee annually reviews and approves compensation levels and pay mix for our executives.

Advisory Vote on Executive Compensation.Each year the Compensation Committee submits to shareholders an advisory resolution on executive compensation, and carefully considers the voting results of this proposal, though the final vote is advisory in nature and therefore not binding on the Company. Our shareholders expressed strong support for our executive compensation program in the advisory vote at our 20152019 Annual Meeting of Shareholders. Based upon these results, the Compensation Committee has determined to follow the shareholders’ recommendation by continuing our present compensation policies and practices.

Elements of Compensation.For the year ended December 31, 2015,2019, the principal targeted components of compensation for executive officers were:

The target weighting of each of the components of compensation reflected in the Summary of Cash and Certain Other Compensation table on page 14 for the CEO and other Named Executive Officers was as follows for the year ended December 31, 2015:2019:

Realized Pay vs. Reported Pay. In the following table, Reported Pay is compensation reflected in the Summary of Cash and Certain Other Compensation table on page 17.14. Realized Pay is compensation actually received byfor each of the Named Executive Officer during the year, includingOfficers includes base salary, performance-based andcash incentive compensation earned for the respective year’s performance, discretionary cash incentive compensation paid during the respective year, market values at vesting of previously granted RSUs and PSAs, and All Other Compensation amounts received during the year. Realized Pay was greaterless than Reported Pay in 20152019 for all Named Executive Officers otheras the value of the equity awards received was less than Ms. Taylor due to the fact that no Long-Term Equity Incentive Awards were issued in 2015, yet certain Long-Term Equity Incentive Awards issued in prior years vested in 2015.grant date fair value of equity awards granted.

Base Salary.We 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 experience, position, and responsibilities, and take in tointo consideration market data and conditions. In addition, we consider the individual performance of each executive, and conduct internal reviews of each executive’s compensation, to ensure equity among executive officers. Salary levels are typically reviewed annually as part of our 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 in conjunction with recommendations provided by the CEO.

Base salary is reflected in the ‘Salary’ column in the Summary of Cash and Certain Other Compensation table on page 17.14.

Performance-Based Cash Incentive Compensation.We provide, executive officers and other employees withfrom time to time, incentive compensation to retain, incentivize, and reward thememployees for high performance and achievement of corporate goals. The incentive compensation program provides for an award of cash incentive compensation to executive officers and others as a reward for our growth and profitability, and places a significant percentage of each executive officer’s compensation at risk. Awards are based on our achievement of certain financial performance measures each year.measures.

The performance measureIn 2019, executive officers were awarded short term incentive plans providing for 2015cash payments for the Named Executive Officers wasachievement of certain levels of adjusted income before income taxes for the 2019 fiscal year. Adjusted Incomeincome before Income Taxes, for which the Compensation Committee established a target level of $30.0 million. Adjusted Income before Income Taxesincome taxes is calculated by adjusting our income before income taxes as reported in our audited financial statements for certain events that occur during the year, such as the acquisitionsacquisition of businesses, the sales of significant capital assets, or other extraordinary or unusual developments. For 2015, Adjusted Income2019, adjusted income before Income Taxesincome taxes excludes net gains on the impairmentSaginaw fire insurance recoveries and net proceeds related to legal settlements.

The following scale shows the payout as a percentage of our Water Transmission goodwill.base salary that may be awarded. Payouts for performance between the rankings are interpolated on a straight-line basis:

Cash payments under this short term incentive plan were made in March 2020, and were determined by multiplying base salary times the payout percentage of 105% for Mr. Montross and 75% for Ms. Gantt and Messrs. Smith, Wilkins, and Brittain.

Performance-based cash incentive compensation if awarded, is reflected in the ‘Non-Equity Incentive Plan Compensation’ column in the Summary of Cash and Certain Other Compensation table on page 17.14.

Discretionary Incentive Compensation.We provide, from time to time, additional discretionary incentive compensation in recognition of an executive officer's or other employee's success in attaining results that delivered value to the Company, but were not captured in the performance-based cash incentive compensation, or for other reasons as determined appropriate by the Compensation Committee.

In 2019, discretionary cash incentive compensation was awarded to the executive officers for the acquisition and integration of Ameron Water Transmission Group, LLC.

Discretionary incentive compensation if awarded, is reflected in the ‘Bonus’ column in the Summary of Cash and Certain Other Compensation table on page 17. There has been no discretionary incentive compensation awarded in 2015, 2014 or 2013.14.

Long-Term Equity Incentive Awards. We provide long-term equity incentive awards to executive officers and certain designated key employees. The long-term equity incentive awards are designed to ensure that our executive officers and key employees have a continuing stake in our long-term 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. Due to continuing challenging economic conditions, no Long-Term Equity Incentive Awards were granted in 2015.

When granted, RSUs are service-based and entitle the holder to receive Common Stock at the end of the vesting period (generally over approximatelyperiods up to three years), 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 us long-term.

When granted, PSAs are service-based awards with a market-basedperformance-based vesting condition. PSAs serve several purposes. They have value to the holder only if the goals are achieved during their performance measurement period, and they serve as a retention tool because the performance measurement periods generally extend over approximately three years.one year. Additionally, the holders benefit further if they are successful in increasing the value of our Common Stock. PriorWhen PSAs wereare granted, with a market-basedthey typically include vesting conditionconditions that entitlesentitle the holder to receive between zero and twoone hundred fifty percent of the target award. Payouts for performance between the rankings will be interpolated on a straight-line basis.

In 2019, each Named Executive Officer received an award of PSAs and RSUs valued at an amount equal to a specific percentage of his or her respective annual base salary, with 75 percent of each award represented by PSAs and 25 percent of each award represented by RSUs.

The PSAs awarded will vest based on our Total Shareholder Return comparedthe Company’s Earnings before Interest Expense, Income Taxes, Depreciation, and Amortization Margin before extraordinary or unusual items (“EBITDA Margin Performance”) over the measurement period. Two-thirds of the PSAs vested on March 31, 2020, based on EBITDA Margin Performance for the 2019 fiscal year which excluded net gains on the Saginaw fire insurance recoveries and net proceeds related to our PSA peer group.legal settlements. One-third of the PSAs will vest on March 31, 2021, based on EBITDA Margin Performance for the 2019-2020 fiscal years. The following scale shows the adjustment to the number of PSAs that may be awarded following the measurement period:

PayoutsThe PSAs for performance between the rankings2019 measurement period vested on March 31, 2020; the actual number of shares of Common Stock that were issued was determined by multiplying the PSAs by a payout percentage of 136%. The PSAs for the 2019-2020 measurement period will vest on March 31, 2021. In the event a “change in control” of the Company (as defined in the Performance Share Unit Agreement) occurs at any time prior to March 31, 2021, the PSAs will be interpolatedimmediately vested and the amount awarded will be based on a straight line basis.the results obtained through the change in control date.

Long-term equityThe RSUs awarded vest in three equal installments on January 15, 2020, January 15, 2021, and January 17, 2022, based upon continued service with the Company on that date. In the event a “change in control” of the Company (as defined in the RSU agreement) occurs at any time prior to January 17, 2022, a pro-rata number of RSUs will be calculated based on time elapsed as of the date of the change in control, and those RSUs will be immediately vested.

Equity incentive awards are reflected in the ‘Stock Awards’ column in the Summary of Cash and Certain Other Compensation table on page 17.14. These amounts represent the target value of the award issued, but not what was actually received by the Named Executive Officer. Over the 2012 – 2014 performance period corresponding with our 2012 performance grants, when the award vested in 2015 our Total Shareholder Return was 26%, resulting in a ranking in the 36% percentile, and a payout of 59% of the target award.

Retirement Benefits. In order to provide competitive total compensation, we 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 the Deferred Compensation Plan are credited with market-based returns. We may make a discretionary matching contribution based on deferrals made by each participant. In addition, we 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 2015, Company contributions to the Deferred Compensation Plan accounted for between zero and eleven percent of the total compensation for each of the Named Executive Officers.

We also offer 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.

Retirement benefits are reflected in the ‘All Other Compensation’ column in the Summary of Cash and Certain Other Compensation table on page 17.14.

Perquisites and Other Personal Benefits. We provide executive officers with limited perquisites and other personal benefits that we and the Compensation Committee believe are reasonable and consistent with our overall compensation program to better enable us to attract, retain, and motivate employees for key positions. We are selective in our 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 allowancesCompany contributions to a qualified 401(k) defined contribution plan and life insurance premiums.

Perquisites and other personal benefits are reflected in the ‘All Other Compensation’ column in the Summary of Cash and Certain Other Compensation table on page 17.14.

Executive Compensation and Risk. Although a substantial portion of the compensation paid to our executive officers is performance-based, weWe believe our executive compensation programs do not encourage excessive and unnecessary risk-taking by our executive officers because theseour 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 better alignment with the interests of shareholders. Additionally, annual compensation decisions for executive officers are influenced by the review of the performance of each executive officer by the Compensation Committee, including an evaluation of the officers’ commitment to promoting effective internal controls and legal and regulatory compliance. We believe this helps to ensure “the tone at the top” deters unnecessary risk-taking.

Clawback Provisions. Our performance-based cashequity incentive compensation program containsawards contain a provision that allows the Company to recapture amounts paid to the Named Executive Officers under certain circumstances. If the Company’s financial statements are the subject of a restatement due to misconduct, to the extent permitted by governing law, in all appropriate cases, the Company will seek reimbursement of excess incentive cashshare compensation paidgranted under the programagreements for the relevant years. For purposes of this provision, excess incentive cashshare compensation means the positive difference, if any, between (i) the award paid to the Named Executive Officer and (ii) the award that would have been madepaid to the Named Executive Officer not including the effect of any discretionary reductions made by the Committee, had the target award been calculated based on the Company’s financial statements as restated.

Stock Ownership and Anti-Hedging/Pledging Policy. The Nominating and Governance Committee of the Board of Directors has adopted a stock ownership policy because it believes it is in the best interests of the Company and its shareholders to align the financial interests of our executive officers and directors with those of the Company’s shareholders. Under the policy, the directors are expected to accumulate and own shares having a market value equal to three times their annual cash retainer; the CEO is expected to accumulate and own shares having a market value equal to three times his base salary; and each of the other Named Executive Officers is expected to accumulate and own shares having a market value equal to either one or two times his or her base salary, depending on his or her position with the Company. Each executive officer or director has five years to accumulate the expected ownership level beginning from the later of September 2011 or their date of hire or promotion. Until such ownership is achieved, each executive officer or director is required to retain 100% of net after-tax shares issued upon vesting of equity incentive awards. In addition, executive officers and directors are expressly prohibited from engaging in hedging transactions related to the Company’s stock, including trading in publicly-traded options, puts, calls, or other derivative instruments related to the Company’s stock, and from pledging the Company’s stock as collateral for a loan.

Summary of Cash and Certain Other Compensation

The following table reflects compensation earned by our CEO, our CFO, and each of the three other most highly compensated executive officers,Named Executive Officers for the years ended December 31, 2015, 20142019, 2018, and 2013 (the “Named Executive Officers”).2017.

Summary Compensation Table

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2019Grants of Plan-Based Awards

The following table sets forth, for each of the Named Executive Officers, the performance-based incentive awards granted for the year ended December 31, 2019.

2015 Grants of Plan-Based Awards

Outstanding Equity Awards at 20152019 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 atas of December 31, 2015. 2019.

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20152019 Option Exercises and Stock VestingVested

During 2019, no options were exercised or stock vested for any of the Named Executive Officers.

2019 Nonqualified Deferred Compensation

The following table sets forth, for each of the Named Executive Officer, the number of shares acquired upon option exercises and vesting of stock awards during 2015, and the related value realized upon such exercises and vesting. 

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2015 Nonqualified Deferred Compensation

The following table sets forth, for each Named Executive Officer under our Deferred Compensation Plan, the amounts of the contributions made by each executive, the contributions made by us,Officers, the earnings generated by the investments within the Deferred Compensation Plan, which was frozen in 2016, and the balance of each Named Executive Officer’s account under the Deferred Compensation Plan for the year ended December 31, 2015.2019.