<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
NORTHWEST PIPE COMPANY
(Name of Registrant as Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed per Exchange Act Rules 14a-6(i)(4) and 0-11.
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
<PAGE>
NORTHWEST PIPE COMPANY
12005 N. BURGARD
PORTLAND, OREGON 97203
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
-----------------------
To the Shareholders of Northwest Pipe Company:
NOTICE IS HEREBY GIVEN that the annual meeting of shareholders (the "Annual
Meeting") of Northwest Pipe Company (the "Company") will be held on Tuesday,
May 19, 1998 at the Heathman Hotel, 1001 SW Broadway, Portland, OR 97205, at
9:00 a.m., local time. The purposes of the Annual Meeting will be:
1. ELECTION OF DIRECTORS. To elect two directors, to hold office for
a term of three years or until their successors are elected and qualified
(Proposal No. 1);
2. RATIFICATION OF APPOINTMENT OF AUDITORS. To ratify the
appointment of Coopers & Lybrand L.L.P. as the Company's independent
auditors for the year ending December 31, 1998 (Proposal No. 2); and
3. OTHER BUSINESS. To transact such other business as may properly
come before the meeting or any adjournments or postponements thereof.
The Board of Directors has fixed the close of business on March 27, 1998 as
the record date for determining shareholders entitled to notice of and to
vote at the meeting or any adjournments thereof. Only shareholders of record
at the close of business on that date will be entitled to notice of and to
vote at the Annual Meeting or any adjournments or postponements thereof.
By Order of the Board of Directors,
Brian W. Dunham
President, Chief Operating Officer,
Secretary and Treasurer
Portland, Oregon
April 14, 1998
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE, WHETHER OR NOT
YOU PLAN TO BE PRESENT IN PERSON AT THE ANNUAL MEETING, PLEASE DATE, SIGN AND
COMPLETE THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE,
WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
<PAGE>
NORTHWEST PIPE COMPANY
12005 N. BURGARD
PORTLAND, OREGON 97203
PROXY STATEMENT FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 19, 1998
---------------------
INTRODUCTION
GENERAL
This Proxy Statement and the accompanying 1997 Annual Report to Shareholders
are being furnished to the shareholders of Northwest Pipe Company, an Oregon
corporation (the "Company"), as part of the solicitation of proxies by the
Company's Board of Directors (the "Board of Directors") for use at the
Company's annual meeting of shareholders (the "Annual Meeting") to be held on
Tuesday, May 19, 1998 at the Heathman Hotel, 1001 SW Broadway, Portland, OR
97205, at 9:00 a.m., local time. At the Annual Meeting, shareholders will be
asked to elect two members of the Board of Directors, to ratify the
appointment by the Board of Directors of Coopers & Lybrand L.L.P. as
independent auditors of the Company for the year ending December 31, 1998,
and 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 1997 Annual Report to
Shareholders, are first being mailed to shareholders of the Company on or
about April 14, 1998.
SOLICITATION, VOTING AND REVOCABILITY OF PROXIES
The Board of Directors has fixed the close of business on March 27, 1998 as
the record date for the determination of the shareholders entitled to notice
of and to vote at the Annual Meeting. Accordingly, only holders of record of
shares of Common Stock at the close of business on such date will be entitled
to vote at the Annual Meeting, with each such share entitling its owner to
one vote on all matters properly presented at the Annual Meeting. On the
record date, there were approximately 6,432,035 shares of Common Stock then
outstanding. The presence, in person or by proxy of a majority of the total
number of outstanding shares of Common Stock entitled to vote at the Annual
Meeting is necessary to constitute a quorum at the Annual Meeting.
If the enclosed form of proxy is properly executed and returned in time to be
voted at the Annual Meeting, the shares represented thereby will be voted in
accordance with the instructions marked thereon. EXECUTED BUT UNMARKED
PROXIES WILL BE VOTED FOR THE ELECTION OF THE TWO NOMINEES FOR ELECTION TO
THE BOARD OF DIRECTORS AND FOR THE RATIFICATION OF THE APPOINTMENT OF COOPERS
& LYBRAND L.L.P. AS THE COMPANY'S INDEPENDENT AUDITORS FOR THE YEAR ENDING
DECEMBER 31, 1998. The Board of Directors does not know of any matters other
than those described in the Notice of Annual Meeting that are to come before
the Annual Meeting. If any other matters are properly brought before the
Annual Meeting, the persons named in the proxy will vote the shares
represented by such proxy upon such matters as determined by a majority of
the Board of Directors.
Shareholders who execute proxies retain the right to revoke them at any time
prior to the exercise of the powers conferred thereby by filing a written
notice of revocation with, or by delivering a duly executed proxy bearing a
later date to, Corporate Secretary, Northwest Pipe Company, 12005 N. Burgard,
Portland, Oregon 97203, or by attending the Annual Meeting and voting in
person. All valid, unrevoked proxies will be voted at the Annual Meeting.
1
<PAGE>
ELECTION OF DIRECTORS
(PROPOSAL NO. 1)
At the Annual Meeting, two directors will be elected, each for a three-year
term. Unless otherwise specified on the proxy, it is the intention of the
persons named in the proxy to vote the shares represented by each properly
executed proxy for the election of the nominees named below. The Board of
Directors believes that the nominees will stand for election and will serve
if elected as directors. However, if either of the persons nominated by the
Board of Directors fails to stand for election or is unable to accept
election, the proxies will be voted for the election of such other person as
the Board of Directors may recommend.
The Company's Articles of Incorporation and Bylaws provide that the Board of
Directors shall be composed of not less than six (6) and not more than nine
(9) directors. The Board of Directors has fixed the number of directors at
six (6). The Company's directors are divided into three classes composed of
two directors each. The term of office of only one class of directors expires
each year, and their successors are elected for terms of three years, and
until their successors are elected and qualified. There is no cumulative
voting for election of directors.
INFORMATION AS TO NOMINEES AND CONTINUING DIRECTORS
The following table sets forth the names of and certain information about the
Board of Directors' nominees for election as a director and those directors
who will continue to serve after the Annual Meeting.
<TABLE>
<CAPTION>
DIRECTOR EXPIRATION
AGE SINCE OF TERM
--- ----- -------
<S> <C> <C> <C>
NOMINEES:
Warren K. Kearns 68 1986 1998
Vern B. Ryles, Jr. 60 1986 1998
CONTINUING DIRECTORS:
William R. Tagmyer 60 1986 1999
Neil R. Thornton 67 1995 1999
Brian W. Dunham 40 1995 2000
Wayne B. Kingsley 55 1987 2000
</TABLE>
NOMINEES FOR DIRECTOR
WARREN K. KEARNS has been a director of the Company since 1986. Mr. Kearns is
currently the Principal in Warren Kearns Associates, providing consulting
services to clients in steel and steel-related industries. Mr. Kearns also
serves as a director for Erie Forge & Steel Company. Mr. Kearns was formerly
President and director of L. B. Foster Company.
VERN B. RYLES has been a director of the Company since 1986. Mr. Ryles is
President and Chief Executive Officer of Poppers Supply, a manufacturer of
flavored popcorn snacks and distributor of snack foods and equipment. Mr.
Ryles is also a director of Electro Scientific Industries, a public company.
CONTINUING DIRECTORS
WILLIAM R. TAGMYER has been the Chairman of the Board, Director and Chief
Executive Officer since 1986. From 1986 to January 1998 Mr. Tagmyer also
served as President of the Company. From 1975 to 1986, he worked for L. B.
Foster Company, another steel pipe manufacturer. Prior to 1975, Mr. Tagmyer
was employed by the U.S. Steel Corporation and FMC Corporation in the areas
of sales, marketing, product management and contract administration.
2
<PAGE>
NEIL R. THORNTON has been a director of the Company since 1995. He was
previously a director of the Company from 1986 to 1993. Mr. Thornton was
President and Chief Executive Officer of American Steel, L.L.C., a
distributor of carbon steel products, from 1985 until December 1997.
BRIAN W. DUNHAM has been a director of the Company since August 1995. Mr.
Dunham served as Chief Financial Officer from 1990 until February 1997 when
he was appointed the Company's Chief Operating Officer. In January 1998, Mr.
Dunham was elected President of the Company. Mr. Dunham has served as Vice
President, Treasurer and Secretary since 1990, and became Executive Vice
President in 1995. From 1981 to 1990 he was employed by Coopers & Lybrand
L.L.P., independent accountants.
WAYNE B. KINGSLEY has been a director of the Company since 1987. Mr. Kingsley
is Chairman of the Board of Directors of InterVen Partners, Inc., American
Waterways, Inc. and BIT, Inc., and a director of Coleman Natural Products,
Inc.
BOARD OF DIRECTORS COMMITTEES AND NOMINATIONS BY SHAREHOLDERS
Each year the members of the Board of Directors who are not employed by the
Company and whose term of office is not expiring at the next annual meeting
serve as the Nominating Committee for selecting nominees for election as
directors. The Company's Bylaws also permit shareholders to make nominations
for the election of directors, if such nominations are made pursuant to
timely notice in writing to the Company's Secretary. To be timely, notice
must be delivered to, or mailed to and received at, the principal executive
offices of the Company not less than 60 days nor more than 90 days prior to
the date of the meeting, provided that at least 60 days notice or prior
public disclosure of the date of the meeting is given or made to
shareholders. If less than 60 days' notice or prior public disclosure of the
date of the meeting is given or made to shareholders, notice by the
shareholder to be timely must be received by the Company not later than the
close of business on the tenth day following the date on which such notice of
the date of the meeting was mailed or such public disclosure was made. A
shareholder's notice of nomination must also set forth certain information
specified in the Company's Bylaws concerning each person the shareholder
proposes to nominate for election and nominating shareholder.
The Board of Directors held five (5) meetings during 1997. Each director
attended more than 75 percent of the aggregate of (i) the total number of
meetings of the Board of Directors and (ii) the total number of meetings held
by all committees of the Board on which he served. The Board of Directors has
an Executive Committee, an Audit Committee, a Compensation Committee and a
Nominating Committee. The Executive Committee, comprised of Messrs. Kingsley,
Ryles and Tagmyer, exercises the authority of the Board of Directors between
meetings of the Board, subject to certain limitations. The Executive
Committee met one (1) time during 1997. The Audit Committee was comprised of
Messrs. Kearns and Thornton until May 1997, and Messrs. Kearns and Kingsley
from May 1997 to present. The Audit Committee oversees actions taken by the
Company's independent auditors and reviews the Company's internal audit
controls. The Audit Committee met one time in 1997. The Compensation
Committee was comprised of Messrs. Kingsley and Ryles until May 1997, and
Messrs. Thornton and Ryles from May 1997 to present. The Compensation
Committee reviews the compensation levels of the Company's employees, makes
recommendations to the Board regarding changes in compensation and
administers the Company's stock option plans. The Compensation Committee met
four (4) times in 1997. The Nominating Committee did not meet in 1997. There
are no family relationships among any of the directors or executive officers
of the Company.
See "Management - Executive Compensation" for certain information regarding
compensation of directors.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE
ELECTION OF ITS NOMINEES FOR DIRECTOR. If a quorum is present, the Company's
Bylaws provide that directors are elected by a plurality of the votes cast by
the shares entitled to vote. Abstentions and broker non-votes are counted for
purposes of determining whether a quorum exists at the Annual Meeting, but
are not counted and have no effect on the determination of whether a
plurality exists with respect to a given nominee.
3
<PAGE>
MANAGEMENT
EXECUTIVE OFFICERS
Information with respect to the Company's current executive officers is set
forth below. Officers of the Company are elected by the Board of Directors
and hold office until their successors are elected and qualified.
<TABLE>
<CAPTION>
NAME AGE CURRENT POSITION(S) WITH COMPANY
- ---- --- --------------------------------
<S> <C> <C>
William R. Tagmyer 60 Chairman of the Board and Chief Executive Officer
Brian W. Dunham 40 Director, President, Chief Operating Officer,
Secretary and Treasurer
Gary A. Stokes 46 Vice President, Sales and Marketing
Charles L. Koenig 55 Vice President, Water Transmission Products
Terrence R. Mitchell 42 Vice President, Tubular Products
John D. Murakami 44 Vice President, Chief Financial Officer
</TABLE>
Information concerning the principal occupations of Messrs. Tagmyer and
Dunham is set forth under "Election of Directors".
GARY A. STOKES has been Vice President, Sales and Marketing since 1993. He
has been with the Company since 1987. Mr. Stokes was previously employed by
L. B. Foster Company for eleven years. He served as the Regional Manager
responsible for L.B. Foster Company's West Coast sales operations.
CHARLES L. KOENIG was named Vice President, Water Transmission Products in
February 1997 and had served as Vice President - California Operations since
1993. Additionally, Mr. Koenig was named President of Thompson Pipe and Steel
Company, a subsidiary of the Company, in May 1996. He has been with the
Company since 1992 and is a registered Professional Engineer. Previously, he
was Operations Manager with Thompson Pipe and Steel Company, where he was
employed for more than twenty years.
TERRENCE R. MITCHELL was named Vice President, Tubular Products in May 1996,
and had served as Vice President and General Manager - Kansas Division since
1993 and has been with the Company since 1985. Prior to joining the Company,
he was employed by Valmont Industries, another pipe manufacturer.
JOHN D. MURAKAMI was named Vice President, Chief Financial Officer in
February 1997, and had served as Corporate Controller since September 1995.
Prior to joining the Company, he was employed by Babler Brothers, Inc., a
manufacturer of concrete pipe products.
4
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table provides certain summary information concerning
compensation awarded to, earned by or paid to the Company's Chief Executive
Officer and each of the four other most highly compensated executive officers
of the Company determined as of the end of the last fiscal year (hereafter
referred to as the "named executive officers") for the fiscal years ended
December 31, 1997, 1996 and 1995.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONG TERM
COMPENSATION
ANNUAL ------------
COMPENSATION STOCK
------------ OPTIONS ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS(1) GRANTED COMPENSATION
- --------------------------- ---- ------ -------- ------- ------------
<S> <C> <C> <C> <C> <C>
William R. Tagmyer 1997 $280,008 $ -- 48,000 $18,358(2)
Chairman of the Board and 1996 262,992 220,000 -- 12,539(2)
Chief Executive Officer 1995 216,840 165,000 25,470 13,206(2)
Brian W. Dunham 1997 $203,603 $ -- 25,000 $ 4,750(3)
Director, President 1996 168,345 200,000 -- 4,375(3)
Chief Operating Officer, 1995 138,000 125,000 42,900 4,140(3)
Secretary and Treasurer
Gary A. Stokes 1997 $150,000 $ -- 12,000 $ 4,750(3)
Vice President, 1996 130,400 120,000 -- 4,586(3)
Sales & Marketing 1995 104,400 83,000 17,160 3,148(3)
Charles L. Koenig 1997 $150,000 $ -- 12,000 $ 4,506(3)
Vice President, Water 1996 126,000 120,000 -- 4,489(3)
Transmission Products 1995 106,020 83,000 17,160 3,211(3)
Terrence R. Mitchell 1997 $125,000 $ -- 9,000 $ 4,750(4)
Vice President, Tubular Products 1996 88,500 80,000 -- 39,512(4)
1995 72,000 39,000 17,160 2,160(4)
</TABLE>
(1) Paid pursuant to the Company's discretionary bonus program, in which all
salaried employees are eligible to participate. As of the date of this
proxy statement, the development of the executive bonus plan for 1997 has
not been completed and approved and no bonus awards for 1997 have been
made.
(2) Represents $13,608, $7,789 and $8,586 of Company-paid life insurance in
1997, 1996 and 1995, respectively, and $4,750, $4,750 and $4,620 of
matching amounts contributed to the Company's 401(k) plan in 1997, 1996
and 1995, respectively.
(3) Represents matching amounts contributed to the Company's 401(k) plan in
1997, 1996 and 1995.
(4) Represents $35,559 of relocation expenses in 1996, and $4,750, $3,953 and
$2,160 of matching amounts contributed to the Company's 401(k) plan in
1997, 1996 and 1995, respectively.
5
<PAGE>
STOCK OPTIONS
The following table contains information concerning the grant of stock
options to the named executive officers in 1997.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-------------------------------------------
POTENTIAL REALIZABLE
PERCENT OF VALUE AT ASSUMED ANNUAL
TOTAL OPTIONS RATES OF STOCK PRICE
GRANTED TO EXERCISE APPRECIATION FOR
OPTIONS EMPLOYEES PRICE EXPIRATION OPTION TERM($) (2)
NAME GRANTED(1) IN 1997 ($/SH) DATE 5% 10%
---- ---------- ------- ------ ---- ------ -------
<S> <C> <C> <C> <C> <C> <C>
William R. Tagmyer 48,000 33% $18.75 2/13/07 $566,005 $1,434,368
Brian W. Dunham 25,000 17 18.75 2/13/07 294,794 747,067
Gary A. Stokes 12,000 8 18.75 2/13/07 141,501 358,592
Charles L. Koenig 12,000 8 18.75 2/13/07 141,501 358,592
Terrence R. Mitchell 9,000 6 18.75 2/13/07 106,126 268,944
</TABLE>
(1) Stock options are granted at an exercise price equal to the fair market
value of the Company's Common Stock on the date of grant. Options granted
vest ratably over a 60 month period, and have a ten year term.
(2) The potential realizable value is calculated based on the term of the
option at time of grant (10 years) and is calculated by assuming that the
stock price on the date of grant appreciates at the indicated annual rate
compounded annually for the entire term of the option and that the option
is exercised and sold on the last day of its term for the appreciated
price. Actual gains, if any, on stock option exercises are dependent on
the future performance of the Common Stock and overall stock market
conditions.
6
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION
VALUES
The following table sets forth, for each of the named executive officers, the
number and value of unexercised options as of December 31, 1997. None of the
named executive officers exercised stock options during 1997.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS
DECEMBER 31, 1997 AT DECEMBER 31, 1997 (1)
----------------------------- -----------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
William R. Tagmyer 20,870 52,870 $ 289,361 $457,361
Brian W. Dunham 63,223 42,284 1,301,627 521,647
Gary A. Stokes 40,666 18,580 869,824 217,407
Charles L. Koenig 25,815 18,580 523,512 217,407
Terrence R. Mitchell 13,228 16,080 245,187 204,222
</TABLE>
(1) The value of unexercised in-the-money options is calculated based on the
closing price of the Company's Common Stock on December 31, 1997, $24.00
per share. Amounts reflected are based on the assumed value minus the
exercise price and do not necessarily indicate that the optionee sold
such stock.
DIRECTOR COMPENSATION
The members of the Company's Board of Directors are reimbursed for their
travel expenses incurred in attending Board meetings. In addition,
nonemployee members of the Board of Directors receive a $10,000 annual
retainer, $1,000 for each Board meeting attended, $500 for each telephonic
Board meeting attended and $500 for each meeting of a committee of the Board
attended. The Company has adopted the 1995 Stock Option Plan for Nonemployee
Directors (the "1995 Nonemployee Director Plan"), which provides that an
option to purchase 5,000 shares of Common Stock is granted to each new
nonemployee director at the time such person is first elected or appointed to
the Board of Directors. In addition, each nonemployee director receives an
option to purchase 2,000 shares of Common Stock annually after each annual
meeting of shareholders. The number of options which may be granted under the
1995 Nonemployee Director Plan in any fiscal year may not exceed 20,000,
subject to stock splits and similar events, and a total of 100,000 shares of
Common Stock have been reserved for issuance upon exercise of stock options
granted under the 1995 Nonemployee Director Plan. On May 22, 1997 options to
purchase 2,000 shares of Common Stock, at $15.75 each, were granted to each
of Messrs. Kingsley, Kearns, Ryles and Thornton.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
IN COMPENSATION DECISIONS
The Compensation Committee of the Board of Directors was comprised of Messrs.
Kingsley and Ryles until May 1997 and Messrs. Thornton and Ryles from May
1997 to present. Prior to December 1997, the Company leased substantially all
of its Portland, Oregon facilities from Multnomah Land & Equipment Company, a
partnership in which Mr. Ryles is a general partner. See "Certain
Relationships and Related Transactions." The Compensation Committee is
responsible for establishing the compensation of William R. Tagmyer, the
Company's President and Chief Executive Officer, who also serves on the Board
of Directors. Mr. Tagmyer is responsible for reviewing the compensation
levels of the Company's other executive officers and makes recommendations to
the Compensation Committee regarding changes in compensation.
7
<PAGE>
COMPENSATION REPORT OF THE COMPENSATION COMMITTEE
COMPENSATION COMMITTEE REPORT
Under rules established by the Securities and Exchange Commission (the
"SEC"), the Company is required to provide certain data and information with
regard to the compensation and benefits provided to the Company's Chief
Executive Officer and the four other most highly compensated executive
officers. In fulfillment of this requirement, the Compensation Committee has
prepared the following report for inclusion in this Proxy Statement.
EXECUTIVE COMPENSATION PHILOSOPHY
The Compensation Committee is composed entirely of nonemployee, outside
directors and is responsible for setting and monitoring policies governing
compensation of executive officers. The Compensation Committee reviews the
performance and compensation levels for executive officers, and sets salary
and bonus levels and option grants under the Company's stock option plans.
The objectives of the Committee are to correlate executive compensation with
the Company's business objectives and performance and to enable the Company
to attract, retain and reward executive officers who contribute to the
long-term success of the Company.
The Omnibus Budget Act of 1993 added Section 162(m) to the Internal Revenue
Code of 1986, which limits to $1,000,000 the deductibility of compensation
(including stock-based compensation) individually paid to a publicly-held
Company's chief executive officer and the four other most highly compensated
executive officers. The Board of Directors and the Compensation Committee
intend to take the necessary steps to structure executive compensation
policies to comply with this limit on deductibility of executive compensation.
SALARIES. Salaries for executive officers are based on a review of salaries
for similar positions requiring similar qualifications. In determining
executive officer salaries, the Compensation Committee reviews
recommendations from management which include information from salary
surveys. Additionally, the Compensation Committee establishes both financial
and operational based objectives and goals. These goals and objectives
include sales and spending forecasts, along with published executive
compensation literature for comparable sized companies. The Compensation
Committee considers not only the performance evaluations of executive
officers but also reviews the financial condition of the Company in setting
salaries.
The Compensation Committee annually assesses the performance and sets the
salary of the Company's Chief Executive Officer, William R. Tagmyer. Mr.
Tagmyer annually assesses the performance of all other executive officers and
recommends salary increases which are reviewed and approved by the
Compensation Committee.
BONUS AWARDS. The Compensation Committee administers a cash bonus plan to
provide additional incentives to executive officers and certain other
management employees. For 1997, the Compensation Committee is developing a
new executive bonus plan. This plan will continue to be based on established
key measurement targets, but will reduce the level of discretion of the
Compensation Committee in determining the total amount of cash bonuses
available and the amount awarded to each executive. Awards will be weighted
so that proportionately higher awards are made when the Company's performance
reaches maximum targets, proportionately smaller awards are made when the
Company's performance reaches minimum targets, and no awards are made when
the Company does not meet minimum performance targets. As of the date of this
proxy statement, the development of the executive bonus plan for 1997 has not
been completed and approved and no bonus awards for 1997 have been made.
8
<PAGE>
STOCK OPTIONS. The Compensation Committee believes that employee equity
ownership provides significant motivation to executive officers to maximize
value for the Company's shareholders and, therefore, periodically grants
stock options under the Company's stock option plans. Stock options are
granted at the current market price and will only have value if the Company's
stock price increases over the exercise price. The Compensation Committee
determines the size and frequency of option grants for executive officers,
after consideration of recommendations from the Chief Executive Officer.
Recommendations for option grants are based upon the relative position and
responsibilities of each executive officer, expected contributions of each
officer to the Company and previous option grants to such executive officers.
CHIEF EXECUTIVE OFFICER COMPENSATION. Mr. Tagmyer's 1997 base salary was
determined in the same manner as the other executives as described in
SALARIES above. The Compensation Committee approved Mr. Tagmyer's 1997 annual
base salary of approximately $280,000, based on the salary survey data
referred to above and compensation levels of President/Chief Executive
Officers of comparable size companies in industries similar to the Company's.
As described in BONUS AWARDS above, the executive bonus plan for 1997 has not
been completed and approved and no bonus awards for 1997 have been made.
Options to purchase 48,000 shares of the Company's Common Stock at $18.75 per
share were granted to Mr. Tagmyer in 1997.
COMPENSATION COMMITTEE
Neil R. Thornton
Vern B. Ryles, Jr.
9
<PAGE>
STOCK PERFORMANCE GRAPH
The SEC requires that registrants include in their proxy statement a
line-graph presentation comparing cumulative five-year shareholder returns on
an indexed basis, assuming a $100 initial investment and reinvestment of
dividends, of (a) the registrant, (b) a broad-based equity market index and
(c) an industry-specific index. The Company's Common Stock began trading on
the Nasdaq Stock Market on November 30, 1995. Accordingly, the following
graph includes the required information from November 30, 1995 through the
end of the last fiscal year (December 31, 1997). The broad-based market index
used is the Nasdaq U.S. Stock Market Total Return Index and the
industry-specific index used is a peer group of companies consisting of
Ameron International, Inc., Lindsay Manufacturing Co., Valmont Industries,
Inc., L.B. Foster Company and Maverick Tube Corporation.
[CHART]
<TABLE>
<CAPTION>
NOVEMBER 30, DECEMBER 31, DECEMBER 31, DECEMBER 31,
COMPANY NAME/INDEX 1995 1995 1996 1997
- ------------------ ---- ---- ---- ----
<S> <C> <C> <C> <C>
Northwest Pipe Company $100 $122.05 $180.30 $266.29
Nasdaq U.S. Index $100 $ 99.48 $122.37 $150.13
Peer Group Index $100 $104.53 $168.93 $230.94
</TABLE>
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") requires the Company's directors and executive officers and
persons who own more than ten percent of a registered class of the Company's
equity securities, to file initial reports of ownership and reports of
changes in ownership of shares with the Securities and Exchange Commission.
Such persons also are required to furnish the Company with copies of all
Section 16(a) reports they file.
Based solely on its review of the copies of such reports received by it with
respect to 1997, or written representations from certain reporting persons,
the Company believes that all filing requirements applicable to its
directors, officers and persons who own more than ten percent of a registered
class of the Company's equity securities have been complied with for 1997.
10
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On February 1, 1982, the Company entered into a Lease Agreement with
Multnomah Land & Equipment Company ("Multnomah Land"), a partnership in which
Vern B. Ryles, Jr., a director of the Company, is a general partner. The
Lease Agreement covered substantially all of the Company's Portland, Oregon
facilities. The amounts paid by the Company to Multnomah Land under this
Lease were $315,000 and $344,000 in each of the years ended December 31, 1997
and 1996. The Company exercised its option to acquire the property covered by
this Lease in December 1997 for $2,557,000, the outstanding balance of the
unpaid principal and accrued interest on the loan collateralized by such
property.
STOCK OWNED BY MANAGEMENT AND PRINCIPAL SHAREHOLDERS
The table below sets forth certain information, as of February 28, 1998,
regarding the beneficial ownership of the Common Stock by: (i) each person
known by the Company to be the beneficial owner of 5% or more of its
outstanding Common Stock, (ii) each of the named executive officers, (iii)
each of the Company's directors and (iv) all directors and executive officers
as a group:
<TABLE>
<CAPTION>
SHARES BENEFICIALLY
OWNED(1)
--------
NAME OF BENEFICIAL OWNER SHARES PERCENT
------------------------ ------ -------
<S> <C> <C>
Becker Capital Management, Inc. (2) 529,917 8.3%
1211 SW Fifth Avenue, Suite 2185
Portland, OR 97204
Harris Associates, Inc. (3) 538,000 8.4
Harris Associates L.P.
2 North LaSalle Street
Chicago, IL 60602
U.S. Bancorp (4) 361,842 5.6
601 2nd Avenue South
Minneapolis, MN 55402
William R. Tagmyer 247,781 3.8
Brian W. Dunham 100,801 1.6
Gary A. Stokes 52,775 *
Charles L. Koenig 63,212 1.0
Terrence R. Mitchell 15,210 *
Warren K. Kearns 4,000 *
Wayne B. Kingsley (5) 17,929 *
Vern B. Ryles, Jr 11,479 *
Neil R. Thornton 14,378 *
All directors and executive officers as a group,
(eleven persons) 533,539 8.0%
</TABLE>
---------
(*) Represents beneficial ownership of less than one percent of the
outstanding Common Stock.
11
<PAGE>
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission, and includes voting power and
investment power with respect to shares. Shares issuable upon the exercise
of outstanding stock options that are currently exercisable or become
exercisable within 60 days from February 28, 1998 are considered
outstanding for the purpose of calculating the percentage of Common Stock
owned by such person but not for the purpose of calculating the percentage
of Common Stock owned by any other person. The number of stock options
that are exercisable within 60 days of February 28, 1998 is as follows:
Mr. Kingsley - 4,000; Mr. Kearns - 4,000; Mr. Ryles - 11,479;
Mr. Thornton - 9,000 ; Mr. Tagmyer - 26,849; Mr. Dunham - 68,416;
Mr. Stokes - 42,867; Mr. Koenig - 27,916; Mr. Mitchell - 15,210; and all
directors and officers as a group - 215,211.
(2) The information as to beneficial ownership is based on a Schedule 13G
filed with the Securities and Exchange Commission by Becker Capital
Management, Inc. on February 12, 1998, reflecting its beneficial ownership
of Common Stock as of December 31, 1997. The Schedule 13G states that
Becker Capital Management has sole voting power and sole dispositve power
with respect to 529,917 shares of Common Stock.
(3) The information as to beneficial ownership is based on Schedules 13G filed
with the Securities and Exchange Commission by Harris Associates, Inc. and
Harris Associates L.P. on February 12, 1998, reflecting their beneficial
ownership of Common Stock as of December 31, 1997. The Schedule 13G states
that Harris Associates, Inc. and Harris Associates L.P. have shared voting
and dispositive power with respect to 538,000 shares of Common Stock.
Included in the total of 538,000 shares of Common Stock are 520,000 shares
which are owned by the Harris Associates Investment Trust, to which Harris
Associates L.P. serves as an investment advisor.
(4) The information as to beneficial ownership is based on a Schedule 13G
filed with the Securities and Exchange Commission by U.S. Bancorp on
February 13, 1998, reflecting its beneficial ownership of Common Stock as
of December 31, 1997. The Schedule 13G states that U.S. Bancorp has sole
voting power with respect to 360,842 shares of Common Stock, sole
dispositve power with respect to 347,642 shares of Common Stock and shared
dispositive power with respect to 700 shares of Common Stock.
(5) Shares held by Mr. Kingsley include 593 shares held in trust over which
Mr. Kingsley has sole voting and dispositive power.
12
<PAGE>
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
(PROPOSAL NO. 2)
The Board of Directors has appointed Coopers & Lybrand L.L.P., independent
accountants, as auditors of the Company for the year ending December 31,
1998, subject to ratification by the shareholders.
Unless otherwise indicated, properly executed proxies will be voted in favor
of ratifying the appointment of Coopers & Lybrand L.L.P. to audit the books
and accounts of the Company for the year ending December 31, 1998. No
determination has been made as to what action the Board of Directors would
take if the shareholders do not ratify the appointment.
A representative of Coopers & Lybrand L.L.P. is expected to be present at the
Annual Meeting. The representative will be given the opportunity to make a
statement on behalf of his firm if such representative so desires, and will
be available to respond to any appropriate questions of any shareholder.
Coopers & Lybrand L.L.P. were the Company's independent accountants for the
year ended December 31, 1997.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THIS PROPOSAL. If a
quorum is present, this proposal will be approved if the votes cast by the
shareholders entitled to vote favoring the ratification exceeds the votes
cast opposing the ratification. Abstentions and broker non-votes are counted
for purposes of determining whether a quorum exists at the Annual Meeting,
but are not counted and have no effect on the determination of the outcome of
this proposal.
DATE FOR SUBMISSION OF SHAREHOLDER PROPOSALS
Any shareholder proposal intended for inclusion in the proxy statement and
form of proxy relating to the Company's 1999 annual meeting of shareholders
must be received by the Company not later than December 15, 1998, pursuant to
the proxy soliciting regulations of the SEC. In addition, the Company's
Bylaws require that notice of shareholder proposals and nominations for
director be delivered to the Secretary of the Company not less than 60 days
nor more than 90 days prior to the date of an annual meeting, unless notice
or public disclosure of the date of the meeting occurs less than 60 days
prior to the date of such meeting, in which event, shareholders may deliver
such notice not later than the tenth day following the day on which notice of
the date of the meeting was mailed or public disclosure thereof was made.
Nothing in this paragraph shall be deemed to require the Company to include
in its proxy statement and form of proxy for such meeting any shareholder
proposal which does not meet the requirements of the SEC in effect at the
time.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors does not know
of any other matters to be presented for action by the shareholders at the
1998 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.
13
<PAGE>
COST OF SOLICITATION
The cost of soliciting proxies will be borne by the Company. In addition to
use of the mails, proxies may be solicited personally or by telephone by
directors, officers and employees of the Company, who will not be specially
compensated for such activities. Such solicitations may be made personally,
or by mail, facsimile, telephone, telegraph or messenger. The Company will
also request persons, firms and companies holding shares in their names or in
the name of their nominees, which are beneficially owned by others, to send
proxy materials to and obtain proxies from such beneficial owners. The
Company will reimburse such persons for their reasonable expenses incurred in
that connection.
ADDITIONAL INFORMATION
A copy of the Company's Annual Report to Shareholders for the year ended
December 31, 1997 accompanies this Proxy Statement. The Company will provide,
without charge on the written request of any beneficial owner of shares of
the Company's Common Stock entitled to vote at the Annual Meeting, a copy of
the Company's Annual Report on Form 10-K as filed with the SEC for the year
ended December 31, 1997. Written requests should be mailed to the secretary,
Northwest Pipe Company, 12005 N. Burgard, Portland, OR 97203.
By Order of the Board of Directors,
Brian W. Dunham
President, Chief Operating Officer,
Secretary and Treasurer
Portland, Oregon
April 14, 1998
14
<PAGE>
NORTHWEST PIPE COMPANY
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 19, 1998
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting of
Shareholders and Proxy Statement, each dated April 14, 1998 and hereby names,
constitutes and appoints William R. Tagmyer and Brian W. Dunham, or each of them
acting in absence of the other, with full power of substitution, my true and
lawful attorneys and Proxies for me and in my place and stead to attend the
Annual Meeting of the Shareholders of Northwest Pipe Company (the "Company") to
be held at 9:00 a.m. local time in Portland, Oregon on Tuesday, May 19, 1998 and
at any adjournments or postponements thereof, and to vote all the shares of
Common Stock held of record in the name of the undersigned on March 27, 1998,
with all the powers that the undersigned would possess if he were personally
present.
1. PROPOSAL 1--Election of Directors
/ / FOR all nominees listed below
(except as marked to the contrary below)
/ / WITHHOLD AUTHORITY
(to vote for all nominees listed below)
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
STRIKE A LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW.)
WARREN K. KEARNS VERN B. RYLES, JR.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR EACH OF THE
NOMINEES NAMED ABOVE.
2. PROPOSAL 2--To ratify the appointment of Coopers & Lybrand L.L.P. as the
Company's independent auditors for the year ending December 31, 1998.
FOR PROPOSAL 2 / / AGAINST PROPOSAL 2 / / ABSTAIN ON PROPOSAL 2 / /
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE APPROVAL OF
PROPOSAL 2.
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.
<PAGE>
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE COMPANY. IF NO
SPECIFIC DIRECTION IS GIVEN AS TO ANY OF THE ABOVE ITEMS, THIS PROXY WILL BE
VOTED FOR THE TWO NOMINEES NAMED IN PROPOSAL 1 AND FOR PROPOSAL 2.
Dated____________________________
_________________________________
Shareholder (print name)
_________________________________
Shareholder (sign name)
I do ( ) do not ( ) plan to attend
the meeting.
(Please check)
The shareholder signed above reserves
the right to revoke this Proxy at any
time prior to its exercise by written
notice delivered to the Company's
Secretary at the Company's corporate
offices, 12005 N. Burgard, Portland,
Oregon 97203, prior to the Annual
Meeting. The power of the Proxy holders
shall also be suspended if the
shareholder signed above appears at the
Annual Meeting and elects in writing to
vote in person.
