Exhibit 10.19
July 28, 1999
(As Amended December 31, 2008)
Dear Senior Vice
President:
Northwest Pipe Company, an Oregon
corporation (the “Company”), considers the
establishment and maintenance of a sound and vital management to be
essential to protecting and enhancing the best interest of the
Company and its shareholders. In this connection, the Company
recognizes that, as is the case with many publicly held
corporations, the possibility of a Change in Control may exist and
that such possibility, and the uncertainty and questions which it
may raise among management, may result in the departure or
distraction of management personnel to the detriment of the Company
and its shareholders. Accordingly, the Board of Directors of the
Company (the “Board”) has determined that appropriate
steps should be taken to reinforce and encourage the continued
attention and dedication of members of the Company’s
management to their assigned duties without distraction in
circumstances arising from the possibility of a Change in Control
of the Company.
In order to induce you to remain in
the employ of the Company, this letter agreement, which has been
approved by the Board, sets forth the severance benefits which the
Company agrees will be provided to you in the event your employment
with the Company is terminated subsequent to a “Change in
Control” of the Company under the circumstances described
below.
1. Right to Terminate . The
Company or you may terminate your employment at any time, subject
to the Company’s obligations to provide the benefits
hereinafter specified in accordance with the terms
hereof.
2. Term of Agreement . This
Agreement shall commence on the date hereof and shall continue in
effect until July 19, 2009; provided, however, that commencing
on July 19, 2009 and each July 19 thereafter, the term of
this Agreement shall automatically be extended for one additional
year unless at least 90 days prior to such July 19 date, the
Company or you shall have given notice that this Agreement shall
not be extended; provided, however, that this Agreement shall
continue in effect for a period of twenty-four (24) months
beyond the term provided herein if a Change in Control, as defined
in Section 3 hereto shall have occurred during such term.
Notwithstanding anything in this Section 2 to the contrary,
this Agreement shall terminate if you or the Company terminate your
employment prior to a Change in Control as defined in
Section 3 hereof.
3. Change in Control; Person
.
3.1 For purposes of this Agreement,
a “Change in Control” shall mean the occurrence of any
of the following events:
3.1.1 The approval by the
shareholders of the Company of:
(a) any consolidation, merger or
plan of share exchange involving the Company (a
“Merger”) in which the Company is not the continuing or
surviving corporation or pursuant to which shares of Common Stock
of the Company (“Company Shares”) would be converted
into cash, securities or other property, other than a Merger
involving Company Shares in which the holders of Company Shares
immediately prior to the Merger have the same proportionate
ownership of common stock of the surviving corporation immediately
after the Merger,
(b) any sale, lease, exchange or
other transfer (in one transaction or a series of related
transactions) of all, or substantially all, the assets of the
Company; or
(c) the adoption of any plan or
proposal for the liquidation or dissolution of the
Company.
3.1.2 At any time during a period of
two consecutive years, individuals who at the beginning of such
period constituted the Board (“Incumbent Directors”)
shall cease for any reason to constitute at least a majority
thereof unless each new director elected during such two-year
period was nominated or elected by two-thirds of the Incumbent
Directors then in office and voting (with new directors nominated
or elected by two-thirds of the Incumbent Directors also being
deemed to be Incumbent Directors); or
3.1.3 Any Person (as hereinafter
defined) shall, as a result of a tender or exchange offer, open
market purchases, or privately negotiated purchases from anyone
other than the Company, have become the beneficial owner (within
the meaning of Rule 13d-3 under the Securities Exchange Act of
1934), directly or indirectly, of securities of the Company
ordinarily having the right to vote for the election of directors
(“Voting Securities”) representing thirty percent
(30%) or more of the combined voting power of the then
outstanding Voting Securities.
Notwithstanding anything in the
foregoing to the contrary, unless otherwise determined by the
Board, no Change in Control shall be deemed to have occurred for
purposes of this Agreement if (1) you acquire (other than on
the same basis as all other holders of the Company Shares) an
equity interest in an entity that acquires the Company in a Change
in Control otherwise described under subparagraph 3.1.1 above, or
(2) you are part of a group that constitutes a Person which
becomes a beneficial owner of Voting Securities in a transaction
that otherwise would have resulted in a Change in Control under
subparagraph 3.1.3 above.
3.2 For purposes of this Agreement,
the term “Person” shall mean and include any
individual, corporation, partnership, group, association or other
“person,” as such term is used in Section 13(d)(3)
or Section 14(d)(2) of the Securities Exchange Act of 1934
(the “Exchange Act”), other than the Company or any
employee benefit plan(s) sponsored by the Company.
4. Termination Following Change
In Control . If a Change in Control shall have occurred, you
shall be entitled to the benefits provided in Section 5.3
hereof upon the termination of your employment within twenty-four
(24) months after such Change in Control unless such
termination is (a) because of your death, (b) by the
Company for Cause or Disability or (c) by you other than for
Good Reason (as all such capitalized terms are hereinafter
defined).
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4.1 Disability . Termination
by the Company of your employment based on “Disability”
shall mean termination because of your absence from your duties
with the Company on a full-time basis for one hundred eighty
(180) consecutive days as a result of your incapacity due to
physical or mental illness, unless within thirty (30) days
after Notice of Termination (as hereinafter defined) is given to
you following such absence you shall have returned to the full-time
performance of your duties.
4.2 Cause . Termination by
the Company of your employment for “Cause” shall mean
termination upon (a) the willful and continued failure by you
to substantially perform your reasonably assigned duties with the
Company consistent with those duties assigned to you prior to the
Change in Control (other than any such failure resulting from your
incapacity due to physical or mental illness) which failure shall
not have been corrected within thirty (30) days after a demand
for substantial performance is delivered to you by the Chairman of
the Board or President of the Company which specifically identifies
the manner in which such executive believes that you have not
substantially performed your duties, or (b) the willful
engaging by you in illegal conduct which is materially and
demonstrably injurious to the Company. For purposes of this
paragraph 4.2, no act, or failure to act, on your part shall be
considered “willful” unless done, or omitted to be
done, by you in knowing bad faith and without reasonable belief
that your action or omission was in, or not opposed to, the best
interests of the Company. Any act, or failure to act, based upon
authority given pursuant to a resolution duly adopted by the Board
or based upon the advice of counsel for the Company shall be
conclusively presumed to be done, or omitted to be done, by you in
good faith and in the best interests of the corporation.
Notwithstanding the foregoing, you shall not be deemed to have been
terminated for Cause unless and until there shall have been
delivered to you a copy of a resolution duly adopted by the
affirmative vote of not less than two-thirds of the entire
membership of the Board at a meeting of the Board called and held
for the purpose (after reasonable notice to you and an opportunity
for you, together with your counsel, to be heard before the Board),
finding that in the good faith opinion of the Board you were guilty
of the conduct set forth above in (a) or (b) of this
paragraph 4.2 and specifying the particulars thereof in
detail.
4.3 Good Reason . Termination
by you of your employment for “Good Reason” shall mean
termination based on:
4.3.1 a change in your status,
title, position(s) or responsibilities as an officer of the Company
which, in your judgment (which shall be exercised in good faith),
constitutes an adverse change from your status, title, position(s)
and responsibilities as in effect immediately prior to the Change
in Control, or the assignment to you of any duties or
responsibilities which, in your judgment (which shall be exercised
in good faith), are inconsistent with such status, title or
position(s), or any removal of you from or any failure to reappoint
or reelect you to such position(s), except in connection with the
termination of your employment for Cause, Disability or as a result
of your death or by you other than for Good Reason;
4.3.2 a reduction by the Company in
your base salary as in effect immediately prior to the Change in
Control;
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4.3.3 the failure by the Company to
continue in effect any Plan (as hereinafter defined) in which you
are participating at the time of the Change in Control (or Plans
providing you with at least substantially similar benefits) other
than as a result of the normal expiration of any such Plan in
accordance with its terms as in effect at the time of the Change in
Control, or the taking of any action, or the failure to act, by the
Company which would adversely affect your continued participation
in any of such Plans on at least as favorable a basis to you as is
the case on the date of the Change in Control or which would
materially reduce your benefits in the future under any of such
Plans or deprive you of any material benefit enjoyed by you at the
time of the Change in Control;
4.3.4 the failure by the Company to
provide and credit you with the number of paid vacation days to
which you are then entitled in accordance with the Company’s
normal vacation policy as in effect immediat
