Exhibit 10.4

Northwest Pipe Company 2011 Salaried Employee Cash Incentive Plan

 

I. PURPOSE

The purpose of the Northwest Pipe Company 2011 Salaried Employee Cash Incentive
Plan (“Plan”) is to enhance the ability of the Company to attract, motivate,
reward and retain its salaried employees while aligning employees’ interests
with those of the Company’s shareholders by providing additional cash
compensation to salaried employees of the Company based on the achievement of
objective performance targets.

 

II. DEFINITIONS

 

  a) “Award” means an annual incentive bonus earned by a salaried employee under
the Plan for a Year.

 

  b) “Base Salary” for a Year means the salaried employee’s annual base salary
actually received as a salaried employee for the Year. Base salary does not
include Awards under the Plan, long-term incentive awards, imputed income from
such programs as life insurance, or nonrecurring expenses such as moving
expenses. It is also based on salary before reductions for such items as
contributions under Section 401(k) of the Internal Revenue Code of 1986, as
amended.

 

  c) “Board” means the Board of Directors of the Company.

 

  d) “Committee” means the Compensation Committee of the Board.

 

  e) “Company” means Northwest Pipe Company, an Oregon Corporation, its
successors and assigns.

 

  f) “Executive Officers” means executive officers of the Company as appointed
by the Board.

 

  g) “Group” means Water Transmission Group or Tubular Products Group.

 

  h) “Income Before Income Taxes” means income before income taxes for the
Company as reflected in the Company’s audited consolidated financial statements
before extraordinary or unusual items (e.g. charges for divestiture and
restructuring activities and gains on sales) and the cumulative effect of any
change in accounting principles.

 

  i) “Maximum” for any Year, means the level of achievement, as established by
the Committee, of the Performance Criteria level necessary to earn 200% of the
target payout for the Plan.

 

  j) “Operating Income” means operating income for the Company and Group as
reflected in the Company’s audited consolidated financial statements before
extraordinary or unusual items (e.g. charges for divestiture and restructuring
activities and gains on sales) and the cumulative effect of any change in
accounting principles.

 

  k) “Performance Criteria” means:

 

  i. Income Before Taxes,

 

  ii. Operating Income, or

 

  iii. A combination of the foregoing or such other performance measures as the
Committee may approve from time to time.

 

  iv. Performance Criteria may be in respect to the performance of the
consolidated Company, a Group, or any combination of the foregoing. It may be
absolute or relative and may be expressed in terms of a progression with a
specified range.

 

  l) “Performance Goals” means the Threshold, Target and Maximum levels
specifically.

 

  m) “Plan” means this Salaried Employee Cash Incentive Plan.

 

  n) “Target” for any Year, means the level of achievement, as established by
the Committee, of the Performance Criteria necessary to earn the target payout
for the Plan.

 

  o) “Target Award Percentage” for a salaried employee with respect to any Year
means the percentage of the salaried employee’s Base Salary as established by
the Committee the salaried employee would earn as an Award for that Year upon
attainment of the Performance Targets applicable to such salaried employee.

 

  p) “Threshold” for any Year, means the minimum acceptable performance
necessary to start earning an Award, as established by the Committee of the
Performance Criteria necessary to earn any Award under the Plan.

 

  q) “Year” means the fiscal year of the Company or any other period designated
by the Committee with respect to which an Award is earned.

 

III. PLAN ADMINISTRATION

The Committee administers the Plan. The Committee has full authority to
establish the rules and regulations relating to the Plan and to interpret the
Plan and those rules and regulations. The Committee has the authority to approve
the Performance Criteria, Performance Goals and Target Award Percentages
applicable to each salaried employee. The Committee has the authority to decide
and interpret the facts in any case arising under the Plan and to make all other
determinations and to take all other actions necessary or appropriate for the
proper administration of the Plan, including the delegation of such authority or
power, where appropriate. However, the Committee is not authorized to increase
the amount of the Award that would otherwise be payable pursuant to the terms of
the Plan without the approval of the Board.

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IV. CHANGES TO THE PERFORMANCE GOALS

The Committee may change the Performance Goal(s) to reflect a change in
corporate capitalization or a corporate transaction, such as a merger,
consolidation, separation, reorganization or partial or complete liquidation.
The Committee may also change the Performance Goal(s) to reflect the occurrence
of unexpected events, such as the acquisition or disposition, product liability
judgment or such others as the Committee may determine.

 

V. EMPLOYEE ELIGIBILITY

All salaried employees of the Company are eligible for participation in the
Plan. A salaried employee must have been employed at least 90 days on the last
day of the Year to participate in that Year’s Plan. Salaried employees must
continue as an employee of the Company through the day the bonus is awarded.

 

VI. DETERMINATION AND PAYMENT OF AWARDS

 

  a) The CEO shall prepare, for Committee review and approval, schedules with
respect to each Year, which after approval will be treated as part of the Plan
for that Year, setting forth:

 

  i. The Company and Group Performance Goals, and

 

  ii. The Target Award Percentages for each salaried employee.

 

  b) The CEO shall notify each salaried employee of his or her Target Award
Percentage and Performance Goals for the Year.

 

  c) The amount of a salaried employee’s Award will vary depending on
performance. There is no Award for below Threshold performance, performance at
Target earns a 100% Target Award Percentage, and performance at Maximum earns a
200% Target Award Percentage. For performance between Threshold, Target and
Maximum, Awards are calculated by interpolating on a straight line basis between
the established goals.

 

  d) Notwithstanding anything contained in this Plan to the contrary, the
Committee in its sole discretion may reduce any Award to any salaried employee
to any amount, including zero.

 

  e) As soon as practicable after the completion of the Company’s financial
statements for the Year, the CEO shall review and approve each salaried
employee’s Award and the Committee shall review and approve any Award earned by
any Executive Officer. Each Award shall be paid in a single lump sum cash
payment as soon as practicable after the completion of the review and approval
process, generally no later than 2 1/2 months after the close of the Year in
which the Award was earned.

 

  f) 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 cash compensation
paid under the Plan to Executive Officers for the relevant Plan Years. For
purposes of this Plan, excess incentive cash compensation means the positive
difference, if any, between (i) the Award paid to the Executive Officer and
(ii) the Award that would have been made to the Executive Officer, not including
the effect of any discretionary reductions made by the Committee, had the Target
Award Percentage been calculated based on the Company’s financial statements as
restated.

 

VII. AMENDMENTS

The Committee may at any time amend (in whole or in part) the Plan.

 

VIII. TERMINATION

The Committee may terminate this Plan (in whole or in part) at any time.

 

IX. MISCELLANEOUS PROVISIONS

 

  a) This Plan is not a contract between the Company and the salaried employees.
Neither the establishment of this Plan, nor any other action taken hereunder,
shall be construed as giving any individual any right to participate in the
Plan, receive an Award or be retained in the employ of the Company. The Company
is under no obligation to continue the Plan.

 

  b) The Plan is not funded. The Plan is not required to establish any special
or separate fund, or to make any other segregation of assets, to assure payment
of Awards.

 

  c) The Company has the right to deduct from Awards paid any taxes or other
amounts required by law to be withheld.

 

  d) Nothing contained in the Plan shall limit or affect in any manner or degree
the normal and usual powers of management exercised by the executives, officers,
the Board or committees thereof. Management will continue to have the power to
change the duties or the character of employment of any employee (including any
executive) of the Company or to remove the individual from the employment of the
Company at any time, all of which rights and powers are specifically reserved.

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  e) The Plan and all rights hereunder shall be construed in accordance with and
governed by the laws of the State of Oregon.

 

  f) If all or any part of this Plan is declared, by any court, governmental
authority or arbitrator, to be unlawful or invalid, such unlawfulness or
invalidity will not serve to invalidate any portion of this Plan not declared to
be unlawful or invalid. Any section or part of a section so construed in a
manner which will give effect to the terms of such section or part of a section
to the fullest extent possible while remaining lawful and valid.

 

  g) Neither the Committee’s nor the Board’s determinations under this Plan need
to be uniform and may be made by the Committee or the Board selectively among
persons who receive, or are eligible to receive, Awards (whether or not such
persons are similarly situated).

 

X. EFFECTIVE DATE

This Plan was approved by the Committee on May 20, 2011 and is effective as of
January 1, 2011.