Exhibit 10.1

SEPARATION AGREEMENT AND RELEASE

The parties to this Separation Agreement and Release (“Agreement”) are Northwest
Pipe Company (the “Company”) and Brian W. Dunham (“Dunham”).

RECITALS

A. Dunham’s employment will terminate, effective October 5, 2010.

B. Dunham elects to receive severance pay and related benefits under this
Agreement under the terms and conditions set forth below.

Therefore, in consideration of the mutual promises set forth below, the parties
agree as follows:

1. Employment Termination. Dunham’s employment with the Company is hereby
terminated, effective October 5, 2010 (the “Separation Date”).

2. Payment. Dunham has received all accrued wages owing through the Separation
Date, at which time Dunham’s stock options and RSU’s will cease to vest. As
consideration for this Agreement, and provided Dunham complies with his
obligations under Section 7, Dunham shall receive the following:

2.1 Four Hundred Ninety Thousand Dollars ($490,000), payable as salary
continuation for a period of twelve months (the “Severance Period”) in
accordance with the Company’s regular payroll schedule, and starting the first
pay period following expiration of the revocation period under Section 6. The
Company will withhold taxes on this amount in accordance with all applicable
local, state and federal laws.

2.2 Eighty Thousand Dollars ($80,000), payable in a single lump sum not later
than March 15, 2011. The Company will withhold taxes on this amount in
accordance with all applicable local, state and federal laws.

2.3 The Company will pay the first twelve months’ premiums for continuation of
Dunham’s health insurance coverage under COBRA.

2.4 Dunham agrees to repay all amounts he received as severance under this
Section 2 in the event Dunham is found by a court of competent jurisdiction to
have engaged in intentional or reckless illegal activity in connection with any
of the items of accounting practice, policy, procedures or disclosures that are
related to the investigation being conducted by the Audit Committee of the
Company’s Board of Directors.

3. Health Insurance. Dunham’s coverage under the Company’s health insurance plan
ends on October 5, 2010. If eligible, Dunham may continue full health insurance
benefits for himself and his immediate family as provided under federal COBRA
regulations. Except as set forth in Section 2, Dunham is responsible for all
payments under COBRA for continuation of health insurance benefits.

 

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4. Employee Pension and Retirement Plans. Dunham shall be entitled to Dunham’s
rights under the Company’s retirement benefit and other deferred compensation
plans as such plans, by their provisions, apply upon Dunham’s termination.

5. General Release. Except as provided below, in consideration of the benefits
provided in this Agreement, Dunham releases the Company, its directors,
officers, agents, employees, attorneys, insurers, related corporations,
successors and assigns, from any and all liability, damages or causes of action,
whether known or unknown, whether in tort, contract, or under state or federal
statute. Dunham understands and acknowledges that this release includes, but is
not limited to any claim for reinstatement, reemployment, attorneys’ fees or
additional compensation in any form, and any claim, including but not limited to
those arising under the Rehabilitation Act of 1973, Title VII of the Civil
Rights Act of 1964, the Civil Rights Act of 1991, the Post Civil War Civil
Rights Act (42 U.S.C. 1981-88), the Equal Pay Act, the Age Discrimination in
Employment Act, the Older Workers Benefit Protection Act, the Americans with
Disabilities Act, the Vietnam Era Veterans Readjustment Assistance Act, the Fair
Labor Standards Act, the Family Medical Leave Act of 1993, the Uniformed
Services Employment and Re-employment Rights Act, the Consolidated Omnibus
Budget Reconciliation Act of 1985 (COBRA), the Employee Retirement Income
Security Act of 1974 (ERISA), Executive Order 11246, as amended, and the civil
rights, employment, and labor laws of any state and any regulation under such
authorities relating to Dunham’s employment or association with the Company or
the termination of that employment and association. The parties specifically
exclude and except from this release any indemnity and advancement rights of
Dunham which arise by virtue of Dunham’s position as an officer or director of
the Company and the parties specifically exclude and exempt from this release
any rights of Dunham under any insurance or indemnity policy covering acts or
omissions of the Company’s officers and directors. This Agreement neither
creates, enhances, diminishes or extinguishes any right or entitlement that
Dunham may subsequently claim to possess with respect to his access to any
Company documents, nor any defense the Company may possess with respect to any
such claim.

6. Release of Rights Under Older Workers’ Benefit Protection Act. In accordance
with the Age Discrimination in Employment Act and Older Workers’ Benefit
Protection Act (collectively, the “Act”), Dunham acknowledges that (1) he has
been advised in writing to consult with an attorney prior to executing this
Agreement; (2) he is aware of certain rights to which he may be entitled under
the Act; (3) as consideration for executing this Agreement, Dunham has received
additional benefits and compensation of value to which he would otherwise not be
entitled; and (4) by signing this Agreement, he will not waive rights or claims
under the Act which may arise after the execution of this Agreement. Dunham
acknowledges that he has been given a period of at least 21 days from
September 9, 2010 to consider this offer. A change in the terms of this
Agreement shall not restart the 21-day consideration period. Dunham further
acknowledges that he has a period of seven days from the date of execution in
which to revoke this Agreement by written notice to Richard A. Roman, Chief
Executive Officer. In the event Dunham does not exercise his right to revoke
this Agreement, the Agreement shall become effective on the date immediately
following the seven-day waiting period described above.

 

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7. Obligations of Dunham.

7.1 Return of Company Property. Dunham agrees that, on or before the effective
date of his termination, he will return to the Company all property belonging to
the Company, including, but not limited to keys, credit cards, telephone calling
card, files, records, computer access codes, computer hardware, computer
programs, instruction manuals, business plans, and all other property and
documents which Dunham prepared or received in connection with his employment
with the Company.

7.2 Confidentiality. Dunham acknowledges that in the course of his employment
with the Company, he obtained Confidential Information, i.e., data that has been
researched, compiled, developed and/or maintained by the Company, and that is
not generally known within the industry. For the purpose of this Agreement,
Confidential Information includes, but is not limited to, trade secrets,
information, ideas, knowledge, data, or know-how related to products, processes,
software, designs, formulae, tests, research, business and/or marketing plans
and strategies, costs, profits, pricing, personnel and financial information,
capitalization and other corporate data and information, and information about
or obtained from customers, authors, suppliers, consultants, licensees, or
affiliates. Confidential Information also includes information the Company has
received from third parties in confidence. Dunham agrees that he will not use or
disclose Confidential Information, in any form, for any purpose, notwithstanding
the termination of his employment.

7.3 Disclosure of this Agreement. Dunham shall keep both the fact and terms of
this Agreement secret and confidential, except that Dunham may disclose this
Agreement as required by law, and (a) to his immediate family, (b) to his
lawyers, tax accountants and other advisors in order to seek advice about its
provisions, properly account for and report its effects, (c) to obtain
enforcement of any of its provisions, provided anyone to whom Dunham is
authorized to disclose this Agreement agrees to be bound by the terms of this
Section; and (d) if and to the extent that the Agreement has been publicly
disclosed by the Company, and except that the Company may disclose the fact and
terms of this Agreement to the extent required by public reporting obligations.

7.4 Cooperation. In the event of any litigation or investigation to which the
Company is a party, Dunham agrees to make himself reasonably available to
provide information and assistance in meetings, depositions, and other related
activities without the requirement of a subpoena. The Company will pay Dunham’s
reasonable out of pocket expenses incurred in complying with his obligations
under this Section 7.4. Nothing in this paragraph shall operate to prevent any
party from testifying truthfully under oath when compelled to do so by subpoena
or other legal process. This Agreement neither requires nor precludes any
cooperation by the Company with Dunham in his defense of any proceeding or claim
that may be pending or subsequently filed against him.

7.5 Resignation from the Board of Directors. Dunham shall resign from the Board
of Directors of the Company, effective as of the Separation Date.

7.6 Consulting Duties. Dunham agrees that during the Severance Period, he will
serve as a consultant to and as reasonably requested by the Company with respect
to such

 

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matters as may be mutually agreed upon by Dunham and the Company.
Notwithstanding the foregoing, Dunham’s services as a consultant shall not
exceed the regulatory threshold under Treas. Reg. 1.409A-1(h)(1)(ii) so as to
preclude Dunham from qualifying for the presumption that he has separated from
service from the Company.

8. Consent to Injunction. Dunham agrees that his violation of Section 7.2 shall
constitute a breach of this Agreement that will cause irreparable injury to the
Company, and that monetary damages alone would not adequately compensate the
Company for the harm suffered. Dunham agrees that the Company shall be entitled
to injunctive relief to enjoin any breach or threatened breach of Section 7.2,
in addition to any other available remedies.

9. Disparagement. Neither party shall make any malicious, disparaging or false
remarks about the other, or their respective, officers, directors, employees,
heirs or assigns. The parties further agree to refrain from making any negative
statements regarding the other to any third parties or any statements which
could be construed as having or causing a diminishing effect on the other’s
reputation, goodwill or business. For the purpose of this paragraph, the
“Company” shall mean the management and Board of Directors of Northwest Pipe
Company. Notwithstanding the foregoing, nothing in this paragraph shall operate
to prevent any party from testifying truthfully under oath when compelled to do
so by subpoena or other legal process.

10. No Admission of Liability. Dunham agrees that nothing in this Separation
Agreement and Release, its contents, and any payments made under it, will be
construed as an admission of liability on the part of Dunham or the Company.

11. Governing Law, Forum and Attorney Fees. This Agreement shall be interpreted
and enforced in accordance with the laws of the State of Washington, except to
the extent preempted by federal law, without regard to conflict of law
principles. In the event of any suit, action, arbitration or other proceeding to
interpret or enforce this Agreement, the prevailing party shall be entitled to
its attorney fees, costs, and out-of-pocket expenses, at trial and on appeal.
The exclusive jurisdiction for any action to interpret or enforce this Agreement
shall be the State of Washington. This Agreement is intended to comply with the
requirements of Section 409A of the Internal Revenue Code of 1986, as amended
(the “Code”) and the Treasury Regulations and other regulatory guidance
promulgated thereunder such that amounts payable to Dunham hereunder are exempt
from taxation under Code section 409A(a)(1). The provisions of this Agreement
shall be construed and interpreted in a manner that is consistent with such
intent. For purposes of applying Code section 409A to this Agreement, each
separately identified amount to which Dunham is entitled under this Agreement
shall be treated as a separate payment. Moreover, to the extent permissible
under Code section 409A, any series of installment payments under this Agreement
shall be treated as a right to a series of separate payments.

12. Successors and Assigns. This Agreement shall be binding upon Dunham’s heirs,
executors, administrators and other legal representatives and may be assigned
and enforced by the Company, its successors and assigns. This Agreement shall be
binding upon the Company’s successors and assigns and may be enforced by Dunham
and his heirs, executors and other legal representatives.

 

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13. Severability. The provisions of this Agreement are severable. If any
provision of this Agreement or its application is held invalid, it shall be
modified as necessary to render it valid and enforceable. If any provision of
this Agreement or its application is held invalid and cannot be modified to
render it valid and enforceable, the invalidity shall not affect other
obligations, provisions, or applications of this Agreement which can be given
effect without the invalid provisions or applications.

14. Waiver. The failure of either party to demand strict performance of any
provision of this Agreement shall not constitute a waiver of any provision,
term, covenant, or condition of this Agreement or of the right to demand strict
performance in the future.

15. Section Headings. The section headings contained herein are for reference
purposes only and will not in any way affect the meaning or interpretation of
this Agreement.

16. Entire Agreement. Except as otherwise provided in this section, this
Agreement constitutes the entire agreement between the parties and supersedes
all prior or contemporaneous oral or written understandings, statements,
representations or promises with respect to its subject matter. Dunham remains
bound by the terms of any and all prior agreements with the Company pertaining
to confidential information, non-competition, non-solicitation and assignment of
inventions. This Agreement was the subject of negotiation between the parties
and, therefore, the parties agree that the rule of construction requiring that
the agreement be construed against the drafter shall not apply to the
interpretation of this Agreement.

This Agreement is not effective until it is signed by all parties.

 

BRIAN W. DUNHAM     NORTHWEST PIPE COMPANY

 

    By:  

 

Date:  

 

    Date:  

 

 

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