Document:

EX-10.2

 Exhibit 10.2 

SEPARATION AND RELEASE AGREEMENT 

This Separation and Release Agreement (“Separation Agreement”) is made by and between Neothetics, Inc. (“Company”) and
Susan Knudson (“Employee” or “You”) and shall be effective as of the Separation Date (as defined below) with respect to the following facts: 

A. Employee is presently employed by Company as Chief Financial Officer. 

B. The Company is a party to that certain Agreement and Plan of Merger and Reorganization, dated as of October 17, 2017 (the “Merger
Agreement”) by and among the Neothetics, Inc., Nobelli Merger Sub, Inc., and Evofem Biosciences, Inc. 
 C. The Employee has been
informed that, following completion of the merger pursuant to the Merger Agreement (the “Merger”), her employment will be terminated effective on January 31, 2018 (the “Separation Date”). 

D. The Company and the Employee are parties to that certain Executive Employment Agreement, dated November 14, 2014 (the “Employment
Agreement”) pursuant to which the Employee is entitled to certain severance payments in the event of termination or resignation under the circumstances described therein. 

E. Employee and Company have mutually agreed that the Company shall treat Employee’s separation from the Company as a termination without
cause within 12 months of a change in control under the Employment Agreement. 
 F. The severance payments set forth herein are exclusive of
any payment payable to you upon completion of the Merger (the “Transaction Bonus”). 
 G. The severance payments set forth herein
are in lieu of any payments otherwise payable under the Employment Agreement. 
 H. The parties desire to settle all claims and issues that
have, or could have been raised by Company or Employee in relation to Employee’s employment with Company and arising out of or in any way related to the acts, transactions or occurrences between Employee and Company to date, including, but not
limited to, Employee’s employment with Company or the termination of that employment, on the terms set forth below. 
 THEREFORE, in
consideration of the promises and mutual agreements hereinafter set forth, it is agreed by and between the undersigned as follows: 
 1.
Severance Package. In exchange for the promises set forth herein, Company agrees to provide Employee with the following payments and benefits (“Severance Package”). Employee acknowledges and agrees that this Severance Package
constitutes adequate legal consideration for the promises and representations made by Employee in this Separation Agreement. 
 1.1
Severance Payment. Company agrees to provide Employee with a severance payment equal to twelve (12) months of Employee’s base salary, Three Hundred Seventeen Thousand Dollars ($317,000), less all applicable federal and state income
and employment taxes (“Severance Payment”). The Severance Payment will be paid out in a lump sum within ten (10) days following the Separation Date. 

1.2 Payment of Group Health Benefits. Company agrees to provide Employee with a payment of additional severance in the total amount of
$24,939, payable subject to standard payroll deductions and withholdings in a lump sum within ten (10) days following the Separation Date, which is equivalent to the employer portion of your group health insurance premiums that the Company was
paying prior to the Separation Date for twelve (12) months following your Separation Date. You may, but are not obligated to, apply this additional severance payment toward the cost of COBRA premiums. 

  
 1 

 1.3 Acceleration of Vesting. Company shall cause the vesting and/or exercisability of each
of Employee’s outstanding stock awards (that are specifically identified in Exhibit A hereto) (“Stock Awards”) to be automatically accelerated on the Separation Date. All of Employee’s vested Stock Awards that are stock options
shall remain exercisable by Employee until the earlier of (i) the expiration of the stock option pursuant to its terms or (ii) March 31, 2019. Company shall be entitled to withhold applicable federal and state income and employment
taxes related to the vesting contemplated by this Section 1.3 from amounts otherwise payable pursuant to Section 1.1 and Section 1.2 of this Separation Agreement. Other than the specific Stock Awards set forth on Exhibit A, Employee
represents and agrees that no other equity or equity interest in the Company exists in to which Employee may now or later claim a right. 

1.4 No Further Payments or Benefits. You acknowledge and agree that this Agreement provides you with payments and benefits that
exceed that to which you would otherwise be entitled absent your execution of this Agreement. Furthermore, you acknowledge that, after the Separation Date, except for the Accrued Benefits (as defined below), you will be entitled to no other or
further compensation, remuneration or benefits from the Company including coverage under any benefits plans or programs sponsored by the Company or any equity rights not specifically identified in Exhibit A. Any payments made to you under this
Agreement shall be less all applicable taxes and other deductions required by law. 
 2. Accrued Benefits. On the Separation Date, the
Company will pay Employee all accrued salary and bonuses and all accrued and unused vacation earned through the Separation Date, subject to standard payroll deductions and withholdings. Employee will be reimbursed for all reasonable business
expenses Employee incurred through the Separation Date in accordance with the Company’s expense reimbursement policies. Employee must submit, on or before the Separation Date, any request for reimbursement for any such expenses, accompanied by
proper documentation, to the Company. The payments discussed in this Section shall hereinafter be considered “Accrued Benefits” and will be paid to Employee regardless of whether or not Employee executes this Agreement. 

3. General Release. 
 3.1
Effective as of the Separation Date, Employee unconditionally, irrevocably and absolutely releases and discharges Company, and any parent or subsidiary corporations, divisions or affiliated corporations, predecessors, successors, partnerships or
other affiliated entities of the foregoing, past and present, as well as their respective employees, officers, directors, shareholders, agents, and each of the successors and assigns of each such identified entities and individuals (collectively,
“Company Released Parties”), from all claims related in any way to the transactions or occurrences between them to date, to the fullest extent permitted by law, including, but not limited to, Employee’s employment with Company, the
termination of Employee’s employment, and all other losses, liabilities, claims, charges, demands and causes of action, known or unknown, suspected or unsuspected, arising directly or indirectly out of or in any way connected with
Employee’s employment with Company, and the termination of employment with Company. This release is intended to have the broadest possible application and includes, but is not limited to, any tort, contract, common law, constitutional or other
statutory claims, including, as applicable, but not limited to alleged violations of the California Labor Code, the California Fair Employment and Housing Act, Title VII of the Civil Rights Act of 1964, the Family Medical Leave Act, the California
Family Rights Act, the Americans with Disabilities Act, the Age Discrimination in Employment Act, and all claims for attorneys’ fees, costs and expenses. 

3.2 Employee expressly waives Employee’s right to recovery of any type, including damages or reinstatement, in any administrative or court
action, whether state or federal, and whether brought by Employee or on Employee’s behalf, related in any way to the matters released herein. 

3.3 The parties acknowledge that this general release is not intended to bar any claims that, by statute, may not be waived, such as
Employee’s right to file a charge with the National Labor Relations Board or Equal Employment Opportunity Commission and other similar government agencies, claims for statutory indemnity, workers’ compensation benefits or unemployment
insurance benefits, as applicable, and any challenge to the 

  
 2 

 
validity of the form of Employee’s release of claims under the Age Discrimination in Employment Act. This release does not extend to any severance or other obligations due Employee under
this Agreement or to Employee’s vested rights and benefits under the Company’s benefit plans in accordance with the terms of such plans, nor does this release waive or bar any claim by the Employee to any governmental bounty. Nothing in
this Agreement waives Employee’s rights to indemnification or any payments under any fiduciary insurance policy, if any, provided by any act or agreement of the Company, the Company’s Amended and Restated Certificate of Incorporation, as
amended, the Company’s Amended and Restated Bylaws, as amended, state or federal law or policy of insurance. 
 3.4 The parties
acknowledge that they may discover facts or law different from, or in addition to, the facts or law that they know or believe to be true with respect to the claims released in this Separation Agreement and agrees, nonetheless, that this Separation
Agreement and the releases contained in it shall be and remain effective in all respects notwithstanding such different or additional facts or the discovery of them. 

3.5 The parties declare and represent that they each intend this Separation Agreement to be complete and not subject to any claim of mistake,
and that the release herein expresses a full and complete release and they each intend the release herein to be final and complete. The parties execute this release with the full knowledge that this release covers all possible claims against Company
and the other Company Released Parties, to the fullest extent permitted by law. 
 4. California Civil Code
Section 1542 Waiver. The parties expressly acknowledge and agree that all rights under Section 1542 of the California Civil Code are expressly waived. That section provides: 

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING
THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR. 
 The parties waive any right which each have
or may have under 1542 to the full extent they may lawfully waive such rights pertaining to this general release of claims. 
 5.
Representation Concerning Filing of Legal Actions. Company and Employee represent that, as of the date of this Separation Agreement, neither has filed any lawsuits, charges, complaints, petitions, claims or other accusatory pleadings against
each other or that Employee has against the Company Released Parties, in any court or with any governmental agency, related to the matters released in this Separation Agreement. 

6. Return of Company Property. Employee understands and agrees that as a condition of receiving the Severance Package, all Company
property must be returned to Company. By signing this Separation Agreement, Employee represents that by the Settlement Date, Employee will have returned all Company property, data and information belonging to Company, including all code and computer
programs, and information of whatever nature, as well as any other materials, keys, passcodes, access cards, credit cards, computers, documents or information, including but not limited to confidential information in Employee’s possession or
control; provided, however, that Employee shall be permitted to retain his laptop computer and mobile phone once both such devices have been scrubbed clean of Company proprietary information by the Company’s information technology department.
Further, Employee represents that Employee has retained no copies thereof, including electronic copies and agrees that Employee will not use or disclose to others any confidential or proprietary information of Company. 

7. Confidentiality. This Agreement, its contents and all information pertaining to its negotiations shall remain confidential. Employee
will not disclose this Agreement or its contents to any person, other than her spouse or significant other, and her legal or tax advisor, as may otherwise be required by law, or as may be necessary to challenge an alleged breach of this Agreement in
a court of competent jurisdiction.. 
 8. Affirmation. By your signature below, you represent that: (a) you are not aware of any
unpaid wages, severance, vacation, benefits, commissions, bonuses, expense reimbursements, or other amounts owed to you by the Company, other than the Severance Package specifically promised in this Agreement, the Accrued Benefits and the
Transaction Bonus; (b) you have not been denied any request for leave to which you believe you were legally entitled, and you were not otherwise deprived of any of your rights under the FMLA or any similar state or local statute; (c) you
have not assigned or transferred, or purported to assign or transfer, to any person, entity, or individual whatsoever, any of the Released Claims; and (d) you are knowingly and voluntarily executing this Agreement waiving and releasing any
claims you may have as of the date you execute it. 

  
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 9. No Admissions. By entering into this Separation Agreement, Company, the other Company
Released Parties and Employee make no admission that they have engaged, or are now engaging, in any unlawful conduct. The parties understand and acknowledge that this Separation Agreement is not an admission of liability and shall not be used or
construed as such in any legal or administrative proceeding. 
 10. Older Workers’ Benefit Protection Act. This
Agreement is intended to satisfy the requirements of the Older Workers’ Benefit Protection Act, 29 U.S.C. sec. 626(f). Employee is advised to consult with an attorney before executing this Agreement. 

10.1 Acknowledgments/Time to Consider. Employee acknowledges and agrees that (a) Employee has read and understands the terms of
this Agreement; (b) Employee has been advised in writing to consult with an attorney before executing this Agreement; (c) Employee has obtained and considered such legal counsel as Employee deems necessary; (d) Employee has been given
twenty-one (21) days to consider whether or not to enter into this Settlement Agreement (although Employee may elect not to use the full 21-day period at
Employee’s option); and (e) by signing this Agreement, Employee acknowledges that Employee does so freely, knowingly, and voluntarily. 

10.2 Revocation/Effective Date. This Agreement shall not become effective or enforceable until the eighth day after Employee signs this
Agreement. In other words, Employee may revoke Employee’ acceptance of this Agreement within seven (7) days after the date Employee signs it. Employee’s revocation must be in writing and received by Company by the seventh day in order
to be effective. If Employee does not revoke acceptance within the seven (7) day period, Employee’s acceptance of this Agreement shall become binding and enforceable on the eighth day (“Effective Date”). 

10.3 Preserved Rights of Employee. This Agreement does not waive or release any rights or claims that Employee may have under the Age
Discrimination in Employment Act that arise after the execution of this Agreement. In addition, this Agreement does not prohibit Employee from challenging the validity of this Agreement’s waiver and release of claims under the Age
Discrimination in Employment Act of 1967, as amended. 
 11. Future Cooperation. Employee agrees to cooperate reasonably with Company,
its successors, and all Company affiliates (including Company’s outside counsel) in connection with the contemplation, prosecution and defense of all phases of existing, past and future litigation, regulatory or administrative actions about
which Company reasonably believes Employee may have knowledge or information. Employee further agrees to make herself available at mutually convenient times during regular business hours as reasonably deemed necessary by Company’s counsel.
Company shall not utilize this Section to require Employee to make herself available to an extent that it would unreasonably interfere with employment responsibilities that she may have, and shall reimburse Employee for any pre-approved reasonable business travel expenses that she incurs on Company’s behalf as a result of this Section, after receipt of appropriate documentation consistent with Company’s business expense
reimbursement policy. Employee agrees to appear without the necessity of a subpoena to testify truthfully in any legal proceedings in which Company calls her as a witness. Employee further agrees that she shall not voluntarily provide information to
or otherwise cooperate with any individual or private entity that is contemplating or pursuing litigation or any type of action or claim against Company, its successors or affiliates, or any of their current or former officers, directors, employees,
agents or representatives, except as required by law or regulation. 
 12. Severability. In the event any provision of this Separation
Agreement shall be found unenforceable, the unenforceable provision shall be deemed deleted and the validity and enforceability of the remaining provisions shall not be affected thereby. 

13. Full Defense. This Separation Agreement may be pled as a full and complete defense to, and may be used as a basis for an injunction
against, any action, suit or other proceeding that may be prosecuted, instituted or attempted by either of the parties in breach hereof. 

  
 4 

 14. Applicable Law. The validity, interpretation and performance of this Separation
Agreement shall be construed and interpreted according to the laws of the United States of America and the State of California. 
 15.
Entire Agreement; Modification. This Separation Agreement, including the surviving provisions of Company’s Employee Proprietary Information and Inventions Agreement previously signed by Employee and Exhibits A and B, is intended to be
the entire agreement between the parties and supersedes and cancels any and all other and prior agreements, written or oral, between the parties regarding this subject matter. This Separation Agreement may be amended only by a written instrument
executed by all parties hereto. 
 [Remainder of Page Left Intentionally Blank] 

  
 5 

 THE PARTIES TO THIS SEPARATION AGREEMENT HAVE READ THE FOREGOING SEPARATION AGREEMENT AND FULLY UNDERSTAND EACH
AND EVERY PROVISION CONTAINED HEREIN. WHEREFORE, THE PARTIES HAVE EXECUTED THIS SEPARATION AGREEMENT ON THE DATES SHOWN BELOW. 
  

							
	Dated: January 17, 2018	 		 	By:	 	 /s/ Susan Knudson

		 		 		 	Susan Knudson
				
		 		 		 	NEOTHETICS, INC.
				
	Dated: January 17, 2018	 		 	By:	 	 /s/ Maria Feldman

		 		 	Name:	 	Maria Feldman
		 		 	Title:	 	VP, Clinical Research + Operations, RA + QA

 [Signature Page to Separation and Release Agreement]ex_103171.htm

Exhibit 10.1

 

PERFORMANCE SHARE UNIT AGREEMENT

 

 

This PERFORMANCE SHARE UNIT AGREEMENT (“Agreement”) is made and entered into as of January 15, 2018 (“Effective Date”) by and between Northwest Pipe Company (the “Company”), and XXX (“Employee”) (collectively, “the parties”).

 

RECITALS

 

The Company has determined that it would like to provide certain financial incentives to Employee in order to encourage continued employment, on the terms and subject to the conditions set forth in this Agreement.

 

AGREEMENT

 

The parties hereto hereby agree as follows:

 

1.             Performance Share Unit Grant. The Employee shall receive a Performance Share Unit (“PSU”) Grant on the following terms:

 

1.1     Grant. The Company hereby grants Employee an award of XXX PSUs, subject to all of the terms and conditions of this Agreement and the Company’s stockholder approved 2007 Stock Incentive Plan (the “Plan”). The grant of PSUs obligates the Company, upon vesting in accordance with this Agreement, to deliver to Employee one share of common stock of the Company (a “Share”) for each PSU. The number of Performance Shares that may vest and the timing of vesting of the Performance Shares shall depend upon achievement of certain performance goals and shall be determined in accordance with the Performance Matrices attached hereto as Appendix A. Unless otherwise defined herein, capitalized terms used herein shall have the meanings ascribed to them in the Plan.

 

1.2     Company’s Obligation to Pay. Unless and until the PSUs have vested in the manner set forth in Sections 1.3 through 1.5, Employee will have no right to payment of such PSUs. Prior to actual payment of any vested PSUs, such PSUs will represent an unsecured obligation. Payment of any vested PSUs shall be made only in whole Shares.

 

1.3     Vesting Schedule. Except as provided in Sections 1.4 and 1.5, the PSUs awarded by this Agreement shall vest in accordance with the vesting provisions set forth in Appendix A. PSUs shall not vest unless the Employee has been continuously employed by the Company or by one of its subsidiaries from the Effective Date until the date the PSUs vest in accordance with the provisions of this Agreement.

 

1.4     Change in Control. In the event a change in control of the Company (as defined in Appendix B) occurs at any time prior to March 29, 2019, the PSUs will be immediately vested.

 

1.5     Committee Discretion. The Compensation Committee of the Company’s Board of Directors (the “Committee”), in its discretion, may accelerate the vesting of the PSUs or any portion thereof at any time, subject to the terms of the Plan. If so accelerated, such PSUs will be considered as having vested as of the date specified by the Committee.

 

 

 

 

1.6     Payment after Vesting. Any PSUs that vest in accordance with Sections 1.3 through 1.5 will be paid to the Employee as soon as practicable following the date of vesting, subject to Section 1.10.

 

1.7     Clawback Provision. 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 share compensation granted to Employee per this Agreement. Excess share compensation means the positive difference, if any, between (1) the award paid to Employee, and (ii) the award that would have been paid to you had the award been calculated based on the Company’s financial statements as restated. 

 

1.8     Forfeiture. Notwithstanding any contrary provision of this Agreement, any PSUs that have not vested pursuant to Sections 1.3 through 1.5 at the time of the Employee’s termination of service (with or without cause) with the Company and its subsidiaries will be forfeited and automatically transferred to and reacquired by the Company at no cost to the Company.

 

1.9     Death of Employee. Any distribution of Shares that vested during Employee’s lifetime which is to be made to the Employee under this Agreement after the Employee is deceased shall be made to the administrator or executor of the Employee’s estate. Any such administrator or executor must furnish the Company with (a) written notice of his or her status as transferee, and (b) evidence satisfactory to the Company to establish the validity of the transfer and compliance with any laws or regulations pertaining to said transfer.

 

1.10     Withholding of Taxes. When Shares are issued as payment for vested PSUs, the Company (or the employing Subsidiary) may withhold a portion of the Shares that have an aggregate market value sufficient to pay federal, state, local and foreign income, social insurance, employment and any other applicable taxes required to be withheld by the Company or the employing Subsidiary with respect to the Shares, unless the Company, in its sole discretion, either requires or otherwise permits the Employee to make alternate arrangements satisfactory to the Company for such withholdings in advance of the arising of any withholding obligations. The number of Shares withheld pursuant to the prior sentence will be rounded up to the nearest whole Share, with no refund for any value of the Shares withheld in excess of the tax obligation as a result of such rounding. Notwithstanding any contrary provision of this Agreement, no Shares will be issued unless and until satisfactory arrangements (as determined by the Company) have been made by the Employee with respect to the payment of any income and other taxes which the Company determines must be withheld or collected with respect to such Shares. In addition and to the maximum extent permitted by law, the Company (or the employing Subsidiary) has the right to retain without notice from salary or other amounts payable to the Employee, cash having a sufficient value to satisfy any tax withholding obligations that the Company determines cannot be satisfied through the withholding of otherwise deliverable Shares. All income and other taxes related to the PSU award and any Shares delivered in payment thereof are the sole responsibility of the Employee. By accepting this award, the Employee expressly consents to the withholding of Shares and to any additional cash withholding as provided for in this Section 1.10.

 

 

Page 2 - PSU AGREEMENT

 

 

1.11     Rights as Shareholder. Neither the Employee nor any person claiming under or through the Employee will have any of the rights or privileges of a shareholder of the Company in respect of any Shares deliverable hereunder unless and until certificates representing such Shares (which may be in book entry form) shall have been issued, recorded on the records of the Company or its transfer agents or registrars, and delivered to the Employee (including through electronic delivery to a brokerage account). After such issuance, recordation and delivery, the Employee will have all the rights of a shareholder of the Company with respect to voting such Shares and receipt of dividends and distributions on such Shares.

 

1.12     Grant is Not Transferable. This grant of Performance Shares and the rights and privileges conferred hereby may not be sold, pledged, assigned, hypothecated, transferred or disposed of in any way (whether by operation of law or otherwise) and will not be subject to sale under execution, attachment or similar process, until the Employee has been issued Shares in payment of the Performance Shares. Upon any attempt to sell, pledge, assign, hypothecate, transfer or otherwise dispose of this grant, or any right or privilege conferred hereby, or upon any attempted sale under any execution, attachment or similar process, this grant and the rights and privileges conferred hereby immediately will become null and void.

 

1.13     Restrictions on Sale of Securities. The Shares issued as payment for vested PSUs under this Agreement will be registered under U.S. federal securities laws and will be freely tradable upon receipt. However, an Employee’s subsequent sale of the Shares may be subject to any market blackout-period that may be imposed by the Company and must comply with the Company’s insider trading policies, and any other applicable securities laws.

 

1.14     Additional Conditions to Issuance of Certificates for Shares. The Company shall not be required to issue any certificate or certificates for Shares hereunder prior to fulfillment of all the following conditions: (a) the admission of such Shares to listing on all stock exchanges on which such class of stock is then listed; (b) the completion of any registration or other qualification of such Shares under any U.S. state or federal law or under the rulings or regulations of the Securities and Exchange Commission or any other governmental regulatory body, which the Committee shall, in its absolute discretion, deem necessary or advisable; (c) the obtaining of any approval or other clearance from any U.S. state or federal governmental agency, which the Committee shall, in its absolute discretion, determine to be necessary or advisable; and (d) the lapse of such reasonable period of time following the date of vesting of the PSUs as the Committee may establish from time to time for reasons of administrative convenience.

 

1.15     Modifications to the Agreement. This Agreement constitutes the entire understanding of the parties on the subjects covered. The Employee expressly warrants that Employee is not accepting this Agreement in reliance on any promises, representations, or inducements other than those contained herein. Modifications to this Agreement can be made only in an express written contract executed by a duly authorized officer of the Company. Notwithstanding anything to the contrary in the Plan or this Agreement, the Company reserves the right to revise this Agreement as it deems necessary or advisable, in its sole discretion and without the consent of the Employee, to comply with Section 409A of the Code or to otherwise avoid imposition of any additional tax or income recognition under Section 409A of the Code prior to the actual payment of Shares pursuant to this award of Performance Shares.

 

 

Page 3 - PSU AGREEMENT

 

 

1.16     Adjustments Upon Changes in Capital. The aggregate number of PSUs covered by this Agreement will be proportionally adjusted for any increase or decrease in the number of issued and outstanding Shares resulting from a stock split-up or consolidation of Shares or any like capital adjustments, or the payment of any stock dividend.

 

2.             Not a Contract of Employment. Nothing in this Agreement is intended to be construed to be a contract of employment or shall give Employee any right to continue employment for any period of time. Nothing in this Agreement is intended to require Employee to provide services to the Company for any period of time. The parties acknowledge that Employee’s employment may be terminated by either Employee or the Company at any time.

 

3.             Termination. This Agreement shall terminate upon the earlier to occur; (i) the Final Date, (ii) the Employee’s death or Disability, (iii) the termination of Employee’s employment with the Company or any successor by the Company for Cause or without Cause; or (iv) the voluntary or involuntary termination of Employee’s employment with the Company or in the event of a Change in Control.

 

4.             Miscellaneous. 

 

4.1     No Strict Construction. The language used in this Agreement shall be deemed to be the language chosen by the parties to express their mutual intent, and no rule of strict construction shall be applied against any party. 

 

4.2     Counterparts. This Agreement may be executed in separate counterparts, each of which is deemed to be an original and all of which taken together constitute one and the same agreement. Counterpart signature pages may be delivered via email.

 

4.3     Choice of Law; Jurisdiction. All issues and questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by, and construed in accordance with, the laws of the State of Oregon, without giving effect to any choice of law or conflict of law rules or principles. The parties hereby irrevocably submit to the jurisdiction of the courts of Oregon and waive any claim or defense of inconvenient or improper forum or lack of personal jurisdiction under any applicable law or decision.

 

4.4     Agreement to Arbitrate Disputes. To facilitate efficient resolution of all disputes arising out of or related in any way to the interpretation or application of this Agreement or to Employee’s employment with the Company or the termination of that employment, the Parties agree all such disputes shall be resolved exclusively, fully, and finally by binding arbitration. The parties understand and agree that pursuant to this Agreement they are waiving the right to have disputes resolved in court by a judge or jury and instead to have such disputes resolved by a neutral arbitrator. Arbitration proceedings pursuant to this provision shall occur within 50 miles of Employee’s place of employment, in accordance with the National Rules for the Resolution of Employment Disputes of the American Arbitration Association (AAA) in effect at the time a demand for arbitration is made. Those rules are available on the Internet at http://www.adr.org or by calling the AAA at 1-800-559-3222. 

 

 

Page 4 - PSU AGREEMENT

 

 

4.5     Complete Agreement; Waiver; Amendment. This Agreement and the documents cited herein constitute the parties’ entire agreement, arrangement, and understanding regarding the subject matter, superseding any prior or contemporaneous agreements, arrangements, or understandings, whether written or oral, between the Employee and the Company regarding the same subject matter; and may not be modified, amended, discharged, or terminated, nor may any of their provisions be varied or waived, except by a further signed written agreement between the parties, subject to section 1.15.

 

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the date first set forth above.

 

	
			  THE COMPANY:

			 

			  NORTHWEST PIPE COMPANY

			 

			 

			  By:    _________________________________________

			Scott Montross

			Chief Executive Officer

				
			EMPLOYEE:

			 

			 

			 

			 

			______________________________________________

			XXX

			 

			Date:

			

 

 

Page 5 - PSU AGREEMENT

 

 

Appendix A

 

2018 PSU Performance Condition

 

The information below shows the Target number of Performance Shares that will vest and be paid with respect to the 2018 financial performance in achieving levels of Earnings before Interest Expense, Income Taxes, Depreciation and Amortization (“EBITDA”) margin over the measurement period. The column captioned “Payout (% of Target”) shows the multiple or fraction of the Target Performance Shares granted to each employee that will vest and be paid at each respective level of EBITDA Margin. The actual Vesting Multiple will be determined by interpolation based on the actual EBITDA Margin. For example, if EBITDA Margin for 2018 is 9.7%, the Vesting Multiple would be 150%. 

 

EBITDA margin will be calculated using amounts as reflected in the Company’s audited consolidated financial statements before extraordinary or unusual items (e.g. charges for acquisition, divestiture and restructuring activities and gains/losses on sales) and the cumulative effect of any change in accounting principles.

 

If the Company’s Net Income before extraordinary or unusual items (e.g. charges for acquisition, divestiture and restructuring activities and gains/losses on sales) and the cumulative effect of any change in accounting principles is negative, the payout is 0%.

 

 

 

	
			2018 Target Performance Shares

			 

				
			Vest Date

			
	
			XXX

				
			March 29, 2019

			

 

 

 

	
			EBITDA Margin Performance

				
			Payout (% of Target)

			 

			
	
			10.7%

				
			200%

			
	 	 
	
			8.7%

				
			100%

			
	 	 
	
			6.7%

				
			25%

			
	 	 
	
			<6.7%

				
			0%

			

 

 

 

 

Appendix B

 

Change in Control; Person.

 

	
			A.

				
			For purposes of this Agreement, a “Change in Control” shall mean the occurrence of any of the following events:

			

 

1.       The consummation 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.

 

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.       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 A.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 A.3 above.

 

	
			B.

				
			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.

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