The weighted average grant date fair value of options granted during 2000, 1999 and 1998 was $3.85, $5.67 and $7.69, respective- ly. The weighted average purchase price and weighted average fair value of shares issued under the ESPP in 2000 were $9.93 and $11.68, respectively. Had the Company used the fair value methodology for determining compensation expense, the Company’s net income and earnings per share would approximate the pro forma amounts below (in thousands except per share data): In June 1999, the Board of Directors adopted a Shareholder Rights Plan (the “Plan”) designed to ensure fair and equal treatment for all shareholders in the event of a proposed acquisition of the Company by enhancing the ability of the Board of Directors to negotiate more effectively with a prospective acquirer, and reserved 150,000 shares of Series A Junior Participating Preferred Stock (“Preferred Stock”) for purposes of the Plan. In connection with the adoption of the Plan, the Board of Directors declared a dividend distribution of one preferred stock purchase right (a “Right”) per share of common stock, payable to shareholders of record on July 9, 1999. Each right represents the right to purchase one one-hundredth of a share of Preferred Stock at a price of $83.00, subject to adjustment. The Rights will be exercis- able only if a person or group acquires, or commences a tender offer to acquire, 15% or more of the Company’s outstanding shares of common stock. Subject to the terms of the Plan and upon the occurrence of certain events, each Right would entitle the holder to pur- chase common stock of the Company, or of an acquiring company in certain circumstances, having a market value equal to two times the exercise price of the Right. The Company may redeem the Rights at a price of $0.01 per Right under certain circumstances. From time to time, the Company is involved in litigation relating to claims arising out of its operations in the normal course of business. The Company maintains insurance coverage against potential claims in amounts, which it believes to be adequate. Management believes that it is not presently a party to any litigation, the outcome of which would have a material adverse effect on the Company’s business, financial condition, results of operations or cash flows. As of December 31, 2000, the Company had outstanding raw material purchase commitments of approximately $6.98 million. The components of the provision for income taxes are as follows: The difference between the effective income tax rate and the statutory U.S. Federal income tax rate is explained as follows: Northwest Pipe Company 23 Year Ended December 31, 2000 1999 1998 Net income - as reported $ 10,691 $ 13,285 $ 12,581 Net income - pro forma 10,420 12,887 12,244 Diluted earnings per share - as reported 1.62 2.01 1.90 Diluted earnings per share - pro forma 1.58 1.95 1.85 Year Ended December 31, 2000 1999 1998 Current: Federal $ 1,678 $ 6,845 $ 5,076 State 749 1,092 1,114 Deferred: Federal 4,077 742 1,972 State 466 85 227 $ 6,970 $ 8,764 $ 8,389 Year Ended December 31, 2000 1999 1998 Provision at statutory rate $ 61,181 $ 7,717 $ 7,340 State provision, net of federal benefit 569 766 951 Other 220 281 98 $ 6,970 $ 8,764 $ 8,389 Litigation 13. Commitments and Contingencies: Commitments 14. Income Taxes: 12. Shareholder Rights Plan: