1
SCHEDULE 14A
(RULE 14A)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [ X ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY RULE
14A-6(E)(2))
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
L. B. FOSTER COMPANY
- - --------------------------------------------------------------------------------
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
- - --------------------------------------------------------------------------------
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of filing fee (Check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
---------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
---------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
---------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
---------------
(5) Total fee paid:
------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
----------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------
(3) Filing Party:
--------------------------------------------------
(4) Date Filed:
----------------------------------------------------
[ X ] No fee required
2
LOGO
L.B. FOSTER COMPANY
415 HOLIDAY DRIVE
PITTSBURGH, PENNSYLVANIA 15220
------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 15, 1997
To the Stockholders:
The annual meeting of stockholders of L.B. Foster Company will be held at
the Pittsburgh Green Tree Marriott, 101 Marriott Drive, Pittsburgh, Pennsylvania
on Thursday, May 15, 1997 at 11:00 a.m., local time, for the purpose of (i)
electing a board of five directors for the ensuing year, (ii) approving the
appointment of independent auditors for the year ending December 31, 1997 and
(iii) transacting such other business as may properly come before the meeting or
any adjournment thereof.
Only holders of record of the Class A Common Stock at the close of business
on March 27, 1997 will be entitled to vote at the meeting or at any adjournment
thereof. The stock transfer books will not be closed. The list of stockholders
entitled to vote will be available for examination by any stockholder, during
ordinary business hours, at the Company's principal executive offices, 415
Holiday Drive, Pittsburgh, Pennsylvania, 15220, for a period of ten days prior
to the meeting.
Stockholders are cordially invited to attend the meeting in person.
However, whether or not you expect to attend, we request that you promptly sign,
date and return the enclosed proxy card in the envelope provided to insure a
quorum for the meeting. Your proxy may be revoked at any time before it is
exercised by written notice delivered to the Company at the above address,
attention: Secretary, or by attendance at the meeting and voting in person.
David L. Voltz
Secretary
Pittsburgh, Pennsylvania
April 24, 1997
3
L.B. FOSTER COMPANY
------------------
PROXY STATEMENT
------------------
GENERAL INFORMATION
This proxy statement is furnished in connection with the solicitation of
proxies by the Board of Directors of L.B. Foster Company (the "Company") for use
at the annual meeting of stockholders to be held May 15, 1997 and at any
adjournment thereof. This proxy statement and the enclosed form of proxy and
annual report for 1996 were mailed to stockholders on or about April 24, 1997.
Any proxy given pursuant to this solicitation may be revoked at any time before
its use by written notice of revocation delivered to the Company at its
principal executive offices, 415 Holiday Drive, Pittsburgh, Pennsylvania 15220,
attention: Secretary, or by attendance at the meeting and voting in person.
At the meeting, the holders of Class A Common Stock will vote upon (i) the
election of a board of five directors to serve for the ensuing year and until
their successors are elected and qualified, (ii) approval of the independent
auditors for 1997 and (iii) any other matter which is properly presented at the
meeting. The presence, in person or by proxy, of the record holders of a
majority of the Company's outstanding Class A Common Stock is necessary to
constitute a quorum. At March 27, 1997, the record date for entitlement to vote
at the meeting, there were 10,162,738 shares of Class A Common Stock
outstanding. A quorum will therefore require the presence, in person or by
proxy, of the holders of at least 5,081,370 shares. Where a stockholder's proxy
or ballot indicates that no vote is to be cast on a particular matter (including
broker non-votes) the shares of such stockholders are nevertheless counted as
being present at the meeting for the purposes of the vote on that matter.
Only holders of record of the Class A Common Stock at the close of business
on March 27, 1997, are entitled to notice of and to vote at the meeting or at
any adjournment thereof. Such stockholders will have one vote for each share
held on that date. The Class A Common Stock does not have cumulative voting
rights. Directors shall be elected by a plurality of the votes of the shares
present in person or represented by proxy at the meeting. Other matters shall
require the affirmative vote of the majority of the shares present in person or
represented by proxy at the meeting.
If the enclosed form of proxy is properly executed and returned, it will be
voted as directed. If no directions are given, the proxy will be voted FOR the
election of the five nominees named herein as directors and FOR approval of the
independent auditors for 1997.
The cost of soliciting proxies will be borne by the Company. In addition to
solicitation by mail, proxies may be solicited personally or by telephone or
telegram by officers or employees of the Company. The Company does not expect to
pay any compensation for the solicitation of proxies, but under arrangements
made with brokers, custodians, nominees and fiduciaries to send proxy material
to the beneficial owners of shares held by them, the Company may reimburse them
for their expenses in so doing.
4
PRINCIPAL STOCKHOLDERS
The following table sets forth information with respect to each stockholder
who, to the Company's knowledge, has sole or shared voting or investment power
with respect to more than 5% of the Company's outstanding Class A Common Stock.
This information is based upon the latest report furnished to the Company by
such stockholder and may not be current:
NUMBER OF PERCENT OF
NAME ADDRESS SHARES CLASS
- - ---- ------- ---------- ----------
The TCW Group, Inc. 865 South Figueroa Street 924,500 9.10
Los Angeles, CA 90017
Dimensional Fund Advisors Inc. 1299 Ocean Avenue, 11th Floor 648,600(a) 6.38
Santa Monica, CA 90401
Maxus Investment Group 28601 Chagrin Boulevard, Suite 500 748,400(b) 7.36
Cleveland, Ohio 44122
Quaker Capital Management The Arrott Building 639,900(c) 6.30
Corporation 401 Wood Street, Suite 1300
Pittsburgh, PA 15222
U.S. Bancorp 111 S.W. Fifth Avenue 647,800(d) 6.37
Portland, OR 97204
- - ---------
(a) These shares reportedly are owned by investment advisory clients for which
Dimensional Fund Advisors Inc. serves as investment manager.
(b) These shares are reportedly owned by investment clients of affiliated
companies of Maxus Investment Group.
(c) Quaker Capital Management Corporation and/or its principals reportedly own
directly 179,500 of these shares. The remainder reportedly are owned by
investment advisory clients for which Quaker Capital Management Corporation
serves as investment manager.
(d) Qualivest Capital Management, Inc., an investment advisory and a
wholly-owned subsidiary of the United States National Bank of Oregon which
is a wholly-owned subsidiary of U.S. Bancorp, is the beneficial owner of
249,500 shares, as a result of acting as investment advisor to The Qualivest
Funds, an investment company. An additional 398,300 shares are held by the
Trust Group of U.S. Bancorp.
2
5
ELECTION OF DIRECTORS
A board of five directors is to be elected to serve until the next annual
meeting of stockholders and until their successors are elected and qualified.
Information concerning the nominees is set forth below. The nominees are
currently serving on the Board of Directors.
NOMINEE
- - -----------------
Lee B. Foster II Mr. Foster, age 50, has been President, Chief Executive Officer and a
director of the Company since 1990.
John W. Puth Mr. Puth, age 68, has been a director of the Company since 1977. He
has been President of J.W. Puth Associates, an industrial consulting
company, since 1988. Mr. Puth is a director of Lindberg Corporation
(industrial heat treating), Brockway Standard (a container
manufacturer), System Software Assoc. (development and sale of
software), US Freightways, Inc. (carrier), Allied Products Corp.
(manufacturer of industrial products), and A.M. Castle, Inc. (metals
distributor).
William H. Mr. Rackoff, age 48, has been a director of the Company since 1996.
Rackoff........ Mr. Rackoff has been President of ASKO, INC, which designs, engineers
and manufactures custom engineered tools for the metalworking
industry, since 1981 and became Chief Executive Officer of ASKO, INC
in 1995.
Richard L. Shaw.. Mr. Shaw, age 69, has been a director of the Company since 1992. He
has served as Chairman of the Board of Michael Baker Corporation, an
engineering and construction company, since 1991. Mr. Shaw was Chief
Executive Officer of Michael Baker Corporation from 1984 until May
1992 and from September 1993 until October 1994.
James W. Mr. Wilcock, age 79, has been a director of the Company since 1983 and
Wilcock........ Chairman of the Board since 1990. Mr. Wilcock was Chairman of the
Board and Chief Executive Officer of Monitor Group, Inc. (manufacturer
of mass spectrometers) from 1990 to 1995. Mr. Wilcock is a director of
Copperweld Corp. (manufacturer of steel tubing and bi-metal products)
and Immuno Therapy Corp. (medical research and development).
The foregoing nominees were nominated by the Board of Directors and have
expressed their willingness to serve as directors if elected. However, should
any of such persons be unavailable for election, the proxies (except for proxies
that withhold authority to vote for directors) will be voted for such substitute
nominee or nominees as may be chosen by the Board of Directors, or the number of
directors may be reduced by appropriate action of the Board.
BOARD AND COMMITTEE MEETINGS
The Board of Directors held six meetings during 1996. Each incumbent
nominee attended more than seventy-five percent of the total number of meetings
held by the Board of Directors and the committees of the Board on which he
served.
Messrs. Foster, Shaw and Wilcock constitute the Executive Committee of the
Board of Directors. The Finance and Audit Committee is composed of Messrs. Shaw
(Chairman) Puth and Rackoff, the
3
6
Personnel & Compensation Committee is composed of Messrs. Puth (Chairman), Shaw
and Wilcock, and the Option Committee is composed of Messrs. Puth and Shaw.
The Finance and Audit Committee, which held two meetings during 1996, is
responsible for reviewing, with the independent auditors and management, the
work and findings of the auditors as well as the effectiveness of the Company's
internal auditors and the adequacy of the Company's internal controls and the
accounting principles employed in financial reporting. The Personnel &
Compensation Committee, which met on five occasions in 1996, is responsible for
reviewing and approving all general employee benefit programs and recommending
for approval officer compensation and organizational changes. The Option
Committee, which did not meet in 1996, is responsible for the administration of
the Company's Stock Option Plan. The Company has no standing nominating
committee of the Board of Directors. The Executive Committee met once during
1996.
DIRECTOR'S COMPENSATION
During 1996, outside directors, other than Mr. Wilcock, were paid a base
annual fee of $14,000, plus $1,000 for each Board meeting attended and $500 for
each committee meeting attended. No compensation is paid, however, for
participating in special telephonic meetings or executing unanimous consents in
lieu of meetings. In addition, Messrs. Puth, Rackoff and Shaw were granted
options during 1996 to acquire 15,000, 10,000 and 15,000 shares, respectively,
of the Company's Class A Common Stock at an exercise price of $4.125 per share.
The options are exercisable at any time for 10 years from the date of grant. For
1997, each of the outside directors, other than Mr. Wilcock will also receive
1,000 shares of the Company's Class A Common Stock. Mr. Wilcock receives an
annual fee of $75,000 for his services as Chairman of the Board. Management
directors receive no separate compensation for their services as directors.
4
7
OWNERSHIP OF SECURITIES BY MANAGEMENT
Information concerning ownership of the Company's Class A Common Stock as
of April 24, 1997 by the Company's directors and certain executive officers and
by the directors and all executive officers as a group is set forth in the
following table:
CLASS A PERCENT OF
NAME COMMON STOCK (A) CLASS (B)
- - ---- ---------------- ----------
Directors:
Lee B. Foster II...................................... 187,426 1.81
John W. Puth.......................................... 45,000 .44
William H. Rackoff.................................... 12,500 .12
Richard L. Shaw....................................... 26,000 .26
James W. Wilcock...................................... 100,500 .98
Executive Officers:
Dean A. Frenz......................................... 36,038 .36
Senior Vice President--Rail Products
Stan L. Hasselbusch................................... 33,750 .33
Senior Vice President--Construction and Tubular
Products
Roger F. Nejes........................................ 37,500 .37
Senior Vice President--Finance and Administration
William S. Cook....................................... 16,250 .16
Vice President--Strategic Planning & Acquisitions
All Directors and Executive Officers as a Group......... 622,739 5.84
- - ---------
(a) This column shows the number of shares with respect to which the named
person or group had direct or indirect sole or shared voting or investment
power, whether or not beneficially owned by him. It includes shares which
the named person or group had the right to acquire within 60 days after
April 24, 1997 through the exercise of stock options (90,000 shares for Mr.
Wilcock, 140,000 for Mr. Foster, 25,000 for Mr. Shaw, 25,000 for Mr. Puth,
10,000 for Mr. Rackoff, 25,000 for Mr. Frenz, 31,750 for Mr. Hasselbusch,
35,000 for Mr. Nejes, 16,250 for Mr. Cook and 501,000 for the directors and
executive officers of the Company as a group).
(b) The percentages in this column are based on the assumption that any shares
which the named person has the right to acquire within 60 days after April
24, 1997 have been acquired and are outstanding.
APPROVAL OF APPOINTMENT OF AUDITORS
The firm of Ernst & Young has served as the Company's independent auditors
since 1990 and has been appointed as the Company's independent auditors for the
fiscal year ending December 31, 1997. The Board of Directors recommends a vote
FOR approval of this appointment.
5
8
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth information regarding the compensation of
the Company's five most highly paid executive officers (the "Named Executive
Officers").
LONG TERM
ANNUAL COMPENSATION COMPENSATION
----------------------------------------- -------------
OTHER (1) SHARES ALL
NAME AND PRINCIPAL ANNUAL UNDERLYING OTHER (2)
POSITION YEAR SALARY BONUS COMPENSATION OPTION AWARDS COMPENSATION
- - -------------------------- ---- ------- ------ ------------ ------------- ------------
Lee B. Foster............. 1996 275,833 91,364 * 0 25,232
President & CEO 1995 261,667 53,666 * 0 20,294
1994 217,917 50,235 * 50,000 14,155
Dean A. Frenz............. 1996 157,300 34,106 * 0 13,384
Sr. VP Rail Products 1995 151,054 43,317 * 25,000 11,231
1994 141,750 27,231 * 25,000 9,065
Stan Hasslebusch.......... 1996 139,333 44,560 22,782(3) 0 11,604
Sr. VP Construction 1995 126,418 21,607 * 0 9,218
Products 1994 109,020 20,943 * 25,000 6,974
Roger Nejes............... 1996 131,000 36,159 * 0 10,118
Sr. VP Finance/ 1995 123,502 21,108 15,908(4) 0 8,345
Administration 1994 116,055 22,295 * 25,000 6,803
William S. Cook Jr........ 1996 114,300 44,036 16,924(5) 0 7,217
VP Strategic Planning & 1995 108,500 16,465 14,407(6) 0 3,989
Acquisitions 1994 103,750 14,350 * 10,000 3,238
- - ---------
(1) The amounts in this column include the cost of Company provided term life
insurance, leased car, executive Medical Reimbursement Plan, relocation
expenses and Country Club dues and fees.
(2) The amounts in this column include the Company contributions to the L.B.
Foster Voluntary Investment Plan and the Supplemental Executive Retirement
Plan.
(3) Includes relocation expenses in the amount of $13,348.
(4) Includes country club dues and fees of $4,721 and $8,370 for the company
provided leased car.
(5) Includes country club dues and fees of $4,920 and $9,251 for the company
provided leased car.
(6) Includes country club dues and fees of $4,800 and $6,919 for the company
provided leased car.
* The total is less than 10% of the executives total salary and bonus for the
year.
6
9
OPTION EXERCISES AND YEAR-END OPTION VALUES
The following table provides information on the Named Executive Officer's
unexercised stock options at December 31, 1996. The Company has not awarded any
stock appreciation rights, and no options were exercised during 1996.
NUMBER OF SHARES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT FISCAL IN-THE-MONEY OPTIONS
YEAR-END AT FISCAL YEAR-END ($)
---------------------------- ----------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- - ---- ----------- ------------- ----------- -------------
Lee B. Foster II 150,000 -- 61,100 --
Dean A. Frenz 20,000 30,000 2,688 3,313
Stan L. Hasselbusch 31,750 18,250 3,255 2,375
Roger F. Nejes 35,000 15,000 8,975 2,375
William S. Cook, Jr. 16,250 8,750 950 950
PERSONNEL & COMPENSATION COMMITTEE
AND OPTION COMMITTEE
REPORT ON EXECUTIVE COMPENSATION
The three member Personnel & Compensation Committee (the "Compensation
Committee") of the Board of Directors is composed of non-employee directors and
is generally responsible for determining the compensation of the Company's
executive officers, except for decisions made by the Option Committee concerning
stock option awards. The decisions by the Compensation Committee are then
reviewed by the full Board. This report is submitted by Messrs. Puth, Shaw and
Wilcock in their capacity as the Board's Compensation Committee, and Messrs.
Shaw and Puth in their capacity as the Option Committee, and addresses the
Company's compensation policies for 1996 as they were generally applicable to
the Company's executive officers and as they were specifically applicable to Mr.
Foster.
COMPENSATION POLICIES REGARDING EXECUTIVE OFFICERS
The Compensation Committee's policies are designed to enable the Company to
attract and retain qualified executives and to provide incentives for the
achievement of the Company's annual and long-term performance goals. The
vehicles for compensating and motivating executive officers include cash
compensation, stock options, participation in a 401(k), a supplemental executive
retirement plan and other benefits. The Company has not established a policy
with regard to Section 162(m) of the Internal Revenue Code of 1986, as amended,
since the Company has not and currently does not anticipate paying compensation
in excess of $1 million per annum to any employee.
CASH COMPENSATION
Each year the company obtains survey data in order to determine the
competitiveness of its pay structure for senior management. The surveys
considered in determining the pay scales for 1996 were published by Watson Wyatt
Data Services and covered companies that were manufacturers of durable goods
with annual sales of up to $650 million or engaged in the fabrication of metal
products with annual sales of up to $650 million. This survey data indicated
that the Company's executive officers' base salaries ranged from 14% above to
27.7% below the median base salaries for comparable positions in
7
10
the durable goods manufacturing industry and from 16.6% above to 25% below the
median base salaries for comparable positions in the metal fabrication industry.
The Company uses survey data only to establish rough guidelines for its
decisions on executive compensation. Specific decisions are then made largely on
subjective assessments of the officer's performance, the responsibilities and
importance of the officer's position within the Company and the overall
performance of the Company.
During 1996, the Company also maintained an Incentive Compensation Plan to
provide bonuses as incentives and rewards for employees. Awards to executive
officers under the Incentive Compensation Plan are based upon the Corporation's
overall profitability, the officer's grade level and base salary and, for
officers who are responsible for particular operating units, the performance of
such operating units. For 1996, awards under the Plan ranged from 11% to 38.5%
of the 1996 base compensation of the Company's executive officers. Survey data
published by Watson Wyatt Data Services indicate that the aggregate cash
compensation (including incentive compensation) paid to the Company's 13
executive officers was 20.3% below the aggregate median cash compensation paid
for 13 comparable executive positions in the durable goods manufacturing
industry and approximately 7.7% below the aggregate median cash compensation
paid for 13 comparable positions in the metal fabrication industry.
Many of the companies included in the peer group used to compare
shareholder returns are substantially larger than the Company and do not
necessarily represent the Company's most direct competition for executive
talent. Consequently, the survey data used by the Compensation Committee does
not correspond to the peer group index in the five-year Total Return graph
included in the proxy statement.
STOCK OPTION PLAN
The Company's 1985 Long-Term Incentive Plan as Amended and Restated (the
"Plan") authorizes the award of stock options and stock appreciation rights
("SAR's") to key employees, officers and directors of the Company and its
subsidiaries. The Plan is designed to motivate key employees by providing
participants with a direct, financial interest in the long-term performance of
the Company. The participants and their awards are determined by the Option
Committee of the Board of Directors. The purchase price of optioned shares must
be at least the fair market value of the common stock on the date the option is
granted, and the term of options may not exceed ten (10) years. Both "incentive
stock options" and "nonqualified stock options" may be awarded under the Plan.
Stock appreciation rights may be awarded at any time prior to six months before
the stock option's expiration date and represent the right to receive payment of
an amount not exceeding the amount by which the average of the reported high and
low sales prices of the Company's common stock on the trading day immediately
preceding the date of exercise of the SAR exceeds the option exercise price. The
exercise of a SAR cancels the related stock option. In determining the number of
options to award a participant, the Option Committee generally takes into
account, among other factors, the number of options previously awarded to the
participant.
RETIREMENT PLAN
The Company maintains the L. B. Foster Company Voluntary Investment Plan, a
salary reduction Plan qualifying under Section 401(k) of the Internal Revenue
Code, covering all salaried employees with over one (1) year of service.
Eligible employees may contribute up to 15% (10% maximum on a pre-tax
8
11
basis) of their compensation to the Plan, and the Company is required to
contribute 1% of the employee's compensation plus $.50 for each $1.00
contributed by the employee, subject to a maximum of from 4% to 6% of their
compensation. Based upon the Company's financial performance against
predetermined criteria, the Company may be required to contribute up to an
additional $.50 for each $1.00 so contributed. The Company also may make
additional discretionary contributions to the Plan. Company contributions vest
upon completion of five (5) years of service. The Company's contributions for
1996 to the Voluntary Investment Plan for Messrs. Cook, Foster, Frenz,
Hasselbusch and Nejes are included in the Summary Compensation Table. The
Company also maintains a Supplemental Executive Retirement Plan under which
executive officers may accrue benefits which approximate the benefits which the
executives cannot receive under the Voluntary Investment Plan because of
Internal Revenue Code limitations.
OTHER COMPENSATION PLANS
At various times in the past, the Company has adopted certain broad-based
employee benefit plans in which executive officers have been permitted to
participate and has adopted certain executive officer leased vehicle, life and
health insurance programs. The incremental cost to the Company of the executive
officers' benefits provided under these programs for Messrs. Cook, Foster,
Frenz, Hasselbusch and Nejes are included in the Summary Compensation Table, if
such benefits exceeded 10% of named officer's salary and bonus for the year.
Benefits under these plans are not directly or indirectly tied to Company
performance.
MR. FOSTER'S 1996 COMPENSATION
Mr. Foster is eligible to participate in the same executive compensation
plans as are available to other executive officers. On June 1, 1996, Mr.
Foster's annual base salary was increased to $280,000. According to data
published by Watson Wyatt Data Services, Mr. Foster's salary is below the median
base salary for chief executive officers of companies with annual sales of
between $100 million-$650 million in the businesses of fabricating metal
products by approximately 25% and of companies with annual sales of $100
million-$650 million engaged in the manufacture of durable goods by
approximately 13.9%. Consistent with the Compensation Committee's general
practice, there was no special attempt to set Mr. Foster's compensation in any
particular relationship to the compensation data.
9
12
As a participant in the Incentive Compensation Plan, Mr. Foster received an
award of $91,364 for 1996. Under the Plan, Mr. Foster's award primarily was
based upon the Company's pre-tax income. According to data published by Watson
Wyatt Data Services, Mr. Foster's 1996 total of base salary and incentive
compensation was approximately 40.3% below the median total cash compensation of
chief executive officers in the durable goods manufacturing industry and 44.2%
below the median total cash compensation of chief executive officers in the
metal fabrication industry.
PERSONNEL & COMPENSATION COMMITTEE
John W. Puth, Chairman
Richard L. Shaw
James W. Wilcock
OPTION COMMITTEE
John W. Puth
Richard L. Shaw
10
13
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AMONG L.B. FOSTER COMPANY, THE NASDAQ STOCK MARKET-US INDEX
AND A PEER GROUP
MEASUREMENT PERIOD L.B. FOSTER NASDAQ STOCK
(FISCAL YEAR COVERED) COMPANY PEER GROUP MARKET-US
12/91 100 100 100
12/92 96 123 116
12/93 110 175 134
12/94 108 167 131
12/96 142 180 185
12/96 126 153 227
* $100 invested on 12/31/91 in stock or index--including reinvestments of
dividends.
Fiscal year ending December 31.
The Peer Group is composed of the following steel or iron related companies
whose stocks are listed on domestic securities exchanges: Hmi Inds., Inc.,
Geneva Steel Co., Birmingham Steel Corp., LTV Corp., Bethlehem Steel Corp.,
Bayou Steel Corp., N.S. Group Steel Corp., Armco Inc., USX US Steel Group,
Inland Steel, National Std. Co., Friedman Inds. Inc., Nucor Corp., Weirton Steel
Corp., Carpenter Technology Corp., British Steel Plc., Quanex Corp., Texas Inds.
Inc., Insteel Inds. Inc., Lukens, Inc., Meridian Natl. Corp., Matec Corp.,
Precision Castparts Corp., Chaparral Steel Co., Keystone Cons. Inds. Inc.,
Oregon Steel Mills, Inc., Maverick Tube Corp., Tubos De Acero De Mexico, S.A.,
Wheeling Pittsburgh Corp., Tyler Corp. Rd., Ampco-Pittsburgh Corp.
11
14
ADDITIONAL INFORMATION
Management is not aware at this time of any other matters to be presented
at the meeting. If, however, any other matters should come before the meeting or
any adjournment thereof, the proxies will be voted in the discretion of the
proxyholders.
Representatives of Ernst & Young are expected to be in attendance at the
meeting to respond to appropriate questions from stockholders and will have an
opportunity to make a statement if they so desire.
Stockholders' proposals intended to be presented at the Company's 1998
annual meeting must be received by the Company no later than December 31, 1997
to be considered for inclusion in the Company's proxy statement and form of
proxy for that meeting.
Pittsburgh, Pennsylvania
April 24, 1997
12
15
L. B. FOSTER COMPANY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS MAY 15, 1997
The undersigned hereby appoints Lee B. Foster II and James W. Wilcock, and each
or any of them, to represent the Class A Common Stock of the undersigned at the
Annual Meeting of Stockholders of L. B. Foster Company to be held at the
Pittsburgh Green Tree Marriott, 101 Marriott Drive, Pittsburgh, Pennsylvania on
May 15, 1997 at 11:00 a.m. or at any adjournment thereof.
The shares represented by this proxy will be voted as directed by the
stockholder. If no direction is given when the duly executed proxy is returned,
such shares will be voted "FOR all Nominees" in Item 1 and "FOR" Item 2. If any
other matters should come before the meeting or any adjournment thereof, this
proxy will be voted in the discretion of the proxyholders. If any nominee for
director is unavailable for election, this proxy may be voted for a substitute
nominee chosen by the Board of Directors.
P
R
O
X
Y
(PLEASE DATE AND SIGN ON REVERSE SIDE AND RETURN PROMPTLY.)
A [ X ] PLEASE MARK YOUR
VOTES AS IN THIS
EXAMPLE USING
DARK INK ONLY.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR ALL NOMINEES"
IN ITEM 1 AND "FOR" ITEM 2.
FOR WITHHOLD AUTHORITY
all Nominees to vote for all Nominees FOR AGAINST ABSTAIN
Item 1 - Election of the following [ ] [ ] Item 2. - Approve appointment [ ] [ ] [ ]
nominees as Directors: of Ernst & Young as
L. B. Foster II, WITHHOLD AUTHORITY Independent Auditors
J. W. Puth, to vote for the following only: for 1997.
W. H. Rackoff, (Write the name of the Nominee(s)
R. L. Shaw, in the space below).
J. W. Wilcock.
---------------------------------
(PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY
PROMPTLY IN THE ENCLOSED ENVELOPE.)
Date: , 1997 Date: ,1997
- - ---------------------- ------ ------------------------- ------
SIGNATURE SIGNATURE IF HELD JOINTLY
Please sign exactly as name appears on the certificate or certificates
representing shares to be voted by this proxy, as shown on the label above.
When signing as executor, administrator, attorney, trustee, or guardian, please
give full title as such. If a corporation, please sign full corporation name by
president or other authorized officer. If a partnership, please sign in
partnership name by authorized person(s).
