As filed with the Securities and Exchange Commission on June 14, 2006
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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L. B. FOSTER COMPANY
(Exact name of registrant as specified in its charter)
Pennsylvania 25-1324733
(State of incorporation) (I.R.S. Employer Identification No.)
415 Holiday Drive, Pittsburgh, Pennsylvania 15220
(Address of principal executive offices) (Zip Code)
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L. B. FOSTER COMPANY
2006 Omnibus Incentive Plan
(Full title of the plan)
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DAVID L. VOLTZ, Esq.
Vice President, General Counsel and Secretary
L. B. Foster Company
415 Holiday Drive
Pittsburgh, Pennsylvania 15220
(Name and address of agent for service)
(412) 928-3431
(Telephone number, including area code, of agent for service)
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Copy to:
MICHAEL M. LYONS, Esq.
Klett Rooney Lieber & Schorling
40th Floor, One Oxford Centre
Pittsburgh, Pennsylvania 15219
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CALCULATION OF REGISTRATION FEE
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Proposed Proposed
Amount maximum maximum
Title of securities to be offering price aggregate
to be registered registered per share* offering Amount of
price* registration fee
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Common Stock,
$.01 par value 500,000 shs. $24.06 $12,030,000 $1,287.21
==================== ============ =============== ============= ================
*Estimated in accordance with Rule 457(c) solely for the purpose of computing
the registration fee, based on the average of the high and low prices for June
7, 2006 as reported in the Nasdaq National Market.
[The Prospectus included herein is a combined prospectus pursuant to Rule 429,
relating also to Registration Statements Nos. 33-17073, 33-35152, 33-79450,
333-81535 and 333-60488 and contains the Form S-3 information required by
General Instruction C1 for Form S-8 in order for affiliates to use the
Prospectus in reoffering or reselling stock acquired by them pursuant to this
Registration Statement or Registration Statement No. 33-17073, 33-35152,
33-79450, 333-81535 or 333-60488]
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PROSPECTUS
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L. B. FOSTER COMPANY
Common Stock
($.01 Par Value)
1,500,000 Shares Offered Under The
1985 Long-Term Incentive Plan as Amended and Restated,
900,000 Shares Offered Under The
1998 Long-Term Incentive Plan as Amended and Restated
and
500,000 Shares Offered Under The 2006 Omnibus Incentive Plan
This Prospectus relates to the offer and sale of shares of Common Stock of L. B.
Foster Company (the "Company") to certain present and former officers, directors
and employees of the Company and its subsidiaries pursuant to the 1985 Long-Term
Incentive Plan as Amended and Restated (the "1985 Plan"), the 1998 Long-Term
Incentive Plan as Amended and Restated (the "1998 Plan"), and the 2006 Omnibus
Incentive Plan (the "2006 Plan"). Such persons (including "affiliates" of the
Company as defined in Rule 405 under the Securities Act of 1933) may use this
Prospectus for the reoffer or resale of such shares in brokers' transactions in
the over-the-counter market, in privately negotiated transactions, or otherwise,
and may be deemed to be "underwriters" as defined in the Securities Act of 1933
with respect to such resales. The Company will receive none of the proceeds from
such resales.
The Common Stock is traded in the over-the-counter market and is quoted in the
Nasdaq National Market (Symbol: FSTR). The Company's executive offices are
located at 415 Holiday Drive, Pittsburgh, Pennsylvania 15220 and its telephone
number is (412) 928-3431.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE
SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE
SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
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The date of this Prospectus is June 14, 2006
AVAILABLE INFORMATION
L. B. Foster Company (the "Company") is subject to the informational
requirements of the Securities Exchange Act of 1934, as amended, and the rules
and regulations thereunder (the "Exchange Act"), and in accordance therewith
files reports, proxy statements and other information with the Securities and
Exchange Commission (the "Commission"). Such material can be read and copied by
the public at the Commission's Public Reference Room at 450 5th Street, N.W.,
Washington, D.C. 20549. The public may obtain information on the operation of
the Public Reference Room by calling the Commission at 1-800-SEC-0330.
This Prospectus, which constitutes part of a Registration Statement filed
by the Company with the Commission under the Securities Act of 1933, as amended,
omits certain of the information contained in the Registration Statement.
Reference is hereby made to the Registration Statement and to the exhibits
relating thereto for further information with respect to the Company and the
securities offered hereby. The Registration Statement, including the exhibits
filed or incorporated by reference as a part thereof, may be inspected without
charge at the Public Reference Room of the Commission at 450 5th Street, N.W.,
Washington, D.C. 20549, and copies may be obtained from the Commission at
prescribed rates. Statements contained herein concerning the provisions of
documents are necessarily summaries of such documents, and each such statement
is qualified in its entirety by reference to the copy of the applicable document
filed with the Commission. Further information about the 1985 Plan, the 1998
Plan and the 2006 Plan and their administrators may be obtained by contacting
David L. Voltz, Secretary of the Company, whose address and telephone number are
set forth below.
The Commission maintains an Internet web site that contains reports, proxy
and information statements, and other information regarding issuers who file
electronically with the Commission, such as the Company. The address of that
site is http://www.sec.gov.
If a copy of the Company's annual report to shareholders for the last
fiscal year was not furnished with this Prospectus, a copy of such report may be
obtained, without charge, from the Company upon written or oral request to: L.
B. Foster Company, David L. Voltz, Secretary, 415 Holiday Drive, Pittsburgh, PA
15220, telephone number (412) 928-3431. Participants in the Plans will receive
copies of all reports, proxy statements and other communications distributed to
shareholders of the Company.
THE 1985 PLAN
The 1985 Long-Term Incentive Plan became effective January 1, 1985 and was
approved at the 1985 annual meeting of stockholders. The Board of Directors on
February 6, 1987 amended the Plan in a number of respects by adopting the 1985
Long-Term Incentive Plan as Amended and Restated, which was approved at the 1987
annual meeting of stockholders. At the 1990 annual meeting the Plan was amended
by increasing from 800,000 to 1,000,000 the maximum number of shares issuable
upon the exercise of options or stock appreciation rights. The Plan was further
amended July 30, 1992 to bring the Plan in compliance with the requirements of
Rule 16b-3 (as amended May 1, 1991) under the Securities Exchange Act of 1934,
as amended, and remove certain restrictions and procedures which are no longer
necessary in order to comply with that Rule. The July 1992 amendments had no
effect on stock options granted prior to those amendments, except to the extent
that the stock option agreement may be amended in writing in accordance with the
Plan. At the 1994 annual meeting the stockholders approved amendments to the
Plan which increased from 1,000,000 to 1,500,000 the maximum number of shares of
common stock issuable upon the exercise of options or stock appreciation rights
and extended from January 1, 1995 to January 1, 2005 the termination date of the
Plan. Finally, on May 25, 2005 the Plan was amended by deleting the authority to
award stock appreciation rights ("SARs") to optionees. No SARs or Incentive
Stock Options were awarded under the Plan. The 1985 Long-Term Incentive Plan as
Amended and Restated is hereinafter referred to as the "1985 Plan".
The 1985 Plan expired January 1, 2005; however, stock options granted prior
to the expiration date remain in effect in accordance with their terms. The
purpose of the 1985 Plan was to provide financial incentives for selected key
personnel and directors of the Company and its subsidiaries, thereby promoting
the long-term growth and financial success of the Company by (i) attracting and
retaining personnel and directors of outstanding ability, (ii) strengthening the
Company's capability to develop, maintain and direct a competent management
team, (iii) motivating key personnel to achieve long-range performance goals and
objectives and (iv) providing incentive compensation opportunities competitive
with those of other corporations.
The 1985 Plan was neither qualified under Section 401 of the Internal
Revenue Code nor subject to any provisions of the Employee Retirement Income
Security Act of 1974.
The following summary of the 1985 Plan is qualified in its entirety by
reference to the 1985 Plan, copies of which have been filed with the Commission
and furnished to the recipients of stock options.
Eligibility
The 1985 Plan authorized the granting of stock options to officers and
employees of the Company and its subsidiaries who occupied responsible
executive, professional or administrative positions and who had the capacity to
contribute to the success of the Company. Options could also be granted to
directors of the Company and its subsidiaries who were not employees of the
Company or a subsidiary. Employees were required to be in grade level 15 or
above or otherwise selected for participation. As of June 7, 2006 there were 16
participants in the 1985 Plan.
Administration
Awards to participants are administered by a committee composed of two or
more directors of the Company, each of whom is a "non-employee director" within
the meaning of Rule 16b-3 under the Securities Exchange Act of 1934, as amended,
(the "Committee"). Members of the Committee are appointed by and serve at the
pleasure of the Board of Directors. The Committee was authorized, in its
discretion but within the parameters set forth in the 1985 Plan, to determine
those officers, employees and directors who would receive awards, the number of
shares to be optioned and the time or times when awards would be made, and to
grant such awards. The Committee is authorized to interpret the terms and
provisions of the 1985 Plan. The Committee's interpretations of the awards are
final and conclusive as to all interested parties. The Committee has general
authority to interpret the Plan and establish rules and regulations for its
administration. As of the date of this Prospectus, the members of the Committee
were John W. Puth, J.W. Puth Associates, 5215 Old Orchard Road, Skokie, IL
60077, William H. Rackoff, ASKO, Inc. 501 West 7th Avenue, Homestead, Pa 15120,
Henry J. Massman IV, Massman Construction Co., 8901 State Line Road, Kansas
City, MO 64114 and G. Thomas McKane, c/o L.B. Foster Company, 415 Holiday Drive,
Pittsburgh, PA 15220.
Stock Option Grants
Up to 1,500,000 shares of Common Stock of the Company may be issued or
delivered by the Company under the 1985 Plan, which may include newly-issued or
treasury shares. The number and kind of shares that may be issued, the number of
shares subject to outstanding options, the exercise (purchase) price per share
and other relevant provisions are subject to appropriate adjustment for stock
splits, stock dividends, reverse splits, recapitalizations, a merger in which
the Company is the surviving corporation or other similar capital changes. Such
adjustment shall be as determined by the Board of Directors, whose determination
shall be binding on all persons.
Nonqualified stock options. The stock options granted under the 1985 Plan
are "nonqualified" in that they do not qualify as "incentive stock options"
within the meaning of Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code").
Terms and Provisions of Stock Options
The Committee was authorized to determine the terms and provisions of stock
options granted under the 1985 Plan, provided that (a) the exercise price could
not be less than the fair market value (as defined) of the stock on the date of
grant, as determined by the Committee, and (b) the option must expire no later
than ten years from the date of grant. The terms and provisions of option grants
were not required to be uniform. Unless otherwise provided in the stock option
agreement, (a) the options are exercisable in cumulative annual installments in
the amount of 25% of the shares optioned, commencing on the first anniversary of
the grant, (b) in the case of death, the option may be exercised by the
optionee's legal representative within 12 months after the date of death, but
only to the extent the option was exercisable at the time of death, (c) in the
case of retirement with the consent of the Company or Permanent Disability, the
option may be exercised within three years after termination of service for such
reason, but only to the extent that the option was exercisable at the time of
such termination of service and (d) if the optionee's service with the Company
or a subsidiary of the Company terminates for any reason other than death,
retirement with the consent of the Company or Permanent Disability, all options
held by the optionee will immediately terminate and may not thereafter be
exercised; provided, however, that if the optionee's service terminates more
than four years after the grant of the option and if the optionee's service is
not terminated for "cause", the optionee may exercise the option within 30 days
after such termination of service. Notwithstanding the foregoing, in no event
may any option be exercised after the expiration of ten years from the date on
which it was granted. "Cause" includes willful or gross neglect of duties or
willful misconduct in the performance of duties, so as to cause material harm to
the Company or any subsidiary as determined by the Board of Directors; fraud,
misappropriation or embezzlement in the performance of duties; or conviction of
a felony which, as determined in good faith by the Board of Directors,
constitutes a crime involving moral turpitude and results in material harm to
the Company or a subsidiary.
The Committee is authorized to determine whether an optionee has retired
from service or has suffered Permanent Disability, and its determination shall
be binding on all concerned. In the sole discretion of the Committee, a transfer
of service to an affiliate of the Company other than a subsidiary of the Company
may be deemed retirement from service with the consent of the Company. Except as
otherwise provided in the stock option agreement, an optionee's service will be
treated as continuing while the optionee is on military leave, sick leave or
other bona fide leave of absence if the period of such leave does not exceed 90
days or, if longer, the optionee's right to reestablish his or her service is
guaranteed by statute or by contract; absent such statute or contract, the
optionee's service will be deemed to have terminated on the 91st day of such
leave. The Committee is also authorized, in its discretion, to accelerate the
date on which an option may be exercised, if it determines that to do so will be
in the best interests of the Company and the optionee.
Stock option agreement. Each stock option is evidenced by a stock option
agreement in such form and containing such provisions, not inconsistent with the
provisions of the 1985 Plan, as the Committee approved. The terms and provisions
of such agreements were not required to be uniform. Each optionee should
therefore refer to his or her own stock option agreement for the terms and
provisions of the option.
Exercise of Stock Options and Disposition of Shares
Manner of exercise. Stock options may be exercised by giving written notice
of exercise to the Company specifying the number of shares to be purchased. The
notice of exercise must be accompanied by (a) payment in full of the exercise
price in cash or by certified or cashier's check or (b) a copy of irrevocable
instructions to a broker to promptly deliver to the Company the amount of sale
or loan proceeds sufficient to cover the exercise price.
Conditions to delivery of shares. The Company will not be obligated to
deliver any shares upon the exercise of an option unless and until, in the
opinion of the Company's counsel, all applicable federal, state and other laws
and regulations have been complied with. If the outstanding stock at the time of
exercise is listed on any stock exchange, no delivery will be made unless and
until the shares to be delivered have been listed or authorized for listing upon
official notice of issuance on such exchange. Nor will delivery be made until
all other legal matters in connection with the issuance and delivery of shares
have been approved by the Company's counsel. In this regard, and without
limiting the generality of the foregoing, the Company may require from the
optionee or the optionee's legal representative such investment representation
or such agreement, if any, as legal counsel for the Company may consider
necessary in order to comply with the Securities Act of 1933, as amended, the
securities laws of any state and the regulations thereunder, certificates
evidencing the shares may be required to bear a restrictive legend, a stop
transfer order may be placed with the transfer agent, and there may be
restrictions as to the number of shares that can be resold during a given period
of time and the manner of sale. Optionees or their legal representatives must
take any action reasonably requested by the Company in order to effect
compliance with all applicable securities laws and regulations and any listing
requirements.
Notice of disposition of shares. Each optionee must notify the Company when
any disposition of optioned shares, whether by sale, gift or otherwise, is made
by the optionee.
Miscellaneous Provisions
Nontransferability. No stock option awarded under the 1985 Plan is
transferable by the optionee other than by will or the laws of descent and
distribution. Any transfer contrary to this restriction will nullify the award.
Options are exercisable during the optionee's lifetime only by the optionee or
the optionee's legal representative.
Shareholder rights. An optionee has no rights as a shareholder with respect
to any stock covered by his or her option until the issuance to the optionee of
a stock certificate representing such stock.
No right to employment. Neither the establishment of the 1985 Plan nor any
action taken by the Company, the Board, or the Committee under the 1985 Plan,
nor any provision of the 1985 Plan, shall be construed as giving to any person
the right to be retained in the service of the Company or any subsidiary.
Consolidation or merger. In the event of a consolidation or a merger in
which the Company is not the surviving corporation, or any other merger in which
the shareholders of the Company exchange their shares of stock in the Company
for stock of another corporation, or in the event of complete liquidation of the
Company, or in the case of a tender offer accepted by the Board of Directors,
all outstanding options will thereupon terminate, provided that the Board may,
prior to the effective date of any such consolidation or merger, either (a) make
all outstanding options immediately exercisable or (b) arrange to have the
surviving corporation grant to the optionees replacement options on terms which
the Board determines to be fair and reasonable.
Amendments. The Board of Directors may at any time amend the 1985 Plan or
amend any outstanding option for the purpose of satisfying the requirements of
any changes in applicable laws or regulations or for any other purpose which may
at the time be permitted by law, provided that no such amendment shall result in
Rule 16b-3 under the Securities Exchange Act of 1934, as amended, becoming
inapplicable to any options or without the approval of the shareholders of the
Company (a) increase the maximum number of shares of common stock available
under the 1985 Plan (subject to adjustment as explained above), (b) reduce the
exercise price of options below the prices provided for in the 1985 Plan, (c)
extend the time within which options may be granted, or (d) extend the period of
an outstanding option beyond ten years from the date of grant. No amendment
shall adversely affect the rights of any optionee under any award theretofore
granted except upon the optionee's written consent to such amendment. Amendments
requiring the approval of shareholders may be effected by the Board subject to
such approval.
THE 1998 PLAN
On October 23, 1998, the Board of Directors adopted the 1998 Long-Term
Incentive Plan which provided for the issuance of options to acquire up to
25,000 shares of the Company's common stock. Options to acquire 25,000 shares of
common stock were subsequently awarded to outside directors of the Company. On
February 24, 1999, the Board of Directors adopted, subject to shareholder
approval, an amended and restated 1998 Long-Term Incentive Plan which, among
other things, increased the number of shares of Common Stock which may be issued
under that Plan from 25,000 to 450,000. On February 2, 2001 the Board of
Directors adopted, subject to shareholder approval, a further amended and
restated 1998 Long-Term Incentive Plan which increased the number of shares
which may be issued under the Plan from 450,000 to 900,000. That Plan was
approved at the annual meeting of shareholders on May 9, 2001. On May 25, 2005,
the Plan was amended by deleting the authority to award SARs or Incentive Stock
Options to participants and in certain other respects (as so amended, the "1998
Plan"). No SARs or Incentive Stock Options have been awarded under the 1998
Plan. The Plan will expire on October 22, 2008, unless terminated on an earlier
date by the Board. As of June 7, 2006 there were 31 participants in the 1998
Plan.
The purpose of the 1998 Plan is to provide financial incentives for
selected key personnel and directors and to enable the Company to offer
competitive compensation to them.
The 1998 Plan is neither qualified under Section 401 of the Code nor
subject to any provisions of the Employee Retirement Income Security Act of 1974
("ERISA").
The following summary of the 1998 Plan is qualified in its entirety by
reference to the 1998 Plan, copies of which have been filed with the Commission
and furnished to the recipients of stock options.
Administration
The 1998 Plan is administered by a Committee consisting of either (a) at
least two "non-employee" directors (within the meaning of Rule 16b-3 under the
Securities Exchange Act of 1934) or (b) the full Board of Directors. The
Committee currently consists of Henry J. Massman IV, G. Thomas McKane, John W.
Puth and William H. Rackoff. Within the parameters set forth in the 1998 Plan,
the Committee has the authority to determine those key employees or directors
who shall receive a discretionary award and the terms and conditions of each
such award. The Committee may also prescribe regulations for the operation of
the 1998 Plan and interpret the 1998 Plan and option agreements issued under the
1998 Plan. In addition to discretionary awards made by the Committee,
non-employee directors were automatically awarded options to acquire up to 5,000
shares of Common Stock after each annual shareholders meeting. These automatic
awards, which have been discontinued, are described below under "Automatic Stock
Options."
General
Up to 900,000 shares of Common Stock of the Company may be issued under the
1998 Plan, which may include newly issued or treasury shares. An option's
exercise price must be at least the fair market value of the shares on the day
the option is granted. Each option must be evidenced by a stock option agreement
in a form prescribed by the Committee. Options granted under the 1998 Plan are
not transferable other than by will or the laws of descent and distribution.
Options may be exercised by giving written notice of exercise to the
Company specifying the number of shares to be purchased. The notice of exercise
must be accompanied by (a) payment in full of the exercise price in cash,
certified check or other medium acceptable to the Company in its sole discretion
or (b) a copy of irrevocable instructions to a broker to promptly deliver to the
Company the amount of sale or loan proceeds sufficient to cover the exercise
price.
The number of shares that may be issued under the 1998 Plan and the number
and price of shares subject to outstanding options are subject to appropriate
adjustment for stock splits, stock dividends, reverse splits, reclassifications
and other similar events.
Each optionee must notify the Company when any disposition of optioned
shares, whether by sale, gift or otherwise, is made by the optionee.
Awards under the 1998 Plan consist of "non-qualified" stock options in that
they do not qualify as "incentive stock options" within the meaning of Section
422 of the Code.
Automatic Stock Options
Immediately after each annual meeting of shareholders, each non-employee
director who was elected at the meeting or whose term in office continued after
the meeting was automatically granted an option to purchase up to 5,000 shares
of Common Stock, subject to adjustment for any future stock splits, stock
dividends, reverse splits, reclassifications or other similar events (the
"Automatic Options"). The Automatic Options have an exercise price per share
equal to the fair market value of the Common Stock on the date of the meeting,
have a term of ten years and were immediately exercisable.
When a director has served less than five years, the director may exercise
his or her Automatic Options only within one year after termination of service,
unless the director's service is terminated due to death, disability or
retirement with the consent of the Company, in which case the options may be
exercised during their full ten year term. A director who has served five years
or longer may exercise his or her Automatic Options during their full ten year
term. Notwithstanding the foregoing, if a director is removed for cause, all of
his or her Automatic Options shall immediately terminate. On May 24, 2006, the
Company's shareholders approved the 2006 Omnibus Incentive Plan and the 1998
Plan was amended so that automatic stock options awards are no longer made.
Discretionary Stock Options
In addition to the Automatic Options, stock options may be granted to key
personnel and directors, including both employee directors and non-employee
directors, in the discretion of the Committee ("Discretionary Options").
Discretionary Options granted to directors are hereinafter referred to as
"Director Options." Discretionary Options are subject to the following
provisions of the 1998 Plan, and the terms and provisions of such options need
not be uniform:
Eligibility. Discretionary Options may be granted by the Committee to
directors or to key employees who occupy a responsible executive, sales,
professional or administrative position and, in the Committee's view, have the
capacity to contribute to the success of the Company. In addition to the
Company's non-employee directors, the Company has approximately 90 employees,
out of approximately 645 total employees, whose grade level makes them likely
candidates for option awards.
Exercise Price. The exercise price of Discretionary Options is determined
by the Committee, but shall be not less than the fair market value of the Common
Stock on the date of grant.
Term. The term of Discretionary Options is determined by the Committee, but
shall not exceed ten years from the date of grant. Director Options have the
same early-termination provisions as Automatic Options. The early-termination
provisions of the 1998 Plan as to all other Discretionary Options are the same
as those of the 1985 Plan. See "THE 1985 PLAN - Terms and Provisions of Stock
Options."
Vesting. Options granted to outside directors are immediately exercisable.
Except as otherwise provided in the option agreement, all other Discretionary
Options may be exercised in cumulative annual installments, each for one-fourth
of the total optioned shares, commencing one year from the date of grant.
Amendments and Termination
The Board of Directors may at any time amend the 1998 Plan or amend any
outstanding option for purposes of satisfying the requirements of any changes in
applicable laws or regulations or, in the case of Discretionary Options, for any
other purpose which may at the time be permitted by law; provided, however, that
no such amendment is permissible if it would result in Rule 16b-3 becoming
inapplicable to any options, nor may any such amendment adversely affect the
rights of any participant in the 1998 Plan under any option theretofore granted
to such participant except upon his or her written consent to such amendment.
The Board may terminate the 1998 Plan at any time. However, awards made
prior to the expiration or termination of the 1998 Plan will remain in effect in
accordance with their terms. In the event of a consolidation or merger in which
the Company is not the surviving corporation, or any other merger in which the
shareholders of the Company exchange their shares of stock in the Company for
stock of another corporation, or in the event of complete liquidation of the
Company, or in the case of a tender offer accepted by the Board, all outstanding
stock options shall thereupon terminate, provided that the Board may, prior to
the effective date of any such consolidation or merger, either (a) make all
outstanding options immediately exercisable or (b) arrange to have the surviving
corporation grant to the participants replacement options on terms which the
Board shall determine to be fair and reasonable.
THE 2006 PLAN
On March 3, 2006 the Board of Directors approved the 2006 Omnibus Incentive
Plan, subject to shareholder approval. The 2006 Plan provides for the issuance
of up to 500,000 shares of the Company's Common Stock, which may include
newly-issued or treasury shares, through the exercise of stock options or the
award of restricted shares of Common Stock. The purposes of the Plan include
motivating employees and directors to achieve long-term performance goals and to
provide such employees and directors with competitive compensation. The 2006
Plan is neither qualified under Section 401 of the Code nor subject to any
provisions of ERISA. As of June 1, 2006, there were 5 participants in the 2006
Plan.
Administration
The Plan is administered by a committee (the "Committee") consisting of
either (a) at least two "non-employee" directors (within the meaning of Rule
16b-3 under the Securities Exchange Act of 1934) or (b) the full Board of
Directors. The Compensation Committee of the Board, which currently consists of
Messrs. Massman, McKane, Puth and Rackoff, currently administers the Plan.
Within the parameters set forth in the Plan, the Committee has the authority to
determine those key employees and directors who shall receive a discretionary
award and the terms and conditions of each such award. The Committee may also
prescribe regulations for the operation of the Plan and interpret the Plan and
option or restricted stock agreements issued under the Plan. These automatic
awards are described below. Stock options and stock awards may be granted, in
the Committee's discretion, to key personnel and directors, including both
employee and non-employee directors in the discretion of the Committee. Stock
options and stock awards granted to non-employee directors are hereinafter
respectively referred to as "Director Options" and "Director Awards." The
provisions of stock options and stock awards need not be uniform.
Stock Options
The exercise price of stock options is determined by the Committee, but
shall be not less than the last reported sale price of the Common Stock on the
NASDAQ National Market on the date of grant. The exercise price is payable in
cash or other medium acceptable to the Company. The term of options is
determined by the Committee, but shall not exceed ten years from the date of
grant.
Except as otherwise provided in the option agreement, options, other than
Director Options, will terminate 30 days after termination of the optionee's
employment with the Company for any reason other than death, permanent
disability or retirement with the consent of the Company. Director Options are
immediately exercisable for a period of ten years from the date of the award.
Except as otherwise provided in the option agreement, other discretionary
options may be exercised in cumulative annual installments, each for one-fourth
of the total optioned shares, commencing one year from the date of grant.
Stock Awards
Commencing with the May 24, 2006 annual meeting, at each annual meeting of
shareholders each non-employee director automatically will be granted a Director
Award of 3,500 shares of fully vested Common Stock.
Awards may also be granted to key personnel and directors in the discretion
of the Committee. Such stock awards will become vested and/or saleable pursuant
to the terms of the applicable stock award agreement approved by the Committee.
Amendments and Termination
The Board may at any time amend the Plan or amend any outstanding award
agreement for the purpose of satisfying any legal requirement or for any other
legal permissible purpose; provided that an amendment shall not be deemed
permissible if it would result in Rule 16b-3 under the Securities Exchange Act
of 1934, as amended, being inapplicable to any award. The Board may terminate
the Plan at any time, but no such termination shall adversely affect the rights
of any participant under any award previously granted in which the participant
has a vested interest, except upon his or her written consent.
In the event of a stock dividend, recapitalization or merger in which the
Company is the surviving corporation or other similar capital change, the number
and shares of stock then outstanding or to be awarded thereunder, the maximum
number of shares of stock or securities which may be issued on the exercise of
options granted under the Plan, the exercise price and other relevant provisions
shall be appropriately adjusted by the Board. In the event of a consolidation or
a merger in which the Company is not the surviving corporation, or any other
merger in which the shareholders of the Company exchange their shares of stock
in the Company for stock of another corporation, or in the event of a complete
liquidation of the Company, or in the case of a tender offer accepted by the
Board of Directors, all outstanding options shall thereupon terminate, provided
that the Board may, prior to the effective date of any such consolidation or
merger, either (i) make all outstanding options immediately exercisable or (ii)
arrange to have the surviving corporation grant to the participants replacement
options on terms which the Board shall determine to be fair and reasonable.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
Under the Internal Revenue Code of 1986 as in effect on the date of this
Prospectus, there is no taxable income to an optionee when an option is granted
to him or her under the 1985, the 1998 or the 2006 Plan; however, upon exercise
of the option, the excess of the fair market value of the underlying shares on
the date of exercise over the option exercise price for such shares will be
taxable to the optionee as ordinary income. The Company will be entitled to a
corresponding tax deduction for any amounts which are taxable to an optionee as
ordinary income. If at any time an optionee is treated as receiving ordinary
income and at that time he or she is employed by the Company or any of its
affiliates, the Company may be required to withhold federal income taxes and
also may be required to withhold contributions under the Federal Insurance
Contributions Act (FICA) from either the source of such ordinary income or other
income payable to the optionee. In addition, whenever stock is to be delivered
to an optionee, the Company may (a) require the optionee to remit an amount in
cash sufficient to satisfy all federal, state and local tax withholding
requirements related thereto, (b) withhold such required withholding from
compensation otherwise due to the optionee or (c) any combination of (a) and
(b).
A grantee will not recognize any income upon the grant of restricted stock
if that stock is subject to a substantial risk of forfeiture on the date of
grant, unless the holder elects under Section 83(b) of the Code, within 30 days
of the grant, to recognize ordinary income in an amount equal to the fair market
value of the restricted stock at the time of receipt, less any amount paid for
the shares. If the Section 83(b) election is made, the holder will not be
allowed a deduction in the event that the shares are substantially forfeited. If
the election is not made, the holder will generally recognize ordinary income on
the date that the restricted stock is no longer subject to a substantial risk of
forfeiture, in an amount equal to the fair market value of those shares on that
date, less any amount paid for the shares. At the time the holder recognizes
ordinary income, the Company generally will be entitled to a deduction in the
same amount. Generally, upon a sale or other disposition of restricted stock
with respect to which the holder has recognized ordinary income (i.e., a Section
83(b) election was previously made) or the restrictions were previously removed,
the holder will recognize capital gain or loss in an amount equal to the
difference between the amount on that sale or other disposition and the holder's
basis in those shares.
Because of the complexity of the federal income tax laws and the
possibility of changes therein, and because the tax consequences to a particular
participant will at least in part depend upon his or her personal financial
situation, participants are urged to consult their personal tax advisors before
exercising their options or reselling shares acquired under the 1985 Plan, the
1998 Plan or the 2006 Plan. Participants should also consult their personal tax
advisors as to the state, local and federal estate tax consequences of such
transactions.
OUTSTANDING OPTIONS AND RESTRICTED STOCK
The following table sets forth information concerning the stock options and
restricted stock outstanding at the date of this Prospectus under the 1985 Plan,
the 1998 Plan and the 2006 Plan.
Per Share Expiration
Grant Date Exercise Price Date (1) Percent Vested
- ---------- -------------- -------- --------------
a. Options
07/30/97 4.875 07/29/07 100
08/13/98 5.25 08/12/08 100
10/14/98 3.9375 10/13/08 100
10/23/98 4.38 10/22/08 100
10/23/98 4.38 (2) 10/22/08 100
12/16/98 6.00 12/15/08 100
12/16/98 6.00 (2) 12/15/08 100
07/16/99 5.75 07/15/09 100
10/19/99 5.375 (2) 10/18/09 100
03/01/00 4.44 02/28/10 100
03/01/00 4.44 (2) 02/28/10 100
05/10/00 3.625 (2) 05/09/10 100
08/03/00 3.563(2) 08/02/10 100
02/02/01 2.75 02/01/11 100
02/02/01 2.75 (2) 02/01/11 100
05/09/01 3.65 (2) 05/08/11 100
12/12/01 4.75 (2) 12/11/11 100
05/15/02 5.50 (2) 05/14/12 100
07/26/02 4.30 (2) 07/25/12 75
12/10/02 4.10 (2) 12/09/12 75
05/13/03 4.23 (2) 05/12/13 75
05/26/04 7.81 (2) 05/25/14 100
10/22/04 8.01 10/21/14 25
12/13/04 9.30 12/12/14 25
02/16/05 9.29 (2) 02/15/15 25
05/25/05 8.97(2) 05/24/15 100
12/05/05 14.77(2)(4) 12/04/15 25
b. Restricted Stock
05/24/06 (3) N/A N/A 100
- -----------------
(1) Unless terminated on an earlier date as a result of termination of service,
death or permanent disability, as more fully set forth in the stock option
agreements.
(2) Granted under the 1998 Plan.
(3) Granted under the 2006 Plan.
(4) 25% to vest on each of 5/25/06, 5/25/07, 5/25/08 and 5/25/09.
As of June 7, 2006, options for 1,185,950 shares had been exercised under
the 1985 Plan and options for 418,575 shares had been exercised under the 1998
Plan. As of that date, no options had been granted under the 2006 Plan.
CERTAIN SELLING SECURITYHOLDERS
The following table sets forth information as of the date of this
Prospectus concerning the officers and directors of the Company who hold options
granted under the 1985 Plan, the 1998 Plan or the 2006 Plan or restricted stock
acquired under the 2006 Plan. Shares of Common Stock acquired by such officers
and directors under any of those Plans, through the exercise of stock options or
an award of restricted stock, may be resold by them using this Prospectus.
Common Common
Name Position With The Company Shares Shares
Owned Optioned
- ---- ------------------------- ------- --------
Marry L. Brumbaugh Vice President - Tubular Products 2,468 25,000
Samuel K. Fisher Senior Vice President - Rail 9,918
Donald L. Foster Senior Vice President - Construction - 41,250
Lee B. Foster II (Director) Chairman of the Board 198,641 160,000
Stan L. Hasselbusch President, Chief Executive Officer and 62,870 170,000
Director
John F. Kasel Sr. Vice President - Operations and 275 25,000
Manufacturing
Gregory W. Lippard Vice President - Rail Product Sales 1,863 -
Henry J. Massman IV Director 17,829 40,000
G. Thomas McKane Director 3,500 -
David J. Russo Senior Vice President, Chief Financial 3,669 35,000
Officer and Treasurer
Diane B. Owen Director 12,046 20,000
Linda K. Patterson Controller 3,493 15,000
John W. Puth Director 30,746 50,000
William H. Rackoff Director 46,246 40,000
David L. Voltz Vice President, General Counsel and 20,473 31,000
Secretary
LEGAL OPINION
The validity of the Common Stock offered hereby has been passed upon for
the Company by its counsel, Klett Lieber Rooney & Schorling, a Professional
Corporation, 40th Floor, One Oxford Centre, Pittsburgh, Pennsylvania 15219.
DOCUMENTS INCORPORATED BY REFERENCE
The Company's Annual Report on Form I0-K for the year ended December 31,
2005, its Quarterly Report on Form 10-Q for the quarter ended March 31, 2006,
its report on Form 8-K dated April 27, 2006, its report on Form 8-K dated May 9,
2006 and its report on Form 8-K dated May 24, 2006, and the descriptions of its
Common Stock, $.01 par value, and Common Stock purchase rights contained in the
Company's Registration Statements on Form 8-A as may from time to time be
amended, all as filed with the Securities and Exchange Commission, are
incorporated herein by reference. In addition, all documents filed by the
Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities
Exchange Act of 1934 after the date of this Prospectus, and prior to the filing
of a post-effective amendment to the Registration Statement of which this
Prospectus forms a part which indicates that all securities covered by this
Prospectus have been sold or which deregisters all such securities then
remaining unsold, shall be deemed to be incorporated herein by reference and to
be a part hereof from the date of filing of such documents. The Company will
provide without charge to each person, including any beneficial owner, to whom
this Prospectus has been delivered, upon written or oral request, a copy of any
and all of the documents incorporated by reference herein (not including
exhibits to such documents unless such exhibits are specifically incorporated by
reference into such documents). Requests for such documents should be directed
to David L. Voltz, Secretary, L. B. Foster Company, 415 Holiday Drive,
Pittsburgh, PA 15220, telephone number (412) 928-3431.
L. B. FOSTER COMPANY
1985 Long-Term Incentive Plan as Amended and Restated
1998 Long-Term Incentive Plan as Amended and Restated
2006 Omnibus Incentive Plan
No person is authorized to give any information or to make any representation
not contained in this Prospectus in connection with the offer contained herein,
and if given or made, such information or representation not contained herein
must not be relied upon as having been authorized by the company. This
Prospectus does not constitute an offer of stock in any jurisdiction where such
offer would be unlawful. The delivery of this Prospectus at any time does not
imply that the information herein is correct as of any time subsequent to its
date.
TABLE OF CONTENTS
Page
----
Available Information.............................................. 2
The 1985 Plan...................................................... 2
Eligibility.................................................... 3
Administration................................................. 3
Stock Option Grants ........................................... 4
Terms and Provisions of Stock Options ......................... 4
Exercise of Stock Options and Disposition of Shares............ 5
Miscellaneous Provisions ...................................... 6
The 1998 Plan...................................................... 6
Administration................................................. 7
General........................................................ 7
Automatic Stock Options........................................ 8
Discretionary Stock Options.................................... 8
Amendments and Termination..................................... 9
The 2006 Plan...................................................... 9
Administration................................................. 10
Stock Options ................................................. 10
Stock Awards .................................................. 10
Amendments and Termination..................................... 11
Certain Federal Income Tax Consequences ........................... 11
Outstanding Options and Restricted Stock .......................... 12
Certain Selling Securityholders.................................... 13
Legal Opinion...................................................... 15
Documents Incorporated By Reference ............................... 15
Prospectus dated June 14, 2006
PART II.
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The required statements are included in the Prospectus.
Item 4. Description of Securities.
The Common Stock is registered under Section 12 of the Exchange Act.
Item 5. Interests of Named Experts and Counsel.
None
Item 6. Indemnification of Directors and Officers.
Section 6.01 of the Company's By-Laws provides, in part, that the
Company shall, to the fullest extent permitted by Pennsylvania law, indemnify
its officers and directors in connection with any actual, threatened or
completed action, suit or proceeding arising out of their service to the Company
or to another entity at the request of the Company.
Item 7. Exemption from Registration Claimed.
No "restricted" securities will be reoffered or resold.
Item 8. Exhibits.
The following exhibits are filed as part of this registration
statement:
5 Opinion and consent of Klett Rooney Lieber & Schorling,
a Professional Corporation, filed herewith.
10.33.2 1985 Long-Term Incentive Plan as Amended and Restated,
filed as Exhibit 10.33.2 to Form 10-Q for the Quarter
Ended June 30, 2005 and incorporated herein by reference,
and standard form of stock option agreement filed as part
of Exhibit 10.33.2 to Form 10-Q for the quarter ended
March 31, 1990 and incorporated herein by reference.**
10.34 1998 Long-Term Incentive Plan as Amended and Restated,
filed as Exhibit 10.34 to Form 10-Q for the Quarter Ended
June 30, 2005 and incorporated herein by reference. **
10.35 2006 Omnibus Incentive Plan, filed herewith. **
23. Consent of Independent Auditors, filed herewith.
**Identifies management contract or compensatory plan or arrangement
required to be filed as an Exhibit.
Item 9. Undertakings.
The Company undertakes to deliver or cause to be delivered with the
prospectus to each optionee to whom the prospectus is sent or given a copy of
the Company's annual report to shareholders for its last fiscal year, unless
such optionee otherwise has received a copy of such report. If the last fiscal
year of the Company has ended within 120 days prior to the use of the
prospectus, the annual report of the Company for the preceding fiscal year may
be so delivered, but within such 120 day period the annual report for the last
fiscal year will be furnished to each such optionee. The Company further
undertakes to transmit or cause to be transmitted to all persons participating
in the 1998 Plan or the 2006 Plan, who do not otherwise receive such material as
shareholders of the Company, at the time and in the manner such material is sent
to its shareholders, copies of all reports, proxy statements and other
communications distributed to its shareholders generally.
The Company hereby undertakes that, for purposes of determining any
liability under the Securities Act of 1933, each filing of the Company's annual
report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act
of 1934 that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
The Company undertakes to remove from registration by means of a
post-effective amendment any of the registered securities which remain unsold at
the termination of the offering.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the By-Laws or otherwise, the registrant has been advised
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Pittsburgh, Commonwealth of Pennsylvania, on June 13,
2006.
L. B. FOSTER COMPANY
(Registrant)
By: /s/ David J. Russo
----------------------
David J. Russo
Senior Vice President and
Chief Financial Officer
-------------------------
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
Stan L. Hasselbusch, David J. Russo and David L. Voltz, and each of them, his
true and lawful attorneys-in-fact and agents, with full power of substitution
and resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this Registration Statement on Form S-8 and to file the same, with all
exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission under the Securities Act of 1933.
--------------------
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
Signature Title Date
- --------- ----- ----
/s/ Stan L. Hasselbusch
- -----------------------
Stan L. Hasselbusch President, Chief Executive June 13, 2006
Officer and Director
/s/ Lee B. Foster II
- ---------------------
Lee B. Foster II Director June 13, 2006
/s/ Henry J. Massman IV
- -----------------------
Henry J. Massman IV Director June 13, 2006
/s/ G. Thomas McKane
- --------------------
G. Thomas McKane Director June 13, 2006
/s/ Diane B. Owen
- -----------------
Diane B. Owen Director June 13, 2006
/s/ John W. Puth
- ----------------
John W. Puth Director June 13, 2006
/s/ William H. Rackoff
- ----------------------
William H. Rackoff Director June 13, 2006
/s/ David J. Russo
- ------------------
David J. Russo Senior Vice President and June 13, 2006
Chief Financial Officer
Exhibit 5
June 13, 2006
L. B. Foster Company
415 Holiday Drive
Pittsburgh, Pennsylvania 15220
Re: 2006 Omnibus Incentive Plan (the "Plan")
500,000 Shares of Common Stock
------------------------------
Ladies and Gentlemen:
We have acted as your counsel in connection with the registration with the
Securities and Exchange Commission (the "Commission") of 500,000 shares of your
Common Stock, $.01 par value per share (the "Shares"), that may be acquired
under the Plan by participants in the Plan.
In that connection, we have examined originals or copies certified or
otherwise identified to our satisfaction of such documents, corporate records
and other instruments as we have deemed necessary or appropriate for the
purposes of this opinion. Based on the foregoing, we are of the opinion that the
Shares, when issued or delivered, and paid for as may be required, in accordance
with the provisions of the Plan, will have been validly issued and will be fully
paid and nonassessable. In rendering this opinion we have of course assumed that
the certificates evidencing the Shares will be properly executed and
authenticated.
We consent to the filing of this opinion with the Commission as an exhibit
to the Registration Statement on Form S-8 for registration of the Shares under
the Securities Act of 1933, as amended, and to the reference to us under "LEGAL
OPINION" in the Prospectus.
Very truly yours,
/s/ KLETT ROONEY LIEBER & SCHORLING
-----------------------------------
KLETT ROONEY LIEBER & SCHORLING,
a Professional Corporation
Exhibit 10.35
L. B. FOSTER COMPANY
2006 OMNIBUS INCENTIVE PLAN*
ARTICLE I
PURPOSE, EFFECTIVE DATE AND AVAILABLE SHARES
1.1 Purpose. The purpose of this Plan is to provide financial incentives for
selected Key Personnel and Directors of L. B. Foster Company (the "Company") and
its subsidiaries, thereby promoting the long-term growth and financial success
of the Company by (i) attracting and retaining personnel and directors of
outstanding ability, (ii) strengthening the Company's capability to develop,
maintain and direct a competent management team, (iii) motivating officers to
achieve long-range performance goals and objectives, and (iv) providing
incentive compensation opportunities competitive with those of other
corporations.
1.2 Effective Date and Expiration of Plan. The Board of Directors of the Company
has adopted the Plan with an effective date March 3, 2006, subject to
shareholder approval and ratification. Unless terminated by the Board pursuant
to Section 6.3, the Plan shall expire on March 3, 2016. No Award shall be made
pursuant to the Plan after its termination date, but Awards made prior to the
termination date may extend beyond that date.
1.3 Shares Available Under the Plan. L. B. Foster Company stock to be issued
under the Plan may be authorized but unissued common stock or previously issued
shares of common stock which have been reacquired by the Company and are held in
its treasury. Subject to adjustment under Section 6.6, no more than 500,000
shares of common stock shall be issuable under the Plan. Any shares of stock
subject to an Option which for any reason is cancelled or terminated, and any
restricted stock awarded which is cancelled, shall again be available for Awards
under the Plan.
- -------------------------------
* As adopted by the Board of Directors on March 3, 2006, subject to shareholder
approval at the annual meeting on May 24, 2006.
ARTICLE II
DEFINITIONS
2.1 "Award" means, individually or collectively, any Option or Restricted Stock
Award under this Plan.
2.2 "Award Agreement" means, as applicable, either the Restricted Stock
Agreement or the Stock Option Agreement.
2.3 "Board" means the Board of Directors of L. B. Foster Company.
2.4 "Code" means the Internal Revenue Code of 1986, as amended.
2.5 "Committee" means directors of the Company, not to be less than two,
appointed by the Board, each of who is a "non-employee director" within the
meaning of Rule 16b-3 under the Securities Exchange Act of 1934, as amended. If
the Board has not appointed a Committee, "Committee" shall mean the Board.
2.6 "Company" means L. B. Foster Company and its successors and assigns.
2.7 "Director" means a director of the Company. In some instances, Plan
provisions are applied differently with respect to non-employee Directors
(within the meaning of Rule 16b-3 under the Securities Exchange Act of 1934, as
amended) and, where the term Director is so qualified to say "non-employee
Director", such Plan provisions shall be limited to such outside, non-employee
Directors.
2.8 "Disability" means a disability which results in the Participant being
unable to engage in any substantial, gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or can be expected to last for a continuous period of not less than twelve
months. The determination of whether a Participant has a Disability shall be
made in accordance with Code Section 22(e)(3), including any regulations issued
by the Internal Revenue Service thereunder.
2.9 "Effective Date" means the date on which the Plan is effective as provided
in Section 1.2.
2.10 "Fair Market Value" of the Stock as to a particular time or date shall be
the closing price of the Stock on the trading day that is the date of grant or,
if the date of grant is not a trading day, on the trading day immediately
preceding the date of grant.
2.11 "Key Personnel" means officers and employees of the Company and its
Subsidiaries who occupy responsible executive, professional, sales or
administrative positions and who have the capacity to contribute to the success
of the Company.
2.12 "Officer" means an officer of the Company or of a Subsidiary.
2.13 "Option" means an option to purchase common stock of the Company, where
such option is not a qualified (or statutory) option under Code Section 422.
2.14 "Option Price" means the price at which common stock of the Company may be
purchased under an Option as provided in Section 4.4.
2.15 "Participant" means a person to whom an Award is made under the Plan.
2.16 "Personal Representative" means the person or persons who, upon the death,
Disability or incompetency of a Participant, shall have acquired, by will or by
the laws of descent and distribution or by other legal proceedings, the right to
exercise an Option theretofore granted to such Participant.
2.17 "Plan" means this 2006 Omnibus Incentive Plan.
2.18 "Restricted Stock Agreement" means a written agreement entered into between
the Company and a Participant setting forth the terms and conditions of a
Restricted Stock Award made pursuant to Article V.
2.19 "Restricted Stock Award" means a grant of Stock to a Participant pursuant
to Article V.
2.20 "Stock" means common stock of the Company.
2.21 "Stock Option Agreement" means a written agreement entered into between the
Company and a Participant setting forth the terms and conditions of an Option
awarded pursuant to Article IV.
2.22 "Subsidiary" means a corporation or other business entity, domestic or
foreign, the majority of the voting stock or other voting interests in which is
owned directly or indirectly by the Company.
2.23 "Termination for Cause" or "Terminated for Cause" means (i) termination due
to (a) willful or gross neglect of duties or (b) willful misconduct in the
performance of such duties, so as to cause material harm to the Company or any
Subsidiary, (ii) termination due to the Participant committing fraud,
misappropriation or embezzlement in the performance of his or her duties or
(iii) termination due to the Participant committing any felony of which he or
she is convicted and which, as determined in good faith by the Board,
constitutes a crime involving moral turpitude and results in material harm to
the Company or a Subsidiary. The Committee shall make all determinations of
whether the Participant was Terminated for Cause.
ARTICLE III
ADMINISTRATION
3.1 Committee to Administer.
(a) The Plan shall be administered by the Committee. The Committee shall
have full discretionary power and authority to interpret, construe, and
administer the Plan and to establish and amend rules and regulations for its
administration. The Committee's decisions shall be final and conclusive with
respect to the interpretation of the Plan and any Award made under it.
(b) A majority of the members of the Committee shall constitute a quorum
for the conduct of business at any meeting. The Committee shall act by majority
vote of the members present at a duly convened meeting, including a telephonic
meeting in accordance with Section 1708 of the Pennsylvania Business Corporation
Law ("BCL"). Action may be taken without a meeting if written consent thereto is
given in accordance with Section 1727 of the BCL.
(c) Notwithstanding any provision herein to the contrary, to the
extent the Board is performing any Plan-related functions, including the
determination of whether a Participant has been Terminated for Cause, the
Board shall have the same discretionary power and authority to administer
the Plan as the Committee does under this Article III.
3.2 Powers of Committee.
(a) Subject to the provisions of the Plan, the Committee shall have
authority, in its discretion, to determine those Key Personnel and Directors who
shall receive Awards, the time or times when each such Award shall be made, the
type of Award to be made, and the number of shares to be subject to each Award.
(b) A Director shall not participate in a vote granting himself an Award.
(c) The Committee shall determine the terms, restrictions and provisions of
the agreement relating to each Award. The Committee may correct any defect or
supply any omission or reconcile any inconsistency in the Plan, or in any
agreement relating to an Award, in such manner and to the extent the Committee
shall determine in order to carry out the purposes and intent of the Plan,
including Section 6.7. Unless prohibited by Code Section 409A (if applicable) or
by any other applicable law, the Committee may, in its discretion, accelerate
the date on which an Option may be exercised if the Committee determines that to
do so will be in the best interests of the Company and the Participant.
(d) Notwithstanding any provision herein to the contrary, to the extent the
Board is performing any Plan-related functions, the Board shall have the same
discretionary power and authority to administer the Plan as the Committee does
under this Article III.
3.3 Awards. Awards under the Plan shall consist of Options and Restricted Stock
Awards. All Awards shall be subject to the terms and conditions of the Plan and
to such other terms and conditions consistent with the Plan as the Committee
deems appropriate. Awards need not be uniform.
3.4 Eligibility for Awards. Awards may be made to Key Personnel and Directors.
In selecting Participants and in determining the form and amount of the Award,
the Committee may give consideration to his functions and responsibilities, his
present and potential contributions to the success of the Company, the value of
his services to the Company, and other factors deemed relevant by the Committee.
ARTICLE IV
STOCK OPTIONS
4.1 Award of Stock Options. The Committee may, from time to time, subject to
Section 3.2(b) and other provisions of the Plan and such terms and conditions as
the Committee may prescribe, grant Options to any Key Personnel or Directors.
4.2 Period of Option.
(a) Except as provided in the remaining subsections of this Section 4.2 or
in the Stock Option Agreement, an Option shall be exercisable only after twelve
(12) months have elapsed from the date of grant, and after such twelve-month
waiting period, the Option may be exercised in cumulative installments in the
following manner:
(i) The Participant may purchase up to one-fourth (1/4) of the total
optioned shares at any time after one year from the date of grant and prior to
the termination of the Option.
(ii) The Participant may purchase an additional one-fourth (1/4) of the
total optioned shares at any time after two years from the date of grant and
prior to the termination of the Option.
(iii) The Participant may purchase an additional one-fourth (1/4) of the
total optioned shares at any time after three years from the date of grant and
prior to the termination of the Option.
(iv) The Participant may purchase an additional one-fourth (1/4) of the
total optioned shares at any time after four years from the date of grant and
prior to the termination of the Option.
The duration of each Option shall not be more than ten (10) years from the
date of grant.
(b) Notwithstanding the foregoing, the Committee may establish, in the
applicable Stock Option Agreement, any other period during which Options may be
exercised.
(c) Except as otherwise provided in Sections 4.6, 4.7, and 4.8 of the Plan
or in the Stock Option Agreement, an Option may not be exercised by a
Participant, other than a non-employee Director, unless such Participant is
then, and continually (except for approved sick leave, FMLA, authorized military
service, or other approved, bona fide leave of absence) after the grant of the
Option has been, an officer or employee of the Company or a Subsidiary.
(d) An Option granted to a non-employee Director, who is a Director at the
time of such grant, shall be immediately exercisable, except as may be otherwise
provided in the Option Agreement.
4.3 Stock Option Agreement. Each Option shall be evidenced by a Stock Option
Agreement in such form and containing such terms and conditions as the Committee
from time to time shall approve, except that the terms and conditions in the
Stock Option Agreement shall be consistent with those set forth herein.
4.4 Option Price and Exercise.
(a) The Option Price of Stock under each Option shall be determined by the
Committee, except that, in no event, may the Option Price be less than the Fair
Market Value (as defined under Article II of this Plan) of the Stock on the date
on which the Option is granted. Once an Option is granted, repricing of the
Option Price for an outstanding Option, whether exercisable or not exercisable,
shall not be permitted.
(b) Options may be exercised from time to time by giving written notice of
exercise to the Company specifying the number of shares to be purchased. The
notice of exercise shall be accompanied by (i) payment in full of the Option
Price in cash, certified check, or other medium accepted by the Company, in its
sole discretion, or (ii) a copy of irrevocable instructions to a broker to
promptly deliver to the Company the amount of sale or loan proceeds sufficient
to cover the Option Price. An Option shall be deemed exercised on the date the
Company receives the notice of exercise and all the requirements of this Section
4.4(b) have been fulfilled.
4.5 Delivery of Option Shares. The Company shall not be obligated to deliver any
Stock upon the exercise of an Option unless and until, in the opinion of the
Company's counsel, all applicable federal, state and other laws and regulations
have been complied with. In the event the outstanding Stock is at the time
listed on any stock exchange, no delivery shall be made unless and until the
shares to be delivered have been listed or authorized to be added to the list
upon official notice of issuance on such exchange. No delivery shall be made
until all other legal matters in connection with the issuance and delivery of
Stock have been approved by the Company's counsel. Without limiting the
generality of the foregoing, the Company may require from the Participant or
other person purchasing shares of Stock under the Plan such investment
representation or such agreement, if any, as counsel for the Company may
consider necessary in order to comply with the Securities Act of 1933, as
amended, and the regulations thereunder. Certificates evidencing the shares may
be required to bear a restrictive legend. A stop transfer order may be required
to be placed with the transfer agent, and the Company may require that the
Participant or such other person agree that any sale of the shares will be made
only on one or more specified stock exchanges or in such other manner as
permitted by the Committee.
4.6 Termination of Service.
(a) Except as otherwise provided in this Plan or in the applicable Stock
Option Agreement, if the service of a Participant, other than as a non-employee
Director, terminates for any reason other than death, permanent Disability or
retirement with the consent of the Company, all Options held by the Participant
shall expire and may not thereafter be exercised. For purposes of this section,
the employment or other service in respect to Options held by such a Participant
shall be treated as continuing intact while the Participant is on authorized
military leave, FMLA, approved sick leave, or other approved, bona fide leave of
absence (such as temporary employment with the government) if the period of such
leave does not exceed 90 days, or, if longer, so long as the Participant's right
to reestablish his service with the Company is guaranteed either by statute or
by contract. Where the period of leave exceeds 90 days and where such
Participant's right to reestablish his service is not guaranteed by statute or
by contract, his service, in the Committee's sole discretion, shall be deemed to
have terminated on the ninety-first day of such leave.
Notwithstanding anything herein to the contrary, and unless the Stock
Option Agreement provides otherwise, if the service of a Participant, other than
as a non-employee Director, terminates, other than due to a Termination for
Cause, the Participant may exercise all unexercised and vested Options within 30
days of such termination. Any Options in which such Participant is not vested at
the time of his termination shall be forfeited. Except as so exercised, such
Option shall expire at the end of such period. In no event, however, may any
Option be exercised after the expiration of ten (10) years from the date of
grant of such Option.
(b) Except as otherwise provided in the Stock Option Agreement, a
non-employee Director whose service is terminated shall be entitled to exercise
his Option until the expiration of the full term of the Option, unless the
non-employee Director has been Terminated for Cause. In the event that a
non-employee Director is Terminated for Cause, all Options held by such Director
shall terminate immediately and may not thereafter be exercised.
4.7 Death. Except as otherwise provided in the Stock Option Agreement and except
with respect to non-employee Directors as provided in Section 4.6(b), during the
twelve (12) month period following the Participant's death, any or all of the
unexercised and vested Options that the Participant was entitled to exercise
immediately prior to his death may be exercised by such Participant's executor,
administrator, or the person(s) to whom the Options are transferred by will or
the applicable laws of descent and distribution. Any Options in which such
Participant is not vested at the time of his death shall be forfeited. In no
event, however, may any such Option be exercised after the expiration of ten
(10) years from the date of grant of such Option.
4.8 Retirement or Disability. Except as otherwise provided in the applicable
Stock Option Agreement and except with respect to non-employee Directors as
provided in Section 4.6(b), if a Participant retires from service with the
consent of the Company, or suffers Disability, at a time when he is entitled to
exercise an Option, then at any time or times within three years after his
termination of service because of such retirement or Disability the Participant
may exercise such Option as to all or any of the shares which he was entitled to
purchase under the Option immediately prior to such termination. Except as so
exercised, such Option shall expire at the end of such period. In no event,
however, may any Option be exercised after the expiration of 10 years from the
date of grant of such Option.
4.9 Committee Discretion. The Committee shall have authority to determine
whether or not a Participant (including a non-employee Director) has retired
from service with the Company's consent, resigned or has suffered a Disability,
and its determination shall be binding on all concerned. In the sole discretion
of the Committee, a transfer of service to an affiliate of the Company other
than a Subsidiary (the latter type of transfer not constituting a termination of
service for purposes of the Plan) may be deemed to be a retirement from service
with the consent of the Company so as to entitle the Participant to exercise the
Option within 90 days after such transfer.
4.10 Stockholder Rights and Privileges. A Participant shall have no rights as a
shareholder with respect to any Stock covered by an Option until the issuance of
a stock certificate to the Participant representing such Stock.
ARTICLE V
RESTRICTED STOCK AWARDS
5.1 Grant of Restricted Stock Awards. In its sole discretion, the Committee may
elect to grant a Restricted Stock Award to any Key Personnel and/or Director,
including but not limited to grants derived from participation in another plan,
program or arrangement established or maintained by the Company or its
Subsidiaries. Notwithstanding anything in this Plan to the contrary, the
Committee, in its discretion, may determine that a Restricted Stock Award
granted pursuant to another plan, program or arrangement established or
maintained by the Company will not be forfeitable when issued, but may be
subject to such other terms, conditions and restrictions (including but not
limited to restrictions on the sale of stock for a two year, or other
appropriate, period), as set forth in the Award Agreement.
5.2 Vesting Requirements. The restrictions imposed on Stock granted under a
Restricted Stock Award shall lapse in accordance with the vesting requirements
specified by the Committee in the Restricted Stock Agreement, provided that the
Committee, subject to Section 6.7 and Code Section 83, may accelerate the
vesting of a Restricted Stock Award at any time. Such vesting requirements may
be based on the continued service of the Participant with the Company or its
affiliates for a specified time period (or periods), on the attainment of
specified performance goals established by the Committee in its discretion, or
on any other condition creating a substantial risk of forfeiture under Code
Section 83. If the vesting requirements of a Restricted Stock Award are not
satisfied, the Award shall be forfeited and the Stock subject to the Award shall
be returned to the Company.
5.3 Restrictions. Stock granted under any Restricted Stock Award may not be
transferred, assigned or subject to any encumbrance, pledge or charge until all
applicable restrictions are removed or have expired, unless otherwise permitted
by the Committee. Failure to satisfy any applicable restrictions shall result in
the subject Stock being forfeited and returned to the Company. The Committee may
require in a Restricted Stock Agreement that certificates representing the Stock
granted under a Restricted Stock Award bear a legend making appropriate
reference to the restrictions imposed, and that certificates representing the
Stock granted or sold under a Restricted Stock Award will remain in the physical
custody of an escrow holder until all restrictions are removed or have expired.
5.4 Rights as a Shareholder. Subject to the foregoing provisions of this Article
V and the applicable Restricted Stock Agreement, the Participant shall have all
rights of a shareholder with respect to the Stock granted to the Participant
under a Restricted Stock Award, including the right to vote the Stock and
receive all dividends and other distributions paid or made with respect thereto.
The Committee may provide in a Restricted Stock Agreement for the payment of
dividends and distributions to the Participant at such times as paid to
shareholders generally or at the times of vesting or other payment of the
Restricted Stock Award. Notwithstanding the foregoing, if the Committee
determines that the payment of dividends at any time would invoke application of
Code Section 409A and Section 6.7, the Participant shall not have any right to
receive dividends and distributions related to such Restricted Stock.
5.5 Restricted Stock Awards to Outside Directors. In addition to discretionary
Restricted Stock Awards under Section 5.1, and subject to adjustment in
accordance with Section 6.6, commencing on May 24, 2006, each non-employee
Director, elected at an annual meeting of the Company's shareholders, shall be
awarded 3,500 shares of Stock as of each date he is elected (or re-elected).
Each such Award shall be a Restricted Stock Award subject to such terms and
restrictions as shall be approved by the Committee.
5.6 Section 83(b) Election. If a Participant makes an election pursuant to Code
Section 83(b) with respect to a Restricted Stock Award, the Participant shall
file, within 30 days following the date of grant, a copy of such election with
the Company and with the Internal Revenue Service in accordance with the
regulations under Code Section 83. The Committee may provide in a Restricted
Stock Agreement that the Restricted Stock Award is conditioned upon the
Participant's making or refraining from making an election with respect to the
Award under Code Section 83(b).
5.7 Compliance with Securities Laws. Section 4.5 shall apply to all Restricted
Stock Awards.
ARTICLE VI
MISCELLANEOUS PROVISIONS
6.1 Nontransferability. No Award under the Plan shall be transferable by the
Participant other than by will or the laws of descent and distribution. Except
as provided in Section 4.7, all Options shall be exercisable during the
Participant's lifetime only by such Participant or his Personal Representative.
Any transfer contrary to this Section 6.1 will nullify the Award.
6.2 Amendments. The Committee may at any time discontinue granting Awards under
the Plan. The Board may at any time amend the Plan or amend any outstanding
Award Agreement for the purpose of satisfying the requirements of any changes in
applicable laws or regulations or for any other purpose which may at the time be
permitted by law; provided that no such amendment shall be permissible if it
would result in Rule 16b-3 under the Securities Exchange Act of 1934, as
amended, becoming inapplicable to any Award.
6.3 Termination. The Board may terminate the Plan at any time prior to its
scheduled expiration date, but no such termination shall adversely affect the
rights of any Participant under any Award theretofore granted in which he has a
vested interest without his written consent.
6.4 Nonuniform Determinations. The Committee's determinations under the Plan,
including without limitation (i) the determination of the Key Personnel and
Directors to receive Awards, (ii) the form, amount and timing of such Awards,
(iii) the terms and provisions of such Awards and (iv) the Agreements evidencing
the same, need not be uniform and may be made by it selectively among Key
Personnel and Directors who receive, or who are eligible to receive, Awards
under the Plan, whether or not such Key Personnel or Directors are similarly
situated.
6.5 No Right to Employment. Neither the action of the Board in establishing the
Plan, nor any action taken by the Committee under the Plan, nor any provision of
the Plan, shall be construed as giving to any person the right to be retained in
the employ, or as an officer or Director, of the Company or any Subsidiary.
6.6 Changes in Stock. In the event of a stock dividend, split-up, or a
combination of shares, recapitalization or merger in which the Company is the
surviving corporation or other similar capital change, the number and kind of
shares of stock or securities of the Company to be subject to the Plan and to
Options or Stock then outstanding or to be awarded thereunder, the maximum
number of shares of stock or securities which may be issued on the exercise of
Options granted under the Plan, the Option Price and other relevant provisions
shall be appropriately adjusted by the Board, whose determination shall be
binding on all persons. In the event of a consolidation or a merger in which the
Company is not the surviving corporation, or any other merger in which the
shareholders of the Company exchange their shares of stock in the Company for
stock of another corporation, or in the event of complete liquidation of the
Company, or in the case of a tender offer accepted by the Board of Directors,
all outstanding Options shall thereupon terminate, provided that the Board may,
prior to the effective date of any such consolidation or merger, either (i) make
all outstanding Options immediately exercisable or (ii) arrange to have the
surviving corporation grant to the Participants replacement Options on terms
which the Board shall determine to be fair and reasonable.
6.7 Compliance with Code Section 409A. This Plan does not provide for the
deferral of compensation, as defined under Code Section 409A and applicable
regulations. Accordingly, this Plan is specifically not subject to Code Section
409A and its requirements. However, if Code Section 409A is determined to apply
to any Award made under the Plan, the provisions of the Plan applicable to such
Awards shall be administered in a manner consistent with Code Section 409A.
Further, any provision that would cause the Plan or any Award to fail to satisfy
Code Section 409A shall have no force and effect until amended to comply with
Code Section 409A (which amendment may be retroactive to the extent permitted by
Code Section 409A and may be made by the Company without the consent of
Participants). All references in this Plan to Code Section 409A shall include
any proposed, temporary or final regulations, or any other guidance, promulgated
with respect to Code Section 409A by the U.S. Department of the Treasury or the
Internal Revenue Service.
6.8 Tax Withholding. Whenever Stock is to be delivered to a Participant upon
exercise of an Option or the award of a Restricted Stock Award, the Company may
(i) require such Participant to remit to the Company an amount in cash
sufficient to satisfy all federal, state and local tax withholding requirements
related thereto, (ii) withhold such required withholding from compensation
otherwise due to such Participant, (iii) any combination of the foregoing, or
(iv) any other acceptable method approved by the Company, including a netting of
Stock, provided such approach is permissible under applicable securities and
other laws.
6.9 Status. A Participant's status as Key Personnel or a Director shall be made
exclusively by the Committee and determined for each Award as of the date the
Award is granted to the Participant.
* * * * * * * *
Exhibit 23
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement (Form
S-8) pertaining to the L.B. Foster Company 2006 Omnibus Incentive Plan of our
report dated March 3, 2006, with respect to the consolidated financial
statements and schedule of L. B. Foster Company included in its Annual Report
(Form 10-K) for the year ended December 31, 2005, L. B. Foster Company
management's assessment of the effectiveness of internal control over financial
reporting, and the effectiveness of internal control over financial reporting of
L. B. Foster Company, filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
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Ernst & Young LLP
Pittsburgh, Pennsylvania
June 8, 2006