UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event March 8, 2007 (March 2, 2007)
reported) -------------------------------
L.B. Foster Company
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(Exact name of registrant as specified in its charter)
Pennsylvania 000-10436 25-1324733
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
415 Holiday Drive, Pittsburgh, Pennsylvania 15220
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 412-928-3417
-------------------------
None
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(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
Item 1.01
2007 Management Incentive Plan
------------------------------
On March 2, 2007, Registrant's board of directors, upon the recommendation
of its Compensation Committee (the "Committee"), approved the 2007 Management
Incentive Plan (the "Plan"), which is attached hereto and incorporated herein by
reference.
Participants in the Plan are assigned initial target percentages ranging
from 5% to 45%. For example, the Registrant's President and Chief Executive
Officer's initial target percentage is 45% and the remainder of the Registrant's
five most highly compensated employees' target percentages range from 30% to
35%.
Target awards will be calculated by multiplying the participant's target
percentage by the participant's base compensation in 2007. Target awards are
then allocated between "corporate" and/or applicable operating units and/or
departmental/individual goals. For example, the President and Chief Executive
Officer's target award is 100% allocated to corporate; the Sr. Vice President
and Chief Financial Officer's target award is 80% allocated to corporate and is
20% allocated to departmental/individual goals; and the Sr. Vice President -
Rail Products' target award is 20% allocated to corporate, 60% allocated to his
operating unit and 20% allocated to departmental/individual goals.
Participants' actual incentive awards are then calculated by multiplying
the target award by a percentage (the "Performance Percentage") based upon the
Registrant's consolidated results (with respect to "corporate") and/or the
applicable operating units' pre-tax income (in both cases subject to certain
adjustments and herein "incentive income") compared to their respective planned
pre-tax income(herein "planned incentive income").
For example, if an operating unit's incentive income was 125% of its
planned incentive income, the participant's portion of target award allocated to
the operating unit's performance would be 130% of the allocated target award.
Target awards are, however, subject to adjustment under the circumstances
described below.
If corporate's or an operating unit's incentive income exceeds 100% of
applicable planned incentive income, target awards are, if necessary, initially
adjusted so that the sum of the resulting target awards allocated to the
operating unit or to corporate does not exceed 16% of the Registrant's or the
applicable operating unit's planned incentive income; this adjusted target award
is then multiplied by the Performance Percentage.
The Chief Executive Officer may reduce any incentive award by 25%.
The Plan also provides for discretionary awards equal to the sum of: (i)
$100,000; (ii) amounts not paid because the individual was terminated for cause
or resigned prior to the date incentive awards were paid under the Plan; (iii)
the amount of any reduction in incentive awards made by the Chief Executive
Officer and (iv) any amount which was not paid due to a failure to achieve a
department/individual goals.
Any discretionary awards to executive officers must be approved by the
Committee. Payment of awards under the Plan shall be made on or before March 15,
2008 and the completion of the Registrant's 2007 financial statement audit.
Item 9.01 Exhibits
10.55 2007 Management Incentive Compensation Plan
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
L.B. FOSTER COMPANY
-------------------
(Registrant)
Date: March 8, 2007
-------------
/s/ David J. Russo
------------------
David J. Russo
Senior Vice President
Chief Financial Officer and Treasurer
Exhibit Index
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Exhibit Number Description
- -------------- -----------
10.55 2007 Management Incentive Compensation Plan
L. B. FOSTER COMPANY 2007
MANAGEMENT INCENTIVE COMPENSATION PLAN
I. PURPOSE
This Plan is designed to motivate employees to achieve goals, to reward
employees who achieve such goals and to improve corporate performance.
II. CERTAIN DEFINITIONS
The terms below shall be defined as follows for the purposes of this Plan. The
definitions shall be subject to such adjustments as, from time to time, may be
made, by the Committee.
2.1 "Base Compensation" shall mean the total base salary, rounded to the
nearest whole dollar, actually paid to a Participant during the Fiscal
Year, excluding payment of overtime, incentive compensation, commissions,
reimbursement of expenses, severance, car allowances or any other payments
not deemed part of a Participant's base salary; provided, however, that the
Participant's contributions to the Corporation's 401(k) plan(s) shall be
included in Base Compensation. Base Compensation for Participants who die,
retire or are terminated shall include only such compensation paid to such
during the fiscal year with respect to the period prior to death,
retirement or termination.
2.2 "Committee" shall mean the Compensation Committee of the Board of Directors
and any successors thereto.
2.3 "Corporation" shall mean L. B. Foster Company and those subsidiaries
thereof in which L.B. Foster Company owns 100% of the outstanding common
stock.
2.4 "Department/Individual Goals" are those goals approved by the Chief
Executive Officer ("CEO") and utilized to establish incentive awards
pursuant to Section 4.3
2.5 "Fiscal Year" means the 2007 calendar year.
2.6 "Incentive Award" shall mean the payment made to a Participant under this
Plan, after and/or subject to adjustments under this Plan.
2.7 " Incentive Income" shall mean the pre-tax income (after, inter alia,
deductions for benefits payable under the annual sales incentive and profit
sharing plans) for the Corporation or, as applicable, for an Operating Unit
for the Fiscal Year, but determined in accordance with generally-accepted
accounting principles, excluding (i) benefits payable under this Plan; (ii)
dividends and related interest with respect to Dakota Minnesota & Eastern
Railroad Corporation preferred stock to the extent not included in the
Corporation's Planned Incentive Income; and (iii) any portion of gains or
losses arising from transactions not in the ordinary course of business
which the Committee, in its sole discretion, determines to exclude.
2.8 "Operating Unit" shall mean the following units or divisions which are
reported in the Company's internal financial statements: CXT Rail, CXT
Buildings, Foster Coated Pipe, Threaded Products, Rail Products (excluding
CXT Rail), Piling, Bridge Products and Precise subject to such adjustments
as may be made by the CEO. The CEO may consolidate certain of the above
Operating Units into larger Operating Unit(s) and each such consolidated
Operating Unit(s) also shall be deemed an Operating Unit with respect to
the calculation of Incentive Awards for specific Participants selected by
the CEO.
2.9 "Participant" shall mean a salaried employee of the Corporation who
satisfies all of the eligibility requirements set forth in Article III
hereof.
2.10 "Plan" shall mean the L. B. Foster Company Management Incentive
Compensation Plan, which Plan shall be in effect with respect to the Fiscal
Year.
2.11 "Planned Incentive Income" shall mean, as applicable, Incentive Income for
the Corporation and each Operating Unit as approved by the Corporation's
Board of Directors.
2.12 "Target Award" shall mean the product of a Participant's Base Compensation
multiplied by said Participant's Target Percentage.
2.13 "Target Percentage" shall mean those percentages assigned to Participants
pursuant to Section 4.1 hereof.
III. ELIGIBILITY
Unless changed or amended by the Committee, an employee shall be deemed a
Participant in the Plan only if all of the following requirements are satisfied:
3.1 A Participant must be a salaried employee (but excluding an employee whose
sole title is Chairman of the Board) of the Corporation, at a grade level
set forth in Section 4.1 or as otherwise approved both by the Corporation's
Chairman of the Board and CEO, for at least six (6) months of the entire
fiscal year, unless deceased or retired.
3.2 A Participant may not have: (i) been terminated for cause; (ii) voluntarily
have resigned (other than due to retirement with the Company's consent)
prior to the date Individual Incentive Awards are paid; (iii), unless the
Corporation agrees in writing that the employee shall remain a Participant
in this Plan, been terminated for any reason whatsoever and have received
money from the Corporation in connection with said termination, or (iv)
have been primarily employed by Natmaya or Fosmart during the Fiscal Year.
3.3 A Participant's Target Percentage shall be based on the Participant's Grade
Level on July 1, 2007. Those Participants who have retired or died prior to
July 1, 2007 shall have a Target Percentage based upon their grade level at
death or retirement.
3.4 A Participant may not, unless agreed to in writing by the CEO, be a
participant in any other incentive plan maintained by the Corporation,
other than the Corporation's stock option plans.
3.5 As used herein, "cause" to terminate employment shall exist upon, in the
sole judgment and discretion of the Committee, (i) the failure of an
employee to substantially perform his duties with the Corporation in a
competent fashion; (ii) the engaging by an employee in any criminal act or
in other conduct injurious to the Corporation; or (iii) the failure of an
employee to follow the reasonable directives of the employee's superior(s).
3.6 A Participant must have executed an agreement substantially in the form of
Exhibit A hereto and delivered the executed agreement to the Company's Vice
President - Human Resources on or before April 15, 2007.
IV. CALCULATION OF INCENTIVE AWARDS
4.1 Eligibility and Target Percentages. Each Participant shall have a Target
Percentage based upon the grade level of such Participant, as follows:
2007 MIP ELIGIBILITY AND TARGET PERCENTAGES
- -------------------------------------------------
MANAGEMENT GRADE LEVEL TARGET PERCENTAGE
- ------------------------ -------------------
GRADE X28 5%
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GRADE X29 10%
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GRADE X30 15%
- ------------------------ -------------------
GRADE X31 20%
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GRADE X32 20%
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GRADE X33 20%
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- ------------------------ -------------------
GRADE O40 20%
- ------------------------ -------------------
GRADE O41 20%
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GRADE O42 30%
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GRADE O43 35%
- ------------------------ -------------------
GRADE O50 45%
- ------------------------ -------------------
Other employees selected, in writing, by the Corporation's Chairman of the Board
and CEO may also be made Participants in the Plan on such terms as may be
approved by the Chairman of the Board and CEO.
4.2 Thresholds. The following table shows how Incentive Awards are calculated,
prior to adjustment and to limitations under this Plan:
- ------------------------- ---------------------------------------------
Actual Performance, based Unadjusted Incentive Award, as Percentage
on Percentage of Planned of Lower of Target Award or Target Award
Incentive Income Achieved at Incentive Planned Income
- ------------------------- ------------------- -------------------------
Outstanding Corporate Operating Unit
- ------------------------- ------------------- -------------------------
160% and over 200% 200%
- ------------------------- ------------------- -------------------------
155% 190% 190%
- ------------------------- ------------------- -------------------------
150% 180% 180%
- ------------------------- ------------------- -------------------------
145% 170% 170%
- ------------------------- ------------------- -------------------------
140% 160% 160%
- ------------------------- ------------------- -------------------------
135% 150% 150%
- ------------------------- ------------------- -------------------------
130% 140% 140%
- ------------------------- ------------------- -------------------------
125% 130% 130%
- ------------------------- ------------------- -------------------------
Exceeding
- ------------------------- ------------------- -------------------------
120% 120% 120%
- ------------------------- ------------------- -------------------------
115% 115% 115%
- ------------------------- ------------------- -------------------------
110% 110% 110%
- ------------------------- ------------------- -------------------------
105% 105% 105%
- ------------------------- ------------------- -------------------------
Target
- ------------------------- ------------------- -------------------------
100% 100% 100%
- ------------------------- ------------------- -------------------------
Threshold
- ------------------------- ------------------- -------------------------
90% 80% 80%
- ------------------------- ------------------- -------------------------
80% 60% 60%
- ------------------------- ------------------- -------------------------
70% 40%
- ------------------------- ------------------- -------------------------
The calculation of "Unadjusted Incentive Award" in the second and third columns
of the above table shall be adjusted proportionately to reflect "Percentage of
Income Achieved" between the levels in the table. For example, if Corporate
achieved 73% of "Planned Incentive Income", the percentage in the second column
would be deemed to be 46%; if Corporate achieved 137% of "Planned Incentive
Income" the percentage in the second column would be deemed to be 154%.
4.3 Allocated Target Awards. For purposes of calculating Incentive Awards, a
Participant's Target Award shall be allocated as follows, which allocations
shall be approved by the CEO.
- ------------------ -------------- ---------------- -----------------------
Corporate Operating Department/
Unit(s) Individual
Goals
- ------------------ -------------- ---------------- -----------------------
CEO 100%
- ------------------ -------------- ---------------- -----------------------
Operating Unit
Heads 20% 60% 20%
- ------------------ -------------- ---------------- -----------------------
Corporate 80% 20%
- ------------------ -------------- ---------------- -----------------------
General Managers &
other Participants
with a grade level
X30 & above 20% 60% 20%
- ------------------ -------------- ---------------- -----------------------
Other Participants 80% 20%
- ------------------ -------------- ---------------- -----------------------
4.4 Limitations and Adjustments to Awards. The portion of a Participant`s
Target Award allocated to "Department/Individual Goals" shall be adjusted
to the same extent that the Participant's Target Award(s) allocated to
Corporate or Operating Units are adjusted under Sections 4.2 and 4.4 based
upon the primary allocation of the Participant's Target Award between
Corporate and Operating Units(s).
All Incentive Awards allocated to an Operating Unit or to Corporate
first shall be proportionately adjusted downward (an "Adjusted
Incentive Award") to the extent necessary, so that the sum of such
resulting Adjusted Incentive Awards and unadjusted Incentive Awards,
within Corporate or the applicable Operating Unit does not exceed 16% of
the applicable Corporate's or Operating Unit's Planned Incentive Income.
If Incentive Income for Corporate or an Operating Unit exceeds 100%
of applicable Planned Incentive Income, the Incentive Award or, if
adjusted pursuant to the preceding paragraph, the Adjusted Incentive
Award shall be multiplied by the applicable percentage in the right
hand column of the table in Section 4.2.
Incentive awards attributable to an Operating Unit are not adjusted
under this Section 4.4 based upon overall Corporate Incentive Income, but
instead are adjusted based on such Operating Unit's Incentive Income.
The CEO may, in his discretion, reduce any Incentive Awards payable
under this Plan by up to 25% and the total amount of such reduction(s)
shall be added to the amount available for discretionary awards under
Article V.
4.5 Department/Individual Goals. Determinations on the achievement of
Department/Individual Goals shall be approved by the CEO.
Example 1:
General Manager Smith works for CXT Buildings and has a Target
Award of $18,000 (i.e. Base Compensation of $90,000 and a 20%
Target Percentage). In 2007, the Corporation earns $7,000,000
of Incentive Income, which is 100% of its Planned Incentive
Income and CXT Buildings earns $2,000,000 of Incentive Income
which is 125% of its Planned Incentive Income ($1, 600,000).
The CEO determines that Mr. Smith has achieved 1/2 of his
Department/Individual goals. Mr. Smith's Incentive Award
(ignoring the 16% limits and the CEO's ability to adjust
upward or downward), would be calculated as follows:
a. $ 3,600 of Mr. Smith's Target Award (20% X $18,000)
would be allocated to Corporate. Assuming that
Corporate total awards do not exceed 16% of the
Corporation's Incentive Income and since Corporate
achieved 100% of its Planned Incentive Income, Mr.
Smith would receive $ 3,600 from the Corporate
allocation. See Sec. 4.2.
b. $ 10,800 of the Target Award (or 60% of $18,000)
would be allocated to the Operating Unit. Since CXT
Buildings earned 125% of Planned Income, Mr. Smith
would receive $14,040 ($10,800 X 130%) from the
Operating Unit allocation.
c. $3,600 (or 20% of $18,000) was allocated to individual/departmental
Goals. Since Mr. Smith's Target Award was primarily allocated to an
Operating Unit, Mr. Smith would have been eligible to receive a maximum
of $4,680 ($3,600 X 130%) from the achievement of individual/
departmental goals. Since Mr. Smith achieved 50% of his goals, he would
receive $2,340 from the individual/departmental goals allocation.
d. Mr. Smith's total Incentive Award would be $19,980.
Example 2:
Same facts as Example 1, except that: (i) the total of all
unadjusted Incentive Awards (without reference to 16%
limitations and with CXT Buildings Incentive Income being 125%
of its Planned Income of $1,600,000) based on Target Awards
allocated to CXT Buildings would have been $450,000; and (ii)
the total Incentive Awards payable from Corporate, without
adjustment, would have been $600,000. Mr. Smith's Incentive
Award would be calculated as follows:
a. Mr. Smith's Corporate allocation would be unaffected
by the 16% caps since the maximum Corporate
allocation would be 16% X $7,000,000, or $1,120,000,
which exceeds the $600,000 of Incentive Awards
payable from Corporate. Mr. Smith would receive
$3,600 from his Corporate allocation.
b. If CXT Buildings had achieved its Planned Incentive
Income of $1,600,000 its maximum aggregate Incentive
Awards could not have exceeded $256,000 ($1,600,000 X
16%). Since CXT Buildings achieved 125% of its
Planned Incentive Income, the total Incentive Awards
would be limited to $256,000 X 130%, see Sec. 4.2, or
$332,800. Accordingly, Mr. Smith would receive 74%
($332,800 / $450,000) of the unadjusted $16,380
($14,040 + $2,340, see (b) and (c) of Example 1), or
$12,121 from the Operating Unit allocation.
c. Mr. Smith's total Incentive Award would be $15,721.
The examples are for illustrative purposes only and do not contain the Company's
or any Operating Unit's actual Planned Incentive Income.
4.6 Special Provisions for Bridge Products. To the extent a Participant's award
is allocated to Bridge Products, that portion of the Participant's
Incentive Award shall be calculated as follows, subject to applicable
adjustment and limitations under this Plan.
- -------------------------------- -----------------------------------------------
Incentive Income Incentive Award as Percentage of Target Award
- -------------------------------- -----------------------------------------------
- -------------------------------- -----------------------------------------------
$500,000 and over 200%
- -------------------------------- -----------------------------------------------
-0- (break even) 100%
- -------------------------------- -----------------------------------------------
($450,000) loss 60%
- -------------------------------- -----------------------------------------------
More than a ($450,000) loss 0
- -------------------------------- -----------------------------------------------
The calculation of Incentive Awards as Percentage of Target Awards in the second
column of the above table shall be adjusted proportionately to reflect
"Incentive Income" between the levels in the table. For example, if Bridge
Products achieved Incentive Income of $250,000, the percentage in the second
column would be deemed to be 150%, if Bridge Products had a $100,000 loss, the
percentage in the second column would be 91%.
V. DISCRETIONARY AWARDS
An amount shall be available for discretionary awards equal to the sum of (i)
$100,000; (ii) the amount which would have been paid except that an individual
was not a Participant due to such individual's failure to satisfy the
requirements of Sections 3.2(i) or 3.2(ii); (iii) the amount of any reduction in
Incentive Awards made by the CEO under Section 4.4; and (iv) any amount,
otherwise available for payment, that was not paid due to a failure to achieve
Department/Individual goals pursuant to Sections 4.3 and 4.4. Discretionary
awards shall be determined by the CEO, except that any discretionary awards to
officers, elected by the Board of Directors, must be approved by the Committee.
Amounts available under this Article V, but not paid, shall remain the
Corporation's property.
VI. PAYMENT OF AWARDS
Payment of Individual Incentive Awards will be made on or before the later of
March 15, 2008 or the completion of the audit for the Corporation's Fiscal Year.
VII. ADMINISTRATION AND INTERPRETATION OF THE PLAN
The CEO, if there is a dispute, shall determine the Operating Unit(s) that will
receive credit for any sale and/or how credit for any sale is to be allocated
among any Operating Units. The CEO's decisions are subject to final review by
the Committee if the Committee requests such review.
A determination by the Committee in carrying out, administering or interpreting
this Plan shall be final and binding for all purposes and upon all interested
persons and their heirs, successors and personal representatives.
The Committee may, from time to time, amend the Plan;.
The CEO may delegate any of his duties herein.
The Corporation's Internal Audit Department will review and verify the
calculation of Incentive Awards.
Exhibit A
MIP
Executed in
Pittsburgh, PA
LBFoster
CONFIDENTIALITY, INTELLECTUAL PROPERTY AND
NON-COMPETE AGREEMENT
This Confidentiality, Intellectual Property and Non-Compete Agreement (the
"Agreement"), dated as of _______________, 2007 is between _________________
(the "Employee") and L. B. FOSTER COMPANY, its subsidiaries and their respective
successors (the "Company").
WITNESSETH:
WHEREAS, Employee has, or is being offered, a position within the Company
wherein Employee has and/or will acquire substantial knowledge about the
Company, its subsidiaries, its customers, manufacturing processes and other
confidential matters, all of which the Company deems proprietary; and
WHEREAS, Employee has been provided with opportunities to develop
proprietary and intellectual property with the understanding that such property
shall at all times belong to the Company; and,
WHEREAS, Employee has received, or may receive, new and valuable
consideration in connection with his execution of this agreement, including,
without limitation, becoming a participant in the Company's 2007 Management
Incentive Plan.
NOW, THEREFORE, in consideration of $1.00, the employment relationship
between the parties, eligibility to participate in the Company's 2007 Management
Incentive Plan, other good and valuable consideration and the premises and
covenants herein contained, the parties agree, intending to be legally bound, as
follows:
1. Employment At Will
Employee shall be an employee-at-will and either party may terminate
the employment relationship at any time and for any reason.
2. Inventions
For purposes of this Agreement, "Invention" shall mean any and all
machines, apparatuses, compositions of matter, methods, know-how,
processes, designs, configurations, uses, ideas, concepts or writings
of any kind, discovered, conceived, developed, made, or produced, or
any improvements to them, and shall not be limited to the definition of
an invention contained in the Unite States Patent Laws. Employee
understands and agrees that all Inventions or trademarks, copyrights or
patents relating thereto, which reasonably relate to the Company's
business as now or hereafter constituted and/or which are conceived or
made by Employee while employed by the Company, either alone or with
others, are the sole and exclusive property of the Company. Employee
understands and agrees that all Inventions, trademarks, copyrights or
patents relating thereto, which reasonably relate to the Company's
business as now or hereafter constituted and/or which are conceived or
made by Employee while employed by the Company, either alone or with
others, are the sole and exclusive property of the Company. Employee
understands and agrees that all Inventions, trademarks, copyrights or
patents described above in this paragraph are the sole and exclusive
property of the Company whether or not they are conceived or made
during regular working hours.
Employee agrees that he will disclose promptly and in writing to the
Company all Inventions within the scope of this Agreement, whether he
considers them to be patentable or not, which he, either alone or with
others, conceives or makes (whether or not during regular working
hours). Employee hereby assigns and agrees to assign all his right,
title and interest in and to those Inventions which reasonably relate
to the Company's business and agrees not to disclose any of these to
others without written consent of the Company. Employee agrees that he
will at any time during his engagement hereunder, or after this
Agreement terminates, on the request of the Company: (i) execute
specific assignments in favor of the Company, or its nominee, of any of
the Inventions covered by this Agreement; (ii) execute all papers and
perform all lawful acts the Company considers necessary or advisable
for the preparation, application, procurement, maintenance, enforcement
and defense of patent applications and patents of the United States and
foreign countries for these Inventions, for the perfection or
enforcement of any trademarks or copyrights relating to such
Inventions, and for the transfer of any interest Employee may have; and
(iii) execute any and all papers and lawful documents required or
necessary to vest sole right, title and interest in the Company, or its
nominee, of the above Inventions, patent applications, patents, or any
trademarks or copyrights relating thereto. Employee will, at the
Company's expense, execute all documents (including those referred to
above) and do all other acts necessary to assist in the preservation of
all the Company's interest arising under this Agreement.
3. Confidentiality
For purposes of this Agreement, "Proprietary Information" shall mean
any information relating to the Company's business that has not
previously been publicly released by duly authorized representatives of
the Company and shall include (but shall not be limited to) trade
secrets, information encompassed in all drawings, designs, plans,
proposals, marketing and sales plans, financial information, costs,
pricing information, customer information, and all methods, concepts or
ideas in or reasonably related to the Company's business, as now or
hereafter constituted.
Employee agrees to regard and preserve as confidential all Proprietary
Information whether he has such information in his memory or in writing
or other physical form. Employee will not, without written authority
from the Company to do so, use for his benefit or purposes, nor
disclose to others, either during the term of this engagement hereunder
or thereafter, any Proprietary Information.
4. Restrictive Covenants
As an inducement to the Company to provide the consideration described
above:
(a) Solicitation of Customers. Employee agrees that during the
Non-compete Period Employee will not, directly or indirectly, solicit
any employee, person or entity that has been, at any time during the
five (5) years preceding the Employee's termination of employment, a
customer, supplier or client of the Company, to purchase or otherwise
acquire or use any similar products or services offered by any
Competing Business.
(b) Non-Competition. Employee agrees that during the
Non-compete Period Employee will not, directly or indirectly, own,
manage, operate, join, control, finance, assist or participate in the
ownership (except that Employee may own 5% or less of the outstanding
common stock of any publicly traded corporation), management, operation
or control of, or be employed by, or otherwise engage in or become
interested in or be connected in any manner with any Competing Business
whether as a director, officer, employee, agent, consultant,
independent contractor, broker, manager, shareholder, partner, lender,
guarantor or in any other capacity; provided, however, that the
obligations of this Paragraph 4(b) shall only be applicable if Employee
resigns from the Company or is terminated "for cause".
For purposes of this Agreement, termination "for cause" shall
mean that Employee was terminated for any of the following reasons:
(i) the Employee's neglect of or failure to
properly perform the duties and
responsibilities assigned to the Employee or
the failure of the Employee to comply with
proper directives of Employee's
supervisor(s);
(ii) an act of dishonesty or disloyalty by the
Employee relating to the business and
affairs of the Company or its relationship
with its employees, suppliers, customers or
others having a business relationship with
the Company;
(iii) conviction of the Employee of a crime
involving fraud, theft, intentional
dishonesty, moral turpitude or similar
conduct;
(iv) misappropriation by the Employee of any
funds or property of the Company or actions
by the Employee which are inconsistent with
the Employee's fiduciary obligations to the
Company;
(v) Employee's failure to abide by any of the
Company's policies; or
(vi) Any other action or course of conduct by the
Employee which has or reasonably can be
expected to have an adverse effect on the
Company, its business or its affairs.
The Company's Chief Executive Officer's good faith
determination that the Employee has resigned or has
been terminated "for cause" shall be conclusive. The
concept of "constructive discharge" shall not be
applicable and any person who claims he was
constructively discharged shall be deemed to have
resigned from the Company.
(c) Definitions.
(i) The term "Competing Business" as used herein
shall refer to any business (whether conducted
through an individual or an entity) which conducts
all or part of its business in North America and
which sells, fabricates or manufactures products
substantially similar to or competitive with products
sold, fabricated or manufactured by the Company.
(ii) The term "Non-compete Period" as used herein shall
refer to the one (1) year period commencing on the
Employee's termination of employment with the
Company, provided that, (a) in the event the party
subject to the restriction violates any aspect of
this Section 4, the Non-compete Period shall be
extended by the number of days during the period from
the commencement of the violation through the time
when such party ceases violating this Section 4.
(d) General. All parties hereby acknowledge that there are
legitimate business interests at stake (such as protection of
the Company's goodwill, customers, employees and trade secrets
and other confidential information), that breach of this
Section would harm the Company and that the restrictions and
restraints contained in this covenant are reasonable. This
covenant is ancillary to this Agreement.
(e) Reformation. Should any court of competent jurisdiction
determine that, consistent with the established precedent of
the forum jurisdiction, the public policy of such jurisdiction
requires a more limited restriction in geographic area,
duration, nature of restricted activity, or any combination
thereof, it would be in furtherance of the intentions of the
parties hereto for the court to so interpret and construe the
terms of this Section 4 to apply only to the extent of such
limited restriction.
5. Injunctive Relief
It is understood and agreed by and between the parties hereto that the
violation of this Agreement cannot be reasonably or adequately
compensated in damages in any action at law, and that a breach by
Employee of any of the provisions contained in this Agreement will
cause the Company great and irreparable injury and damage. Employee
hereby expressly agrees that the Company shall, in addition to all
legal remedies, be entitled to the remedies of injunction, specific
performance and other equitable relief to prevent or terminate a breach
of this Agreement by Employee.
6. Non-Assignability
This Agreement may not be assigned by the Employee. The Company may
assign all or part of its rights and/or obligations hereunder to any
subsidiary, parent or successor of the Company and any successor to the
Company by merger shall automatically be entitled to the benefit of
this Agreement.
7. Governmental Regulation
Nothing contained in this Agreement shall be construed so as to require
the commission of any act contrary to law and wherever there is any
conflict between any provision of this Agreement and any statute, law,
ordinance, order or regulation, the latter shall prevail, but in such
event any such provision of this Agreement shall be curtailed and
limited only to the extent necessary to bring it within the legal
requirements.
8. Governing Law
This Agreement has been executed in Pennsylvania and shall be governed
and construed in accordance with the laws of the Commonwealth of
Pennsylvania, excluding its rules on conflicts of laws. The parties
hereby consent to the jurisdiction of any federal district court or
state common pleas court located within Allegheny County, Pennsylvania,
with the party initiating suit being empowered to select the court.
9. Fees and Expenses
If the Company prevails in any claims or suits brought with respect to
this Agreement, the Employee shall be liable to the Company for all of
the Company's costs, expenses and attorneys' fees which the Company
incurs in any resulting litigation, including any appeals.
10. Waiver of Jury Trial
EXCEPT AS PROHIBITED BY LAW, THE EMPLOYEE HEREBY WAIVES ANY RIGHT IT
MAY HAVE TO A TRIAL BY A JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR
INDIRECTLY ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS AGREEMENT
OR ANY TRANSACTIONS RELATING THERETO.
11. Entire Agreement; Amendment
This Agreement sets forth the entire understanding of the parties in
respect of the subject matter contained herein and supersedes all prior
agreements, arrangements and understandings relating to the subject
matter and may only be amended by a written agreement signed by both
parties hereto or their duly authorized representatives.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
____________________________
Employee Signature
Accepted:
L. B. FOSTER COMPANY
By: ____________________________
Title: ____________________________
Executed in Pittsburgh, PA