<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
[X] Definitive Proxy Statement RULE 14C-5(D)(2))
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
L. B. FOSTER COMPANY
------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
Notes:
<PAGE>
L.B. FOSTER COMPANY
[LOGO OF L.B. FOSTER COMPANY] 415 HOLIDAY DRIVE
PITTSBURGH, PENNSYLVANIA 15220
------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 8, 1996
To the Stockholders:
The annual meeting of stockholders of L.B. Foster Company will be held at
the Green Tree Holiday Inn, 401 Holiday Drive, Pittsburgh, Pennsylvania on
Wednesday, May 8, 1996 at 11:00 a.m., local time, for the purpose of (i)
electing a board of five directors for the ensuing year, (ii) approving the
appointment of independent auditors for the year ending December 31, 1996 and
(iii) transacting such other business as may properly come before the meeting or
any adjournment thereof.
Only holders of record of the Class A Common Stock at the close of business
on March 29, 1996 will be entitled to vote at the meeting or at any adjournment
thereof. The stock transfer books will not be closed. The list of stockholders
entitled to vote will be available for examination by any stockholder, during
ordinary business hours, at the Company's principal executive offices, 415
Holiday Drive, Pittsburgh, Pennsylvania, 15220, for a period of ten days prior
to the meeting.
Stockholders are cordially invited to attend the meeting in person.
However, whether or not you expect to attend, we request that you promptly sign,
date and return the enclosed proxy card in the envelope provided to insure a
quorum for the meeting. Your proxy may be revoked at any time before it is
exercised by written notice delivered to the Company at the above address,
attention: Secretary, or by attendance at the meeting and voting in person.
David L. Voltz
Secretary
Pittsburgh, Pennsylvania
April 8, 1996
<PAGE>
L.B. FOSTER COMPANY
------------------
PROXY STATEMENT
------------------
GENERAL INFORMATION
This proxy statement is furnished in connection with the solicitation of
proxies by the Board of Directors of L.B. Foster Company (the "Company") for use
at the annual meeting of stockholders to be held May 8, 1996 and at any
adjournment thereof. This proxy statement and the enclosed form of proxy and
annual report for 1995 were mailed to stockholders on or about April 8, 1996.
Any proxy given pursuant to this solicitation may be revoked at any time before
its use by written notice of revocation delivered to the Company at its
principal executive offices, 415 Holiday Drive, Pittsburgh, Pennsylvania 15220,
attention: Secretary, or by attendance at the meeting and voting in person.
At the meeting, the holders of Class A Common Stock will vote upon (i) the
election of a board of five directors to serve for the ensuing year and until
their successors are elected and qualified, (ii) approval of the independent
auditors for 1996 and (iii) any other matter which is properly presented at the
meeting. The presence, in person or by proxy, of the record holders of a
majority of the Company's outstanding Class A Common Stock is necessary to
constitute a quorum. At March 29, 1996, the record date for entitlement to vote
at the meeting, there were 9,937,738 shares of Class A Common Stock outstanding.
A quorum will therefore require the presence, in person or by proxy, of the
holders of at least 4,968,870 shares. Where a stockholder's proxy or ballot
indicates that no vote is to be cast on a particular matter (including broker
non-votes) the shares of such stockholders are nevertheless counted as being
present at the meeting for the purposes of the vote on that matter.
Only holders of record of the Class A Common Stock at the close of business
on March 29, 1996, are entitled to notice of and to vote at the meeting or at
any adjournment thereof. Such stockholders will have one vote for each share
held on that date. The Class A Common Stock does not have cumulative voting
rights. Directors shall be elected by a plurality of the votes of the shares
present in person or represented by proxy at the meeting. Other matters shall
require the affirmative vote of the majority of the shares present in person or
represented by proxy at the meeting.
If the enclosed form of proxy is properly executed and returned, it will be
voted as directed. If no directions are given, the proxy will be voted FOR the
election of the five nominees named herein as directors and FOR approval of the
independent auditors for 1996.
The cost of soliciting proxies will be borne by the Company. In addition to
solicitation by mail, proxies may be solicited personally or by telephone or
telegram by officers or employees of the Company. The Company does not expect to
pay any compensation for the solicitation of proxies, but under arrangements
made with brokers, custodians, nominees and fiduciaries to send proxy material
to the beneficial owners of shares held by them, the Company may reimburse them
for their expenses in so doing.
<PAGE>
PRINCIPAL STOCKHOLDERS
The following table sets forth information with respect to each stockholder
who, to the Company's knowledge, has sole or shared voting or investment power
with respect to more than 5% of the Company's outstanding Class A Common Stock.
This information is based upon the latest report furnished to the Company by
such stockholder and may not be current:
<TABLE>
<CAPTION>
NUMBER OF PERCENT OF
NAME ADDRESS SHARES CLASS
---- ------- --------- ----------
<S> <C> <C> <C>
The TCW Group, Inc. 865 South Figueroa Street 898,500 9.04
Los Angeles, CA 90017
Dimensional Fund Advisors Inc. 1299 Ocean Avenue, 11th Floor 689,700(a) 6.94
Santa Monica, CA 90401
Quaker Capital Management The Arrott Building 619,900(b) 6.24
Corporation 401 Wood Street, Suite 1300
Pittsburgh, PA 15222
U.S. Bancorp 111 S.W. Fifth Avenue 556,500(c) 5.60
Portland, OR 97204
</TABLE>
- - ---------
(a) These shares reportedly are owned by investment advisory clients for which
Dimensional Fund Advisors Inc. serves as investment manager.
(b) Quaker Capital Management Corporation and/or its principals reportedly own
directly 129,500 of these shares. The remainder reportedly are owned by
investment advisory clients for which Quaker Capital Management Corporation
serves as investment manager.
(c) Qualivest Capital Management, Inc., an investment advisor and a wholly-owned
subsidiary of the United States National Bank of Oregon which is a
wholly-owned subsidiary of U.S. Bancorp, is the beneficial owner of 249,500
shares, as a result of acting as investment advisor to The Qualivest Funds,
an investment company. An additional 307,000 shares are held by the Trust
Group of U.S. Bancorp.
2
<PAGE>
ELECTION OF DIRECTORS
A board of five directors is to be elected to serve until the next annual
meeting of stockholders and until their successors are elected and qualified.
Information concerning the nominees is set forth below. The nominees, other than
Mr. Rackoff, are currently serving on the Board of Directors.
<TABLE>
<CAPTION>
NOMINEE
-------
<S> <C>
Lee B. Foster II Mr. Foster, age 49, has been President, Chief Executive Officer and a director of the
Company since 1990.
John W. Puth Mr. Puth, age 67, has been a director of the Company since 1977. He has been President of
J.W. Puth Associates, a management consulting company, since 1988. Mr. Puth is a director
of Lindberg Corporation (industrial heat treating), Brockway Standard (a container
manufacturer), System Software Assoc. (development and sale of software), TNT Freightways,
Inc. (carrier), Allied Products Corp. (manufacturer of industrial products), and A.M.
Castle & Co. (metals distributor).
William H. Rackoff Mr. Rackoff, age 47, was nominated as a candidate for the Board of Directors in March
1996. Mr. Rackoff has been President of ASKO, INC, which designs, engineers and
manufactures specialty precision tools for the metalworking industry since 1981 and became
Chief Executive Officer of ASKO, INC in 1995.
Richard L. Shaw Mr. Shaw, age 68, has been a director of the Company since 1992. He has served as Chairman
of the Board of Michael Baker Corporation,
an engineering and construction company, since 1991. Mr. Shaw was
Chief Executive Officer of Michael Baker Corporation from 1984 until May 1992 and from
September 1993 until October 1994.
James W. Wilcock Mr. Wilcock, age 78, has been a director of the Company since 1983 and Chairman of the
Board since 1990. Mr. Wilcock was Chairman of the Board and Chief Executive Officer of
Monitor Group, Inc. (manufacturer of mass spectrometers) from 1990 to 1995. Mr. Wilcock is
a director of Copperweld Corp. (manufacturer of steel tubing and bi-metal products) and
Immuno Therapy Corp. (medical research and development).
</TABLE>
The foregoing nominees were nominated by the Board of Directors and have
expressed their willingness to serve as directors if elected. However, should
any of such persons be unavailable for election, the proxies (except for proxies
that withhold authority to vote for directors) will be voted for such substitute
nominee or nominees as may be chosen by the Board of Directors, or the number of
directors may be reduced by appropriate action of the Board.
Milton Porter, a director of the Company since 1958, died on February 28,
1996. Mr. Porter's humor, wisdom and counsel will be missed.
3
<PAGE>
BOARD AND COMMITTEE MEETINGS
The Board of Directors held five meetings during 1995. Each incumbent
nominee attended more than seventy-five percent of the total number of meetings
held, while he was in office, by the Board of Directors and the committees of
the Board on which he served.
Messrs. Foster and Wilcock constitute the Executive Committee of the Board
of Directors. The Finance and Audit Committee is composed of Messrs. Shaw
(Chairman) and Puth, with Messrs. Foster and Nejes serving as ex-officio
members, the Personnel & Compensation Committee is composed of Messrs. Puth
(Chairman), Shaw and Wilcock, and the Option Committee is composed of Messrs.
Puth and Shaw.
The Finance and Audit Committee, which held two meetings during 1995, is
responsible for reviewing, with the independent auditors and management, the
work and findings of the auditors as well as the effectiveness of the Company's
internal auditors and the adequacy of the Company's internal controls and the
accounting principles employed in financial reporting. The Personnel &
Compensation Committee, which met on five occasions in 1995, is responsible for
reviewing and approving all general employee benefit programs and recommending
for approval officer compensation and organizational changes. The Option
Committee, which met once during 1995, is responsible for the administration of
the Company's Stock Option Plan. The Company has no standing nominating
committee of the Board of Directors. The Executive Committee did not meet during
1995.
DIRECTORS' COMPENSATION
During 1995, outside directors, other than Mr. Wilcock, were paid a base
annual fee of $12,000, plus $1,000 for each Board meeting attended and $500 for
each committee meeting attended. No compensation is paid, however, for
participation in special telephonic meetings. Effective January 1, 1996, the
base annual fee was increased to $14,000. Mr. Wilcock receives an annual fee of
$75,000 for his services as Chairman of the Board. Management directors receive
no separate compensation for their services as directors.
4
<PAGE>
OWNERSHIP OF SECURITIES BY MANAGEMENT
Information concerning ownership of the Company's Class A Common Stock as
of April 1, 1996 by the Company's directors and certain executive officers and
by the directors and all executive officers as a group is set forth in the
following table:
<TABLE>
<CAPTION>
CLASS A PERCENT OF
NAME COMMON STOCK (a) CLASS (b)
- - ---- --------------- ----------
<S> <C> <C>
Directors:
Lee B. Foster II 182,426 1.80
John W. Puth 40,000 .40
Richard L. Shaw 10,000 .10
James W. Wilcock 100,500 1.00
Executive Officers:
Dean A. Frenz 13,538 .14
Senior Vice President--Rail and Tubular Products
Stan L. Hasselbusch 19,750 .20
Senior Vice President--Construction Products
Roger F. Nejes 26,250 .26
Senior Vice President--Finance and Administration
Paul V. Dean 17,500 .18
Vice President--Piling Products
All Directors and Executive Officers as a Group 507,529 4.86
</TABLE>
- - ---------
(a) This column shows the number of shares with respect to which the named
person or group had direct or indirect sole or shared voting or investment
power, whether or not beneficially owned by him. It includes shares which
the named person or group has the right to acquire within 60 days after
April 10, 1996 through the exercise of stock options (100,000 shares for Mr.
Wilcock, 150,000 for Mr. Foster, 10,000 for Mr. Shaw, 20,000 for Mr. Puth,
12,500 for Mr. Frenz, 19,750 for Mr. Hasselbusch, 26,250 for Mr. Nejes,
17,500 for Mr. Dean and 445,000 for the directors and executive officers of
the Company as a group).
(b) The percentages in this column are based on the assumption that any shares
which the named person has the right to acquire within 60 days after April
10, 1996 have been acquired and are outstanding.
APPROVAL OF APPOINTMENT OF AUDITORS
The firm of Ernst & Young has served as the Company's independent auditors
since 1990 and has been appointed as the Company's independent auditors for the
fiscal year ending December 31, 1996. The Board of Directors recommends a vote
FOR approval of this appointment.
5
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth information regarding the compensation of
the Company's five most highly paid executive officers (the "Named Executive
Officers").
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
ANNUAL COMPENSATION ------------
----------------------------------------- SHARES
OTHER (1) UNDERLYING ALL
NAME AND ANNUAL OPTION OTHER (2)
PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) COMPENSATION ($) AWARDS COMPENSATION ($)
- - ------------------ ---- --------- -------- --------------- ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
Lee B. Foster II 1995 261,667 53,666 * -- 20,294
President and Chief 1994 217,917 50,235 * 50,000 14,155
Executive Officer 1993 195,000 -- * -- 7,069
Dean A. Frenz 1995 151,054 43,317 * 25,000 11,231
Senior Vice President-- 1994 141,750 27,231 * 25,000 9,065
Rail and Tubular 1993 127,125 -- 14,423(3) -- 5,495
Products
Stan Hasselbusch 1995 126,418 21,607 * -- 9,218
Senior Vice President-- 1994 109,020 20,943 * 25,000 6,974
Construction Products 1993 92,730 -- * 23,000 3,992
Paul Dean 1995 117,998 28,905 * 9,505
Vice President--
Piling Products 1994 112,638 32,889 * 10,000 7,222
1993 105,564 -- * -- 4,566
Roger F. Nejes 1995 123,502 21,108 15,908(4) -- 8,345
Senior Vice President-- 1994 116,055 22,295 * 25,000 6,803
Finance and 1993 107,208 -- 13,778(5) -- 4,048
Administration
</TABLE>
- - ---------
(1) The amounts disclosed in this column include the cost of Company provided
term life insurance, leased car, executive Medical Reimbursement Plan and
country club dues and fees.
(2) The amounts disclosed in this column include the Company contributions to
the L. B. Foster Voluntary Investment Plan and the Supplemental Executive
Retirement Plan.
(3) This amount includes the cost of the Company provided leased car--$10,164.
(4) This amount includes country club dues and fees of $4,721 and the cost of
the Company provided leased car--$8,370.
(5) This amount includes country club dues and fees of $4,044 and the cost of
the Company provided leased car--$7,713.
* The total is less than 10% of the executive's total salary and bonus for the
year.
6
<PAGE>
OPTION EXERCISES AND YEAR-END OPTION VALUES
The following table provides information on the Named Executive Officer's
unexercised stock options at December 31, 1995. The Company has not awarded any
stock appreciation rights, and no options were exercised during 1995.
<TABLE>
<CAPTION>
NUMBER OF SHARES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT FISCAL IN-THE-MONEY OPTIONS
YEAR-END AT FISCAL YEAR-END ($)
--------------------------- ---------------------------
<S> <C> <C> <C> <C>
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- - ---- ----------- ------------- ----------- -------------
Lee B. Foster II 150,000 -- 136,100 --
Dean A. Frenz 6,250 43,750 4,313 26,688
Stan L. Hasselbusch 19,750 30,250 11,138 17,883
Roger F. Nejes 26,250 23,750 20,563 15,088
Paul V. Dean 17,500 7,500 18,925 5,175
</TABLE>
OPTION GRANTS IN 1995
The following table provides information on stock options granted to the
Named Executive Officers in 1995:
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE VALUE AT
ASSUMED ANNUAL RATES
NUMBER OF % OF OF STOCK PRICE
SHARES TOTAL OPTIONS EXERCISE APPRECIATION
UNDERLYING GRANTED TO OR BASE FOR OPTION TERM ($)
OPTIONS EMPLOYEES PRICE EXPIRATION ---------------------
NAME GRANTED IN 1995 ($/SH) DATE 5% 10%
- - ---- ---------- ------------- -------- ---------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
Dean A. Frenz 25,000(a) 100 3.70 4/27/05 55,000 142,500
</TABLE>
- - ---------
(a) The option vests at the rate of 25% per year, commencing one year after the
date of grant.
PERSONNEL & COMPENSATION COMMITTEE
AND OPTION COMMITTEE
REPORT ON EXECUTIVE COMPENSATION
The three member Personnel and Compensation Committee (the "Compensation
Committee") of the Board of Directors is composed of non-employee directors and
is generally responsible for determining the compensation of the Company's
executive officers, except for decisions made by the Option Committee concerning
awards to employees under the Company's stock option plan. The decisions by the
Compensation Committee are then reviewed by the full Board. This report is
submitted by Messrs. Puth, Shaw and Wilcock in their capacity as the Board's
Compensation Committee, and Messrs. Puth and Shaw in their capacity as the
Option Committee, and addresses the Company's compensation policies for 1995 as
they were generally applicable to the Company's executive officers and as they
were specifically applicable to Mr. Foster.
7
<PAGE>
COMPENSATION POLICIES REGARDING EXECUTIVE OFFICERS
The Compensation Committee's policies are designed to enable the Company to
attract and retain qualified executives and to provide incentives for the
achievement of the Company's annual and long-term performance goals. The
vehicles for compensating and motivating executive officers include cash
compensation, stock options, participation in a 401(k) plan and other benefits.
The Company has not established a policy with regard to Section 162(m) of the
Internal Revenue Code of 1986, as amended, since the Company has not and
currently does not anticipate paying compensation in excess of $1 million per
annum to any employee.
. CASH COMPENSATION
Each year the Company obtains survey data in order to determine the
competitiveness of its pay structure for senior management. The surveys
considered in determining the pay scales for 1995 were published by Watson Wyatt
Data Services and covered companies that were manufacturers of durable goods
with annual sales of up to $650 million or engaged in the fabrication of metal
products with annual sales of up to $650 million. This survey data indicated
that the Company's executive officers' base salaries ranged from 5% above to 21%
below the median base salaries for comparable positions in the durable goods
manufacturing industry and from 15.6% above to 24% below the median base
salaries for comparable positions in the metal fabrication industry.
The Company uses survey data only to establish rough guidelines for its
decisions on executive compensation. Specific decisions are then made largely on
subjective assessments of the officer's performance, the responsibilities and
importance of the officer's position within the Company and the overall
performance of the Company.
During 1995, the Company also maintained an Incentive Compensation Plan to
provide bonuses as incentives and rewards for employees. Awards to executive
officers under the Incentive Compensation Plan are based upon the Company's
overall profitability, the officer's grade level and base salary and, for
officers who are responsible for particular operating units, the performance of
such operating units. For 1995, awards under the Plan ranged from 10.9% to 24.5%
of the 1995 base compensation of the Company's executive officers. In addition
to bonuses paid under the Plan, the Company may also award discretionary
bonuses. Survey data published by Watson Wyatt Data Services indicate that the
aggregate cash compensation (including incentive compensation) paid to the
Company's 11 executive officers was 16.3% below the aggregate median cash
compensation paid for 11 comparable executive positions in the durable goods
manufacturing industry and approximately 9.65% below the aggregate median cash
compensation paid for 11 comparable positions in the metal fabrication industry.
Many of the companies included in the peer group used to compare
shareholder returns are substantially larger than the Company and do not
necessarily represent the Company's most direct competition for executive
talent. Consequently, the survey data used by the Compensation Committee does
not correspond to the peer group index in the five-year Total Return graph
included in the proxy statement.
8
<PAGE>
. STOCK OPTION PLAN
The Company's 1985 Long-Term Incentive Plan as Amended and Restated (the
"Plan") authorizes the award of stock options and stock appreciation rights
("SAR's") to key employees, officers and directors of the Company and its
subsidiaries. The Plan is designed to motivate key employees by providing
participants with a direct, financial interest in the long-term performance of
the Company. The participants and their awards are determined by the Option
Committee of the Board of Directors. The purchase price of optioned shares must
be at least the fair market value of the common stock on the date the option is
granted, and the term of options may not exceed ten (10) years. Both "incentive
stock options" and "nonqualified stock options" may be awarded under the Plan.
Stock appreciation rights may be awarded at any time prior to six months before
the stock option's expiration date and represent the right to receive payment of
an amount not exceeding the amount by which the average of the reported high and
low sales prices of the Company's common stock on the trading day immediately
preceding the date of exercise of the SAR exceeds the option exercise price. The
exercise of a SAR cancels the related stock option. In determining the number of
options to award a participant, the Option Committee generally takes into
account, among other factors, the number of options previously awarded to the
participant. In 1995, stock options were granted to Dean A. Frenz, Senior Vice
President--Rail and Tubular Products, upon the recommendation of management and
the approval of the Option Committee and were granted at an option price equal
to the fair market value of the Company's common stock on the grant date.
. RETIREMENT PLAN
The Company maintains the L. B. Foster Company Voluntary Investment Plan, a
salary reduction Plan qualifying under Section 401(k) of the Internal Revenue
Code, covering all salaried employees with over one (1) year of service.
Eligible employees may contribute up to 15% (10% maximum on a pre-tax basis) of
their compensation to the Plan, and the Company is required to contribute 1% of
the employee's compensation plus $.50 for each $1.00 contributed by the
employee, subject to a maximum of from 4% to 6% of their compensation. Based
upon the Company's financial performance against predetermined criteria, the
Company may be required to contribute up to an additional $.50 for each $1.00 so
contributed. The Company also may make additional discretionary contributions to
the Plan. Company contributions vest upon completion of five (5) years of
service. The Company's contributions for 1995 to the Voluntary Investment Plan
for Messrs. Dean, Foster, Frenz, Hasselbusch and Nejes are included in the
Summary Compensation Table. The Company also maintains a Supplemental Executive
Retirement Plan under which executive officers may accrue benefits which
approximate the benefits which the executives cannot receive under the Voluntary
Investment Plan because of Internal Revenue Code limitations.
. OTHER COMPENSATION PLANS
At various times in the past, the Company has adopted certain broad-based
employee benefit plans in which executive officers have been permitted to
participate and has adopted certain executive officer leased vehicle, life and
health insurance programs. The cost of the executive officers' benefits provided
under these programs for Messrs. Dean, Foster, Frenz, Hasselbusch and Nejes are
included in the Summary Compensation Table, if such benefits exceeded 10% of the
named officer's salary and
9
<PAGE>
bonus for the year. Benefits under these plans are not directly or indirectly
tied to Company performance.
MR. FOSTER'S 1995 COMPENSATION
Mr. Foster is eligible to participate in the same executive compensation
plans as are available to other executive officers. On March 1, 1995, Mr.
Foster's annual base salary was increased to $270,000. According to data
published by Watson Wyatt Data Services, Mr. Foster's salary is below the median
base salary for chief executive officers of companies with annual sales of
between $100 million - $650 million in the businesses of fabricating metal
products by approximately 24% and of companies with annual sales of $200 million
- - - $650 million engaged in the manufacture of durable goods by approximately 18%.
Consistent with the Compensation Committee's general practice, there was no
special attempt to set Mr. Foster's compensation in any particular relationship
to the compensation data.
As a participant in the Incentive Compensation Plan, Mr. Foster received an
award of $53,666 for 1995. Under the Plan, Mr. Foster's award was primarily
based upon the Company's pre-tax income. According to data published by Watson
Wyatt Data Services, Mr. Foster's 1995 total of base salary and incentive
compensation was approximately 32% below the median total cash compensation of
chief executive officers in the durable goods manufacturing industry and 37%
below the median total cash compensation of chief executive officers in the
metal fabrication industry.
PERSONNEL & COMPENSATION COMMITTEE
John W. Puth, Chairman
Richard L. Shaw
James W. Wilcock
OPTION COMMITTEE
John W. Puth
Richard L. Shaw
10
<PAGE>
[GRAPH APPEARS HERE]
COMPARISON OF FIVE YEAR CUMULATIVE RETURN
AMONG L.B. FOSTER COMPANY, PEER GROUP INDEX AND NASDAQ STOCK MARKET_US INDEX
<TABLE>
<CAPTION>
NASDAQ
Measurement period L.B. Foster Peer Group Stock Market_US
(Fiscal year Covered) Company Index Index
- - -------------------- ----------- ---------- ---------------
<S> <C> <C> <C>
Measurement PT_
12/31/90 $100 $100 $100
FYE 12/31/91 $120 $ 95 $161
FYE 12/31/92 $115 $109 $187
FYE 12/31/93 $133 $163 $215
FYE 12/31/94 $130 $164 $210
FYE 12/31/95 $170 $163 $296
</TABLE>
The Peer Group is composed of the following steel or iron related companies
whose stocks are listed on domestic securities exchanges: HealthMor, Inc.,
Geneva Steel Co., Birmingham Steel Corp., LTV Corp., Bethlehem Steel Corp.,
Bayou Steel Corp., N.S. Group Steel Corp., Armco Inc., USX US Steel Group,
Inland Steel, Allegheny Ludlum Corp., National Std. Co., Friedman Inds. Inc.,
Nucor Corp., Weirton Steel Corp., Carpenter Technology Corp., British Steel
Plc., Quanex Corp., Texas Inds. Inc., Insteel Inds. Inc., Lukens, Inc.,
Meridian Natl. Corp., Matec Corp., Precision Castparts Corp., Proler Intl.
Corp., Chaparral Steel Co., Keystone Cons. Inds. Inc., Oregon Steel Mills,
Inc., Maverick Tube Corp., Tubos De Acero De Mexico, S.A., Wheeling Pittsburgh
Corp., Tyler Corp. Rd., Ampco Pittsburgh Corp.
11
<PAGE>
ADDITIONAL INFORMATION
Management is not aware at this time of any other matters to be presented
at the meeting. If, however, any other matters should come before the meeting
or any adjournment thereof, the proxies will be voted in the discretion of the
proxyholders.
Representatives of Ernst & Young are expected to be in attendance at the
meeting to respond to appropriate questions from stockholders and will have
an opportunity to make a statement if they so desire.
Stockholders' proposals intended to be presented at the Company's 1997
annual meeting must be received by the Company no later than December 13,
1996 to be considered for inclusion in the Company's proxy statement and
form of proxy for that meeting.
Pittsburgh, Pennsylvania
April 8, 1996
12
<PAGE>
PROXY
L. B. FOSTER COMPANY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE ANNUAL
MEETING OF STOCKHOLDERS, MAY 8, 1996
The undersigned hereby appoints Lee B. Foster II and James W. Wilcock, and
each or any of them, to represent the Class A Common Stock of the undersigned at
the Annual Meeting of Stockholders of L. B. Foster Company to be held at the
Greentree Holiday Inn, 401 Holiday Drive, Pittsburgh, Pennsylvania on May 8,
1996 at 11:00 a.m., or at any adjournment thereof.
The shares represented by this proxy will be voted as directed by the
stockholder. IF NO DIRECTION IS GIVEN WHEN THE DULY EXECUTED PROXY IS RETURNED,
SUCH SHARES WILL BE VOTED "FOR ALL NOMINEES" IN ITEM 1 AND "FOR" ITEM 2. If any
other matters should come before the meeting or any adjournment thereof, this
proxy will be voted in the discretion of the proxyholders. If any nominee for
director is unavailable for election, this proxy may be voted for a substitute
nominee chosen by the Board of Directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR ALL NOMINEES" IN ITEM 1 AND "FOR"
ITEM 2.
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ITEM 1 -- Election of the following nominees as Directors: FOR all WITHHOLD AUTHORITY WITHHOLD AUTHORITY
L.B. Foster II, J.W. Puth, W.H. Rackoff Nominees to vote for all to vote for the
R. L. Shaw, and J.W. Wilcock. Nominees following only:
(Write the name of the
Nominee(s) in the space
below).
[_] [_]
ITEM 2 -- Approve appointment of Ernst & Young FOR AGAINST ABSTAIN
as Independent Auditors for 1996. [_] [_] [_]
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(Please date and sign on reverse side and return promptly)
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DATED ....................... , 1996
.............................................
Signature
.............................................
Signature
Please date and sign exactly as name appears
hereon. When signing as Attorney, Executor,
Administrator, Trustee, etc. so indicate. For
joint accounts, each joint owner should sign.
(PLEASE MARK, SIGN, DATE AND RETURN THIS
PROXY PROMPTLY IN THE ENCLOSED ENVELOPE.)
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