<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
<TABLE>
<S> <C>
Filed by the Registrant [ X ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
</TABLE>
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission only (as permitted by Rule
14a-6(e)(2))
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
L.B. FOSTER COMPANY
--------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
N/A
----------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (check the appropriate box):
<TABLE>
<S> <C> <C>
[ X ] No fee required.
[ ] 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:
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</TABLE>
<PAGE> 2
L.B. FOSTER LOGO
L.B. FOSTER COMPANY
415 HOLIDAY DRIVE
PITTSBURGH, PENNSYLVANIA 15220
------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 10, 2000
To the Stockholders:
L.B. Foster Company will hold its annual stockholders' meeting at the
Radisson Hotel GreenTree, 101 Marriott Drive, Pittsburgh, Pennsylvania on
Wednesday, May 10, 2000 at 11:00 a.m., local time, for the purposes of:
1. Electing a board of five directors for the ensuing year.
2. Approving the appointment of Ernst & Young, LLP as our independent
auditors for 2000.
3. Any other matters that properly come before the shareholders at the
meeting.
Only holders of record of common stock at the close of business on March
28, 2000 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.
Your vote at the annual meeting is important to us. Please vote your shares
of common stock by completing the enclosed proxy card and returning it to us in
the enclosed envelope.
David L. Voltz
Secretary
Pittsburgh, Pennsylvania
April 12, 2000
<PAGE> 3
L.B. FOSTER COMPANY
------------------
PROXY STATEMENT
------------------
GENERAL INFORMATION
This proxy statement is furnished in connection with the solicitation of
proxies by the Board of Directors of L.B. Foster Company (the "Company") for use
at the annual meeting of stockholders to be held May 10, 2000 and at any
adjournment thereof. This proxy statement, the enclosed form of proxy and the
Company's 1999 annual report were mailed to stockholders on or about April 12,
2000. 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.
The presence, in person or by proxy, of the record holders of a majority of
the Company's outstanding common stock is necessary to constitute a quorum. At
March 28, 2000, the record date for entitlement to vote at the meeting, there
were 9,499,106 shares of common stock outstanding. A quorum will therefore
require the presence, in person or by proxy, of the holders of at least
4,749,554 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 common stock at the close of business on
March 28, 2000, 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 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. The appointment of Ernst & Young, LLP as
the Company's independent auditors for 2000 and other matters shall also require
that more votes be cast in favor of the item than are cast against the item.
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 2000.
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> 4
STOCK OWNERSHIP
The following table shows the number of common stock beneficially owned by:
- each person who has reported beneficial ownership or more than 5% of the
Company's common stock;
- each director;
- each executive officer named in the Summary Compensation Table on page 6;
and
- the directors and executive officers as a group.
Information furnished by owners of more than 5% of the Company's common
stock is based upon the latest report furnished to the Company and may not be
current.
<TABLE>
<CAPTION>
NUMBER OF
SHARES PERCENT OF
NAME OWNED (a) SHARES (b)
---- --------- ----------
<S> <C> <C>
More than 5% Stockholders:
Artisan Partners Limited Partnership (c) 1,145,700(d) 12.06
Dimensional Fund Advisors Inc. (c) 790,800(e) 8.32
The TCW Group, Inc. (c) 535,200 5.63
Directors:
Lee B. Foster II 430,086 4.42
Henry J. Massman IV 11,083 0.12
John W. Puth 77,000 0.81
William H. Rackoff 32,000 0.34
Richard L. Shaw 38,000 0.40
Executive Officers:
Dean A. Frenz
Senior Vice President--Rail Distribution Products 68,259 0.71
Stan L. Hasselbusch
President and Chief Operating Officer 97,802 1.02
Roger F. Nejes
Senior Vice President--Finance and Administration
and Chief Financial Officer 69,377 0.73
Alec C. Bloem
Senior Vice President--Concrete Products 4,176 0.04
All Directors and Executive Officers as a Group 1,081,667 10.67
</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 had the right to acquire within 60 days after
March 28, 2000 through the exercise of stock options (232,500 for Mr.
Foster, 10,000 for
2
<PAGE> 5
Mr. Massman, 35,000 for Mr. Puth, 20,000 for Mr. Rackoff, 35,000 for Mr.
Shaw, 50,000 for Mr. Frenz, 60,500 for Mr. Hasselbusch, 38,750 for Mr.
Nejes, 2,500 for Mr. Bloem and 603,125 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 March
28, 2000 have been acquired and are outstanding.
(c) The address of Artisan Partners Limited Partnership is 1000 North Water
Street, #1770, Milwaukee, WI 53202, the address of the TCW Group, Inc. is
865 South Figueroa Street, Los Angeles, CA 90017 and the address of
Dimensional Fund Advisors, Inc. is 1299 Ocean Avenue, 11th Floor, Santa
Monica, CA 90401.
(d) These shares reportedly have been acquired on behalf of discretionary
clients of Artisan Partners Limited Partnership.
(e) These shares reportedly are owned by investment advisory clients for which
Dimensional Fund Advisors, Inc. serves as investment manager.
3
<PAGE> 6
ELECTION OF DIRECTORS
A board of five directors is to be elected to serve until the next annual
meeting of stockholders and until their successors are elected and qualified.
Information concerning the nominees is set forth below. The nominees are
currently serving on the Board of Directors.
<TABLE>
<CAPTION>
NOMINEE
-------
<S> <C>
Lee B. Foster II Mr. Foster, age 53, has been Chief Executive Officer and a
director of the Company since 1990. Mr. Foster is a director
of Wabtec Corporation, a manufacturer of components for
locomotives, freight cars and passenger transit vehicles.
Wabtec Corporation also provides aftermarket services,
including locomotive and freight car maintenance.
Henry J. Massman IV Mr. Massman, age 37, has been a director of the Company
since November, 1998. He has been President and Chief
Executive Officer of Massman Construction Co., Inc., a heavy
civil, bridge and marine contractor, since 1988.
John W. Puth Mr. Puth, age 71, has been a director of the Company since
1977. He is a managing member of J.W. Puth Associates, LLC
and a general partner of BVCF III and BVCF IV (institutional
venture capital funds). Mr. Puth is a director of BWAY
Corporation (a container manufacturer), US Freightways, Inc.
(trucking logistics and freight forwarding), A.M. Castle,
Inc. (metal fabrication and distributor) and several private
manufacturing companies.
William H. Rackoff Mr. Rackoff, age 51, has been a director of the Company
since 1996. Mr. Rackoff has been President of Asko, Inc.,
which manufactures custom engineered tooling for the
metalworking industry, since 1991 and became Chief Executive
Officer of Asko, Inc. in 1995.
Richard L. Shaw Mr. Shaw, age 72, 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 has been Chief Executive Officer of
Michael Baker Corporation from 1984 until May 1992, from
September 1993 until October 1994, and from September 1999
to the present.
</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.
BOARD AND COMMITTEE MEETINGS
The Board of Directors held five meetings during 1999. Each incumbent
nominee attended more than seventy-five percent of the total number of meetings
held by the Board of Directors and the committees of the Board on which he
served.
Messrs. Puth (Chairman) and Foster constitute the Executive Committee of
the Board of Directors. The Finance and Audit Committee is composed of Messrs.
Shaw (Chairman), Puth and Rackoff, the
4
<PAGE> 7
Personnel & Compensation Committee is composed of Messrs. Puth (Chairman),
Massman and Shaw, and the Option Committee is composed of Messrs. Puth, Rackoff
and Shaw.
The Finance and Audit Committee, which held two meetings during 1999, 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 auditing department 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 1999, 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 in 1999, 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 in 1999.
DIRECTOR'S COMPENSATION
Outside directors are paid a base annual fee of $14,000, plus $1,000 for
each board meeting attended and $500 for each committee meeting attended. During
1999, Mr. Puth was awarded non-qualified stock options to purchase up to 10,000
shares of common stock at an exercise price of $5.75 per share. No compensation
is paid for participating in special telephonic meetings or executing unanimous
consents in lieu of meetings. Under the 1998 Long Term Incentive Plan, as
amended and restated, each outside director, commencing with the May 10, 2000
annual shareholders' meeting, automatically shall be awarded annually a
non-qualified option to acquire up to 5,000 shares of the Company's common
stock. Management directors receive no separate compensation for their services
as directors.
Section 16(a) Beneficial Ownership Reporting Compliance.
On June 16, 1999, Lee B. Foster II exercised an option to acquire 2,500
shares of the Company's common stock. The required Form 4 was filed with the
Securities and Exchange Commission on July 13, 1999.
APPROVAL OF APPOINTMENT OF AUDITORS
The firm of Ernst & Young, LLP has served as the Company's independent
auditors since 1990 and has been appointed as the Company's independent auditors
for the fiscal year ending December 31, 2000. The Board of Directors recommends
a vote FOR approval of this appointment.
5
<PAGE> 8
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth information regarding the compensation of
the Company's five most highly paid executive officers (the "Named Executive
Officers").
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION COMPENSATION AWARDS
---------------------------------------- -------------------------
OTHER ALL
ANNUAL RESTRICTED OPTIONS/ OTHER
SALARY BONUS COMPENSATION STOCK AWARDS SARS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) ($)(1) ($)(2) ($)(3) (# SHARES) ($)(4)
- --------------------------- ---- ------ ------ ------------ ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Lee B. Foster II................ 1999 292,000 73,353 * 18,858 0 29,376
Chief Executive Officer and 1998 283,000 114,295 * 31,950 32,500 28,988
Chairman 1997 280,000 69,049 * 19,480 0 26,493
Stan L. Hasselbusch............. 1999 200,000 50,241 * 12,919 0 18,162
President and 1998 175,721 82,967 * 19,837 50,000 16,081
Chief Operating Officer 1997 151,250 39,900 * 9,845 0 12,822
Alec C. Bloem................... 1999 168,250 25,372 99,781(6) 5,236 15,000 9,142
Senior Vice President-- 1998(5) 58,526 9,443 * 992 10,000 1,756
Concrete Products
Dean A. Frenz................... 1999 166,000 29,619 * 7,613 0 14,376
Senior Vice President-- 1998 162,000 57,287 * 16,014 0 13,856
Rail Distribution 1997 160,000 21,469 * 6,057 0 12,911
Roger F. Nejes.................. 1999 154,219 32,284 18,744(7) 8,300 0 12,732
Senior Vice President-- 1998 150,000 50,486 * 14,115 15,000 12,979
Finance and Administration 1997 140,000 28,772 18,190(8) 8,118 0 10,485
and Chief Financial
Officer
</TABLE>
- ---------
(1) The amounts included in this column for 1999 include, in addition to cash,
the value, at $4 1/16 per share of the Company's Stock issued to the named
executive officers on April 1, 2000 pursuant to the Company's 1999 bonus
plan. The amounts for 1998 include, in addition to cash, the value at
$5 3/16 per share of the Company's common stock issued pursuant to the
Company's 1998 bonus plan. The amounts for 1997 include, in addition to
cash, the value at $5 1/8 per share of the Company's common stock issued
pursuant to the Company's 1997 bonus plan. The stock is subject to
forfeiture if, subject to certain exceptions, the recipient's employment
with the Company terminates within two years after the date of the stock's
issuance.
(2) The amounts disclosed in this column include the value of Company provided
term life insurance, leased car, executive medical reimbursement plan,
relocation expenses and country club dues and fees.
(3) Pursuant to the Company's 1999 bonus plan, 13,028 shares of the Company's
common stock were awarded to the named executive officers, with 4,642 shares
awarded to Mr. Foster; 3,180 shares awarded to Mr. Hasselbusch; 1,289 shares
awarded to Mr. Bloem; 1,874 shares awarded to Mr. Fenz; and 2,043 shares
awarded to Mr. Nejes. Dividends are payable on the restricted shares to the
same extent as other shares of common stock. The awards set forth in this
column also are included in the named executive officer's annual bonus and
are further described in footnote (1). As of December 31, 1999, Mr. Foster
held 9,960 shares of restricted common stock valued at $48,555; Mr.
Hasselbusch held 5,745 shares valued at $28,007; Mr. Frenz held 4,269 shares
valued at $20,811 and Mr. Nejes held 4,305 shares valued at $20,987.
6
<PAGE> 9
(4) The amounts disclosed in this column include the Company contributions to
the L.B. Foster Company Voluntary Investment Plan and the Supplemental
Executive Retirement Plan.
(5) The amounts disclosed are for a partial 1998 calendar year.
(6) This amount includes relocation expenses in the amount of $92,363.
(7) This amount includes country club dues and fees of $5,378 and $9,660 for a
leased car.
(8) This amount includes country club dues and fees of $5,446 and $9,396 for a
leased car.
* The total is less than 10% of the executive's total salary and bonus for the
year.
OPTION GRANTS
The following table provides information on non-qualified stock options
granted to the named executive officers in 1999:
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
NUMBER OF % OF TOTAL ANNUAL RATES OF STOCK
SHARES OPTIONS PRICE APPRECIATION
UNDERLYING GRANTED TO EXERCISE FOR OPTION TERM ($)
OPTIONS EMPLOYEES OR BASE EXPIRATION ----------------------
NAME GRANTED IN 1999 PRICE ($/SH) DATE 5% 10%
- ---- ------- ------- ------------ ---- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Alec C. Bloem 15,000(a) 12 5.375 10/18/09 $50,700 $128,475
</TABLE>
- ---------
(a) The option vests at the rate of 25% per year, commencing one year after the
date of grant, and is exercisable until ten years after the date of the
grant.
OPTION EXERCISES AND YEAR-END OPTION VALUES
The following table provides information on option exercises in fiscal 1999
by the named executive officers and such officers' unexercised options at
December 31, 1999. The Company has not awarded any stock appreciation rights.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT FISCAL IN-THE-MONEY OPTIONS AT
SHARES YEAR-END (#) FISCAL YEAR-END ($)
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE (#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ------------ ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Lee B. Foster II 12,500 26,438 167,500 -- $219,363 --
Stan L. Hasselbusch -- -- 60,500 57,500 53,734 9,281
Alec C. Bloem -- -- 2,500 22,500 1,238 3,713
Dean A. Frenz -- -- 50,000 -- 62,250 --
Roger F. Nejes -- -- 38,750 11,250 45,281 5,569
</TABLE>
PERSONNEL & COMPENSATION COMMITTEE
AND OPTION COMMITTEE
REPORT ON EXECUTIVE COMPENSATION
The three member Personnel & Compensation Committee (the "Compensation
Committee") of the board of directors is composed of non-employee directors and
is generally responsible for determining the compensation of the Company's
executive officers, except for decisions made by the Option
7
<PAGE> 10
Committee concerning stock option awards. The decisions by the Compensation
Committee are then reviewed by the full board. This report is submitted by
Messrs. Massman, Puth and Shaw in their capacity as the board's Compensation
Committee, and Messrs. Puth, Rackoff and Shaw in their capacity as the Option
Committee, and addresses the Company's compensation policies for 1999 as they
were generally applicable to the Company's executive officers and as they were
specifically applicable to Mr. Foster.
COMPENSATION POLICIES REGARDING EXECUTIVE OFFICERS
The Compensation Committee's policies are designed to enable the Company to
attract and retain qualified executives and to provide incentives for the
achievement of the Company's annual and long-term performance goals. The
vehicles for compensating and motivating executive officers include cash
compensation, stock awards, stock options, participation in a 401(k), a
supplemental executive retirement plan and other benefits. The Company has not
established a policy with regard to Section 162(m) of the Internal Revenue Code
of 1986, as amended, since the Company has not and currently does not anticipate
paying compensation in excess of $1 million per annum to any employee.
CASH COMPENSATION
Each year the Company obtains survey data in order to determine the
competitiveness of its pay structure for senior management. The surveys
considered in determining the pay scales for 1999 were published by Watson Wyatt
Data Services and covered companies that were manufacturers of durable goods
with annual sales of up to $310 million, fabricators of metal products with
annual sales of up to $435 million, or general manufacturers with sales of up to
$350 million. The data indicates that the Company's executive officers' base
salaries average 15.19% below the blended average of the median base salaries
for comparable positions in such industries.
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 1999, the Company also maintained an Incentive Compensation Plan to
provide incentives and rewards for employees. Awards to executive officers under
the Incentive Compensation Plan are in the form of both cash and Company stock
and are based upon the Corporation's overall profitability, the officer's grade
level and base salary and, for officers who are responsible for particular
operating units, the performance of such operating units. For 1999, cash awards
under the Plan ranged from 6.5% to 18.7% of the 1999 base compensation of the
Company's executive officers. Survey data published by Watson Wyatt Data
Services indicate that the current salaries plus cash incentive compensation
(excluding stock awards under the Incentive Compensation Plan) paid to the
Company's executive officers were 21.47% below the blended aggregate median cash
compensation for comparable executive positions in the durable goods
manufacturing industry, metal fabricating industry and general manufacturing
industry. In addition, the Company awarded 24,270 shares of the Company's common
stock to its executive officers, which stock is subject to forfeiture if,
subject to certain exceptions, the executive's employment with the Company
terminates within two years from the date of the award. Awards of stock to
Messrs. Bloem, Foster, Frenz, Hasselbusch and Nejes are included in the Summary
Compensation Table.
8
<PAGE> 11
Many of the companies included in the peer group used to compare
shareholder returns are substantially larger than the Company and do not
necessarily represent the Company's most direct competition for executive
talent. Consequently, the survey data used by the Compensation Committee does
not correspond to the peer group index in the five-year Total Return graph
included in the proxy statement.
STOCK OPTION PLAN
The Company's 1985 Long-Term Incentive Plan as Amended and Restated and the
1998 Long-Term Incentive Plan (the "Plans") 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 Plans are 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 "non-qualified stock
options" may be awarded under the Plan. Stock appreciation rights may be awarded
at any time prior to six months before the stock option's expiration date and
represent the right to receive payment of an amount not exceeding the amount by
which the average of the reported high and low sales prices of the Company's
common stock on the trading day immediately preceding the date of exercise of
the SAR exceeds the option exercise price. The exercise of a SAR cancels the
related stock option. In determining the number of options to award a
participant, the Option Committee generally takes into account, among other
factors, the number of options previously awarded to the participant.
RETIREMENT PLAN
The Company maintains the L. B. Foster Company Voluntary Investment Plan, a
salary reduction plan qualifying under Section 401(k) of the Internal Revenue
Code, covering all salaried employees with over one (1) year of service.
Eligible employees may contribute up to 15% (10% maximum on a pre-tax 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 the employee's 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 1998 to the Voluntary
Investment Plan for Messrs. Bloem, Foster, Frenz, Hasselbusch and Nejes are
included in the Summary Compensation Table. The Company also maintains a
Supplemental Executive Retirement Plan under which executive officers may accrue
benefits which approximate the benefits which the executives cannot receive
under the Voluntary Investment Plan because of Internal Revenue Code
limitations.
OTHER COMPENSATION PLANS
At various times in the past, the Company has adopted certain broad-based
employee benefit plans in which executive officers have been permitted to
participate and has adopted certain executive officer leased vehicle, life and
health insurance programs. The incremental cost to the Company of the executive
officers' benefits provided under these programs for Messrs. Bloem, Foster,
Frenz, Has-
9
<PAGE> 12
selbusch and Nejes are included in the Summary Compensation Table, if such
benefits exceeded 10% of named officer's salary and bonus for the year. Benefits
under these plans are not directly or indirectly tied to Company performance.
MR. FOSTER'S 1999 COMPENSATION
Mr. Foster is eligible to participate in the same executive compensation
plans as are available to other executive officers. Mr. Foster's annual salary
for 1999 was $292,000 and was increased on March 1, 2000 to an annual salary of
$310,000. According to data published by Watson Wyatt Data Services, Mr.
Foster's 1999 salary was approximately 14.2% below the blended average of the
median base salary for chief executive officers of metal fabricating companies
with median sales of $166 million, durable goods manufacturing companies with
median sales of $216 million and general manufacturing companies with median
sales of $283 million. 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 a
cash award of $54,495 for 1999 plus 4,642 shares of the Company's common stock.
Under the Plan, Mr. Foster's award was based upon the Company's 1999 pre-tax
income. According to data published by Watson Wyatt Data Services, Mr. Foster's
1999 total of base salary and cash incentive compensation (excluding stock
awards) was 22.47% below the blended median total cash compensation of the chief
executive officers in the durable good manufacturing industry, in the metal
fabrication industry and in general manufacturing.
PERSONNEL & COMPENSATION COMMITTEE
John W. Puth, Chairman
Richard L. Shaw
Henry J. Massman IV
OPTION COMMITTEE
John W. Puth
William H. Rackoff
Richard L. Shaw
10
<PAGE> 13
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AMONG L.B. FOSTER COMPANY, THE NASDAQ STOCK MARKET-US INDEX
AND A PEER GROUP
<TABLE>
<CAPTION>
NASDAQ STOCK
L.B. FOSTER COMPANY PEER GROUP MARKET (U.S.)
------------------- ---------- -------------
<S> <C> <C> <C>
12/94 100.00 100.00 100.00
12/95 130.77 97.64 141.33
12/96 115.38 96.69 173.89
12/97 151.92 107.86 213.07
12/98 208.85 75.73 300.25
12/99 150.00 92.97 542.43
</TABLE>
* $100 invested on 12/31/94 in stock or index--including reinvestment of
dividends.
Fiscal year ending December 31.
The Peer Group is composed of the following steel or iron related companies
where stocks are listed on domestic securities exchanges: Ampco-Pittsburgh
Corp., Bayou Steel Corp. La Place, Bethlehem Steel Corp., Birmingham Steel
Corp., Carpenter Technology Corp., Friedman Inds. Inc., Hmi Inds., Inc.,
Keystone Cons Inds. Inc., LTV Corp. New, Matec Corp., Maverick Tube Corp.,
Meridian Natl. Corp., N.S. Group, Inc., National Std Co., Nucor Corp., Oregon
Steel Mills, Inc., Precision Castparts Corp., Quanex Corp., Texas Inds. Inc.,
Tubos De Acero De Mexico S.A., Tyler Corp. Del., USX US Steel Group, Weirton
Steel Corp., Whx Corp.
11
<PAGE> 14
ADDITIONAL INFORMATION
Management is not aware at this time of any other matters to be presented
at the meeting. If, however, any other matters should come before the meeting or
any adjournment thereof, the proxies will be voted in the discretion of the
proxyholders.
Representatives of Ernst & Young, LLP 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 2001
annual meeting must be received by the Company no later than December 31, 2000
to be considered for inclusion in the Company's proxy statement and form of
proxy for that meeting. A nomination of a person for election as a director and
any other proposal made by a shareholder shall not be considered unless written
notice has been received by the Company's Secretary not less than 90 days in
advance of the meeting or, if later, the seventh calendar day following the
first public announcement of the date of the meeting.
Pittsburgh, Pennsylvania
April 12, 2000
12
<PAGE> 15
PLEASE MARK, DATE, SIGN AND MAIL YOUR
PROXY CARD BACK AS SOON AS POSSIBLE!
ANNUAL MEETING OF STOCKHOLDERS
L.B. FOSTER COMPANY
MAY 10, 2000
Please Detach and Mail in the Envelope Provided
- --------------------------------------------------------------------------------
[X] Please mark your
votes as in this
example.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR ALL NOMINEES" IN ITEM 1
AND "FOR" ITEM 2
Item 1 Election of the following nominees as Directors.
FOR all WITHHOLD AUTHORITY
Nominees to vote for all nominees Nominees: L.B. Foster II
H.J. Massman IV
[ ] [ ] J.W. Puth
W.H. Rackoff
R.L. Shaw
WITHHOLD AUTHORITY to vote for the following only, write the name
of the Nominee(s) in the space below.
___________________________________________________________________________
Item 2 Approve appointment of Ernst & Young as Independent Auditors for 2000.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
(PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY
PROMPTLY IN THE ENCLOSED ENVELOPE)
Signature: __________________________________________ Date: ______________, 2000
_____________________________________________________ Date: ______________, 2000
SIGNATURE IF HELD JOINTLY
NOTE: Please sign exactly as name appears on the certificate (representing
shares to be voted by this proxy as shown on the label above. When
signing as executor, administrator, attorney, trustee or guardian please
sign full title as such.) If a correspondent, please sign full corporate
name by president or other authorized officer. If a partnership, please
sign the partnership name by authorized person.
<PAGE> 16
PROXY
L.B. FOSTER COMPANY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS MAY 10, 2000
The undersigned hereby appoints Lee B. Foster II and Stan L. Hasselbusch, and
each or any of them, to represent the L.B. Foster Company common stock of the
undersigned at the Annual Meeting of Stockholders of L.B. Foster Company to be
held at the Radisson Hotel Green Tree, 101 Marriott Drive, Pittsburgh,
Pennsylvania on May 10, 2000 at 11:00 a.m. or at an 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 matter 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 in unavailable for election, this proxy may be voted for a substitute
nominee chosen by the Board of Directors.
(PLEASE DATE AND SIGN ON REVERSE SIDE AND RETURN PROMPTLY)
