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 reported) May 25, 2005
-------------------------------
L.B. Foster Company
-------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Pennsylvania 000-10436 25-1324733
-------------------------------------------------------------------------------
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
415 Holiday Drive, Pittsburgh, Pennsylvania 15220
-------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 412-928-3417
---------------------------
None
-------------------------------------------------------------------------------
(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
A. 2005 Three Year Incentive Plan
On May 25, 2005, the Registrant's Board of Directors, upon the prior
recommendation of its Compensation Committee (the "Committee"), approved the
"L.B. Foster Company 2005 Three Year Incentive Plan" (the "Plan"). The Plan is
designed to further motivate selected senior officers to improve the
Registrant's performance over the three year period, 2005 - 2007 (the "Fiscal
Period").
The total amount payable under the Plan is based on a "Performance Percentage".
The "Performance Percentage" is calculated by dividing Incentive Income, as
defined in the Plan, minus $13,168,000, by $10,341,000. Incentive Income
essentially is the Registrant's aggregate pre-tax income for the Fiscal Period,
excluding income with respect to the Registrants' investments in the Dakota,
Minnesota & Eastern Railroad, LIFO adjustments or other gains, losses, charges
or income which the Committee, in its sole discretion, deems extraordinary.
Based upon the Performance Percentage, the maximum amount payable to
participants is equal to the corresponding percentage in the table below (the
"Payment Percentage") multiplied by $1,825,000:
2
--------------------------- -------------------------
Performance Percentage Payout Percentage (as %
of $1,825,000)
--------------------------- -------------------------
--------------------------- -------------------------
Less than 70% -0-
--------------------------- -------------------------
70% 10.0%
--------------------------- -------------------------
80% 30.0%
--------------------------- -------------------------
90% 62.5%
--------------------------- -------------------------
100% 100.0%
--------------------------- -------------------------
110% 112.5%
--------------------------- -------------------------
120% 130.0%
--------------------------- -------------------------
130% 150.0%
--------------------------- -------------------------
150% 200.0%
--------------------------- -------------------------
The Payout Percentage shall be adjusted proportionately between the levels in
the table to reflect the Performance Percentage actually achieved.
Individual awards are calculated by multiplying the total amount available for
awards by a fraction, the numerator of which is the points assigned to the
participant and the denominator of which is the sum of all points assigned to
all participants in the Plan. The initial participants include the President and
Chief Executive Officer, 5 Senior Vice Presidents, 4 Vice Presidents and the
Controller. Points have been assigned to these initial participants as follows:
President/CEO 4 Points
Sr. Vice President 2 Points
Vice President, Controller 1 Point
There are various eligibility requirements, including that a participant may not
have been terminated for "cause", as defined in the Plan and that a participant
may not have been terminated for any reason and received money from the
Registrant in connection with such termination. If a participant ceases to be an
employee of the Registrant during the Fiscal Period (yet continues to meet
applicable eligibility criteria), the amount of any incentive award payable to
the participant shall be determined by the Committee and such payment shall be
deducted from the total amount available for other participants.
Subsequent participants, if any, shall have points assigned to them by the
Committee. If a participant satisfies the eligibility requirements but ceases to
be an employee of the Registrant on or prior to December 31, 2007, the Committee
shall adjust such participant's points downward by an amount which the
Committee, in its discretion, deems appropriate.
Notwithstanding any other provisions of the Plan, an incentive award payable to
any participant may not exceed twice the incentive award that would have been
payable to the participant if the Registrant had achieved a "Performance
Percentage" of 100% and all of the initial participants had remained
participants for the full Fiscal Period, and no subsequent participants had been
added to the Plan. In addition, if the sum of all points assigned to
participants is less than 19, incentive awards payable under the Plan shall be
adjusted downward in amounts determined by the Committee. Any amounts not paid
shall remain the Registrant's property.
Upon receiving any necessary approvals from the Registrant's shareholders, the
Committee may substitute restricted shares of the Registrant's common stock for
up to 50% of the incentive awards that
3
would otherwise be payable under the Plan, based upon the Committee's
determination of the fair market value of such restricted stock.
Incentive awards shall be paid on or before March 15, 2008.
Item 9.01 Exhibits
10.56 2005 Three Year Incentive Plan
4
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: May 31, 2005
/s/David J. Russo
-------------------------------------
David J. Russo
Senior Vice President
Chief Financial Officer and Treasurer
5
Exhibit Index
- -------------
Exhibit Number Description
- -------------- -----------
10.56 2005 Three Year Incentive Plan