L.B. FOSTER COMPANY
1998 LONG-TERM INCENTIVE PLAN FOR OFFICERS AND DIRECTORS
ARTICLE I
PURPOSE, EFFECTIVE DATE AND AVAILABLE SHARES
1.1 Purpose. The purpose of this Plan is to provide financial incentives for
officers and directors of L.B. Foster Company (the "Company") and its
subsidiaries, thereby promoting the long-term growth and financial success of
the Company by (i) attracting and retaining officers and directors of
outstanding ability, (ii) strengthening the Company's capability to develop,
maintain and direct a competent management team, (iii) motivating officers to
achieve long-range performance goals and objectives, and (iv) providing
incentive compensation opportunities competitive with those of other
corporations.
1.2 Effective Date and Expiration of Plan. The Plan was adopted by the Board of
Directors of the Company on October 23, 1998 and was made effective as of that
date. Unless earlier terminated by the Board pursuant to Section 5.3, the Plan
shall terminate on the fifth anniversary of its Effective Date. No Award shall
be made pursuant to the Plan after its termination date, but Awards made prior
to the termination date may extend beyond that date.
1.3 Shares Available Under the Plan. L.B. Foster Company stock to be offered
under the Plan pursuant to Options and SARs may be authorized but unissued
common stock or previously issued shares of common stock which have been
reacquired by the Company and are held in its treasury. Subject to adjustment
under Section 5.6, no more than 25,000 shares of common stock shall be issuable
upon the exercise of Options or SARs. Any shares of stock subject to an Option
which for any reason is cancelled (excluding shares subject to an Option
cancelled upon the exercise of a related SAR) or terminated without having been
exercised shall again be available for Awards under the Plan. Shares subject to
an Option cancelled upon the exercise of an SAR shall not again be available for
Awards under the Plan.
ARTICLE II
DEFINITIONS
2.1 "Award" means, individually or collectively, any Option or SAR under this
Plan.
2.2 "Board" means the Board of Directors of L.B. Foster Company.
2.3 "Committee" means directors of the Company, not to be less than two,
appointed by the Board, each of who is a "non-employee director" within the
meaning of Rule 16b-3 under the Securities Exchange Act of 1934, as amended. In
the absence of such a committee, the term "Committee" shall mean the Board.
2.4 "Company" means L.B. Foster Company and its successors and
assigns.
2.5 "Director" means a director of the Company or of a Subsidiary.
2.6 "Effective Date" means the date on which the Plan is effective as
provided in Section 1.2.
2.7 "Fair Market Value" of the Stock as to a particular time or date means the
last sale price of the Stock as reported in the NASDAQ National Market System
or, if the Stock is listed on a securities exchange, the last reported sale
price of the Stock on such exchange that shall be for consolidated trading if
applicable to such exchange, or if neither so reported or listed, the last
reported bid price of the Stock.
2.8 "Incentive Stock Option" means an option within the meaning of
Section 422 of the Internal Revenue Code
of 1986, as amended.
2.9 "Nonqualified Stock Option" means a stock option granted under the Plan
other than an Incentive Stock Option.
2.10 "Officer" means an officer of the Company or of a Subsidiary.
2.11 "Option" means both a Nonqualified Stock Option and an Incentive Stock
Option to purchase common stock of the Company.
2.12 "Option Price" means the price at which common stock of the Company may be
purchased under an Option as provided in Section 4.6.
2.13 "Participant" means a person to whom an Award is made under the Plan.
2.14 "Personal Representative" means the person or persons who, upon the death,
disability or incompetency of a Participant, shall have acquired, by will or by
the laws of descent and distribution or by other legal proceedings, the right to
exercise an Option or SAR theretofore granted to such Participant.
2.15 "Plan" means this 1998 Long-Term Incentive Plan for Officers and
Directors.
2.16 "SAR" means a stock appreciation right under the Plan.
2.17 "Stock" means common stock of the Company.
2.18 "Stock Option Agreement" means an agreement entered into between a
Participant and the Company under Section 4.5.
2.19 "Subsidiary" means a corporation or other business entity, domestic or
foreign, the majority of the voting stock or other voting interests in which is
owned directly or indirectly by the Company.
ARTICLE III
ADMINISTRATION
3.1 Committee to Administer. (a) The Plan shall be administered by the
Committee. The Committee shall have full power and authority to interpret and
administer the Plan and to establish and amend rules and regulations for its
administration. The Committee's decisions shall be final and conclusive with
respect to the interpretation of the Plan and any Award made under it.
(b) A majority of the members of the Committee shall constitute a quorum for the
conduct of business at any meeting. The Committee shall act by majority vote of
the members present at a duly convened meeting, including a telephonic meeting
in accordance with Section 1708 of the Pennsylvania Business Corporation Law
("BCL"). Action may be taken without a meeting if written consent thereto is
given in accordance with Section 1727 of the BCL.
3.2 Powers of Committee. (a) Subject to the provisions of the Plan, the
Committee shall have authority, in its discretion, to determine those Officers
and Directors who shall receive Awards, the time or times when each such Award
shall be made and the type of Award to be made, whether an Incentive Stock
Option or a Nonqualified Stock Option shall be granted and the number of shares
to be subject to each Option.
(b) A Director shall not participate in a vote granting himself an Option or
SAR.
(c) The Committee shall determine the terms, restrictions and provisions of the
agreement relating to each Award, including such terms, restrictions and
provisions as shall be necessary to cause certain Options to qualify as
Incentive Stock Options. The Committee may correct any defect or supply any
omission or reconcile any inconsistency in the Plan, or in any agreement
relating to an Award, in such manner and to the extent the Committee shall
determine in order to carry out the purposes of the Plan. The Committee may, in
its discretion, accelerate the date on which an Option or SAR may be exercised,
if the Committee determines that to do so will be in the best interests of the
Company and the Participant.
ARTICLE IV
AWARDS
4.1 Awards. Awards under the Plan shall consist of Incentive Stock Options,
Nonqualified Stock Options and/or SARs. All Awards shall be subject to the terms
and conditions of the Plan and to such other terms and conditions consistent
with the Plan as the Committee deems appropriate. Awards need not be uniform.
4.2 Eligibility for Awards. Awards may be made to Officers and Directors. In
selecting Participants and in determining the form and amount of the Award, the
Committee may give consideration to his or her functions and responsibilities,
his or her present and potential contributions to the success of the Company,
the value of his or her services to the Company, and other factors deemed
relevant by the Committee.
4.3 Award of Stock Options. The Committee may, from time to time, subject to
Section 3.2(b) and other provisions of the Plan and such terms and conditions as
the Committee may prescribe, grant Incentive Stock Options and Nonqualified
Stock Options to any Officers or Directors. Awards of Incentive Stock Options
and Nonqualified Stock Options shall be separate and not in tandem.
4.4 Period of Option. (a) Unless otherwise provided in the related Stock Option
Agreement, an Option granted under the Plan shall be exercisable only after
twelve (12) months have elapsed
from the date of grant and, after such twelve-month waiting period, the Option
may be exercised in cumulative installments in the following manner:
(i) The Participant may purchase up to one-fourth
(1/4) of the total optioned shares at any time after one year from the
date of grant and prior to the termination of the Option.
(ii) The Participant may purchase an additional one-
fourth (1/4) of the total optioned shares at any time after two years
from the date of grant and prior to the termination of the Option.
(iii) The Participant may purchase an additional one-
fourth (1/4) of the total optioned shares at any time after three years
from the date of grant and prior to the termination of the Option.
(iv) The Participant may purchase an additional one-
fourth (1/4) of the total optioned shares at any time after four years
from the date of grant and prior to the termination of the Option.
The duration of each Option shall not be more
than ten (10) years from the date of grant.
(b) Except as otherwise provided in the Stock Option Agreement, an Option may
not be exercised by a Participant unless such Participant is then, and
continually (except for sick leave, military service or other approved leave of
absence) after the grant of an Option has been, an officer, director or employee
of the Company or a Subsidiary.
4.5 Stock Option Agreement. Each Option shall be evidenced by a Stock Option
Agreement, in such form and containing such provisions not inconsistent with the
provisions of the Plan as the Committee from time to time shall approve.
4.6 Option Price and Exercise. (a) The Option Price of Stock under each Option
shall be determined by the Committee but shall be not less than the Fair Market
Value of the Stock on the trading day immediately preceding the date on which
the Option is granted, as determined by the Committee.
(b) Options may be exercised from time to time by giving written notice of
exercise to the Company specifying the number of shares to be purchased. The
notice of exercise shall be accompanied by (i) payment in full of the Option
Price in cash, certified check or cashier's check or (ii) a copy of irrevocable
instructions to a broker to promptly deliver to the Company the amount of sale
or loan proceeds sufficient to cover the Option Price.
Delivery of Option Shares. The Company shall not be
obligated to deliver any shares upon the exercise of an Option unless and until,
in the opinion of the Company's counsel, all applicable federal, state and other
laws and regulations have been complied with. In the event the outstanding Stock
is at the time listed on any stock exchange, no delivery shall be made unless
and until the shares to be delivered have been listed or authorized to be added
to the list upon official notice of issuance on such exchange. No delivery shall
be made until all other legal matters in connection with the issuance and
delivery of shares have been approved by the Company's counsel.
Without limiting the generality of the foregoing, the Company may require from
the Participant or other person purchasing shares of Stock under the Plan such
investment representation or such agreement, if any, as counsel for the Company
may consider necessary in order to comply with the Securities Act of 1933, as
amended, and the regulations thereunder. Certificates evidencing the shares may
be required to bear a restrictive legend. A stop transfer order may be required
to be placed with the transfer agent, and the Company may require that the
Participant or such other person agree that any sale of the shares will be made
only on one or more specified stock exchanges or in such other manner as
permitted by the Committee.
The Participant shall notify the Company when any disposition of the shares,
whether by sale, gift or otherwise, is made. The Company shall use its best
efforts to effect any such compliance and listing, and the Participant or other
person shall take any action reasonably requested by the Company in such
connection.
4.8 Limitations on Incentive Stock Options. (a) The aggregate Fair Market Value
(determined at the time the Option is granted) of the Stock with respect to
which Incentive Stock Options are exercisable for the first time by a
Participant during any calendar year (under all plans of the Participant's
employer corporation and its parent and subsidiary corporations) shall not
exceed $100,000. (b) An Incentive Stock Option shall not be granted to any
Officer or Director who, at the time of grant, owns stock possessing more than
ten percent of the total combined voting power of all classes of stock of the
Company or any Subsidiary.
(c) No Incentive Stock Option may be exercisable more than three months after
termination of the Participant's employment with the Company or with a parent or
Subsidiary of the Company, except that where such employment is terminated
because of permanent and total disability, within the meaning of Section
22(e)(3) of the Internal Revenue Code of 1986 ("Permanent Disability"), or
death, such period may be one year.
4.9 Termination of Service. Except as otherwise provided in this Plan, or in the
applicable Stock Option Agreement, if the service of a Participant (i.e., as an
officer, director or employee of the Company or a Subsidiary) terminates for any
reason other than death, permanent disability or retirement with the consent of
the Company, all Options held by the Participant shall expire and may not
thereafter be exercised. For purposes of this section, the employment or other
service in respect to Options held by a Participant shall be treated as
continuing in tact while the participant is on military leave, sick leave, or
other bona fide leave of absence (such as temporary employment with the
Government) if the period of such leave does not exceed 90 days, or, if longer,
so long as the Participant's right to reestablish his service with the Company
is guaranteed either by statute or by contract. Where the period of leave
exceeds 90 days and where the Participant's right to reestablish his service is
not guaranteed by statute or by contract, his service shall be deemed to have
terminated on the ninety-first day of such leave. Anything herein to the
contrary notwithstanding and unless the Stock Option Agreement provides
otherwise, if the service of a Participant terminates more than four years after
the grant of the Option, other than due to a termination for Cause, the
Participant may exercise such Option within 30 days of such termination. Except
as so exercised, such Option shall expire at the end of such period. In no
event, however, may any Option be exercised after the expiration of ten (10)
years from the date of grant of such Option.
For the purpose of the Plan, termination for Cause shall mean (i) termination
due to (a) willful or gross neglect of duties or (b) willful misconduct in the
performance of such duties, so as to cause material harm to the Company or any
Subsidiary as determined by the Board, (ii) termination due to the Participant
committing fraud, misappropriation or embezzlement in the performance of his or
her duties or (iii) termination due to the Participant committing any felony of
which he or she is convicted and which, as determined in good faith by the
Board, constitutes a crime involving moral turpitude and results in material
harm to the Company or a Subsidiary.
4.10 Death. Except as otherwise provided in the applicable Stock Option
Agreement, if a Participant dies at a time when his Option is not fully
exercised, then at any time or times within such period after his death, not to
exceed 12 months, as may be provided in the Stock Option Agreement, such Option
may be exercised as to any or all of the shares which the Participant was
entitled to purchase under the Option immediately prior to his death, by his
executor or administrator or the person or persons to whom the Option is
transferred by will or the applicable laws of descent and distribution. In no
event, however, may any Option be exercised after the expiration of ten (10)
years from the date of grant of such Option.
4.11 Retirement or Permanent Disability. Except as otherwise provided in the
applicable Stock Option Agreement, if a Participant retires from service with
the consent of the Company, or suffers Permanent Disability, at a time when he
or she is entitled to exercise an Option, then at any time or times within three
years after his or her termination of service because of such retirement or
Permanent Disability the Participant may exercise such Option as to all or any
of the shares which he or she was entitled to purchase under the Option
immediately prior to such termination. Except as so exercised, such Option shall
expire at the end of such period. In no event, however, may any Option be
exercised after the expiration of ten (10) years from the date of grant of such
Option.
The Committee shall have authority to determine whether or not a Participant has
retired from service or has suffered Permanent Disability, and its determination
shall be binding on all concerned. In the sole discretion of the Committee, a
transfer of service to an affiliate of the Company other than a Subsidiary (the
latter type of transfer not constituting a termination of service for purposes
of the Plan) may be deemed to be a retirement from service with the consent of
the Company so as to entitle the Participant to exercise the Option within 90
days after such transfer.
4.12 Stockholder Rights and Privileges. A Participant shall have no rights as a
stockholder with respect to any Stock covered by an Option until the issuance of
a stock certificate to the Participant representing such Stock.
4.13 Award of SARs. (a) At any time prior to six months before an Option's
expiration date, the Committee may award to the Participant an SAR related to
the Option.
(b) The SAR shall represent the right to receive payment of an amount not
greater than the amount, if any, by which the Fair Market Value of the Stock on
the trading day immediately preceding the date of exercise of the SAR exceeds
the Option Price.
(c) SARs awarded under the Plan shall be evidenced by either the Stock Option
Agreement or a separate agreement between the Company and the Participant.
(d) An SAR shall be exercisable only at the same time and to the same extent and
subject to the same conditions as the Option related thereto is exercisable,
except that the Committee may prescribe additional conditions and limitations on
the exercise of any SAR, including a maximum appreciation value. An SAR shall be
transferable only when the related Option is transferable, and under the same
conditions. The exercise of an SAR shall cancel the related Option. SARs may be
exercised only when the Fair Market Value of a share of Stock subject to the
related Option exceeds the Option Price. Such value shall be determined in the
manner specified in Section 4.13(b).
(e) An SAR shall be exercisable only by written notice to the Company and only
to the extent that the related Option is exercisable. However, an SAR shall in
no event be exercisable during the first six months of its term except in the
event of death or Permanent Disability of the Participant prior to the
expiration of such six-month period.
(f) All SARs shall automatically be exercised on the last trading day prior to
the expiration of the related Option, so long as the Fair Market Value of the
Stock at the time of exercise exceeds the Option Price, unless prior to such day
the holder instructs the Company otherwise in writing.
(g) Payment of the amount to which a Participant is entitled upon the exercise
of an SAR shall be made in cash, Company stock, or partly in cash and partly in
Company stock, as the Committee shall determine at the time of the Award. To the
extent that payment is made in Company stock, the shares shall be valued at
their fair market value, as determined by the Committee.
(h) At any time when a Participant is, in the judgment of counsel to the
Company, subject to Section 16 of the Securities Exchange Act of 1934 with
respect to any equity securities of the Company:
(i) any election by such Participant to receive cash
in whole or in part upon the exercise of such SAR shall be made only
during the period beginning on the third business day following the
date of release by the Company for publication of any quarterly or
annual summary statement of its sales and earnings and ending on the
twelfth business day following such date of release, and
(ii) in the event the Committee has not determined
the form in which such SAR will be paid (i.e., cash, shares of Company
stock, or any combination thereof), any election to exercise such right
in whole or in part for cash shall be subject to the subsequent consent
thereto, or disapproval thereof, by the Committee in its sole
discretion.
(i) Each SAR shall expire on a date determined by the Committee at the time of
Award, or, if later, upon the termination of the related Option.
ARTICLE V
MISCELLANEOUS PROVISIONS
5.1 Nontransferability. No Award under the Plan shall be transferable by the
Participant other than by will or the laws of descent and distribution. All
Awards shall be exercisable during the Participant's lifetime only by such
Participant or his Personal Representative. Any transfer contrary to this
Section 5.1 will nullify the Award.
5.2 Amendments. The Committee may at any time discontinue granting
Awards under the Plan. The Board may at any time amend
the Plan or amend any outstanding Option for the purpose of
satisfying the requirements of any changes in applicable laws or regulations or
for any other purpose which may at the time be permitted by law; provided that
no such amendment shall result in Rule 16b-3 under the Securities Exchange Act
of 1934, as amended, becoming inapplicable to any Options. No amendment shall
adversely affect the right of any Participant under any Award theretofore
granted to him or her except upon his or her written consent to such amendment.
5.3 Termination. The Board may terminate the Plan at any time prior to its
scheduled expiration date but no such termination shall adversely affect the
rights of any Participant under any Award theretofore granted without his or her
written consent.
5.4 Nonuniform Determinations. The Committee's determinations under the Plan,
including without limitation (i) the determination of the Officers and Directors
to receive Awards, (ii) the form, amount and timing of such Awards, (iii) the
terms and provisions of such Awards and (iv) the Agreements evidencing the same,
need not be uniform and may be made by it selectively among Officers and
Directors who receive, or who are eligible to receive, Awards under the Plan,
whether or not such Officers or Directors are similarly situated.
5.5 No Right to Employment. Neither the action of the Board in establishing the
Plan, nor any action taken by the Committee under the Plan, nor any provision of
the Plan, shall be construed as giving to any person the right to be retained in
the employ, or as an officer or director, of the Company or any Subsidiary.
5.6 Changes in Stock. In the event of a stock dividend, split-up, or a
combination of shares, recapitalization or merger in which the Company is the
surviving corporation or other similar capital change, the number and kind of
shares of stock or securities of the Company to be subject to the Plan and to
Options or SARs then outstanding or to be granted thereunder, the maximum number
of shares of stock or security which may be issued on the exercise of Options
granted under the Plan, the Option Price and other relevant provisions shall be
appropriately adjusted by the Board, whose determination shall be binding on all
persons. In the event of a consolidation or a merger in which the Company is not
the surviving corporation, or any other merger in which the shareholders of the
Company exchange their shares of stock in the Company for stock of another
corporation, or in the event of complete liquidation of the Company, or in the
case of a tender offer accepted by the Board of Directors, all outstanding
Options and SARs shall thereupon terminate, provided that the Board may, prior
to the effective date of any such consolidation or merger, either (i) make all
outstanding Options and SARs immediately exercisable or (ii) arrange to have the
surviving corporation grant to the Participants replacement Options and SARs on
terms which the Board shall determine to be fair and reasonable.