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 Rule 
     14a-6(e)(2))

[X]  Definitive Proxy Statement

[ ]  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]  No fee required.

[ ]  Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and O-11.

[ ]  Fee paid previously with preliminary materials.

[ ]  Check box if any part of the fee is offset as provided by Exchange Act Rule
     O-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.





 
                                               L.B. FOSTER COMPANY
LOGO                                            415 HOLIDAY DRIVE
L.B.FOSTER                               PITTSBURGH, PENNSYLVANIA 15220
COMPANY
                                 ------------
 
                 NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
                          TO BE HELD MAY 14, 1998
 
   To the Stockholders:
 
     The annual meeting of stockholders of L.B. Foster Company will be
   held at the Pittsburgh Green Tree Marriott, 101 Marriott Drive,
   Pittsburgh, Pennsylvania on Thursday, May 14, 1998 at 11:00 a.m.,
   local time, for the purposes of (i) electing a board of five
   directors for the ensuing year, (ii) considering and voting upon a
   proposal to change the state of incorporation of the Company from
   Delaware to Pennsylvania by adopting a Plan of Merger pursuant to
   which the Company will merge into a new, wholly-owned Pennsylvania
   subsidiary, (iii) approving the appointment of independent auditors
   for the year ending December 31, 1998 and (iv) transacting such
   other business as may properly come before the meeting or any
   adjournment thereof.
 
     Only holders of record of Class A Common Stock at the close of
   business on March 27, 1998 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 17, 1998

 
                              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 14, 1998 and at any
adjournment thereof. This proxy statement and the enclosed form of proxy and
annual report for 1997 were mailed to stockholders on or about April 17, 1998.
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) the adoption of a Plan of
Merger whereby the Company will be reincorporated in Pennsylvania, (iii)
approval of the independent auditors for 1998 and (iv) 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 27, 1998, the record date
for entitlement to vote at the meeting, there were 9,991,801 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 4,995,901 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 27, 1998, 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. Adoption of the Plan
of Merger shall require the affirmative vote of a majority of the shares
entitled to be voted. 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, FOR the adoption of
the Plan of Merger and FOR approval of the independent auditors for 1998.
 
  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.
 
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:
 


                                                              NUMBER OF   PERCENT OF
              NAME                         ADDRESS             SHARES       CLASS
              ----                         -------            ---------   ----------
                                                                 
 The TCW Group, Inc.            865 South Figueroa Street      735,600       7.36
                                Los Angeles, CA 90017
 Dimensional Fund Advisors Inc. 1299 Ocean Avenue, 11th Floor  703,300(a)    7.04
                                Santa Monica, CA 90401
 Quaker Capital Management      The Arrott Building            599,700(b)    6.00
  Corporation                   401 Wood Street, Suite 1300
                                Pittsburgh, PA 15222
 U.S. Bancorp                   601 2nd Avenue South           528,766       5.29
                                Minneapolis, MN 55402

- ------
(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 168,500 of these shares. The remainder reportedly are owned by
    investment advisory clients for which Quaker Capital Management
    Corporation serves as investment manager.
 
                                       2

 
                             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.
 


      NOMINEE
      -------
                 
 Lee B. Foster II   Mr. Foster, age 51, has been President, Chief Executive
                    Officer and a director of the Company since 1990. Mr.
                    Foster is a director of MotivePower Industries, Inc., a
                    manufacturer of locomotives and locomotive components.
 John W. Puth       Mr. Puth, age 69, has been a director of the Company since
                    1977. He has been President of J.W. Puth Associates, an
                    industrial 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),
                    US Freightways, Inc. (carrier), Allied Products Corp.
                    (manufacturer of industrial products), and A.M. Castle,
                    Inc. (metals distributor).
 William H. Rackoff Mr. Rackoff, age 49, has been a director of the Company
                    since 1996. Mr. Rackoff has been President of Asko, Inc,
                    which designs, engineers and manufactures custom engineered
                    tools for the metalworking industry, since 1981 and became
                    Chief Executive Officer of Asko, Inc in 1995.
 Richard L. Shaw    Mr. Shaw, age 70, 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 80, has been a director of the Company
                    since 1983 and Chairman of the Board since 1990. Mr.
                    Wilcock is a director of Copperweld Corp. (manufacturer of
                    steel tubing and bi-metal products) and Immuno Therapy
                    Corp. (medical research and development).

 
  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 eight meetings during 1997. 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.
 
                                       3

 
  Messrs. Foster, Shaw and Wilcock constitute the Executive Committee of the
Board of Directors. The Finance and Audit Committee is composed of Messrs.
Shaw (Chairman), Puth and Rackoff, the Personnel & Compensation Committee is
composed of Messrs. Puth (Chairman), Shaw and Wilcock, and the Option
Committee is composed of Messrs. Puth, Rackoff and Shaw.
 
  The Finance and Audit Committee, which held two meetings during 1997, 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 1997, 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 twice in 1997, 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 1997.
 
DIRECTOR'S COMPENSATION
 
  Outside directors, other than Mr. Wilcock, are paid a base annual fee of
$14,000, plus $1,000 for each Board meeting attended and $500 for each
committee meeting attended. In addition, each outside director, other than Mr.
Wilcock, also receives 1,000 shares of the Company's Class A Common Stock for
services during the preceding year. No compensation is paid for participating
in special telephonic meetings or executing unanimous consents in lieu of
meetings. Mr. Wilcock receives an annual fee of $100,000 for his services as
Chairman of the Board. Management directors receive no separate compensation
for their services as directors.
 
                                       4

 
OWNERSHIP OF SECURITIES BY MANAGEMENT
 
  Information concerning ownership of the Company's Class A Common Stock as of
March 27, 1998 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:
 


                                                        CLASS A      PERCENT OF
NAME                                                COMMON STOCK (A) CLASS (B)
- ----                                                ---------------- ----------
                                                               
Directors:
 Lee B. Foster II                                       242,491          2.4
 John W. Puth                                            46,000          .46
 William H. Rackoff                                      21,000          .21
 Richard L. Shaw                                         27,000          .27
 James W. Wilcock                                       100,500          1.0
Executive Officers:
 Dean A. Frenz                                           49,720          .50
  Senior Vice President--Rail Products
 Stan L. Hasselbusch                                     47,671          .48
  Senior Vice President--Construction and Tubular
   Products
 Roger F. Nejes                                          50,634          .50
  Senior Vice President--Finance and Administration
 Henry M. Ortwein Jr.                                    33,352          .33
  Group Vice President--Rail Manufactured Products
 All Directors and Executive Officers as a Group        796,521         7.60

- ------
(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
    April 14, 1998 through the exercise of stock options (90,000 shares for
    Mr. Wilcock, 140,000 for Mr. Foster, 25,000 for Mr. Shaw, 25,000 for Mr.
    Puth, 10,000 for Mr. Rackoff, 37,500 for Mr. Frenz, 43,750 for Mr.
    Hasselbusch, 43,750 for Mr. Nejes, 22,500 for Mr. Ortwein and 549,500 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
    27, 1998 have been acquired and are outstanding.
 
                                       5

 
                   PROPOSAL TO REINCORPORATE IN PENNSYLVANIA
 
GENERAL
 
  At the annual meeting, the stockholders will vote upon a proposal to change
the state of incorporation of the Company from Delaware to Pennsylvania. If
approved, the reincorporation will be effected by merging (the "Merger") the
Company into a wholly-owned Pennsylvania subsidiary which was recently formed
solely for the purpose of effecting the reincorporation. The surviving
corporation will be L.B. Foster Company, a Pennsylvania corporation ("LBF-
PA"). Upon consummation of the Merger, each share of Class A Common Stock of
the Company, par value $.01 per share, will be automatically converted into
one share of Common Stock of LBF-PA, par value $.01 per share, and will
continue to be quoted without interruption on the Nasdaq National Market
(ticker symbol FSTRA). IT WILL NOT BE NECESSARY FOR STOCKHOLDERS OF THE
COMPANY TO EXCHANGE THEIR EXISTING STOCK CERTIFICATES FOR STOCK CERTIFICATES
OF LBF-PA.
 
  The proposed Merger will be effected pursuant to the terms and conditions of
a Plan of Merger dated as of March 30, 1998, a copy of which is included as
Appendix A. By virtue of the Merger, the Company will cease to exist as a
Delaware corporation, the stockholders of the Company will become shareholders
of LBF-PA, LBF-PA will succeed to all of the assets, liabilities, subsidiaries
and other properties of the Company to the full extent provided by law, and
the rights of the shareholders and internal affairs of the corporation will be
governed by the articles of incorporation (the "LBF-PA charter") and bylaws of
LBF-PA and by the Pennsylvania Business Corporation Law of 1988, as amended
(the "BCL"), rather than the certificate of incorporation (the "Company
charter") and bylaws of the Company and the Delaware General Corporation Law
(the "GCL"). A copy of the LBF-PA charter is included as Appendix B. Copies of
the Company charter and bylaws as currently in effect and of the full text of
the bylaws of LBF-PA are available for inspection at the headquarters of the
Company and will be sent to stockholders without cost upon request. There will
be no change in the name, business, management, benefit plans, location,
assets, liabilities or net worth of the Company as a result of the
reincorporation. While the rights of shareholders under the BCL and the GCL
differ in a number of respects, the LBF-PA charter and bylaws, considered
together, have been designed to minimize these differences. For example,
Pennsylvania corporations that have a class of stock registered under the
Securities Exchange Act of 1934 ("registered" corporations) are automatically
subject to certain antitakeover provisions of the BCL, unless the corporation
expressly elects in its articles of incorporation not to be subject to those
provisions. The LBF-PA charter states that those antitakeover provisions shall
not be applicable to the corporation. See "Statutory Antitakeover Provisions."
The material changes in stockholder rights, corporate governance and other
matters resulting from the reincorporation are discussed below. The GCL refers
to "stockholder" whereas the BCL uses the term "shareholder." The term
shareholder is used throughout the discussion because stockholder and
shareholder have the same meaning under those statutes.
 
  The Merger is intended to constitute a reorganization within the meaning of
Section 368 of the Internal Revenue Code of 1986, as amended. Accordingly,
shareholders will not recognize gain or loss for Federal income tax purposes
as a result of the Merger and the automatic conversion of their shares into
shares of LBF-PA. Each shareholder's basis in shares of LBF-PA will be the
same as his or her basis in the shares of the Company, and the holding period
for shares of LBF-PA will include the holding period for shares of the Company
held as capital assets. No information is provided herein with
 
                                       6

 
respect to the consequences to shareholders, if any, under applicable state,
local or foreign laws. Shareholders are advised to consult their personal tax
advisors as to any tax consequences arising from individual circumstances.
 
  The Plan of Merger was approved by the Board of Directors of the Company on
March 30, 1998. Under Delaware law, consummation of the Merger will require
that the Plan of Merger be adopted by the affirmative vote of the holders of
record of a majority of the outstanding shares of Class A Common Stock of the
Company entitled to vote thereon. The Merger and reincorporation will be
effected as soon as practicable after the shareholders have adopted the Plan
of Merger. However, the Merger and reincorporation may be abandoned or the
Plan of Merger amended, either before or after shareholder adoption of the
Plan of Merger (except that the principal terms may not be amended without
shareholder approval) if in the opinion of the Board of Directors of the
Company circumstances arise that make it inadvisable to proceed. If the Plan
of Merger is not adopted by the shareholders, the reincorporation will not be
consummated and the Company will remain a Delaware corporation.
 
  Shareholders of the Company who vote against adoption of the Plan of Merger
or who abstain from voting will not be entitled to appraisal rights as a
result of the Merger.
 
  THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY RECOMMENDS A VOTE FOR
ADOPTION OF THE PLAN OF MERGER.
 
REASONS FOR THE REINCORPORATION
 
  The principal reason for reincorporating the Company in Pennsylvania is to
eliminate the Company's liability of approximately $50,000 per year under the
Delaware franchise tax. As a Pennsylvania corporation, the Company would no
longer be subject to the Delaware franchise tax.
 
  In recommending that the Company change its corporate domicile to
Pennsylvania, the Board of Directors also considered that the reason for
having incorporated the Company in Delaware has been largely abrogated by the
adoption in 1988 and subsequent years of important amendments to the BCL. The
Company historically has maintained its corporate headquarters in Pennsylvania
and has had virtually no business operations in Delaware. It was incorporated
in Delaware, however, because the GCL was commonly viewed as more modern and
less restrictive than the corporation laws of Pennsylvania then in effect. The
differences between the Delaware and Pennsylvania corporation laws, however,
were largely eliminated in 1988 when Pennsylvania adopted sweeping changes in
the BCL which afforded Pennsylvania corporations significant operating
flexibility and even certain advantages over the GCL.
 
  The Board also considered certain differences in shareholder rights and the
powers of management under the Delaware and Pennsylvania law and under the
Company charter and bylaws and the LBF-PA charter and bylaws, and concluded
that these changes would provide desirable flexibility in the management of
the Company and would enhance the Board's ability to pursue the long-term
interests of the shareholders of the Company and the other constituencies
served by the Company.
 
  As a result of the large number of corporations incorporated in Delaware,
the Delaware courts have developed a considerable expertise in dealing with
corporate issues and a substantial body of
 
                                       7

 
case law has developed construing Delaware law and establishing public
policies with respect to Delaware corporations. The Board believes, however,
that the tax savings and other advantages of reincorporating in Pennsylvania
outweigh these benefits of being domiciled in Delaware.
 
MANAGEMENT AFTER THE MERGER
 
  Upon consummation of the Merger, the Board of Directors of LBF-PA will be
composed of those persons elected to the Board of Directors of the Company at
the annual meeting to be held on May 14, 1998. Those persons will continue to
serve as directors of LBF-PA for the ensuing year and until their successors
are elected and qualified. It is expected that the first annual meeting of the
LBF-PA shareholders will be held in May 1999.
 
  The persons who currently serve as executive officers of the Company will
serve as the executive officers of LBF-PA following the Merger.
 
EMPLOYEE BENEFIT PLANS
 
  The Company's retirement plans and all other employee benefit plans will not
be changed in any material respect by the Merger. The options to acquire Class
A Common Stock of the Company under the Company's Long-Term Incentive Plan
which are outstanding immediately prior to the Merger will be converted into
options to purchase the same number of shares of LBF-PA Common Stock on the
same terms and conditions as those in effect immediately prior to the Merger,
and future options granted under that plan will be for shares of LBF-PA Common
Stock.
 
CAPITALIZATION
 
  . COMMON STOCK
 
  The Company is authorized to issue up to 20,000,000 shares of Class A Common
Stock, par value $.01 per share. As of March 27, 1998, 9,991,801 shares were
issued and outstanding, 236,938 shares were issued and held in the Company's
treasury and 1,241,250 shares were reserved for issuance upon the exercise of
stock options. The Company is also authorized to issue up to 1,391,000 shares
of Class B Common Stock, par value $.01 per share, which has only limited
voting rights but which is convertible on a share-for-share basis into Class A
Common Stock. No shares of Class B Common Stock are outstanding, and the
Company has no plans to issue any. The holders of Class A Common Stock are
entitled to one vote per share on all matters to be voted upon by the
shareholders, and there is no cumulative voting in the election of directors,
nor are there preemptive rights upon the issuance of additional shares. Upon
dissolution of the Company (which does not include the Merger), the holders of
Class A Common Stock will be entitled to a ratable portion of any assets
remaining after payment of all priority claims.
 
  LBF-PA is authorized to issue up to 20,000,000 shares of Common Stock, par
value $.01 per share. One share has been issued to the Company but will be
canceled upon consummation of the Merger. With the exceptions noted in
"Comparative Rights of Shareholders Before and After the Merger," the voting
and other rights of the holders of the Common Stock are essentially the same
as those of the holders of the Company's Class A Common Stock. LBF-PA is not
authorized to issue any other classes of common stock.
 
                                       8

 
  At the effective time of the Merger, each share of Class A Common Stock of
the Company (including the shares held in the treasury) will be automatically
converted into one share of LBF-PA Common Stock, and the number of shares of
Common Stock reserved for future issuance will be the same as the number of
shares of Class A Common Stock then reserved by the Company for future
issuance.
 
  American Stock Transfer & Trust Company serves as the transfer agent and
registrar for the Company's Class A Common Stock and will serve in the same
capacity for the Common Stock of LBF-PA.
 
  . PREFERRED STOCK
 
  The Company is not currently authorized to issue any preferred stock. The
LBF-PA charter, however, authorizes the Board of Directors to issue up to
5,000,000 shares of preferred stock in classes or series and to determine for
any such class or series its voting rights, preferences, limitations and any
special rights. Such action may be taken by the Board at any time and without
shareholder approval.
 
  While management has no current understandings, plans or agreements for the
issuance of preferred stock, the shares of preferred stock may be used in
connection with the raising of additional capital, future acquisitions, and
for other corporate purposes. In addition, some or all of the preferred stock
could be used in connection with the shareholder rights plan described below.
The Board believes that it is in the Company's best interest that such stock
be made available for issuance, without the need to seek shareholder approval
for individual amendments to the LBF-PA charter, as opportunities arise, so
that it may avoid the expense and possible delay involved in obtaining such
approval. The newly authorized shares of preferred stock will not have
preemptive rights under Pennsylvania law.
 
  If the merger is consummated, the Board will have the power to issue shares
of preferred stock having dividend, voting or conversion rights that could
discourage or deter a future unsolicited attempt to gain control of the
company or to acquire substantial ownership of its stock, even if the terms of
the unsolicited transaction might prove advantageous to some or many of the
shareholders. However, the Company's shareholder rights plan has similar
antitakeover effects.
 
  . SHAREHOLDER RIGHTS PLAN
 
  On May 15, 1997 the Board of Directors of the Company declared a dividend
distribution of one Right for each outstanding share of the Company's Class A
Common Stock to shareholders of record at the close of business on May 21,
1997. With certain exceptions, each Right, when exercisable, entitles the
registered holder to purchase one share of Class A Common Stock from the
Company for $30, subject to adjustment. The description and terms of the
Rights are set forth in a Rights Agreement, a summary of which was mailed to
the shareholders. At the time of the Merger, LBF-PA will succeed to the rights
and obligations of the Company under the Rights Agreement. Following the
Merger, the Board intends to amend the Rights Agreement to make conforming
changes. The current operation of the Company's Rights Agreement is described
below.
 
                                       9

 
  Rights are currently attached to all certificates representing shares of
Class A Common Stock, but no Rights certificates have been distributed. With
certain exceptions, the Rights will separate from the Class A Common Stock and
a distribution date will occur upon the earlier of (i) ten days following a
public announcement that a person or group (an "Acquiring Person") has
acquired, or obtained the right to acquire, ownership of 20% or more of the
outstanding Class A Common Stock (the "Acquisition Date") or (ii) ten business
days following the commencement of a tender offer or exchange offer that would
result in a person or group owning 20% or more of such outstanding stock. The
Rights will expire May 15, 2007, unless earlier redeemed or exchanged by the
Company. As soon as practicable after the distribution date, Rights
certificates will be mailed to holders of record of the Class A Common Stock,
and such certificates alone will represent the Rights. Except as otherwise
determined by the Board, only shares of Class A Common Stock issued prior to
the distribution date are issued with Rights.
 
  If a person or group becomes an Acquiring Person other than pursuant to a
qualifying offer (as defined), the holders of the Rights will have the right
to receive, upon exercise, Class A Common Stock, or other securities or assets
of the Company (including preferred stock of LBF-PA after the Merger), having
a value equal to two times the exercise price of the Rights, and all Rights
owned by the Acquiring Person will be null and void. If at any time after the
Acquisition Date (i) the Company is acquired in a merger or other business
combination in which the Class A Common Stock is changed or exchanged or in
which the Company is not the surviving corporation, with certain exceptions,
or (ii) 50% or more of the Company's assets or earning power is sold or
transferred, then the holders of the Rights will have the right to receive,
upon exercise, common stock of the acquiring company having a value equal to
two times the exercise price of the Rights.
 
  The Rights are not exercisable until such time as they are no longer
redeemable by the Company, and the Company may redeem the Rights, at a price
of $.05 per Right, until ten days following the Acquisition Date.
 
COMPARATIVE RIGHTS OF SHAREHOLDERS BEFORE AND AFTER THE MERGER
 
  The rights of shareholders of Pennsylvania and Delaware business
corporations are governed by and subject to the provisions of the BCL and the
GCL, respectively. If the Merger is consummated, the shareholders of the
Company will become shareholders of LBF-PA, and their rights will be governed
by and subject to the provisions of the BCL rather than the GCL. The rights of
the Company shareholders following the Merger will also be governed by the
LBF-PA charter and bylaws rather than the provisions of the Company charter
and bylaws. The following is a summary of certain differences in the rights of
shareholders before and after the Merger and is qualified in its entirety by
reference to the relevant provisions of the GCL, the BCL, the Company charter
and bylaws and the LBF-PA charter and bylaws.
 
  Although the BCL and the GCL are similar in most respects, there are a
number of differences between the two statutes that should be carefully
considered by the shareholders in evaluating the proposed Merger. The
following summary does not purport to be a complete statement of all
differences, nor does it purport to be a complete statement of the provisions
of the two statutes which it compares; nonetheless, the following discussion
does set forth all material differences between the
 
                                      10

 
statutory rights of holders of common stock of a Delaware corporation and
those of holders of common stock of a Pennsylvania corporation.
 
  . AMENDMENTS TO CHARTER; FUNDAMENTAL CORPORATE TRANSACTIONS
 
  The BCL only requires the affirmative vote of a majority of the votes
actually cast, at a meeting of shareholders at which a quorum is present, in
order to amend the articles of incorporation or engage in fundamental
corporate transactions, such as mergers, sales of substantially all of the
assets or dissolution of the corporation. The GCL, however, requires the
affirmative vote of the holders of a majority of the outstanding shares
entitled to vote in order to take those actions. Also, the BCL does not
require shareholder approval of certain non-material amendments to the
articles, such as changing the corporate name or increasing the number of
authorized shares to effectuate a stock dividend where the corporation has
only one class of shares outstanding. Thus, it will be less difficult under
Pennsylvania law to amend the LBF-PA charter and to engage in fundamental
corporate transactions than it is for the Company currently under Delaware
law.
 
  . AMENDMENTS TO BYLAWS
 
  Under Pennsylvania law, the power of the board of directors to adopt or
amend bylaw provisions on certain specified subjects is limited. Delaware law,
however, does not limit the power of the board to make changes in the bylaws
if the certificate of incorporation confers on the board the power to amend
the bylaws. Since the Company charter grants the Board the power to amend or
repeal the bylaws of the Company, the Board of LBF-PA will have less authority
to adopt or amend bylaws. Two sections of the LBF-PA bylaws may be amended by
the shareholders only by the affirmative vote of not less than two-thirds of
the votes that all shareholders, voting as a single class, are entitled to
cast thereon. These are Section 2.05, which requires advance written notice to
the company of nominations and proposals to be presented at any special or
annual meeting of the shareholders, and Section 7.02, which confers on the
Board the power to amend the bylaws. The bylaws of the Company contain similar
provisions.
 
  . CUMULATIVE VOTING RIGHTS
 
  Under Pennsylvania law, shareholders automatically have cumulative voting
rights in the election of directors unless the corporate charter provides
otherwise, whereas under Delaware law cumulative voting is permitted only if
expressly authorized in the corporate charter. The Company charter does not
grant cumulative voting rights, and the LBF-PA charter expressly provides that
the shareholders shall not have such rights. Consequently, the reincorporation
will not change the rights of shareholders in this regard.
 
  . SHAREHOLDER ACTION WITHOUT A MEETING
 
  Pennsylvania law does not permit the shareholders of a registered
corporation to act without a meeting by less than unanimous written consent
unless the articles of incorporation afford them that right. In contrast,
Delaware law permits the shareholders to act without a meeting, by written
consent of the holders of the number of shares required to take the action at
a meeting, unless the certificate of incorporation restricts such action.
Neither the LBF-PA charter nor the Company charter addresses this matter.
Consequently, the shareholders of the Company currently have the right to act
without a
 
                                      11

 
meeting by less than unanimous written consent, but after the reincorporation
they will no longer have that right.
 
  . DIVIDENDS
 
  Under Pennsylvania law, a corporation has the power, subject to restrictions
in its bylaws, to pay dividends or make other distributions to its
shareholders unless after giving effect thereto (i) the corporation would not
be able to pay its debts as they become due in the usual course of business or
(ii) the corporation's assets would be less than the sum of its total
liabilities plus the amount that would be needed upon the dissolution of the
corporation to satisfy the preferential rights, if any, of shareholders having
superior preferential rights to the shareholders receiving the distribution.
The LBF-PA bylaws contain no limitations on such powers.
 
  Under Delaware law, directors may, subject to any restrictions in the
corporation's certificate of incorporation, declare and pay dividends either
(i) out of its surplus or (ii) in case there is no surplus, out of the net
profits for the fiscal year in which the dividend is declared and/or the
preceding fiscal year. The directors of a Delaware corporation may not declare
a dividend out of net profits, however, if the capital of the corporation is
less than the aggregate amount of capital represented by the issued and
outstanding stock of all classes having a preference upon the distribution of
assets. The Company charter does not restrict the payment of dividends.
 
  . DISSENTERS' OR APPRAISAL RIGHTS.
 
  The rights of shareholders to demand payment in cash by a corporation of the
fair value of their shares in the event of certain fundamental corporate
transactions are called dissenters' rights in Pennsylvania and appraisal
rights in Delaware. The BCL does not provide dissenters' rights to holders of
shares that are listed on a national securities exchange or held of record by
more than 2,000 shareholders. In contrast, the GCL does not afford appraisal
rights to holders of shares which are listed on a national securities
exchange, quoted on the Nasdaq National Market or held of record by more than
2,000 shareholders when the plan of merger or consolidation converts such
shares into stock of the surviving corporation or stock of another corporation
which is listed on a national securities exchange, quoted on the Nasdaq
National Market or held of record by more than 2,000 shareholders. The meaning
of "fair value" under the BCL and the GCL is substantially the same.
 
  The Company currently has approximately 1,160 shareholders of record.
Assuming that the number of common shareholders of record remains below 2,000
after the Merger, the reincorporation may result in the shareholders having
dissenters' rights with respect to certain fundamental corporate transactions
that may occur in the future, such as mergers, consolidations or share
exchanges, which they do not have as shareholders of the Company.
 
  . MEETINGS OF SHAREHOLDERS
 
  Pennsylvania law provides that if the annual meeting for election of
directors is not called and held within six months after the designated date,
any shareholder may call the meeting at any time thereafter. Special meetings
of shareholders of a registered corporation may be called by (i) the board of
directors, (ii) shareholders entitled to cast at least 20% of the votes
entitled to be cast at the
 
                                      12

 
meeting, but only if the shareholders are accorded that right in the articles
of incorporation, and (iii) such officers or other persons as may be provided
in the bylaws.
 
  Under Delaware law, if the annual meeting for the election of directors is
not held within 30 days after the designated date, or if no date has been
designated for a period of 13 months after the organization of the corporation
or after its last annual meeting, the Court of Chancery may summarily order a
meeting to be held upon the request of any shareholder or director. Special
meetings of shareholders may be called by the board of directors or by such
persons as may be authorized by the certificate of incorporation or bylaws.
 
  The bylaws of both LBF-PA and the Company provide that annual meetings of
the shareholders to elect the directors shall be held at a date, time and
place fixed by the Board of Directors and that special meetings of the
shareholders may be called by the president for any purpose and shall be
called by the president or secretary if directed by the board of directors.
Neither the LBF-PA charter nor the Company charter addresses shareholder
meetings. Thus, currently the shareholders do not have the right to call
special meetings, and they will not have that right after the reincorporation.
 
  . DERIVATIVE SUITS
 
  Under Pennsylvania law, a shareholder may maintain a derivative suit, even
if the shareholder was not a shareholder at the time of the alleged
wrongdoing, if there is a strong prima facie case in favor of the claim
asserted and if the court determines in its discretion that serious injustice
would result without such suit. Under Delaware law, however, a shareholder may
bring a derivative suit only if he or she was a shareholder at the time of the
alleged wrongdoing or the stock thereafter devolved upon him or her by
operation of law.
 
FIDUCIARY DUTY, LIABILITY AND INDEMNIFICATION OF DIRECTORS AND OFFICERS
 
  . FIDUCIARY DUTY OF DIRECTORS
 
  Both Pennsylvania and Delaware law provide that the board of directors has
the ultimate responsibility for managing the business and affairs of a
corporation. In discharging this function, directors of Pennsylvania and
Delaware corporations owe fiduciary duties of care and loyalty to the
corporations for which they serve as directors. Directors of Delaware
corporations also owe fiduciary duties of care and loyalty to the
shareholders.
 
  A director of a Pennsylvania business corporation stands in a fiduciary
relationship to the corporation and must perform his or her duties as a
director, in good faith, in a manner he or she reasonably believes to be in
the best interests of the corporation and with such care, including reasonable
inquiry, skill and diligence, as a person of ordinary prudence would use under
similar circumstances. In performing these duties, the director is entitled to
rely, in good faith, on information, opinions, reports or statements,
including financial statements and other financial data, in each case prepared
by any of the following: (i) one or more officers or employees whom the
director reasonably believes to be reliable and competent in the matters
presented; (ii) counsel, public accountants or other persons as to matters
which the director reasonably believes to be within the professional
competence of such persons; and (iii) a committee of the board upon which he
or she does not serve, duly designated in accordance with law, as to matters
within its designated authority, which committee the
 
                                      13

 
director reasonably believes to merit confidence. A director will not be
considered to be acting in good faith if he or she has knowledge concerning
the matter in question which would cause his or her reliance to be
unwarranted.
 
  Delaware courts have held that the directors of a Delaware corporation are
required to exercise an informed business judgment in the performance of their
duties. An informed business judgment means that the directors have informed
themselves of all material information reasonably available to them. Delaware
courts have also imposed a heightened standard of conduct upon directors in
matters involving a contest for control of the corporation. A director of a
Delaware corporation, in the performance of his or her duties, is fully
protected in relying, in good faith, upon the records of the corporation and
upon such information, opinions, reports or statements presented to the
corporation by any of the corporation's officers or employees, or committees
of the board of directors, or by any other person as to matters he or she
reasonably believes are within such other person's professional or expert
competence and who has been selected with reasonable care by or on behalf of
the corporation.
 
  The BCL provides that in discharging the duties of their respective
positions, the board of directors, committees of the board and individual
directors of a business corporation may, in considering the best interests of
the corporation, consider the effects of any action upon employees, upon
suppliers and customers of the corporation and upon communities in which
offices or other establishments of the corporation are located and all other
pertinent factors. Absent breach of fiduciary duty, lack of good faith or
self-dealing, actions taken as a director are presumed to be in the best
interests of the corporation. In contrast, the GCL does not contain any
statutory provision permitting the board of directors, committees of the board
and individual directors, when discharging the duties of their respective
positions, to consider the interests of any constituencies other than the
corporation or its shareholders.
 
  It is unclear under the current state of development of Delaware law whether
and the extent to which the board of directors, committees of the board and
individual directors of a Delaware corporation may, in considering what is in
the corporation's best interests or the effects of any action on the
corporation, take into account the interests of any constituency other than
the stockholders of the corporation. In contrast, Pennsylvania law provides
that a director of a Pennsylvania corporation owes a duty only to the
corporation, and in considering what is in the best interests of the
corporation may choose to subordinate the interests of shareholders to the
interests of employees, suppliers, customers or creditors of the corporation
or to the interests of the communities served by the corporation.
Consequently, the fiduciary duty provisions of the BCL may provide
significantly broader discretion, and increased protection from liability, to
directors in exercising their fiduciary duties, particularly in the context of
a threatened change in control.
 
  . LIMITATION OF DIRECTOR LIABILITY
 
  The bylaws of LBF-PA and the Company's charter contain similar provisions
that limit the liability of directors. Both Pennsylvania and Delaware permit a
corporation's charter or, in Pennsylvania, a bylaw adopted by the
shareholders, to limit a director's exposure to monetary liability for breach
of duty. The bylaws of LBF-PA contain such a provision, which was adopted by
the Company as sole
 
                                      14

 
shareholder of LBF-PA. The corresponding provision in the Company charter was
approved by the shareholders at the annual meeting in 1987.
 
  As permitted by the BCL, Section 3.01 of the LBF-PA bylaws, the text of
which is set forth in Appendix C, provides that a director shall not be
personally liable, as such, for monetary damages for any action taken, or any
failure to take any action, unless the director has breached or failed to
perform the duties of his or her office and the breach or failure to perform
constitutes self-dealing, willful misconduct or recklessness. Such limitation
does not apply to the responsibility or liability of a director pursuant to
any criminal statute or the liability of a director for the payment of taxes.
A vote in favor of The Merger will also be deemed to be a vote in fact of
Section 3.01 of the LBF-PA bylaws.
 
  . INDEMNIFICATION OF DIRECTORS AND OFFICERS
 
  Both Pennsylvania and Delaware law permit a corporation to indemnify its
directors and officers against expenses, judgments, fines and amounts paid in
settlement incurred by them in connection with any pending, threatened or
completed action or proceeding, and permit such indemnification against
expenses incurred in connection with any pending, threatened or completed
derivative action, if the director or officer has acted in good faith and in a
manner he or she reasonably believed to be in or not opposed to the best
interests of the corporation and, with respect to any criminal proceeding, had
no reasonable cause to believe his or her conduct was unlawful. Furthermore,
both the BCL and the GCL provide that expenses incurred in defending any
action or proceeding may be paid by the corporation in advance of the final
disposition upon receipt of an undertaking by or on behalf of the director or
officer to repay the amount if it is ultimately determined that the director
or officer is not entitled to be indemnified by the corporation.
 
  In both Pennsylvania and Delaware the statutory provisions for
indemnification and advancement of expenses are non-exclusive with respect to
any other rights, such as contractual rights (and in the case of a
Pennsylvania corporation, under a bylaw or vote of shareholders or
disinterested directors), to which a person seeking indemnification or
advancement of expenses may be entitled. Such contractual or other rights may,
for example, under Pennsylvania law, provide for indemnification against
judgments, fines and amounts paid in settlement incurred by the indemnified
person in connection with derivative actions. Pennsylvania law permits such
derivative action indemnification in any case except where the act or failure
to act giving rise to the claim for indemnification is determined by a court
to have constituted willful misconduct or recklessness.
 
  Like the Company's bylaws, the bylaws of LBF-PA require indemnification of
directors and officers to the fullest extent permitted by law. At the present
time, these boundaries in the LBF-PA bylaws would be dictated by the BCL and
related legislation, which prohibit indemnification where the conduct is
determined by a court to constitute willful misconduct or recklessness.
Subject to these statutory limitations, the bylaws of LBF-PA specifically
require indemnification against both judgments and amounts paid in settlement
of derivative suits. These provisions would also provide indemnification for
negligence or gross negligence and for certain liabilities incurred under the
federal securities laws.
 
  The directors and officers of LBF-PA would be entitled to the benefits of
the indemnification provisions of the LBF-PA bylaws. Because such persons have
a financial interest in these arrangements, their adoption could be deemed an
interested transaction under the BCL, which
 
                                      15

 
provides that an interested transaction will not be void or voidable as such
if the material facts as to such interest and such transaction are disclosed
or are known to the shareholders entitled to vote thereon, and the contract or
transaction is specifically approved in good faith by vote of the
shareholders. The text of Section 6.01 of the LBF-PA bylaws, providing for
indemnification of its directors and officers, is set forth in Appendix C. A
vote in favor of the Merger will also be deemed to be a vote in favor of
Section 6.01 of the LBF-PA bylaws. Thus, the adoption of the LBF-PA bylaws
will not be subject to challenge as an interested transaction if shareholder
approval of the Merger is obtained, and such approval will estop a shareholder
or third party from later challenging the validity or enforceability of the
bylaws on other grounds. The indemnification provisions of the LBF-PA bylaws
have not been adopted in response to any recent, pending or threatened
litigation.
 
  The Board of Directors of LBF-PA also reserves the right to enter into
indemnification agreements in the future with its directors and officers and
to designate other persons who will be entitled to the expanded
indemnification rights. Approval of such actions is not required by the
shareholders.
 
  Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors or officers, the Company and LBF-PA are
aware that, in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in that Act and is
therefore unenforceable. Under certain circumstances, LBF-PA might be required
to submit to a court the question of whether indemnification is permissible
before it could indemnify directors or officers for such liabilities.
 
  Both Pennsylvania and Delaware law permit a corporation to purchase and
maintain insurance on behalf of any director or officer of the corporation
against any liability asserted against the director or officer and incurred in
such capacity, whether or not the corporation would have the power to
indemnify the director or officer against such liability. The directors and
officers of the Company are currently covered as insureds under directors and
officers liability insurance maintained by the Company which would not be
affected by the Merger. Such insurance, subject to annual renewal and certain
rights of the insurer to terminate, provides an aggregate maximum of
$1,000,000 of coverage for directors and officers of the Company and its
subsidiaries, including LBF-PA, against claims made during the policy period.
 
STATUTORY ANTITAKEOVER PROVISIONS
 
  Pennsylvania corporations that have a class of stock registered under the
Securities Exchange Act of 1934, such as LBF-PA after the Merger, are
automatically subject to certain antitakeover provisions of the BCL, unless
the articles of incorporation provide that those provisions shall not apply to
the corporation. LBF-PA has opted out of those antitakeover provisions by
having its articles of incorporation expressly state that they shall not apply
to the corporation. See Appendix B.
 
  The antitakeover provisions that do not apply to LBF-PA are Sections 1715
and 2538 and Subchapters 25E, 25F, 25G and 25H. Section 1715, in addition to
providing that the directors in discharging their duties need not regard the
interests of the shareholders as a dominant factor, expressly states that
their fiduciary duty does not require them to redeem any rights under or
render inapplicable any shareholder rights plan (such as the Company's) or
certain of the antitakeover provisions of the BCL. Section 2538 requires that
fundamental corporate transactions, such as
 
                                      16

 
mergers and share exchanges, be approved by a majority vote of the
disinterested shareholders. Subchapter 25E with certain exceptions entitles
the shareholders to be paid the fair value of their shares by anyone who
acquires 20% or more of the outstanding voting power of the corporation;
Subchapter 25F imposes certain financial requirements and restrictions on
business combinations with interested shareholders; Subchapter 25G, relating
to so-called control share acquisitions, with certain exceptions limits the
voting rights of persons who have acquired 20% or more of the outstanding
voting power of the corporation; and Subchapter 25H requires disgorgement of
certain profits made by "controlling shareholders" following their attempts to
gain control of the corporation.
 
                      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, 1998. The Board of Directors
recommends a vote FOR approval of this appointment.
 
                                      17

 
                            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").
 


                                                                             LONG TERM
                                        ANNUAL COMPENSATION             COMPENSATION AWARDS
                              ---------------------------------------- ---------------------
                                                         OTHER (2)     RESTRICTED  OPTIONS/        ALL
NAME AND                                                   ANNUAL      STOCK (3)     SARS       OTHER (4)
PRINCIPAL POSITION       YEAR SALARY ($) BONUS (1)($) COMPENSATION ($) AWARDS ($) (# SHARES) COMPENSATION ($)
- ------------------       ---- ---------- ------------ ---------------- ---------- ---------- ----------------
                                                                        
Lee B. Foster II         1997  280,000      69,049           *           19,480          0        26,493
 President & Chief       1996  275,833      91,364           *                0          0        25,232
 Executive Officer       1995  261,667      53,666           *                0          0        20,294
Stan L. Hasselbusch      1997  151,250      39,900           *            9,845          0        12,822
 Senior Vice President-- 1996  139,333      44,560         22,782(5)          0          0        11,604
 Construction and        1995  126,418      21,607           *                0          0         9,218
 Tubular Products
Dean A. Frenz            1997  160,000      21,469           *            6,057          0        12,911
 Senior Vice President-- 1996  157,300      34,106           *                0          0        13,384
 Rail Products           1995  151,054      43,317           *                0     25,000        11,231
Henry M. Ortwein, Jr.    1997  130,466      39,545           *            9,748          0         9,157
 Group Vice President--  1996  109,154      30,071           *                0          0         7,738
 Rail Manufactured       1995  105,216      15,694           *                0          0         6,321
 Products
Roger F. Nejes           1997  140,000      28,772         18,190(6)      8,118          0        10,485
 Senior Vice President-- 1996  131,000      36,159           *                0          0        10,118
 Finance and             1995  123,502      21,108         15,908(7)          0          0         8,345
 Administration

- ------
(1) The amounts included in this column include, in addition to cash, the
    value, at $5 1/8 per share, of the Company's Class A Common Stock issued
    to the named executive officers on March 2, 1998 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 1997 bonus plan, 10,390 shares of the Company's
    Class A Common Stock were awarded to the named executive officers, with
    3,801 shares awarded to Mr. Foster, 1,921 shares awarded to Mr.
    Hasselbusch, 1,182 shares awarded to Mr. Frenz, 1,902 shares awarded to
    Mr. Ortwein and 1,584 shares awarded to Mr. Nejes. Dividends are payable
    on the restricted shares to the same extent as other shares of Class A
    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 1, 1997, none of the named executive officers
    held restricted stock.
 
(4) The amounts disclosed in this column include the Company contributions to
    the L.B. Foster Voluntary Investment Plan and the Supplemental Executive
    Retirement Plan.
 
(5) This amount includes relocation expenses in the amount of $13,348.
 
(6) This amount includes Country Club dues and fees of $5,446 and $9,396 for a
    leased car.
 
(7) This amount includes Country Club dues and fees of $4,721 and $8,370 for a
    leased car.
 
  * The total is less than 10% of the executive's total salary and bonus for
    the year.
 
                                      18

 
OPTION EXERCISES AND YEAR-END OPTION VALUES
 
  The following table provides information on the Named Executive Officer's
unexercised stock options at December 31, 1997. The Company has not awarded
any stock appreciation rights, and no options were exercised during 1997.
 


                           NUMBER OF SHARES
                        UNDERLYING UNEXERCISED     VALUE OF UNEXERCISED
                           OPTIONS AT FISCAL       IN-THE-MONEY OPTIONS
                               YEAR-END           AT FISCAL YEAR-END ($)
                       ------------------------- -------------------------
NAME                   EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ----                   ----------- ------------- ----------- -------------
                                                 
Lee B. Foster II         140,000        --         221,851        --
Dean A. Frenz             37,500      12,500        49,031      16,344
Stan L. Hasselbusch       43,750       6,250        54,786       8,609
Roger F. Nejes            43,750       6,250        61,416       8,609
Henry M. Ortwein, Jr.     22,500       2,500        29,474       3,443

 
                      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 Committee
concerning stock option awards. 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, Rackoff and Shaw in their capacity as the Option Committee, and
addresses the Company's compensation policies for 1997 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 1997 were published by Watson
Wyatt Data Services and covered companies that were manufacturers of durable
goods with annual sales of up to $311 million, fabricators of metal products
with annual sales of up to
 
                                      19

 
$300 million, or general manufacturers with sales of up to $289 million. The
data indicated that the Company's executive officers' base salaries ranged
from 12.5% below to 6.7% above the median base salaries for comparable
positions in the durable goods manufacturing industry, from 37.5% below to
15.3% above the median base salaries for comparable positions in the metal
fabricating industry and from 16.1% below to 6.7% above the median base
salaries for comparable positions in the general manufacturing 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 1997, 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
1997, cash awards under the Plan ranged from 3.9% to 21.9% of the 1997 base
compensation of the Company's executive officers. Survey data published by
Watson Wyatt Data Services indicate that the aggregate cash compensation
(excluding stock awards under the Incentive Compensation Plan) paid to the
Company's executive officers was 16.0%, 10.0% and 18.3% below the aggregate
median cash compensation paid for comparable executive positions in the,
respectively, durable goods manufacturing industry, metal fabricating industry
and general manufacturing industry. In addition, the Company awarded 17,448
shares of the Company's Class A 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. Foster, Frenz, Hasselbusch,
Nejes and Ortwein are included in the Summary Compensation Table.
 
  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 (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 "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
 
                                      20

 
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 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 1997 to the Voluntary
Investment Plan for Messrs. Foster, Frenz, Hasselbusch, Nejes and Ortwein 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. Foster,
Frenz, Hasselbusch, Nejes and Ortwein 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 1997 COMPENSATION
 
  Mr. Foster is eligible to participate in the same executive compensation
plans as are available to other executive officers. Mr. Foster's annual base
salary was not adjusted during 1997 and remained at $280,000. According to
data published by Watson Wyatt Data Services, Mr. Foster's salary is
approximately 12.5% above the median base salary for chief executive officers
of metal fabricating companies with median sales of $123 million and
approximately 7.1% below the median base salary for chief executive officers
of durable goods manufacturing companies with median sales of $235 million.
Mr. Foster's salary is 16.1% below the median base salary for chief executive
officers of general manufacturing companies with median sales of $289 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.
 
                                      21

 
  As a participant in the Incentive Compensation Plan, Mr. Foster received a
cash award of $49,569 for 1997 plus 3,801 shares of the Company's Class A
Common Stock. Under the Plan, Mr. Foster's award was based upon the Company's
1997 pre-tax income. According to data published by Watson Wyatt Data
Services, Mr. Foster's 1997 total of base salary and cash incentive
compensation was approximately 26.3% below the median total cash compensation
of chief executive officers in the durable goods manufacturing industry, 8.2%
above the median total cash compensation of chief executive officers in the
metal fabrication industry, and 36.5% below the median total cash compensation
of chief executive officers in general manufacturing.
 
                                       PERSONNEL & COMPENSATION COMMITTEE
 
                                       John W. Puth, Chairman
                                       Richard L. Shaw
                                       James W. Wilcock
 
                                       OPTION COMMITTEE
 
                                       John W. Puth
                                       William H. Rackoff
                                       Richard L. Shaw
 
                                      22


 
                             [GRAPH APPEARS HERE]
                  COMPARISON OF FIVE YEAR CUMULATIVE RETURN
      AMONG L.B. FOSTER COMPANY, PEER GROUP, AND NASDAQ STOCK MARKET-US
 

Measurement period           L.B. FOSTER                         NASDAQ STOCK
(Fiscal year Covered)          COMPANY         PEER GROUP         MARKET-US
- ---------------------        -----------       ----------        ------------
                                                         
Measurement PT -
12/31/92                     $100                $100                $100
                             
FYE 12/31/93                 $115                $151                $115
FYE 12/31/94                 $112                $154                $113
FYE 12/31/95                 $148                $153                $159
FYE 12/31/96                 $130                $152                $195
FYE 12/31/97                 $172                $159                $240


 
 
  The Peer Group is composed of the following steel or iron related companies
where stocks are listed on domestic securities exchanges: Ampco-Pittsburgh
Corp., Armco, Inc., Bayou Steel Corp. La Place, Bethlehem Steel Corp.,
Birmingham Steel Corp., British Steel Plc., Carpenter Technology Corp.,
Chaparral Steel Co., Friedman Inds. Inc., Geneva Steel Co., Hmi Inds. Inc.,
Inland Steel Inds. Inc., Insteel Inds. Inc., Keystone Cons Inds. Inc., LTV
Corp. New, Lukens, Inc., 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.
 
                                       23

 
                            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 1999
annual meeting must be received by the Company no later than December 31, 1998
to be considered for inclusion in the Company's proxy statement and form of
proxy for that meeting
 
Pittsburgh, Pennsylvania
April 17, 1998
 
                                      24

 
                                                                     APPENDIX A
 
                                PLAN OF MERGER
 
                                    MERGING
 
                              L.B. FOSTER COMPANY
                           (A DELAWARE CORPORATION)
 
                                     INTO
 
                              L.B. FOSTER COMPANY
                         (A PENNSYLVANIA CORPORATION)
 
                                   RECITALS
 
  A. L.B. Foster Company ("L.B. Foster-DE") is a Delaware corporation whose
shares are traded on the National Association of Securities Dealers Automated
Quotations Systems ("NASDAQ").
 
  B. L.B. Foster Company ("L.B. Foster-PA") is a Pennsylvania corporation and
wholly-owned subsidiary of L.B. Foster-DE.
 
  C. In order to allow L.B. Foster-DE to be governed by the corporate laws of
the state in which L.B. Foster-DE has its corporate headquarters and
substantial properties and business operations, L.B. Foster-DE has organized
L.B. Foster-PA for the purpose of effecting the merger of L.B. Foster with and
into L.B. Foster-PA pursuant to the terms and subject to the conditions set
forth herein.
 
  D. The parties to this Plan of Merger desire to merge into a single
corporation pursuant to Section 253 of the General Corporation Law of Delaware
and 15 Pa.C.S. Subch. 19C.
 
                             TERMS AND CONDITIONS
 
  1. THE MERGER. At the Effective Time (as defined in Section 2), L.B. Foster-
DE (the "merged corporation") shall be merged (the "Merger") into L.B. Foster-
PA (the "surviving corporation") which shall be the surviving corporation.
 
  2. EFFECTIVE TIME. The Merger shall become effective (the "Effective Time")
at the close of business on May 14, 1998 or such later time as there shall
have been filed both Articles of Merger with the Department of State of the
Commonwealth of Pennsylvania and a Certificate of Merger and Ownership with
the Secretary of State of the State of Delaware.
 
  3. STOCKHOLDER APPROVAL. Subsequent to the approval of this Plan of Merger
by the board of directors of L.B. Foster-DE, L.B. Foster-DE shall submit the
Merger to its stockholders for their approval pursuant to Section 253(a) of
the General Corporation Law of Delaware. Pursuant to 15 Pa.C.S. (S)
1924(b)(1)(ii), L.B. Foster-PA shall not submit this Plan to its initial sole
shareholder for its approval.
 
                                      A-1

 
  4. TERMS AND CONDITIONS. The terms and conditions of the Merger are as
follows:
 
    (a) The articles of incorporation of the surviving corporation as in
  effect immediately prior to the Effective Time shall continue in full force
  and effect as the articles of incorporation of the surviving corporation.
 
    (b) The bylaws of the surviving corporation as in effect immediately
  prior to the Effective Time shall continue in full force and effect as the
  bylaws of the surviving corporation.
 
    (c) The directors of the surviving corporation shall continue in office
  until the next annual meeting of shareholders and until their successors
  shall have been elected and qualified or until their earlier death,
  resignation or removal.
 
    (d) The officers of the surviving corporation shall continue in office
  until their successors shall have been elected or appointed or until their
  earlier death, resignation or removal.
 
  5. PRO RATA ISSUANCE OF STOCK. As more fully set forth in Sections 6 and 7,
the stock of L.B. Foster-PA shall be issued to the holders of the stock of
L.B. Foster-DE on a pro rata basis on surrender of any certificates therefor.
 
  6. CONVERSION OF STOCK. At the Effective Time:
 
    (a) L.B. Foster-DE Common Stock. Each share of the Common Stock, par
  value $.01 per share, of L.B. Foster-DE ("L.B. Foster-DE Common Stock")
  issued and outstanding immediately prior to the Effective Time shall,
  without any action on the part of the holder thereof, become and be
  converted into one validly issued, fully paid and non-assessable share of
  the Common Stock, par value $.01 per share, of L.B. Foster-PA ("L.B.
  Foster-PA Common Stock"). The shares of L.B. Foster-DE Common Stock so
  converted shall cease to exist as such, and shall exist only as shares of
  L.B. Foster-PA Common Stock. Each share of L.B. Foster-DE Common Stock held
  in the treasury of L.B. Foster-DE shall be converted to into one validly
  issued share of the L.B. Foster-PA Common Stock and shall continue to be
  held in the treasury of L.B. Foster-PA.
 
    (b) The shares of L.B. Foster-PA Common Stock issued and outstanding
  immediately prior to the Effective Time shall be canceled and retired and
  resume the status of authorized and unissued shares of L.B. Foster-PA
  Common Stock, and no shares of L.B. Foster-PA Common Stock or other
  securities of L.B. Foster-PA shall be issued in respect thereof.
 
  7. STATUS OF SECURITIES AFTER EFFECTIVE TIME No exchange of certificates
representing shares of L.B. Foster-DE Common Stock converted pursuant to
Section 6 shall be required, and from and after the Effective Time and until
certificates representing such L.B. Foster-DE Common Stock are presented for
exchange or registration of transfer, all such certificates shall be deemed
for all purposes to represent the same number of shares of L.B. Foster-PA
Common Stock into which they were so converted. After the Effective Time,
whenever certificates which formerly represented shares of L.B. Foster-DE
Common Stock are presented for exchange or registration of transfer, L.B.
Foster-PA shall cause to be issued in respect thereof, certificates
representing an equal number of shares of L.B. Foster-PA Common Stock.
 
  8. LONG-TERM INCENTIVE PLAN. At the Effective Time, L.B. Foster-PA shall
automatically and without further action on its part adopt and assume the
rights and obligations of L.B. Foster-DE under
 
                                      A-2

 
the 1985 Long-Term Incentive Plan as Amended and Restated (the "Incentive
Plan") as then in effect. The Incentive Plan shall, pursuant to its terms,
thereafter apply only to shares of L.B. Foster-PA Common Stock. Approval of
the Merger by the stockholders of L.B. Foster-DE shall be deemed to be
approval of the Incentive Plan by the shareholders of L.B. Foster-PA. At the
Effective Time, each right to acquire L.B. Foster-DE Common Stock then
outstanding under the Incentive Plan, shall, automatically and without further
action on the part of the holder thereof, be converted into a right to acquire
the same number of shares of L.B. Foster-PA Common Stock under the same terms
and conditions as contained under the right outstanding under the Incentive
Plan immediately prior to the Effective Time.
 
  9. TERMINATION AND AMENDMENT. Notwithstanding stockholder approval of the
Merger, this Plan of Merger may be terminated and abandoned by the board of
directors of either constituent corporation at any time prior to the Effective
Time. The boards of directors of the constituent corporations may amend this
Plan of Merger at any time prior to the Effective Time in any fashion
permitted by applicable law.
 
  10. STATUTORY FILINGS. Subject to the terms and conditions herein provided,
Articles of Merger, complying with the applicable provisions of the
Pennsylvania Business Corporation Law, and a Certificate of Ownership and
Merger, complying with the applicable provisions of the Delaware General
Corporation Law, shall be duly executed and filed with the Department of State
of the Commonwealth of Pennsylvania and the Secretary of State of the State of
Delaware, respectively.
 
  11. CONDITIONS TO MERGER. Consummation of the Merger is subject to the
satisfaction of the following conditions on or before the Effective Time;
 
    (a) STOCKHOLDER APPROVAL. The Merger shall have received the requisite
  approval of the stockholders of L.B. Foster-DE;
 
    (b) LISTING ON NASDAQ. The L.B. Foster-PA Common Stock to be issued or
  reserved for issuance shall have been approved for listing, upon notice of
  issuance, by NASDAQ.
 
  The condition set forth in subparagraph (b) above may be waived in the
discretion of the Board of Directors of L.B. Foster.
 
  12. FURTHER ASSURANCES. L.B. Foster-DE shall at any time, or from time to
time, as and when requested by L.B. Foster-PA, or by its successors or
assigns, execute and deliver, or cause to be executed and delivered, in the
name of L.B. Foster-DE by its last acting officers, or by the corresponding
officers of L.B. Foster-PA, all such conveyances, assignments, transfers,
deeds or other instruments, and shall take or cause to be taken such further
action as L.B. Foster-PA, its successors and assigns, may deem necessary or
desirable in order to evidence the transfer, vesting or devolution of any
property, right, privilege or franchise or to vest or perfect in or confirm to
L.B. Foster-PA, its successors and assigns, title to and possession of all of
the property, rights, privileges, powers, immunities, franchises and interests
of L.B. Foster-DE and otherwise to carry out the intent and purposes of the
Merger.
 
                                      A-3

 
                                                                     APPENDIX B
 
                           ARTICLES OF INCORPORATION
 
                                      OF
 
                              L.B. FOSTER COMPANY
                         (A PENNSYLVANIA CORPORATION)
 
ARTICLE 1. The name of the corporation is:
 
                              L.B. FOSTER COMPANY
 
ARTICLE 2. The address of the registered office of the corporation in
           Pennsylvania (which is located in Allegheny County) is:
 
               415 Holiday Drive, Pittsburgh, Pennsylvania 15220
 
ARTICLE 3. The corporation is incorporated under the provisions of the
           Business Corporation Law of 1988.
 
ARTICLE 4. The aggregate number of shares that the corporation shall have
           authority to issue is 25,000,000 shares, divided into 20,000,000
           shares of Common Stock, par value $0.01 each, and 5,000,000 shares
           of preferred stock. The board of directors shall have the full
           authority permitted by law to divide the authorized and unissued
           shares of preferred stock into classes or series, or both, and to
           determine for any such class or series its designation and the
           number of shares of the class or series and the voting rights,
           preferences, limitations and special rights, if any, of the class
           or series.
 
ARTICLE 5. The following provisions of the Business Corporation Law of 1988
           shall not be applicable to the corporation:
 
           (i)   Section 1715 (relating to exercise of powers generally).
 
           (ii)  Section 2538 (relating to approval of transactions with
                 interested shareholders).
 
           (iii) Subchapter 25E (relating to control transactions).
 
           (iv)  Subchapter 25F (relating to business combinations).
 
           (v)   Subchapter 25G (relating to control-share acquisitions).
 
           (vi)  Subchapter 25H (relating to disgorgement by certain
                 controlling shareholders following attempts to acquire
                 control).
 
ARTICLE 6. The shareholders of the corporation shall not have the right to
           cumulate their votes for the election of directors of the
           corporation.
 
ARTICLE 7. These Articles of Incorporation may be amended in the manner
           prescribed at the time by statute, and all rights conferred upon
           shareholders in these Articles of Incorporation are granted subject
           to this reservation.
 
                                      B-1

 
ARTICLE 8. The name and address of the incorporator are:
 
                                          L.B. Foster Company
                                          (a Delaware Corporation)
                                          415 Holiday Drive
                                          Pittsburgh, Pennsylvania 15220
 
                                                   L.B. FOSTER COMPANY
                                                     (Incorporator)
 
                                          By:   /s/ David L. Voltz
                                             ----------------------------------
                                              Title: Vice President
 
                                      B-2

 
                                                                     APPENDIX C
 
                  SECTIONS 3.01 AND 6.01 OF THE LBF-PA BYLAWS
 
  Section 3.01 PERSONAL LIABILITY OF DIRECTORS.
 
  (a) GENERAL RULE.--A director shall not be personally liable, as such, for
monetary damages for any action taken, or any failure to take any action,
unless:
 
    (1) the director has breached or failed to perform the duties of his or
        her office under 15 Pa.C.S. Subch. 17B; and
 
    (2) the breach or failure to perform constitutes self-dealing, willful
        misconduct or recklessness.
 
  (b) EXCEPTIONS.--Subsection (a) shall not apply to:
 
    (1) the responsibility or liability of a director pursuant to any
        criminal statute, or
 
    (2) the liability of a director for the payment of taxes pursuant to
        Federal, State or local law.
 
                             ---------------------
 
  Section 6.01 GENERAL.--To the fullest extent permitted by Pennsylvania law,
the corporation shall, in the case of directors and/or officers, and may, at
the discretion of the Board of Directors in the case of employees and/or
agents of the corporation, defend, indemnify and hold harmless any such person
who was or is a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative
(including, without limitation, an action, suit or proceeding by or in the
right of the corporation) by reason of the fact that he is or was a director,
officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees), judgments, fines and amounts
paid in settlement actually and reasonably incurred by him in connection with
such action, suit or proceeding. The indemnification provided pursuant to this
Article is specifically intended to include, without limitation,
indemnification against judgments and settlements in derivative suits. The
indemnification provided by, or granted pursuant to, this Article VI shall,
unless otherwise provided when authorized or ratified in the case of an
employee or agent, continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such person.
 
                                      C-1

 
 
                                   P R O X Y
 
 
                             L. B. FOSTER COMPANY
          THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
              FOR THE ANNUAL MEETING OF STOCKHOLDERS MAY 14, 1998
 
The undersigned hereby appoints Lee B. Foster II and James W. Wilcock, and
each or either 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 Pittsburgh Green Tree Marriott, 101 Marriott Drive, Pittsburgh,
Pennsylvania on May 14, 1998 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, "FOR" ITEM 2
AND "FOR" ITEM 3. 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.
 
          (PLEASE DATE AND SIGN ON REVERSE SIDE AND RETURN PROMPTLY)


                          /\ FOLD AND DETACH HERE /\

 
 
 
[X]  PLEASE MARK YOUR
     VOTES AS IN THIS
     EXAMPLE USING
     DARK INK ONLY.
 
 
 
        THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR ALL
        NOMINEES" IN ITEM 1, "FOR" ITEM 2, AND "FOR" ITEM
        3.
 
 
ITEM 1 - ELECTION OF THE FOLLOWING NOMINEES AS DIRECTORS: L. B. FOSTER II,
J. W. PUTH, W. H. RACKOFF, R. L. SHAW, J. W. WILCOCK.


    FOR          WITHHOLD AUTHORITY              WITHHOLD  AUTHORITY   
all Nominess  to vote for all Nominees     to vote for the following only: 
   [  ]               [  ]                (Write the name of the Nominee(s) 
                                                 in the space below).
            
                                          ----------------------------------


ITEM 2 - APPROVE ADOPTION OF PLAN OF MERGER WHEREBY THE COMPANY WILL BE
REINCORPORATED IN PENNSYLVANIA
 
                  FOR       AGAINST     ABSTAIN
                  [ ]         [ ]         [ ]
 

ITEM 3 - APPROVE APPOINTMENT OF ERNST & YOUNG AS INDEPENDENT AUDITORS FOR 1998.

                  FOR       AGAINST     ABSTAIN
                  [ ]         [ ]         [ ]
 
                 (PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY
                      PROMPTLY IN THE ENCLOSED ENVELOPE.)


               Date:             1988                Date:             , 1998
- ---------------      ------------     ---------------     ------------
   SIGNATURE                             SIGNATURE 
                                      IF HELD JOINTLY

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 give full title as such.
If a corporation, please sign full corporation name by president or other au-
thorized officer. If a partnership, please sign in partnership name by autho-
rized person(s).


                          /\ FOLD AND DETACH HERE /\