L. B. FOSTER COMPANY 2005 MANAGEMENT INCENTIVE COMPENSATION PLAN

 

                                                                   Exhibit 10.55

 

                            L. B. FOSTER COMPANY 2005

                     MANAGEMENT INCENTIVE COMPENSATION PLAN

 

 

I.       PURPOSE

 

     This Plan is designed to motivate  employees  to achieve  goals,  to reward

employees who achieve such goals and to improve corporate performance.

 

II.      CERTAIN DEFINITIONS

 

     The terms below shall be defined as follows for the  purposes of this Plan.

The definitions  shall be subject to such adjustments as, from time to time, may

be made, by the Committee.

 

2.1  "Base  Compensation"  shall  mean the total  base  salary,  rounded  to the

     nearest  whole dollar,  actually  paid to a  Participant  during the Fiscal

     Year, excluding payment of overtime,  incentive compensation,  commissions,

     reimbursement of expenses,  severance, car allowances or any other payments

     not deemed part of a Participant's base salary; provided, however, that the

     Participant's  contributions to the Corporation's Voluntary Investment Plan

     shall be included in Base Compensation.  Base Compensation for Participants

     who die, retire or are terminated shall include only such compensation paid

     to such during the fiscal year with  respect to the period  prior to death,

     retirement or termination.

 

2.2  "Committee"  shall  mean  the   Compensation,   Nomination  and  Governance

     Committee of the Board of Directors and any successors thereto.

 

2.3  "Corporation"  shall  mean L. B.  Foster  Company  and  those  subsidiaries

     thereof in which L.B.  Foster Company owns 100% of the  outstanding  common

     stock.

 

2.4  "Department/Individual  Goals"  are  those  goals  approved  by  the  Chief

     Executive  Officer and utilized to establish  incentive  awards pursuant to

     Section 4.3

 

2.5  "Fiscal Year" means the 2005 calendar year.

 

2.6  "Incentive  Award" shall mean the payment made to a Participant  under this

     Plan, after and/or subject to adjustments under this Plan.

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2.7  " Incentive  Income"  shall mean the  pre-tax  income  (after,  inter alia,

     deductions for benefits payable under the annual sales incentive and profit

     sharing plans) for the Corporation or, as applicable, for an Operating Unit

     for the Fiscal Year, but determined in accordance  with  generally-accepted

     accounting principles, excluding (i) benefits payable under this Plan; (ii)

     dividends and related  interest with respect to Dakota  Minnesota & Eastern

     Railroad  Corporation  preferred  stock to the extent not  included  in the

     Corporation's  Planned Incentive Income;  and (iii) any portion of gains or

     losses  arising from  transactions  not in the ordinary  course of business

     which the Committee, in its sole discretion, determines to exclude.

 

2.8  "Operating  Unit" shall mean the  following  units or  divisions  which are

     reported in the Company's  internal  financial  statements:  CXT Rail,  CXT

     Buildings,  Foster Coated Pipe, Threaded Products, Rail Products (excluding

     CXT  Rail),  Piling,  Fabricated  Products  and  Geotech,  subject  to such

     adjustments as may be made by the Chief Executive Officer.

 

2.9  "Participant"  shall  mean  a  salaried  employee  of the  Corporation  who

     satisfies  all of the  eligibility  requirements  set forth in Article  III

     hereof.

 

2.10 "Plan"  shall  mean  the  L.  B.  Foster   Company   Management   Incentive

     Compensation Plan, which Plan shall be in effect with respect to the Fiscal

     Year.

 

2.11 "Planned Incentive Income" shall mean, as applicable,  Incentive Income for

     the  Corporation  and each Operating Unit as approved by the  Corporation's

     Board of Directors.

 

2.12 "Target Award" shall mean the product of a Participant's  Base Compensation

     multiplied by said Participant's Target Percentage.

 

2.13 "Target  Percentage" shall mean those percentages  assigned to Participants

     pursuant to Section 4.1 hereof, multiplied by 90%.

 

III.     ELIGIBILITY

 

     Unless changed or amended by the  Committee,  an employee shall be deemed a

Participant in the Plan only if all of the following requirements are satisfied:

 

3.1  A Participant must be a salaried  employee (but excluding an employee whose

     sole title is Chairman of the Board) of the  Corporation,  at a grade level

     set forth in Section 4.1 or as otherwise approved both by the Corporation's

     Chairman  of the Board and Chief  Executive  Officer,  for at least six (6)

     months of the entire fiscal year, unless deceased or retired.

 

3.2  A Participant may not have: (i) been terminated for cause; (ii) voluntarily

     have  resigned  (other than due to retirement  with the Company's  consent)

     prior to the date Individual  Incentive Awards are paid; (iii),  unless the

     Corporation  agrees in writing that the employee shall remain a Participant

     in this Plan, been  terminated for any reason  whatsoever and have received

     money from the  Corporation in connection  with said  termination,  or (iv)

     have been primarily employed by Natmaya or Fosmart during the Fiscal Year.

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3.3  A Participant's Target Percentage shall be based on the Participant's Grade

     Level on July 1, 2005. Those Participants who have retired or died prior to

     July 1, 2005 shall have a Target Percentage based upon their grade level at

     death or retirement.

 

3.4  A Participant  may not,  unless agreed to in writing by the Chief Executive

     Officer,  be a participant in any other  incentive  plan  maintained by the

     Corporation, other than the Corporation's stock option plans.

 

3.5  As used herein,  "cause" to terminate  employment  shall exist upon (i) the

     failure  of an  employee  to  substantially  perform  his  duties  with the

     Corporation;  (ii) the  engaging by an employee in any  criminal  act or in

     other  conduct  injurious  to the  Corporation;  or (iii) the failure of an

     employee to follow the reasonable directives of the employee's superior(s).

 

IV.               CALCULATION OF INCENTIVE AWARDS

 

4.1  Eligibility and Target  Percentages.  Each Participant  shall have a Target

     Percentage,  prior to adjustment  under Section 2.13,  based upon the grade

     level of such Participant, as follows:

 

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                         Target

Management Grade Level   Percentage

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Grade 23+                45.0%

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Grade 22                 35.0%

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Grade 21                 35.0%

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Grade 20                 35.0%

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Grade 19                 30.0%

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Grade 18                 30.0%

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Grade 17                 30.0%

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Grade 16                 30.0%

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Grade 15                 20.0%

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Grade 14                 20.0%