UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event
reported) October 27, 2006 (october 24,2006)
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L.B. Foster Company
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(Exact name of registrant as specified in its charter)
Pennsylvania 000-10436 25-1324733
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
415 Holiday Drive, Pittsburgh, Pennsylvania 15220
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 412-928-3400
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None
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(Former name or former address, if changed since
last report.)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
Item 1.01. Entry into a Material Definitive Agreement.
On May 25, 2005, the Board of Directors of L. B. Foster Company (the
"Company"), upon the prior recommendation of its Compensation Committee,
approved the L.B. Foster Company 2005 Three Year Incentive Plan (the "Plan").
The Plan was designed to motivate senior officers to improve the Company's
performance over the three year period, 2005 - 2007. The Company filed a Form
8-K dated May 25, 2005, together with the Plan, with the Securities and Exchange
Commission.
On October 24, 2006, the Board of Directors, upon the prior recommendation
of the Compensation Committee, amended the Plan by including LIFO adjustments in
the calculation of Incentive Income, as defined in the Plan. The anticipated
effect of this amendment will be to reduce Incentive Income. The amended and
restated Plan is being filed with the Securities and Exchange Commission as
Exhibit 10.56 to this Report and is incorporated by reference into this Item
1.01.
Item 8.01. Other Events.
On October 24, 2006, the Board of Directors of the Company declared a
dividend distribution of one right (a "Right') for each outstanding share of the
Company's Common Stock, par value $0.01 per share ("Common Stock'), to
shareholders of record at the close of business on May 15, 2007, the date on
which the Company's currently outstanding, similar stock purchase rights will
expire. Except as described below, each Right, when exercisable, entitles the
registered holder to purchase from the Company one share of Common Stock at a
purchase price of $30.00 (the "Purchase Price"), subject to adjustment. The
description and terms of the Rights are set forth in a Rights Agreement (the
"Rights Agreement") between the Company and American Stock Transfer & Trust
Company, as Rights Agent. The following is a general description only and is
subject to the detailed terms and conditions of the Rights Agreement. A copy of
the Rights Agreement, including the form of Rights Certificate and the Summary
of Rights to be provided to shareholders of the Company, is being filed with the
Securities and Exchange Commission as Exhibit 4B to this Report.
Initially, the Rights will be attached to all Common Stock certificates
representing shares then outstanding, and no separate Rights Certificates will
be distributed. The Rights will separate from the Common Stock and a
Distribution Date will occur upon the earlier of (i) 10 days following a public
announcement that a person or group of affiliated or associated persons other
than the Company, its subsidiaries or any person receiving newly-issued shares
of Common Stock directly from the Company or indirectly via an underwriter in
connection with a public offering by the Company (an "Acquiring Person") has
acquired, or obtained the right to acquire, beneficial ownership of 20% or more
of the outstanding shares of Common Stock (the "Stock Acquisition Date"), or
(ii) 10 business days following the commencement of a tender offer or exchange
offer that would result in a person or group beneficially owning 20% or more of
such outstanding shares of Common Stock. Until the Distribution Date, (i) the
Rights will be evidenced by the Common Stock certificates and will be
transferred with and only with such Common Stock certificates, (ii) new Common
Stock certificates issued after May 15, 2007 will contain a notation
incorporating the Rights Agreement by reference and (iii) the surrender for
transfer of any certificates for Common Stock will also constitute the transfer
of the Rights associated with the Common Stock represented by such certificate.
The Rights are not exercisable until the Distribution Date and will expire
at the close of business on October 24, 2016, unless earlier redeemed or
exchanged by the Company as described below.
As soon as practicable after the Distribution Date, Rights Certificates
will be mailed to holders of record of the Common Stock as of the close of
business on the Distribution Date and, thereafter, the separate Rights
Certificates alone will represent the Rights. Except as otherwise determined by
the Board of Directors, only shares of Common Stock issued prior to the
Distribution Date will be issued with Rights.
If any person becomes an Acquiring Person other than pursuant to a
Qualifying Offer (as defined below), each holder of a Right will thereafter have
the right to receive, upon exercise, Common Stock (or, in certain circumstances,
cash, property or other securities of the Company) having a value equal to two
times the exercise price of the Right. The Rights Agreement contains an
exemption for any issuance of Common Stock by the Company directly to any person
(for example, in a private placement or an acquisition by the Company in which
Common Stock is used as consideration) or indirectly via an underwriter in
connection with a public offering by the Company, even if that person would
become the beneficial owner of 20% or more of the outstanding Common Stock,
provided that such person does not acquire any additional shares of Common
Stock. Notwithstanding any of the foregoing, all Rights that are, or (under
certain circumstances specified in the Rights Agreement) were, beneficially
owned by any Acquiring Person will be null and void. However, Rights are not
exercisable in any event until such time as the Rights are no longer redeemable
by the Company as set forth below.
A "Qualifying Offer" means a tender offer or exchange offer for all
outstanding shares of Common Stock at a price and on terms determined by at
least a majority of the Continuing Directors (as defined below) who are not
officers or employees of the Company and who are not related (as specified in
the Rights Agreement) to the Person making such offer, to be fair to and in the
best interests of the Company and its shareholders.
If at any time following the Stock Acquisition Date (i) the Company is
acquired in a merger or other business combination transaction in which the
Common Stock is changed or exchanged or in which the Company is not the
surviving corporation (other than a merger that follows a Qualifying Offer and
satisfies certain other requirements), or (ii) 50% or more of the Company"s
assets or earning power is sold or transferred, each holder of a Right (except
Rights that have been previously voided as set forth above) shall thereafter
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 Right. The events
set forth in this paragraph and in the second preceding paragraph are referred
to as the "Triggering Events."
The Purchase Price payable, and the number of shares of Common Stock or
other securities or property issuable, upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Common
Stock, (ii) if holders of the Common Stock are granted certain rights or
warrants to subscribe for Common Stock or convertible securities at less than
the current market price of the Common Stock, or (iii) upon the distribution to
holders of the Common Stock of evidences of indebtedness or assets (excluding
regular quarterly cash dividends) or of subscription rights or warrants (other
than those referred to above).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments amount to at least 1% of the Purchase
Price. No fractional shares will be issued and, in lieu thereof, an adjustment
in cash will be made based on the market price of the Common Stock on the last
trading date prior to the date of exercise.
At any time until ten days following the Stock Acquisition Date, the
Company may redeem the Rights in whole, but not in part, at a price of $.05 per
Right (payable in cash, Common Stock or other consideration deemed appropriate
by the Board of Directors). Under certain circumstances set forth in the Rights
Agreement, the decision to redeem shall require the concurrence of a majority of
the Continuing Directors. Immediately upon the action of the Board of Directors
ordering redemption of the Rights or at such other time as may be specified by
the Board when it orders redemption, with, where required, the concurrence of a
majority of the Continuing Directors, the Rights will terminate and the only
right of the holders of Rights will be to receive the $.05 redemption price.
The term "Continuing Directors" means any member of the Board of Directors
of the Company who was a member of the Board prior to the Stock Acquisition
Date, and any person who is subsequently elected to the Board if such person is
recommended or approved by a majority of the Continuing Directors, but shall not
include an Acquiring Person, or an affiliate or associate of an Acquiring
Person, or any representative of the foregoing entities.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Company, including, without limitation, the right
to vote or to receive dividends. While the distribution of the Rights will not
be taxable to shareholders or to the Company, shareholders may, depending upon
the circumstances, recognize taxable income if the Rights become exercisable for
Common Stock (or other consideration) of the Company or for common stock of the
acquiring company as set forth above.
Other than those provisions relating to the principal economic terms of the
Rights, any of the provisions of the Rights Agreement may be amended by the
Board of Directors of the Company prior to the Distribution Date. After the
Distribution Date, the Rights Agreement may be amended by the Board (in certain
circumstances, with the concurrence of the Continuing Directors) in order to
cure any ambiguity, to make changes that do not adversely affect the interests
of holders of Rights (excluding the interests of any Acquiring Person), or to
shorten or lengthen any time period under the Rights Agreement; provided,
however, that no amendment to adjust the time period governing redemption shall
be made at a time when the Rights are not redeemable.
As of October 24, 2006, there were 10,520,245 shares of Common Stock
outstanding and 727,000 shares of Common Stock reserved for issuance under
outstanding options to purchase Common Stock. Each outstanding share of Common
Stock at the close of business on May 15, 2007 will receive one Right. In
addition, Rights shall be issued in respect of all shares of Common Stock that
are issued (whether originally issued or from the Company's treasury) after that
date but prior to the earlier of the Distribution Date or the Expiration Date
and, in certain circumstances as provided in the Rights Agreement, after the
Distribution Date.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
The following exhibits are filed herewith:
4B - Rights Agreement, dated as of October 24, 2006, between
L. B. Foster Company and American Stock Transfer & Trust
Company, including the form of Rights Certificate and the
Summary of Rights attached thereto as Exhibits A and B.
10.56 - 2005 Three Year Incentive Plan, as amended and restated.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
L.B. FOSTER COMPANY
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(Registrant)
Date: October 27, 2006
/s/ David J. Russo
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David J. Russo
Senior Vice President
Chief Financial Officer and Treasurer
Exhibit Index
Exhibit Number Description
4B Rights Agreement, dated as of October 24, 2006, between
L. B. Foster Company and American Stock Transfer & Trust
Company, including the form of Rights Certificate and the
Summary of Rights attached thereto as Exhibits A and B.
10.56 2005 Three Year Incentive Plan, as amended and restated.