EX-10.31



 Exhibit 10.31 
 THE L. B. FOSTER COMPANY 
 2017 

EXECUTIVE ANNUAL INCENTIVE COMPENSATION PLAN 
 The purpose of this document is to establish in writing the 2017 performance goals and other terms applicable to the 2017 awards authorized under the L. B. Foster Company Executive Annual Incentive
Compensation Plan (“Plan”) for the Fiscal Year (as defined below). 
  

	I.	DEFINITIONS 

 Capitalized
terms not otherwise defined herein shall have the meaning ascribed thereto in the Plan. The following terms shall be defined as follows: 
 1.1. “Company” shall mean L. B. Foster Company and those subsidiaries thereof in which L. B. Foster Company owns 100% of the outstanding common stock. 

1.2. “Operating Unit” shall mean the Company’s units or divisions which are reported in the Company’s internal
financial statements and approved by the Committee as applicable to this Plan and set forth on an exhibit on file with the Committee. 
 1.3. “Financial Performance Award” shall mean an award, as determined for each Participant, equal to (i) the “Participant’s Target Incentive” multiplied by
(ii) the applicable aggregate percentage specified for Financial Performance Awards under Section 3.2, with the amount to be paid with respect thereto to be calculated based upon the attainment of the objective financial performance goals
established by the Committee for Corporate and Operating Unit Adjusted EBITDA, Corporate and Operating Unit Working Capital as a Percentage of Sales, and Corporate ROIC for the Fiscal Year, excluding the results and any other impact of IOS Holdings
Inc. as approved by the Committee and set forth on an exhibit on file with the Committee, and subject to the Committee’s right to exercise discretion with respect to the amount to be paid with respect to any such award. 

1.4. “Base Compensation” shall mean base salary, rounded to the nearest whole dollar, as in effect for a Participant on
March 1, 2017. To the extent applicable, Base Compensation for Participants who terminate during the Fiscal Year shall include only such Base Compensation paid to such Participants during the Fiscal Year for the period prior to such
termination. 
 1.5. “Participant” shall mean all executive officers of the Company set forth on Schedule 1.10.

 1.6. “Participant’s Target Incentive” shall mean the product of the Base Compensation of a Participant
multiplied by the specific target percentage established for a Participant by the Committee as described in Section 3.1 hereof. 
 1.7. “Fiscal Year” means the 2017 calendar year (January 1, 2017 through December 31, 2017). 
 1.8. “Adjusted EBITDA” (Earnings before interest, taxes, depreciation, and amortization) shall mean with respect to the Company or an Operating Unit, for the Fiscal Year, determined in
accordance with generally accepted accounting principles, including the applicable 







 
LIFO charge or credit (a) income from continuing operations; (b) plus income tax expense; (c) plus interest expense; (d) minus interest income; (e) plus depreciation
expense; and (f) plus amortization expense. Adjusted EBITDA shall be calculated without regard to: (i) the effect of changes in accounting principles, (ii) any on-going and/or one-time costs and/or expenses attributable to an acquisition, including but not limited to, those related to the negotiation, completion and/or integration of an acquisition, incurred during the Fiscal Year,
(iii) any costs related to the purchase accounting step up in the basis of tangible or intangible assets not classified as depreciation or amortization, (iv) any on-going and/or one-time costs and/or expenses related to the unsuccessfully attempted acquisition of a business during the Fiscal Year (exclusive of employee travel), (v) any on-going
and/or one-time costs and/or expenses (exclusive of employee travel) associated with the sale or attempted sale of a business in the Fiscal Year, (vi) any significant or
non-recurring items which are disclosed in management’s discussion and analysis of financial condition and results of operations in the Company’s Annual Report on Form
10-K for such period and which would have an adverse effect on the pay-out amount of a Participant’s Financial Performance Award, (vii) the costs of the Plan
for domestic Operating Units, (viii) the impact on any Operating Unit attributable to any administrative intercompany charges related to transfer pricing compliance where the consolidated impact is zero, (ix) the reported results of an
acquisition (as well as results of operations and financial position) completed in the Fiscal Year, (x) a reclassification of an operating unit to “Discontinued Operations” or “Held for Sale”, if not sold during the
Performance Period, and (xi) the gain or loss on sale of a business or assets outside of the normal course of business Notwithstanding the foregoing, in the event that a business is sold during the 2017 Performance Period, such business’
target and adjusted actual results shall be eliminated from all calculations. 
 1.9. “Working Capital as a Percentage of
Sales” (“W/C as a % of Sales”) shall mean with respect to the Company, or as applicable, for an Operating Unit, for the Fiscal Year, the average monthly balances of Inventory and Accounts Receivable less the average monthly
balances of Accounts Payable and Deferred Revenue divided by annual net sales, provided however that all the above items, shall be determined without regard to: (i) any on-going and/or one-time costs and/or expenses relating to acquisitions transacted during the Fiscal Year, (ii) a reclassification of an operating unit to “Discontinued Operations” or “Held for Sale”, if
not sold during the Performance Period, (iii) the impact on any Operating Unit attributable to any administrative intercompany charges related to transfer pricing compliance where the consolidated impact is zero, and (iv) the reported
results (as well as results of operations and financial position) of an acquisition completed in the Fiscal Year. Notwithstanding the foregoing, in the event that a business is sold during the Fiscal Year, such business’ target and adjusted
actual results shall be eliminated from all calculations. 
 1.10. “Return on Invested Capital” (“ROIC”) shall
mean, with respect to the Company for the Fiscal Year: (a) after tax earnings from continuing operations before interest income and interest expense and amortization charges (all tax affected using the effective corporate tax rate or adjusted
effective tax rate if adjustments are made to actual results), divided by (b) an average of month end total assets less the sum of cash, marketable securities and non-interest bearing current liabilities,
determined in accordance with generally accepted accounting principles. ROIC shall be expressed as a percentage and shall be determined without regard to: (i) the effect of changes in accounting principles, (ii) any on-going and/or one-time costs and/or expenses attributable to an acquisition, including but not limited to, those related to the negotiation, completion and/or integration of
an acquisition, incurred during the Fiscal Year, (iii) 







 
any costs related to purchase accounting step up in the basis of tangible or intangible assets not classified as amortization, (iv) the impact of all assets and liabilities purchased or
incurred as a result of an acquisition, (v) any on-going and/or one-time costs and/or expenses (exclusive of employee travel) related to the unsuccessfully
attempted acquisition of a business during the Fiscal Year, (vi) any on-going and/or one-time costs and/or expenses associated with the successful or unsuccessful
sale of a business (exclusive of employee travel), (vii) any significant or non-recurring items which are disclosed in management’s discussion and analysis of financial condition and results of operations
in the Company’s Annual Report on Form 10-K for such period and which would have an adverse effect on the pay-out amount of a Participant’s Financial
Performance Award, (viii) the reported results (as well as the results of operations and financial position) of an acquisition completed in the Fiscal Year, (ix) a reclassification of an operating unit to “Discontinued
Operations” or “Held for Sale”, if not sold during the Performance Period and (x) the gain or loss on sale of a business or the sale of assets outside of the ordinary course of business. Notwithstanding the foregoing, in the
event that a business is sold during the Fiscal Year, such business’ target and adjusted actual results shall be eliminated from all calculations. The ROIC calculation shall be rounded to the nearest tenth of a percent. 

1.11. “Target Working Capital as a Percent of Sales (Corporate and Operating Unit), Target Adjusted EBITDA (Corporate and Operating
Unit), and Target ROIC” shall mean the respective targets approved by the Committee as applicable to this Plan and set forth on an exhibit on file with the Committee. 

1.12. “Section 162(m) Officer Bonus Pool” shall mean 9% of the Adjusted EBITDA for the Fiscal Year, which shall be allocable
to the Section 162(m) Officers in the percentages set forth on an exhibit on file with the Committee, subject to the Committee’s right to reduce any such allocations in its sole discretion. Adjusted EBITDA for the Section 162(m) Officer Bonus
Pool shall be defined as set forth on an exhibit on file with the Committee. 
 1.13. “Section 162(m) Officer” shall mean
the officers of the Company who are listed as Section 162(m) Officers on an exhibit on file with the Committee, and who the Company has determined may be subject to the limitations imposed on “covered employees” under Section 162(m) of the
Internal Revenue Code of 1986, as amended. 
  

	II.	ELIGIBILITY 

 2.1. Additional Conditions. Subject to the terms and conditions set
forth herein and in the Plan and unless the Committee determines otherwise, in its sole discretion, a Participant’s right, if any, to receive payment of their respective Financial Performance Awards shall also be contingent upon satisfaction of
each of the following requirements: 
 a. A Participant must execute a Confidentiality, Intellectual Property and Non-Compete Agreement in a form satisfactory to the Committee and deliver the executed agreement to the Company’s Vice President, Human Resources and Administration on or before October 1 of the applicable
Fiscal Year. If a Participant previously has executed a Confidentiality, Intellectual Property and Non-Compete Agreement, the Participant need not execute and deliver another Confidentiality, Intellectual
Property and Non-Compete Agreement. 







 b. A Participant’s Target Percentage award shall be specifically
established by the Committee as set forth in Section 3.1. In the event a Participant changes from one position to another position or is promoted into one of the positions approved by the Committee as described in Section 3.1 during the
Fiscal Year performance period, the Target Percentage for such Participant shall be pro-rated between the Target Percentages of each position held during the Fiscal Year based on which position was held on the
first day of each month in the Fiscal Year performance period and may be allocated among different Operating Units as determined by the Committee. Any newly hired Participant shall have a specific Target Percentage established by the Committee,
provided their employment began in such position by October 1 of the Fiscal Year performance period. 
 c. Except
as otherwise expressly set forth in Section 6 of the Plan or as otherwise determined by the Committee, if a Participant’s employment terminates with the Company prior to the Payment Date, the Participant shall forfeit any and all rights to
payment or any Financial Performance Award granted hereunder. 
 d. For Participants who are Section 162(m) Officers,
funding of the Section 162(m) Officer Bonus Pool. 
  

	III.	AWARDS 

 The Section 162(m) Officer Bonus Pool shall be funded and allocable to Participants who are
Section 162(m) Officers in the percentages set forth on an exhibit on file with the Committee, subject to the Committee’s right to reduce any such allocations in its sole discretion. In this regard, the Target Percentage and Target Amount, as
described in Sections 3.1 and 3.2 below, will be considered by the Committee in exercising its right of discretion. 
 3.1. Target
Percentages. Each Participant shall have a Target Percentage based upon the position held by such Participant as approved by the Committee on February 22, 2017 and set forth on an exhibit on file with the Committee. 

Other employees selected by the Committee may also be made Participants in the Plan on such terms as may be approved by the Committee and
consistent with the terms of the Plan. 







 3.2. Target Amount. The target amount of a Participant’s Financial Performance Award,
if any, shall be determined and allocated based on the percentages specified in the table below: 
  

							
	 	  	 Metric
	  	CEO, Sr VP & CFO;
VP-Business
Development; 
VP-
Human
Resources & Admin; VP
& General Counsel; and
Controller and CAO	 	VP’s and
SVP Responsible
for Operating
Unit(s)
	 Financial

Performance

Awards 
	  	Corporate ROIC	  	15%	 	—  
	  	Operating Unit Adjusted EBITDA	  	—  	 	50%
	  	Working Capital as a % of Sales	  	15%	 	20%
	  	Corporate Adjusted EBITDA	  	70%	 	30%

 3.3. Financial Performance Award Multiplier. Subject to the terms and conditions set forth herein and
in the Plan, the amount of Financial Performance Award earned shall be calculated and adjusted upward or downward based on the actual level of attainment of Target W/C as a % of Sales (Corporate and Operating Unit), Target Adjusted EBITDA (Corporate
and Operating Unit) and/or Target ROIC (as allocated under Section 3.2) utilizing the percentage multiplier as set forth in the following tables: 

a. Adjusted EBITDA Multiplier (Corporate/Operating Unit) 
  

			
	 % of Target Adjusted

EBITDA
	  	 Corporate or Operating Unit
Multiplier

	 170% and over
	  	200%
	 160%
	  	185%
	 150%
	  	175%
	 140%
	  	160%
	 130%
	  	145%
	 120%
	  	130%
	 110%
	  	115%
	 100%
	  	100%
	 90%
	  	84%
	 80%
	  	68%
	 70%
	  	52%
	 60%
	  	36%
	 50%
	  	20%
	 Less than 50%
	  	0%








 b. ROIC Multiplier 

 

			
	 % of Target ROIC
	  	 ROIC Multiplier

	 127.5% and over
	  	200%
	 123.0%
	  	167%
	 112.8%
	  	133%
	 100.0%
	  	100%
	 93.7%
	  	73%
	 87.8%
	  	47%
	 80.0%
	  	20%
	 Less than 80.0%
	  	0.0%

 c. W/C as a % of Sales Multiplier 

 

			
	 % of Target Average W/C

as a % of Sales
	  	 Corporate or Operating Unit
Multiplier

	 86.0% and under
	  	200%
	 88.7%
	  	175%
	 91.3%
	  	150%
	 94.3%
	  	130%
	 97.4%
	  	115%
	 100.0%
	  	100%
	 102.9%
	  	80%
	 106.5%
	  	60%
	 110.0%
	  	40%
	 113.9%
	  	30%
	 118.0%
	  	20%
	 121.5%
	  	10%
	 Greater than 121.5%
	  	0%

 The calculation of the percent of target achieved in the above tables shall be adjusted proportionately to
reflect whole percentages achieved between the levels in the table. For example, if Corporate achieved 73% of Target Adjusted EBITDA, the percent of target achieved would be 57%; if Corporate achieved 137% of Target Adjusted EBITDA, the percent of
target achieved would be 156%. 
 3.4. Limitation on Financial Performance Award. Notwithstanding any provision to the contrary, a
Participant’s Financial Performance Award shall not exceed (i) $1,500,000 for any Participant for the Fiscal Year performance period under the Plan (and after including any other awards granted under the Plan for the Fiscal Year) or
(ii) if lower, for any Participant who is a Section 162(m) Officer, such Participant’s designated performance pool percentage of the Section 162(m) Officer Bonus Pool as set forth on an exhibit on file with the Committee. In the
event that the amount of any award(s) for the Fiscal Year earned exceed $1,500,000, in the aggregate, for a Participant, or the designated performance pool percentage for any Section 162(m) Officer, such award(s) shall be reduced to $1,500,000
or, if lower, the applicable designated performance pool percentage. The decision as to how and, if applicable, which
 award(s) shall be reduced shall be made in a manner determined in the sole discretion of the Committee. 








	IV.	RECOUPMENT 

 In the event the Company is required to prepare an accounting restatement
applicable to any financial reporting period covering a period within the Fiscal Year due to the material noncompliance of the Company with any financial reporting requirement under the securities laws or other applicable law and if the Committee,
in its discretion, so determines, each “Specified Participant” (as defined below) shall pay to the Company, in cash, all cash paid to or on behalf of such Participant under the Plan for the Fiscal Year in excess of the amount of such
compensation that would have been paid to the Participant for the Fiscal Year based on the restated financial results. Any such payment shall be made within the time periods prescribed by the Committee. The term “Specified Participant”
means any Participant that the Committee has determined, in its sole discretion, has committed fraud, negligence, or intentional misconduct that was a significant contributing factor to the Company having to prepare an accounting restatement. A
Specified Participant’s failure to make any such timely payment to the Company constitutes an independent and material breach of the terms and conditions of the Plan, for which the Company may seek recovery of the unpaid amount as liquidated
damages, in addition to all other rights and remedies the Company may have against the Participant. By participating in the Plan, each Participant agrees that timely payment to the Company as set forth in this Section IV is (i) reasonable and
necessary, (ii) is not a penalty, and (iii) does not preclude the Company from seeking all other remedies that may be available to the Company. 

The Committee, in its discretion, shall determine whether the Company shall effect any such recovery (i) by seeking repayment from the
Specified Participant, (ii) by reducing (subject to applicable law and the terms and conditions of the applicable plan, program or arrangement) the amount that would otherwise be payable to the Specified Participant under any compensatory plan,
program or arrangement maintained by the Company or any of its affiliates, (iii) by withholding payment of future increases in compensation (including the payment of any discretionary bonus amount) or grants of compensatory awards that would
otherwise have been made in accordance with the Company’s otherwise applicable compensation practices, or (iv) by any combination of the foregoing. 

Notwithstanding any other provisions of this document, any awards made hereunder shall be subject to recovery under any law, governmental
regulation, stock exchange listing requirement or Company policy applicable to them, including any related deductions, recoupment and/or claw-back as may be required to be made pursuant to such law, government regulation, stock exchange listing
requirement, or Company policy, as may be in effect from time to time, and which may operate to create additional rights for the Company with respect to the awards and recovery of amounts relating thereto (the “Clawback Requirement”). By
accepting Financial Performance Awards granted hereunder and under the Plan, Participants agree and acknowledge that they are obligated to cooperate with, and provide any and all assistance necessary to, the Company to recover or recoup any award or
amounts paid under the Plan subject to claw-back pursuant to such law, government regulation, stock exchange listing requirement or Company policy. Such cooperation and assistance shall include, but is not limited to, executing, completing and
submitting any documentation necessary to recover or recoup any award or amounts paid under the Plan from a Participant’s accounts, or pending or future compensation or awards. In the event the awards granted pursuant to this document and the
Plan become subject to such Clawback Requirement, then the awards shall be subject to such Clawback Requirement, and the foregoing provision of this Section IV shall no longer apply to such awards. 







 Notwithstanding the foregoing, the Company shall not be required to make any additional
payment in the event that the restated financial results would have resulted in a greater payment to any Participant. 
  

	V.	COMPENSATION COMMITTEE 

 All determinations with respect to any Financial Performance
Award shall be made by the Committee and shall be final, conclusive and binding on the Company, the Participant and any and all interested parties. No payment of a Financial Performance Award shall be made prior to the Committee certifying in
writing that the performance goals and other material terms applicable to such awards for the Fiscal Year as set forth herein (including the Schedule attached hereto and/or the applicable exhibits on file with the Committee) have been attained. 

The undersigned Chairman of the Committee hereby certifies, on behalf of the Committee, that the performance goals and other material terms
applicable to the awards for the Fiscal Year as set forth herein (including the Schedule attached hereto) have been determined and approved at the Committee meeting on February 22, 2017. 

 

			
	By:      	 	 /s/ William H. Rackoff

		 	William H. Rackoff
		 	Chairman, Compensation Committee








 Schedule 1.10 
  

					
	 Participants
	  	 Title*
	  	 Operating Unit(s)

	Robert P. Bauer	  	President and CEO	  	Consolidated Corporate
	Steven R. Burgess	  	 VP—Concrete Products

President—CXT
	  	Rail segment including Precast Conc.
Products
	Patrick J. Guinee	  	VP and General Counsel	  	Consolidated Corporate
	John F. Kasel	  	Sr VP—Rail Business	  	Rail segment including Precast Conc.
Products (inc. Buildings)
	Brian H. Kelly	  	VP—Human Resources & Administration	  	Consolidated Corporate
	Alexandre Kosmala	  	Sr VP—LB Foster Company	  	Energy and Construction excluding
Precast concrete Products
	Gregory W. Lippard	  	VP—Rail Product Sales	  	Rail segment including Precast Conc.
Products
	David J. Russo	  	Sr VP and CFO	  	Consolidated Corporate
	Christopher T. Scanlon	  	Controller	  	Consolidated Corporate

  

	*	Subject to change pursuant to Section 3.1. 

  

	
	 Approved by Committee on this
 22nd day of
February, 2017.
  
 /s/ William H. Rackoff

William H. Rackoff
 Chairman, Compensation Committee